Sean Omar Henry v. Dr. Marshall Zaitlen, 2022 ONSC 3050

COURT FILE NO.: CV-12-459089

DATE: 20220519

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SEAN OMAR HENRY, personally and as Estate Trustee for the Estate of SANDY ROBINSON

Plaintiffs

Barbara A. MacFarlane and Michael D. Hodgins, for the Plaintiffs

• and -

DR. MARSHALL ZAITLEN, DR. EDGAR JAN, DR. JOSEPH FAIRBROTHER, DR. HILAIRE LOUISE SHEEHAN, DR. VERA BRIL, DR. ROBERT KURTZ, DR. JOHN DOE, JANE DOE, JOAN DOE, WILLIAM OSLER HEALTH CENTRE – BRAMPTON CIVIC HOSPITAL and UNIVERSITY HEALTH NETWORK – TORONTO GENERAL HOSPITAL

Defendants

Frank McLaughlin, Stephanie Sugar, and Christine Windsor, for the Defendant, Dr. Marshall Zaitlen

HEARD: (In writing):

May 19, 2022

A.A. SANFILIPPO J.

ENDORSEMENT ON COSTS

Overview

[1] After the jury verdict rendered in the trial of this action on December 13, 2021, granting judgment in favour of the Plaintiffs, Sean Omar Henry and the Estate of Sandy Robinson, against the only defendant against whom this trial proceeded, Dr. Marshall Zaitlen, the issue of costs was reserved pending the determination of post-verdict motions. The Defendant objected to the Plaintiffs’ motion for judgment and sought to advance a motion under Rule 52.08(1) (b) and (c) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. This was settled through the parties’ agreement to vary the jury verdict. The remaining post-verdict motion, being a motion by the Defendant to deduct long-term disability benefits and pension contribution benefits from the jury’s award for past income loss (the “Benefits Deduction Motion”), has been dismissed: Sean Omar Henry v. Dr. Marshall Zaitlen, 2022 ONSC 2718.

[2] The parties delivered their written submissions on the issue of costs in accordance with a timetable established by endorsement on February 14, 2022. The Plaintiffs delivered cost submissions in support of their claim for costs of this 11-year action and 25-day trial in the amount of $1,135,676.15, all inclusive. The Defendant did not contest that the Plaintiffs were entitled to an award of costs by reason of their success in this action but submitted that a fair and just award for costs, inclusive of taxes, is $650,000, all inclusive.

[3] The difference in the parties’ positions in cost quantification is mainly attributable to one issue. The Defendant served an offer to settle the issue of damages in this trial at an amount that, in the result, was higher than the damages awarded by the jury. The Defendant submitted that at least half of the length of this trial, and thereby half the trial costs, were unnecessarily incurred by the Plaintiffs’ rejection of the Defendant’s offer to settle the issue of damages. The parties’ dispute on costs was principally on the consequences associated with the Plaintiffs’ failure to obtain a judgment that was as favourable or more favourable than the damage quantification offered by the Defendant.

[4] On the basis of the reasons that follow, I award the Plaintiffs costs of this action, payable by the Defendant, Dr. Marshall Zaitlen, on a partial indemnity basis, fixed in the amount of $800,000, all inclusive of fees, disbursements and applicable taxes.

I. FRAMEWORK FOR ANALYSIS

A. The Issue of Entitlement to Costs

[5] The Plaintiffs initiated this action in 2012, followed by some 11 years of litigation before proceeding to trial on November 8, 2022, with a jury verdict rendered on December 13, 2022. The jury found in favour of the Plaintiffs on the issues of standard of care and causation. After being varied on the parties’ agreement in settlement of the Defendant’s proposed motion under Rule 52.08, the amount of the jury’s award of damages, inclusive of pre-judgment interest, totaled $1,918,491.96.

[6] The Defendant did not, at any time, serve an Offer to Settle the action.

[7] The Plaintiffs delivered an Offer to Settle under Rule 49.10(1), on March 12, 2020, proposing settlement through payment by the Defendant of the amount of $3,275,000 in damages and costs in the amount of $549,706 plus applicable taxes. The Plaintiffs did not obtain a judgment “as favourable as or more favourable than the terms of the offer to settle”, as would be required to activate Rule 49.10(1) and thereby seek costs on a substantial indemnity basis from March 12, 2020 onward.

