Superior Court of Justice - Ontario
Court File No.: CV-16-141 Date: 2022-04-13
Re: Brian Heyworth, Plaintiff And: Doyle Plumbing, Heating & Cooling, Defendant
Before: C.M. Smith J.
Counsel: Martin P. Forget, Counsel for the Plaintiff R. Steven Baldwin, Counsel for the Defendant
Heard: In Writing
Endorsement on Costs
Background
1This matter involved a hard-fought trial on the question of liability and quantum of damages resulting from a furnace oil leak in the basement of a residence near Lakefield, Ontario.
2In my reasons for decision dated February 1, 2022, I found for the defendant and dismissed the action.
3This is my endorsement on the question of costs.
Positions of the Parties
1. The Defendant/Successful Party
4The defendant submits that as the successful party it is presumptively entitled to its costs of the action, calculated on a partial indemnity basis, which amount to the sum of $103,519.91. The defendant has filed a detailed bill of costs setting out time expended by trial counsel, Mr Baldwin, his associates, his paralegal, and his clerks.
5In support of this position the defendant points to the various factors set out in Rule 57.01 and the decision of the Ontario Court of Appeal in Boucher et al. v. Public Accountants Council for the Province of Ontario et al. (“Boucher”).
2. The Plaintiff/Unsuccessful Party
6Counsel for the plaintiff, objects to the trial tactics of the defendant which Mr. Forget characterizes as being “a scorched earth approach” involving the dispute of every issue and objections regarding most of the evidence tendered by the plaintiff.
7The plaintiff takes the position that the trial could have been shortened considerably had the defendant made certain admissions, particularly as to the cause of the leak, the qualifications of the plaintiff’s expert, and the actual cost of the remediation.
8Mr. Forget also takes issue with respect to certain details of the defendant's bill of costs. In his written submissions the plaintiff engages in a lengthy discussion about each phase of the matter and the details of the amounts charged by the defendant for each of those phases. The aggregate amount of the reductions proposed by the plaintiff would effectively reduce the defendant’s bill of costs by half.
9The plaintiff also objects to the fact that the defendant did not include dockets with his submissions nor did the defendant include receipts for the disbursements regarding the accommodation and travel expenses.
Law and Analysis
10Section 131 of the Courts of Justice Act provides that the question of costs is in the discretion of the court.
11The oft cited case of Boucher is much on point in this proceeding. That case provides that the fixing of costs is not simply a function of the amount of time expended by the parties on the matter. Rather the objective of a costs order is to determine an amount of costs that is fair and reasonable having regard to the range of factors set out in Rule 57.01, including the expectations of the parties.
12The overriding principle in assessing costs is the reasonableness of the cost award; see Walsh Energy Inc. v. Better Business Bureau of Ottawa-Hull Incorporated, 2018 ONCA 383.
13Rule 57.01(1) sets out a non-exhaustive list of factors that a court may consider, in addition to the result of the proceeding, in determining the appropriate quantum of costs and to whom they are owed. In my view the relevant Rule 57.01(1) factors that apply in this case are the following:
- the principle of indemnity including the experience of counsel for the successful party, the rates charged and the hours expended;
- the amount of costs that the unsuccessful party could reasonably expect to pay;
- the complexity of the proceeding;
- importance of the issues;
- whether the conduct of either party tended to shorten or lengthen the proceeding;
- whether any steps in the proceeding were improper, vexatious or unnecessary, or were taken through negligence, mistake or excessive caution; and
- whether there were any denials or admissions.
The Principle of Indemnity
14Counsel for the defendant, Mr Baldwin, has been practicing in the area of civil litigation for 29 years. He has developed particular expertise in cases of this nature which involve the regulatory scheme for oil handling and the installation and maintenance of oil burning equipment. His hourly rate is $375 which for a lawyer of almost 30 years experience I find to be both reasonable and at the low end of the scale. His partial indemnity rate is $243.75 per hour.
15Mr Baldwin expended some 224.6 hours on this matter from the time of initial retainer through completion of the costs submissions. The trial itself, which took two weeks from September 13 through September 24, 2021, consumed some 116 hours of Mr. Baldwin’s time for attendance and ongoing preparation. Mr Baldwin mounted what I would call an aggressive defence centred around the intricacies of the regulatory regime in place in Ontario for oil handling and oil burning equipment, as well as the rules of both evidence and procedure. In my view the amount of time expended by counsel on this matter is proportional to the length of the trial and the nature of the defence advanced.
