Court File and Parties

COURT FILE NO.: CV-18-75765 DATE: 2022/03/18 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Wael Musa, Plaintiff AND Carleton Condominium Corporation No. 255 and 6669981 Canada Inc. c.o.b. as Exact Post Ottawa Inc., Defendants

BEFORE: The Honourable Justice C.T. Hackland

COUNSEL: Brenda Hollingsworth, counsel for the Plaintiff Douglas Treilhard, counsel for the Defendants

HEARD: In writing

Costs Endorsement

[1] The Plaintiff succeeded in obtaining a liability determination in his favour in the trial of this slip and fall personal injury case, in which the question of damages had been agreed by counsel. The court’s reasons are reported: see Musa v. Carleton Condominium Corporation No. 255, 2022 ONSC 1030.

[2] The Plaintiff was entirely successful on all the issues argued in this trial including liability, contributory negligence, and on the two motions brought by the Defendants relating to the expert evidence. As such, there is no doubt he is entitled to his costs of the action. The Plaintiff is seeking partial indemnity costs to the date of his Rule 49 offer, which was served on August 5, 2021, and substantial indemnity costs from April 6, 2021 to the conclusion of trial.

[3] The Plaintiff is seeking fees of $108,220.00 (plus HST of $14,068.60 for a total of $122,288.60). The disbursements sought are $25,691.60 (plus HST of $3,113.11 for a total of $28,804.71). The fees claimed of $108,220.00 are broken down as follows:

• $24,211.00 in fees (plus HST of $3,147.43 for a total of $27,358.43 in costs) based on partial indemnity for work done up to and including August 5, 2021, when the Plaintiff served his Rule 49 offer.
• $84,009.00 in fees (plus HST of $10,921.17 for a total of $94,930.17 in costs), based on substantial indemnity for work done after the Rule 49 offer to the conclusion of trial.

[4] The damages agreed to by counsel in March 2020 were $65,000 - $50,000 of which was for general damages. PJI was to run on general damages to be awarded, if any, from the date of the agreement. The proposal to agree on damages was put forward by the Defendants. This undoubtedly saved on trial time and is to be commended.

[5] The Plaintiff served a Rule 49 offer to settle on August 5, 2021, in the following terms:

1. The Defendants, or any one or more of them, shall pay to the Plaintiff as follows: a) $55,000.00 on account of all damages and pre-judgement interest; b) The Plaintiff’s costs and disbursements as agreed or assessed on a partial indemnity basis; and c) The Ontario Ministry of Health’s subrogated interest in the amount of $1,742.94.
2. The Plaintiff shall sign a release in a form acceptable to all parties and shall agree to a dismissal of the action without costs; and,
3. This offer is open for acceptance until one minute after the commencement of trial.

[6] The Defendants made no offer to settle at any time. The Plaintiff bettered his Rule 49 offer by $10,000 plus interest. There can be no doubt he is entitled to his costs on a partial indemnity scale up to the date of his Rule 49 offer and on a substantial indemnity scale thereafter.

[7] The real issue in this case is the appropriate quantum of fees to which the Plaintiff is entitled. An important consideration is the reasonableness of the hourly billing rates and the time expended by Plaintiff’s counsel, but those are not the only relevant considerations contemplated by Rule 57 of the Rules of Civil Procedure. As the cases indicate, the court is not bound to simply award an amount arrived at by multiplying the hourly rates charged by counsel with the time docketed to the matter. The awarding of costs is a highly discretionary exercise.

[8] As can be seen, the Plaintiff seeks to recover fees on a party and party basis of $108,220 in relation to a damages recovery, following trial, of the agreed upon damages amount of $65,000.

Plaintiff’s Bill of Costs

[9] The Plaintiff’s bill of costs discloses in the period prior to their Rule 49 offer, Ms. Hollingsworth (1997 call) docketed 25 hours at an hourly rate of $600, Mr. Genest (2014 call) docketed 29 hours at an hourly rate of $350, and Mr. Villeneuve (2016 call) docketed 20 hours at an hourly rate of $350. Following the Rule 49 offer, Ms. Hollingsworth took carriage of the matter personally (assisted by a student) and docketed 102 hours, which included preparation for and attendance at the seven day trial. Plaintiff’s counsel charged 60% of their hourly rates (partial indemnity) up to the date of the Rule 49 offer and 90% (substantial indemnity) from that point to the conclusion of the case.

Defendants’ Bill of Costs

[10] Defence counsel disclosed their bill of costs, which is a very good practice and helps the court to appreciate some useful parameters. Defence counsel submit that using their hourly billing rate and hours docketed (with partial indemnity applied to the period up to receipt of the Plaintiff’s Rule 49 offer and substantial indemnity afterward), their bill would have been about $86,000, in contrast with the Plaintiff’s claim for $122,000.

[11] The Plaintiff’s fees claimed are about 40% more than the Defendants notionally would have charged. Mr. Treilhard (a 2014 call), lead counsel for the Defendants, used an hourly billing rate of $190-$210 during the relevant period compared to Plaintiff’s counsel, Ms. Hollingsworth (1997 call), who used a billing rate of $600 per hour, as noted previously. The court finds that Mr. Treilhard’s billing rate is quite modest and likely represents a negotiated rate reflecting an ongoing retainer with the insurer. Ms. Hollingsworth, on the other hand utilizes a somewhat ambitious rate considering that in her firm’s contingency fee agreement, she would charge her client $400 per hour on the scenario of the client terminating her firm’s services before the case was resolved.