[8] The Plaintiffs claimed costs on a partial indemnity basis based on their success in obtaining judgment. The Defendant did not dispute that the Plaintiffs had an entitlement to an award of costs, consistent with the principle that absent special circumstances, “costs follow the event”: Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 CanLII 239 (ON CA), 111 D.L.R. (4th) 589 (Ont. C.A.); Yelda v. Vu, 2013 ONSC 5903, at para. 11, leave to appeal refused, 2014 ONCA 353; St. Jean v. Cheung, 2009 ONCA 9, at para. 4; 1318706 Ontario Ltd. v. Niagara (Municipality) (2005), 2005 CanLII 16071 (ON CA), 75 O.R. (3d) 405 (C.A.), at paras. 48-52.

[9] The disagreement between the parties was focused on the quantification of the cost award to be paid by the Defendant to the Plaintiffs.

B. The Parties’ Positions

[10] The Plaintiffs’ Bill of Costs, delivered in accordance with Rule 57.01(5), sets out their cost demand of $802,066.68 in fees, $104,268.67 in HST and $229,340.80 for disbursements, inclusive of applicable taxes, for a total cost demand of $1,135,676.15, all inclusive. The Plaintiffs submitted that the partial indemnity hourly rates that they billed, and the number of hours, are reasonable and within the reasonable expectation of the Defendant. The Plaintiffs submitted that the Defendant unreasonably refused to admit facts that caused the trial to be longer than necessary.

[11] The Defendant did not dispute the Plaintiffs’ entitlement to partial indemnity costs to October 13, 2021, the date that the Defendant delivered an offer to settle the issue of damages on the following terms (the “Defence Offer to Settle Damages”):

1. The quantum of all damages claims (including all non-pecuniary and pecuniary heads of damages, all FLA claims, all Estate claims, all subrogated claims, and interest) shall be the agreed upon amount of $2,150,000.

2. This offer to agree to the quantum of damages shall remain open until revoked in writing or five minutes after the commencement of trial, whichever occurs first.

3. This amount shall become payable to the plaintiff only in the event that the jury finds that the defendant breached the standard of care and that the plaintiff’s injuries would have substantially been avoided but for the breach of standard by the defendant.

[12] The Plaintiffs did not accept the Defence Offer to Settle Damages. Rather, the Plaintiffs delivered, on November 7, 2021, an offer to settle the issue of damages on the following terms (the “Plaintiff Offer to Settle Damages”):

1. The quantum of all damages payable to the Plaintiffs, Sean Henry and the Estate of Sandy Robinson, shall be the agreed amount of $3,850,000 inclusive of all pecuniary, non-pecuniary, and subrogated claims, and interest arising therefrom.

2. This amount shall be payable to the Plaintiffs only in the event that the Jury finds that Dr. Zaitlen breached the standard of care and answers “yes” to the causation question that is put to them, the wording of which will be determined on motion.

3. This offer to settle is not inclusive of costs, which shall be agreed upon or determined by the Trial Judge in the event the Plaintiff is successful in proving liability.

4. This offer to settle damages shall remain open until revoked in writing or 5 minutes after the commencement of trial, whichever occurs first.

[13] It is undisputed that the Plaintiffs obtained a Judgment that was less favourable ($1,918,491.96) than the Defence Offer to Settle Damages ($2,150,000). The Defendant offered to settle the quantification of damages at an amount over $230,000 more than the jury’s award. The Defendant submitted that this activates the cost consequences set out in Rule 49.10(2), which provides as follows:

Where an offer to settle,

(a) is made by a defendant at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the plaintiff,

and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.

[14] The Defendant showed that the fees associated with the Plaintiffs’ attendance at trial, as assessed from the Plaintiffs’ Bill of Costs, totaled $191,423.52. And the Defendant showed, from the Defendant’s Bill of Costs, that the Defendant incurred $207,280.80 in trial fees. The Defendant submitted that one-half of the trial fees were attributable to the issue of damages. Accordingly, with reference to the cost consequences under Rule 49.10(2), the Defendant submitted that the Plaintiffs should not receive any award of costs for trial fees and disbursements incurred after October 13, 2021 in regard to the issue of damages, and that the Defendant should receive an award of partial indemnity costs incurred in relation to the issue of damages after October 13, 2021.