16I am disallowing Mr Baldwin's claim for fees related to the motion to compel attendance for examinations for discovery which are in the amount of $3155.11, as set out in the bill of costs. That motion was dismissed by Justice Speyer who also ordered the defendant to pay $2500 in costs. That being so I do not see it as an appropriate inclusion in a costs award.
17Mr. Baldwin enlisted the assistance of his two associate lawyers, each with 8 years experience, whose hourly partial indemnity rates are $178.75 and $195. Those two associates billed a total of 7.1 hours between them on this matter. I find both the hourly rates and the amount of time expended by the associate's are reasonable.
18Mr. Baldwin also billed some 170.5 hours for services rendered by his paralegal, Ms Thompson, who has some 40 years experience as a paralegal. She assisted Mr Baldwin throughout this matter including at the counsel table through the course of the trial. Ms Thompson's partial indemnity hourly rate is $152.75 which, in my view, is a bargain for 40 years of experience in providing trial support to senior counsel. On this particular point I note the decision of this court in Lloyd v. Bush, 2020 ONSC 2892, where in dealing with a costs issue, Justice Mew found that it would be “unwise to undervalue the contribution which an experienced law clerk/paralegal provides in sophisticated…litigation”. As it happens, Justice Mew was speaking of Ms Thompson at the time. He approved Ms Thompson's personal indemnity rate of $120-$140, her rates presumably having increased through the long and tortured history of that particular case.
19I would also note that had Mr Baldwin elected to employ the services of one of his associates as co-counsel in this matter, as Mr. Forget chose to do, that associate’s billed time would have been readily accepted as an appropriate part of a costs award. I see no reason not to treat Ms Thompson's time in the same way, particularly given that her considerable experience is available at a lower hourly rate than would be the case with an associate lawyer.
20The defendant has also billed 37.4 hours for his clerk’s time at a partial indemnity hourly rate of $107.25. I agree with the plaintiff’s submission about that hourly rate being high and will therefore reduce it to the $65 per hour rate charged by Mr. Forget for his clerk.
21The defendant has included the sum of $6313.61 for disbursements. The plaintiff suggests that receipts for the defendant’s trial accommodations totalling $4221.06 should have been included. I note that the plaintiff has himself included the amount of $3491.80 for accommodations under taxable disbursements in his bill of costs, which I note are also not supported by receipts. Mr. Baldwin signed his bill of costs and certified “that the hours claimed have been spent, that the rates shown are correct and that each disbursement has been incurred as claimed”. I see no reason not to take counsel at his word on this issue. I find the disbursements incurred by the defendant are both reasonable and expected.
22Finally under this heading, the plaintiff has complained about the absence of dockets supporting the defendant’s bill of costs, having not provided any himself. The plaintiff has directed me to the case of Jura v. Carbone, wherein Justice Quinn found that dockets should be provided, “if requested”, in all cases where costs sought exceed $5,000. I did not ask for dockets, nor did I receive them from either counsel. Both counsel have been officers of this court for literally decades. Again, I see no reason not to take them at their word.
The Amount of Fees the Unsuccessful Party Could Reasonably Expect to Pay
23The plaintiff in this matter is actually an insurance company asserting its subrogated claim on behalf of its insured who did not wish to cooperate with the action. As such, the plaintiff is a sophisticated litigant that would have expected such a claim to be defended vigorously by the defendant.
24The plaintiff has filed a bill of costs which shows partial indemnity fees for plaintiff’s counsel in the amount of $96,711.50 exclusive of disbursements and HST. That amount is approximately $10,000 more than the defendant’s partial indemnity fees of $86,023.28 exclusive of disbursements and HST.
25Indeed, a comparison of both bills of costs shows that the plaintiff charged slightly more at each stage of the proceeding than did the defendant. That being the case, I am not going to follow the plaintiff’s lead and engage in an item-by-item analysis of each entry on the defendant's bill of costs. I find that the total amounts charged by each counsel on account of fees, disbursements and HST are within gunshot of one another, and both are reasonable for a trial of this length and complexity.
