COURT FILE NO.: CV-20-00000521-0000
DATE: 05 30 2022
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARILYN ANN BLOCK
Plaintiff
– and –
WINSTON BROWN and THE CORPORATION OF THE CITY OF MISSISSAUGA
Defendants
J. Strype, Counsel for the Plaintiff
A. Cole for the Defendants
Heard: In Writing
COST ENDORSEMENT
L. Shaw J.
Introduction
[1] The plaintiff, Ms. Block, was struck by a bus owned by the City of Mississauga and operated by the defendant, Winston Brown, an employee of the City of Mississauga, on September 30, 2016. Ms. Block was a pedestrian crossing a street in Mississauga when the bus was turning right at the intersection and hit her.
[2] The action was to proceed to trial in January 2022. On December 23, 2021, the defendants served a Rule 49 Offer to Settle for $25,000.00 plus costs to be assessed or agreed upon. In submissions filed for cost purposes, counsel for Ms. Block states that due to Ms. Block’s health, she could not make her own case at trial and the trial itself could be life threatening to her. The offer was, therefore, accepted.
[3] The parties can not agree on costs. The issue has come before me to resolve.
Review of the Litigation
[4] Other than the cost submissions, which included two expert reports, copies of various emails, letters, and excerpts from discovery transcripts, I do not have any evidence with respect to how this litigation was conducted. As such, my review of the litigation is pieced together from the material filed.
[5] At the time of the accident, Ms. Block was 87 years of age. She is now 93. One of the concerns is her declining cognitive deficits. Plaintiff’s counsel indicated in his cost submissions that when meeting with Ms. Block in the months prior to the scheduled trial, her deteriorating mental condition became a growing concern. She also had physical medical problems. These ailments made it difficult for Ms. Block to review the facts and circumstances of the accident and, together with her injuries, rendered her unable to coherently testify at trial. Ms. Block also battled COVID-19 in the fall of 2021 which impacted her health. Dr. Bruno, a neurophysiatrist retained by plaintiff’s counsel, was also concerned that the trial would be detrimental to Ms. Block’s life. Although plaintiff’s counsel had assessed the claim to be worth significantly more than the defendants’ Offer to Settle, given Ms. Block’s condition, the defendant’s offer of $25,000, with costs to be agreed upon, was accepted.
[6] While both parties allege the other delayed the action, I do not consider delay to be a factor in assessing costs.
[7] The Statement of Claim was issued on July 31, 2017, and the Statement of Defence was served on October 3, 2017. The defendants denied liability for the accident saying Ms. Block was walking across an intersection on a red light.
[8] Examinations for discovery were conducted on December 21, 2017, just one month after pleadings were exchanged. It is not uncommon to see discovery dates scheduled months if not years after pleadings are exchanged, so that was a very timely scheduling. There was certainly no delay in conducting discoveries.
[9] Both parties exchanged Affidavits of Documents prior to discoveries. By way of letter, dated December 5, 2017, the defendants served the plaintiff and asked counsel if he required any of the Schedule A documents. The Affidavit of Documents included a document identified as “Mississauga Transit Bus Surveillance Video”. Plaintiff’s counsel first requested that document on July 17, 2018. That same day, it was sent to plaintiff’s counsel. As a result of some technical issues, it was not viewed until the end of August 2018. I was not provided with any explanation with respect to why this video was not requested prior to discoveries once the affidavit of documents was served.
[10] Approximately two years later, in May 2020, after retaining an engineering expert, plaintiff’s counsel requested a signal timing report for the intersection where the accident occurred. It was provided to plaintiff’s counsel in December 2020. It was not a document listed in the defendants’ affidavit of documents. It appears that this document was requested after the surveillance video was viewed by the expert retained by the plaintiff.
[11] The defendants’ denial of liability was based to a certain extent on the evidence of the defendant driver that he saw Ms. Block crossing the intersection on a red light when the impact occurred.
[12] At some point after receiving the surveillance video, plaintiff’s counsel retained an engineering expert to determine whether the pedestrian signal was red or green when Ms. Block commenced walking through the intersection. Unfortunately, no information was provided about when that expert was retained. While a copy of the report from Rosa Engineering and Design Ltd was filed as part of the cost submissions, it is not dated.
[13] According to the defendants’ cost submissions, there were two engineering reports. The first was a preliminary report that the defendants say was served on May 8, 2020, one business day prior to a mediation. The preliminary finding in that report was that Ms. Block was crossing on a green light. The final engineering report was served on May 31, 2021. The defendants did not retain an expert to review that report but eventually admitted liability on December 23, 2021, the eve of trial.