[15] Put arithmetically, the Defendant submitted that the cost consequences of the Plaintiffs’ failure to achieve a result at trial that was more favourable than the Defence Offer to Settle Damages are as follows:

(a) in relation to trial fees, the Defendant submitted that: (i) the Plaintiffs should not receive one-half of their trial fees, being the amount of $95,711.76; and (ii) the Defendant should be awarded or have set-off for one-half of his trial fees, being the amount of $103,640.40.

(b) in relation to disbursements, the Defendant submitted that: (i) the Plaintiffs should not receive the amount of $57,598 in disbursement expense related to the preparation and attendance of expert witnesses at trial to testify on the issue of damages; and (ii) the Defendant should be awarded disbursements totaling $58,056 in expert fees for defence experts to testify at trial on the issue of damages.

(c) in relation to trial preparation, the Defendant submitted that the Defendant should be awarded the amount of $49,692.90 on account of legal fees incurred from the date of the Defence Offer to Settle Damages to the date of trial on account of preparation of the defence of the issue of damages.

[16] Apart from the cost consequences related to the Defence Offer to Settle Damages, the Defendant submitted that the amount of $78,855.54 should be deducted from the Plaintiffs’ Bill of Costs on account of unnecessary duplication resulting from the Plaintiffs’ alleged failure to collaborate in efficient trial preparation, and for duplication in multiple sessions of trial preparation resulting from adjournments caused by the COVID pandemic.

[17] The Plaintiffs contended that the Defence Offer to Settle Damages did not activate Rule 49.10(2) because (i) it was not a valid Rule 49 offer because it was made “shortly before trial” and (ii) because the Defence Offer to Settle Damages was significantly less than the losses quantified by the Plaintiffs’ experts on the issue of damages. Further, the Plaintiffs contended that the costs associated with the damages portion of the trial were inflated by the Defendant’s refusal to admit facts that should have been uncontroversial, and that the Defendant vigorously contested causation at trial despite not having delivered any dedicated report on the issue of causation.

II. APPLICABLE LEGAL PRINCIPLES

[18] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides the court with discretion in the determination of costs. The exercise of this discretion is guided by the principles set out in Rule 57.01, and applicable jurisprudence, having regard for the overriding principles of reasonableness, fairness and proportionality: Barbour v. Bailey, 2016 ONCA 334, at para. 9; Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12, leave to appeal refused, [2019] S.C.C.A. No. 82; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 38; Zesta Engineering Ltd. v. Cloutier, 2002 CanLII 25577 (ON CA), [2002] O.J. No. 4495 (C.A.), at para. 4.

[19] The rules and principles pertaining to the issue of costs have three principal purposes: (i) to indemnify successful litigants for the expense of litigation; (ii) to encourage settlement; and, (iii) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (C.A.), at para. 22.

A. Distributive Costs Awards

[20] The Defendant urges the fixing of costs on an issue-centric basis. Specifically, while the Defendant concedes that the Plaintiffs are entitled to an award of costs based on their success at trial, the Defendant seeks costs from the time of delivery of the Defence Offer to Settle Damages. The Defendant thereby submits that he should receive an award of trial costs on the issue of damages while the Plaintiffs receive the costs of this action except for the issue of damages.

[21] The fixing of cost on an issue-by-issue basis constitutes a “distributive costs award”. This can be traced to Godfrey v. Good Rich Refining Co., 1939 CanLII 423 (ON SC), [1939] 2 D.L.R. 779 (Ont. H.C.), where the plaintiff succeeded on only certain of several claims but was successful in obtaining an injunction. Following Reid, Hewitt & Co. v. Joseph, [1918] A.C. 717, the Court determined costs on an issue-by-issue basis and set off the costs allocated to the plaintiff on successful issues against those allocated to the defendant on claims that the plaintiff failed to establish.

[22] The distributive costs award rendered in Godfrey was commented upon by the Ontario Court of Appeal in Armak Chemicals Ltd. v. Canadian National Railway Co. (1991), 1991 CanLII 7060 (ON CA), 5 O.R. (3d) 1 (C.A.), (sub nom Oakville Storage & Forwarders Ltd. v. C.N.R. Co.) 1991 CanLII 8353 (ON CA), 84 D.L.R. (4th) 326. The Court of Appeal traced the origins of distributive costs orders to two English cases relied upon in Godfrey, both in the period from 1915 to 1918, and stated, at p. 8: “It is not necessary to the present issues to determine whether a distributive award is ever appropriate under our present rules and, while I find it difficult to imagine that it could be, this was certainly not the proper case.”