26I find that the amounts charged for fees, disbursements and HST by counsel for the unsuccessful plaintiff are an excellent benchmark for use in determining what the unsuccessful party in this proceeding could reasonably expect to pay in costs.
The Complexity of the Proceeding
27The governing statutes and regulations governing the handling of oil and the installation and maintenance of oil burning equipment are extensive and intricate. In this case it was also necessary to consider that legislation against the backdrop of the issue of the common law standard of care.
28The case also involved expert witnesses who were necessary in order to assist the court in understanding the oil handling regime. Qualification of the experts, and in particular Mr. Flynn, was complicated considerably by the need to identify and differentiate between participant experts and Rule 53 experts.
29In my view, both counsel were well prepared to deal with the complexities of this matter. That preparedness allowed the matter to proceed in a more focused and orderly manner than may otherwise have been the case.
Importance of the Issues
30This case involved liability for damages of approximately $700,000. That was an issue of equal importance for both parties.
The Conduct of the Parties
31Counsel for the plaintiff submits that the trial should have been completed in one week rather than two. He contends that the defendant’s so-called “scorched earth approach” and the defendant’s failure to concede the expertise of the plaintiff’s expert, Mr. Michael Flynn, unnecessarily lengthened the trial of this matter.
32I disagree. In his statement of defence in this matter the defendant put the plaintiff to the “strict proof” of both liability and quantum of damages. It is certainly true that such words are included in most statements of defence as a matter of course, sometimes without much thought. It is equally true though that some counsel actually mean what they say when they use those words. Apparently, Mr. Baldwin is one such counsel. He did hold the plaintiff to the strict proof of each and every element of its case. He is entitled to do so and he advised the plaintiff of his intention in that regard. He is not obliged to make admissions he does not wish to make, nor did he do so. The fact that the approach worked speaks for itself.
33This case was pre-tried by RSJ Edwards who, as all are aware, is well versed in the area of civil litigation. He also has extensive experience in the conduct of judicial pre-trial conferences, which usually involve the assessment and calculation of trial time. RSJ Edwards’ estimate of trial time for this matter was 10-15 court days. As it turned out, the trial of this matter took only 8 days.
34Had Mr. Baldwin conceded the issue of Mr. Flynn's expertise, as the plaintiff would have him do, then I expect the trial may well have been shorter. However, I note that Mr. Baldwin did admit Mr. Flynn was qualified to assist the court with interpretation of technical standards in the regulatory regime. I also note that Mr. Flynn himself acknowledged that he could not give expert evidence on the cause of metal failure, which was an issue in this case, nor could he opine on the standard of care required of an oil burning technician, which again was a significant issue in this case. That being so, it would appear the subject matters the plaintiff sought Mr. Flynn’s opinion on exceeded Mr. Flynn’s qualifications I see no reason why Mr. Baldwin should have made any further concessions than he did regarding Mr. Flynn.
Steps in the Proceeding
35I am also unable to find that there were any steps in that proceeding that I would characterize as being improper, vexatious, or unnecessary, or were taken by mistake, negligence, or excessive caution.
What is a Reasonable Amount?
36The successful party in an action such as this is presumptively entitled to their costs on a partial indemnity basis. I have found that the partial indemnity costs of the unsuccessful plaintiff in this matter, which exceed the partial indemnity costs of the successful party, are what a reasonable losing party might reasonably expect to pay. The overall objective of a costs award being reasonableness, I think it reasonable to award the defendant its own partial indemnity costs in the amount of $103,519.91, inclusive of all fees, disbursements and applicable HST.
37From that amount I deduct the fees charged by the defendant for the motion to compel attendance, being $3155.11, and the filing fee for that motion, being $160.00, for a total of $3315.11. I also deduct the adjustment for the hourly rate between the fees charged by the defendant’s counsel on account of work performed by his clerks, which means a reduction from the $4011.15 charged (37.4 hours X $107.25) to $2431.00 (37.4 X $65.00) for a net reduction of $1580.15. That results in a total deduction of $4895.26 ($3315.11 + $1580.15) which when subtracted from the defendant’s total partial indemnity fees of $103,519.91 leaves $98,696.65.
Conclusion
38The plaintiff shall pay the defendant it's costs of this matter in the amount of $98,696.65. within 30 days of the date of this endorsement.
Smith, J.
Date: April 13, 2022