[12] The point here is that the court considers billing rates to be relevant but not determinative of the fees ultimately to be allowed. It is not unusual that the Plaintiff’s counsel has more time docketed in the case as the Plaintiff bears the burden of proof at trial and the management of a Plaintiff and/or witness(es) is often a more time consuming process than dealing with an experienced claims adjuster. I conclude there is no significant disproportionality between the parties’ respective bills of costs.

Abandoned Motion

[13] The Defendants’ counsel submit that the Plaintiff’s fees should be reduced by approximately $8,000 – the approximate fees based on the estimated time that Plaintiff’s counsel invested in a motion which was not heard at trial. Although the motion materials were served, the motion would have been unsuccessful if it had proceeded because production of the witness statements, which were subject to litigation privilege, was sought. One of the prospective witnesses was never called to testify, so the privilege was never waived. The other witness did testify and court time was wasted while the lengthy statement sought was produced after the witness was called and Plaintiff’s counsel was given time to consider it. I will take this motion into consideration but I will not give effect to the request of Defendants’ counsel that they be notionally awarded costs of the abandoned motion.

Retainer Agreement

[14] Plaintiff’s counsel relies on a contingency retainer agreement which permitted them to charge their client up to 33% of damages recovered at trial, or in the alternative, to receive as their fee the costs awarded in the action. They, of course, chose the latter in this case, due to the modest amount of damages involved. This type of arrangement is authorized under sections 20 and 20.1 of the Solicitor’s Act, R.S.O., c.S.15. which provides:

Agreement not to affect costs as between party and party

20 (1) Such an agreement does not affect the amount, or any right or remedy for the recovery, of any costs recoverable from the client by any other person, or payable to the client by any other person, and any such other person may require any costs payable or recoverable by the person to or from the client to be assessed in the ordinary manner, unless such person has otherwise agreed. R.S.O. 1990, c. S.15, s. 20 (1).

Idem

(2) However, the client who has entered into the agreement is not entitled to recover from any other person under any order for the payment of any costs that are the subject of the agreement more than the amount payable by the client to the client’s own solicitor under the agreement. R.S.O. 1990, c. S.15, s. 20 (2).

Awards of costs in contingency fee agreements

20.1 (1) In calculating the amount of costs for the purposes of making an award of costs, a court shall not reduce the amount of costs only because the client’s solicitor is being compensated in accordance with a contingency fee agreement. 2002, c. 24, Sched. A, s. 3.

Same

(2) Despite subsection 20 (2), even if an order for the payment of costs is more than the amount payable by the client to the client’s own solicitor under a contingency fee agreement, a client may recover the full amount under an order for the payment of costs if the client is to use the payment of costs to pay his, her or its solicitor. 2002, c. 24, Sched. A, s. 3. (emphasis added)

[15] As noted previously, the retainer agreement also provides that Ms. Hollingsworth would charge for her time at the rate of $400 per hour if the client were to terminate the retainer prior to the case being resolved. Defence counsel suggests that the real hourly rate being charged by counsel is $400 per hour, not the $600 per hour notional rate utilized in the Plaintiff’s bill of costs. The time sheets filed indicate Ms. Hollingsworth was docketing her time at a rate of $500 per hour, which I regard as reasonable, given her seniority and the level of risk in this case.

Disbursements

[16] The Plaintiff claims the disbursements incurred in the amount of $25,353.40. The Defendants dispute the engineering expert’s fee in the amount of $9,866.00 for the first of his two reports. The fee for the second report was $3,273.00. The suggestion is that the first report was inadequate and needed to be replaced by the second report. The court’s perspective is that the engineering expert evidence was very important to the assessment of the technical issues in this case, particularly the proper methodology and timing for the application of road salt. The first report articulated the expert’s criticisms of the Defendants’ approach to applying road salt in all the relevant circumstances. The second report was supplementary to the first in that it identified the publications and organizations which developed and promulgated the standards discussed by the expert in his first report. It answered important questions which the first report gave rise to. In any event, both reports and the expert evidence based thereon formed an important part of this trial and I regard the overall costs paid to this expert as reasonable. I find the disbursements as a whole to be reasonable and will allow them as claimed.

Proportionality

[17] The Plaintiff is seeking costs which exceed the agreed upon damages amount in issue ($65,000). This was a 7 day trial involving expert evidence and a reasonable level of complexity. It was entirely foreseeable that the costs of the action would exceed the damages in issue. In a recent similar case, Justice Hurley awarded $300,000 in costs following a recovery of $205,662. That was an 11 day jury trial where liability had been admitted and in which the Plaintiff had bettered a pre-trial Rule 49 offer. I would respectfully adopt Hurley J.’s observation as applicable to the present case:

The Plaintiff is asking for an amount in costs that is more than double the damages that were awarded. As other judges have done when faced with this issue, I cite the decision of Lane, J. in 163972 Canada Inc. v. Isacco, [1997] O. J. 838:

That the costs significantly exceed the amounts at stake in the litigation is regrettable, but it is a common experience and is well known to counsel as one of the risks involved in pursuing or defending a case such as this to a bitter end rather than finding a compromised solution. To reduce the Plaintiff’s otherwise reasonable costs on this basis would simply encourage the kind of intransigence displayed by the Defendants in this case.

Costs Award

[18] With due consideration to the factors discussed in this decision, I exercise the court’s discretion to award costs of the action to the Plaintiff, which I fix in the sum of $100,000 (plus 13% HST amounting to $13,000), for a total award of $113,000. This represents partial indemnity costs of $24,000 to the Rule 49 offer dated August 5, 2021, and $76,000 thereafter on a substantial indemnity basis, including the trial.

[19] Disbursements are awarded as claimed in the sum of $25,691.60 (plus HST in the sum of $3,113.11), for a total award of $28,804.71.

Justice Charles T. Hackland Date: March 18, 2022