[23] The decision in Armak has significant parallels to the present case. There, the trial judge identified five issues, and awarded costs based on the parties’ success on each of the five issues without regard to overall success in the action. One of the issues was the issue of damages, wherein the trial judge granted costs to the defendant who, like here, offered to settle damages at a level above the plaintiff’s recovery at trial.

[24] The Court of Appeal set aside the distributive cost order. The Court of Appeal commented, at pp. 6-7, that the defendant’s offer to settle the issue of damages “does not qualify as an offer under rule 49.10 because it was not an offer to pay that amount, only one to fix the assessment, and cannot be compared directly to a judgment as contemplated by the rule.” However, the Court of Appeal stated, at p. 7, that the defendant’s offer to settle the issue of damages could be considered under Rule 49.13, and that other matters affecting the conduct of the proceeding may be considered under Rule 57.01. The Court of Appeal instructed, at p. 9, that the defence offer to settle should be taken into consideration in the Court’s general exercise of its discretion in the fixing of costs:

Individual issues can be dealt with more appropriately under the general discretion and explicit guidance set forth in rule 57.01(1). This is not to say that offers restricted to settling issues are unimportant: quite the contrary. Rule 49.13 authorizes the court to consider any offer when awarding costs. The offer of CNR to fix the assessment of damages was reasonable, understandably did not extend to judgment because Oakville Storage had more than one capacity in the action, was related to the evidence it intended to present, and was refused by a party who occupied 12 days of trial in what appears to have been a vain effort to accomplish an unrealistic recovery. This should not go unnoticed in the exercise of the general discretion.

[25] In Skye v. Matthews (1996), 1996 CanLII 1187 (ON CA), 47 C.P.C. (3d) 222 (Ont. C.A.), the Court of Appeal overturned a trial judge’s decision to award costs on a distributive basis. There, the trial judge had awarded the successful plaintiff the costs of the jury trial, except for that part of the trial that dealt with loss of past and future income, for which costs were awarded to the defendant. The Court of Appeal wrote, at para. 15, that in Armak, “Carthy J.A. considered the merits of distributive cost orders and generally rejected that approach to the allocation of costs in litigation involving a number of issues where success was divided. He concluded that a distributive costs order was inconsistent with the offer to settle rules.” The Court stated, at para. 17, that the Rules do not allow for determination of costs on a distributive cost basis: “There is nothing in the offer to settle rules, or the relevant policy considerations, which suggests that eligible offers should be viewed on an issue by issue basis.”

[26] Since these Court of Appeal decisions, several courts have considered distributive cost awards, and have uniformly declined to grant them. In each case, the Court took into account the successful parties’ failure on a discrete issue or issues as part of the exercise of its discretion in the fixing of costs.

[27] In Ford Motor Company of Canada Limited v. Ontario (Municipal Employees Retirement Board), 2004 CanLII 53391 (ON SC), [2005] O.J. No. 1377 (S.C.), at para. 51, Cumming J. declined to grant a distributive award of costs, applying Armak, with comment that the offer to settle rules are result-oriented and not issue-oriented.

[28] In Ontario Realty Corporation v. P. Gabriele & Sons Limited, 2009 CanLII 68828 (Ont. S.C.), at paras. 27-35, Newbould J. thoughtfully reviewed the case authorities that had considered distributive cost awards since Armak and found that in each instance, the Court declined to make a distributive cost award and instead reduced the successful parties’ costs to take into consideration the divided success. Justice Newbould summarized his survey of the case law at para. 35:

I take from all these cases the proposition that generally if the plaintiff has succeeded on some but not all issues, the plaintiff, not the defendant, is entitled to costs but the trial judge is entitled to take into consideration the time and expense involved in those issues that were not successful. Only rarely, perhaps, may a distributive cost order be made.

[29] In McLaughlin v. Airston Realty Corp., [2004] O.J. No. 1456 (S.C.), at paras. 9-10, Swinton J. awarded costs to the successful plaintiff but reduced them by 50 percent because the plaintiff was unsuccessful on two issues that took up a substantial amount of trial time. She declined to make a distributive cost award, stating that the “Court of Appeal has made it clear that a distributive costs award should be made only in a rare case”. Rather than make a distributive cost award, Justice Swinton took the plaintiff’s failure on two issues into consideration as part of the exercise of discretion on the issue of costs:

I do not make [a distributive cost award] here. However, I do have a discretion pursuant to Rule 57.01.(1)(b) to consider apportionment of liability, and pursuant to Rule 57.01(4)(a) to award costs or refuse costs in respect of a particular issue or part of a proceeding. In my view, the costs awarded to the plaintiff should reflect the fact that she was unsuccessful on two important issues that took up a substantial amount of trial time.

[30] Justice Swinton made a similar finding in Adatia v. Damji (Receiver of) (2005), 2005 CanLII 5345 (ON SC), 8 C.B.R. (5th) 165 (S.C.), where the Applicant’s costs were reduced by 70% by reason of failure on a major issue that occupied significant court time. The Court relied on Rule 57.01(4), which confirms the authority of the court to award or refuse costs in relation to a particular issue or part of a proceeding.

[31] The Defendant submitted that he is not seeking a distributive costs award as he is “not seeking to parse the determination of individual issues within a cause of action”. I do not accept this submission. The principles set out by the Court of Appeal in Armak and Skye are controlling. Absent the “rare case”, which this is not as it raises the same costs issues as were decided in Armak, costs are determined on a results basis, and not on an issue-by-issue basis.

[32] Although the Defence Offer to Settle Damages does not have a role as part of a distributive costs award, it still has a role in the exercise of my discretion on the issue of costs, as I will now explain.

B. Rules 49.10(2) and 49.13

[33] Rule 49.10(2) gives rise to cost consequences in favour of the defendant and detrimental to the plaintiff where the defendant serves a valid offer to settle that is not accepted by the plaintiff and where the judgment then obtained by the plaintiff is “as favourable as or less favourable than the terms of the offer to settle”.

[34] In Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at para. 16, the Court of Appeal stated that Rule 49 is a “self-contained scheme that addresses the manner in which offers to settle are brought into play”. The Court of Appeal emphasized, in Barresi v. Jones Lang Lasalle Real Estate Services Inc., 2019 ONCA 884, at para. 17, that “Rule 49.10 provides a presumption as to costs where an offer to settle is not accepted, ‘unless the court orders otherwise’”. The discretion to depart from this presumption is “not unfettered” and the presumption should apply in the majority of cases to help “ensure that the rule is applied in a reasonably predictable fashion, and thereby avoids blunting the rule’s incentives ‘to induce settlements and avoid trials’”: Barresi, at para. 17, relying on Jarbeau v. McLean, 2017 ONCA 115, 410 D.L.R. (4th) 246, at para. 82; Cimmaster v. Piccione (Manufacturing Technologies Company), 2011 ONCA 486, 336 D.L.R. (4th) 506, at para. 32. Commonly invoking the exception would undermine and avoid the purpose of the incentive set out in Rule 49.10 to encourage settlement. In Niagara Structural Steel (St. Catherines) Ltd. v. W.D. Laflamme Ltd. (1987), 1987 CanLII 4149 (ON CA), 58 O.R. (2d) 773 (C.A.), the Court explained, at p. 777, that the cost consequences of Rule 49.10 should be applied unless the “interests of justice require a departure”.

[35] Indeed, where Rule 49.10 is activated by a valid and effective Rule 49 Offer to Settle, it is an error in principle to depart from the presumptive cost consequences even in the case of divided success: Barresi, at para. 20.

[36] The Defendant submitted that the Defence Offer to Settle Damages is a valid and effective offer to settle consonant with Rule 49. I do not accept this submission. The Court of Appeal directly addressed this issue in Armak, at pp. 6-7, and held that an offer to settle the issue of damages “does not qualify as an offer under rule 49.10 because it was not an offer to pay that amount, only one to fix the assessment”. This was reinforced by the Court of Appeal in Skye, at para. 17, where the Court stated that “[t]here is nothing in the offer to settle rules, or the relevant policy considerations, which suggests that eligible offers should be viewed on an issue by issue basis.”

[37] The Defendant relied on the finding in Visneskie v. Visneskie, [2003] O.J. No. 1554 (S.C.), at para. 8, that: “Rule 49.02(1) expressly provides that an offer may relate to one or more particular issues and need not encompass all.” In Visneskie, the Court addressed the cost consequences of a party having made two separate offers to settle, each specific to discrete elements of the family law case: economic claims of support; and, terms for parenting and decision-making. Taken together, they were said to constitute an offer to settle all the issues in the trial. This is distinguishable from the present case, where the Defence Offer to Settle Damages is not an offer to pay damages, but only an offer to fix the quantification of damages.

[38] Notwithstanding my determination that the Defence Offer to Settle Damages does not activate Rule 49.10(2), it still has a role in my cost assessment. Rule 49.13 provides as follows:

Despite rules 49.03, 49.10 and 49.11, the court, in exercising its discretion with respect to costs, may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer.

[39] The Defence Offer to Settle Damages was made in writing, almost a month before the start of trial. It was clearly intended to “promote an offer of compromise”, to encourage settlement, and to visit the consequences of continued litigation on the party who rejects the offer and fails to achieve a better result: Davies, at para. 16. It thereby merits consideration.

[40] I will take the Defence Offer to Settle Damages into consideration in my analysis of costs.

III. ANALYSIS

[41] Rule 57.01 sets out the factors that guide my exercise of discretion in the awarding of costs.

A. Divided Success

[42] Rule 57.01(1) requires that the court consider “the result in the proceeding” in “exercising its discretion in the determination of costs.”

[43] The Plaintiffs succeeded in the result. However, the Plaintiffs’ success on the issue of damages must not be assessed on whether they recovered any amount, at all, but rather must be assessed with reference to the Defence Offer to Settle Damages. Taking into consideration the Defence Offer to Settle Damages, in accordance with Rule 49.13, the Plaintiffs were not successful in their claim for damages because they did not recover an amount at trial that was in excess of the amount offered by the Defendant.

[44] In obtaining judgment in the amount of $1,918,491.96, the Plaintiffs recovered $230,000 less than would have been realized had they accepted the Defence Offer to Settle Damages, and fell considerably short of the $3,850,000 plus costs demanded by the Plaintiffs in the Plaintiff Offer to Settle Damages.

[45] I will thereby discount the amount of costs that I will award the Plaintiffs by reason of the Plaintiffs’ divided success at trial. My assessment of the extent of discount in costs resulting from divided success will take into consideration all factors listed in Rule 57.01, which are affected by the impact of litigating the issue of damages in this trial.

B. The Impact of Litigating the Issue of Damages

[46] Rule 57.01(4) sets out the court’s authority to “award or refuse costs in respect of a particular issue or part of a proceeding” and to “award a percentage of assessed costs or award assessed costs up to or from a particular stage of a proceeding”. Rule 57.01(1)(e) authorizes consideration of the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding.

[47] This trial proceeded for 25 days. The litigation of the issue of damages resulted in the following trial processes:

(a) The afternoon of the first day of trial, November 8, 2022, following the morning of jury selection, was spent in argument of the Plaintiffs’ motion to limit the admissibility of evidence pertaining to Mr. Henry’s receipt of income loss benefits.

(b) Several trial objections were predicated on the admissibility of income loss benefit documents and oral evidence.

(c) A total of 11 witnesses, including at least 10 expert witnesses were called to testify on the issue of damages: Dr. Lesley Carr (urology); Dr. Albert Cheng (physiatry and physical medicine); Dr. Eli Katz (economist); Ms. Patricia Howell (occupational therapist); Ms. Amina Shafi (registered occupational therapist); Dr. Gerald Brock (urology); Dr. Anthony Burns (physical medicine and rehabilitation); Dr. Douglas Hyatt (economist); Ms. Angela Fleming (occupational therapist); Ms. Christine MacGregor (vocational rehabilitation).

(d) At least 21 expert reports were served on the issue of damages.

(e) Over 3,000 pages of documents in 6 volumes of briefs were marked as exhibits at trial on the issue of damages.

(f) At least 30 pages of the 112-page Jury Charge, specifically pages 79-109, were dedicated to the issue of damages, together with the attendant increased court time required to address the Jury Charge on the issue of damages with counsel in the pre-charge hearing and to orally deliver the Jury Charge.

(g) On several trial days, the Court either started early or sat late to hear submissions on the jury questions, including the jury question on damages which feature prominently, including as follows: (i) the Plaintiffs’ proposed multi-page schedule to the Jury Question on damages which would require the Jury to provide numerous individual answers on the minutia of the categories and sub-categories of the damage claim; (ii) the Defendant’s submission that the Jury should be asked to answer a specific question on mitigation of damages: Sean Omar Henry v. Dr. Marshall Zaitlen, 2022 ONSC 318.

(h) In addition to the trial motions already set out, the issue of damages resulted in the following trial motions: (i) Plaintiffs’ motion to recall Mr. Henry to testify to out-of-pocket expenses; (ii) Plaintiffs’ motion to recall Dr. Katz to testify to present value of elements of the damage claim; (iii) Defendant’s motion to remove from the Jury the damage claims for out-of-pocket expenses and past value of care; (iv) the Defendant’s post-verdict motion for deduction of income loss benefits from the jury award for past income loss: Sean Omar Henry v. Dr. Marshall Zaitlen, 2022 ONSC 2718.

[48] In Tahir v. Mitoff, 2019 ONSC 7298, Justice Wilson cited the Best Practices for Medical Malpractice Cases, from the Holland Group, which provides as follows: “In an ideal world, damages would be settled before any trial and counsel should work towards this result. Where damages cannot be settled in their entirety, however, counsel should agree on those heads of damages that can be settled and eliminate those issues. No trial should proceed with all damages issues as live issues.”

[49] This trial proceeded with “all damages issues as live issues”. This made the trial longer than necessary and increased the costs.

[50] The Plaintiffs submitted that 40% of the trial (10 of 25 days) was dedicated to evidence on the issue of damages. This understates the amount of trial time that was occupied by the damage issue additional to the tendering of evidence on this issue.

[51] The Defendant submitted that the trial would have been conducted in less than half the 25 days but for the Plaintiffs’ rejection of the Defence Offer to Settle Damages. I accept this submission and will consider it in my assessment of costs, in accordance with Rules 57.01(1), 57.01(4) and 57.01(1)(e).

C. Reasonableness of the Fees and Disbursements

[52] I have considered the reasonableness of the Plaintiffs’ fees and disbursements, in accordance with Rule 57.01(1)(0.a). The lawyers, clerks and law student fees claimed by the Plaintiffs are on a partial indemnity basis, calculated as 60% of the substantial indemnity fee. I am satisfied that this is within the range set out by the Court of Appeal and this Court for partial indemnity fees: Canadian National Railway Company v. Royal and Sun Alliance Insurance Company of Canada, 2007 ONCA 531, at para. 6; Eastern Power Limited v. Ontario Electricity Financial Corporation, 2012 ONCA 366, at paras. 11, 26; Inter-Leasing, Inc. v. Ontario (Revenue), 2014 ONCA 683, at para. 5; Bain v. UBS Securities Canada Inc., 2018 ONCA 190, 46 C.C.E.L. (4th) 50, at para. 32; Stetson Oil & Gas Ltd. v. Stifel Nicolaus Canada Inc., 2013 ONSC 5213, at paras. 24-25; GB/Plasman v. APP Holdings, 2013 ONSC 6401, at paras. 13-14. I am also satisfied that the hourly rates charged by the Plaintiffs’ legal advisers are reasonable for the level of seniority of the lawyers involved.

[53] I find that the amount of time docketed by the Plaintiffs’ legal advisers is reasonable, particularly when applying the statement by Nordheimer J., as he then was, in Basdeo v. University Health Network, [2002] O.J. No. 597 (S.C.), at para. 7, that it is not “the role of the court to second-guess the time spent by counsel unless it is manifestly unreasonable in the sense that the total time spent is clearly excessive or the matter has been ‘over-lawyered’”.

[54] Similarly, the disbursements claimed by the Plaintiffs are, in my view, reasonable, considering the length of this proceeding, the matters in issue and the evidence adduced at trial.

[55] An analysis of the Plaintiffs’ Bill of Costs with the Defendant’s Bill of Costs show that the Plaintiffs’ fees and disbursements are comparable to the Defendant’s. I am thereby satisfied that the amount claimed by the Plaintiffs was within the reasonable expectation of the unsuccessful party, a relevant consideration under Rule 57.01(1)(0.b)

D. Costs Thrown Away

[56] I do not accept the Defendant’s submission that the Plaintiffs are liable to them in costs for adjournments caused by the COVID pandemic. The COVID pandemic resulted in the abeyance of jury trials, like this case, with a resultant delay in adjudication until the public health requirements permitted the safe conduct of jury trials. The expense in costs thrown away caused by the pandemic was not the fault of either the Plaintiffs or the Defendant.

[57] Similarly, I do not accept the Defendant’s submission that the Plaintiffs’ conduct in the assembly and tendering of joint document books resulted in wasted or duplicated costs. And I do not accept the Plaintiffs’ submissions that the Defendant improperly refused to make admissions that lengthened the trial.

IV. CONCLUSIONS

[58] The Plaintiffs’ success at trial gives rise to a presumptive entitlement to an award of costs, which I will grant. The Plaintiffs have shown that the partial indemnity fees, disbursements, and applicable taxes set out in the Plaintiffs’ Bill of Costs, in the amount of $1,135,676.15, all inclusive, are reasonable values for expenses incurred in this 11-year action and 25-day trial.

[59] I do not accept the Defendant’s submission that costs can be assessed and awarded in favour of the Defendant separately for the issue of damages without contravention of the principles pertaining to distributive costs awards as set out by the Court of Appeal. I do not accept the Defendant’s submission that the Defence Offer to Settle Damages constitutes a valid offer under Rule 49, as necessary to give rise to the presumptive application of the cost consequences under Rule 49.10(2).

[60] However, I am satisfied that, in accordance with Rule 49.13, the Defence Offer to Settle Damages can be taken into account as part of my determination of whether the Plaintiffs were successful on the issue of damages at trial. The Defence Offer to Settle Damages had the effect, in my view, of raising the bar on an assessment of success on the issue of damages from $1 to $2,150,000. The Court of Appeal explained in Armak, at p. 9, that Rule 49.13 authorizes the Court to consider any offer when awarding costs including to assess whether a party rejected a reasonable offer of compromise. On this analysis, the Plaintiffs’ failure to recover more damages than those offered by the Defendant prior to trial resulted in divided success at trial.

[61] The Defence Offer to Settle Damages is also material to the exercise of my discretion in analysing whether the conduct of the Plaintiffs unnecessarily lengthened the proceeding, considering my authority “to award or refuse costs in respect of a particular issue or part of a proceeding” or “to award a percentage of assessed costs or award assessed costs up to or from a particular stage of a proceeding”, in accordance with Rule 57.01(4)(a) and (b).

[62] In my view, all these factors support a deduction of 30% to the Plaintiffs’ proven costs. But that does not end the analysis.

[63] The overarching objective of quantification of costs is to determine an amount that is fair, reasonable, and proportionate, understanding that the mathematical quantification of what the successful litigant has spent in legal fees is pertinent but not dispositive. In Zesta, at para. 4, the Court of Appeal stated: “In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.” The quantification of costs is not a mere mathematical exercise in as much as a determination of what is fair and reasonable: Boucher, at para. 38.

[64] Considering all the factors set out in Rule 57.01, and applicable case law, and in the exercise of my discretion under s. 131 of the Courts of Justice Act, I conclude that it is fair, reasonable and proportionate to fix the Plaintiffs’ costs of this action, on a partial indemnity basis, payable by the Defendant, Dr. Marshall Zaitlen, in the amount of $800,000, all inclusive of legal fees, disbursements and applicable taxes.

[65] For clarity, this cost award of $800,000, all inclusive, does not affect the costs already awarded to the Plaintiffs in the amount of $17,515, all inclusive, upon determination of the Benefits Deduction Motion: Sean Omar Henry v. Dr. Marshall Zaitlen, 2022 ONSC 2718, at paras. 97-98.

V. DISPOSITION

[66] On the basis of these reasons, I order as follows:

1. The Plaintiffs, Sean Omar Henry and the Estate of Sandy Robinson, are awarded costs of this action, on a partial indemnity basis, payable by the Defendant, Dr. Marshall Zaitlen, fixed in the amount of $800,000, all inclusive of legal fees, disbursements and applicable taxes.

A.A. Sanfilippo J.

Date: May 19, 2022