[14] It is not clear to me why it took the plaintiff close to two years to secure an expert’s initial opinion on liability when the surveillance report was part of the defendant’s affidavit of documents that the plaintiff had since December 2017. It is also not clear to me why the defendants, who had the burden of disproving negligence, took no steps to obtain an expert opinion or waited until the eve of trial to admit liability.
[15] In addition to the dispute regarding liability, the parties also assessed damages very differently. Mr. Cole, for the Defendants, wrote to Mr. Strype, for the plaintiff, on March 2, 2018, setting out his client’s views on liability and damages. He assessed the claim as being one that would not meet the threshold or exceed the statutory deductible but invited Mr. Strype to present an Offer to Settle.
[16] Mr. Strype set out a settlement proposal in a letter dated June 8, 2018, assessing general damages at $75,000 and future care at $25,000. Costs and disbursements totalled $33,517.11. The total offer was $133,517.11.
[17] In response, Mr. Cole made an offer for $2,000 all in by way of email dated June 22, 2018.
[18] These offers underscore the different view held by counsel regarding damages.
[19] On December 12, 2018, Mr. Strype withdrew the offer citing his client’s medical problems and said he would be prepared to recommend a settlement of $175,000 all in.
[20] Although this accident occurred in Mississauga and Ms. Block lives in Mississauga, the action was commenced in Toronto. In early 2019, there was an exchange of letters and emails between counsel about transferring the action to this region and scheduling a mediation. Then, on April 8, 2019, Mr. Strype emailed Mr. Cole saying he would agree to transfer the matter to Brampton but wanted to go to a pre-trial conference, rather than mediation, if the defendants’ assessment of the claim remained unchanged. On May 2, 2019, Mr. Cole emailed and said his client’s assessment was not changed and asked for a copy of the motion material to transfer the file.
[21] On September 24, 2019, an articling student from Mr. Strype’s office emailed Mr. Cole saying the plaintiff would bring a motion to amend the Statement of Claim. The following day, Mr. Cole emailed asking for particulars of the amendment.
[22] The action was transferred to this region by way of an order dated October 24, 2019.
[23] On December 6, 2019, Ms. Block was seen by Dr. Bruno. A copy of the report dated December 30, 3019, was included in the cost submissions. In that report, Dr. Bruno concludes that the accident “dramatically and materially changed her level of independence” and “heralded for her an era of chronic pain, marked physical and cognitive decline”. Dr. Bruno concluded that Ms. Block sustained a concussion in the accident which contributed to the risk of accelerated cognitive decline.
[24] I presume this report was served shortly after being received by plaintiff’s counsel. Other than a copy of the ambulance call report, and one page from another medical report, no other medical materials were filed with the cost submissions.
[25] There is information that the defendants retained their own expert who concluded in a report dated December 15, 2021, that Ms. Block’s complaints were related to her age and were not the result of being struck by a bus. That report also noted that Ms. Block was suffering from extensive cognitive deficits.
[26] On January 27, 2020, Mr. Strype emailed Mr. Cole requesting a mediation, although in his email dated April 8, 2019, he said he wanted to go to a pre-trial if the defendants’ position had not changed. The parties agreed to a half-day mediation scheduled for May 11, 2020. After being served with the preliminary report from the engineer on May 8, 2020, Mr. Cole advised Mr. Strype that his client would not consider the report at mediation given its late service but would agree to reschedule the mediation. The mediation did not proceed.
[27] By way of letter dated May 10, 2020, the defendants offered to settle the matter for $5,000 plus interest, costs, and disbursements.
[28] On March 24, 2021, the plaintiff served a Rule 49 Offer to Settle for $500,000 plus costs and disbursements. On April 8, 2021, the defendants served an Offer to Settle for $5,000 plus interests, costs, and disbursements.
[29] At some point the trial record was passed, although I was not provided with the information about when that occurred. A pre-trial was held before Justice Daley on May 4, 2021. The matter did not settle although there was an exchange of offers at the pre-trial.
[30] A trial dates was set for January 2022.
[31] On May 6, 2021, following the pre-trial, the defendants served a Rule 49 Offer to Settle for $12,500, all in. The offer was not accepted.
[32] The defendants served another Rule 49 Offer to Settle on December 23, 2021, for $25,000 plus costs and disbursements. That offer was accepted the same day for the reasons set out herein.
Position of the Parties
[33] The plaintiff is seeking costs on a partial indemnity basis in the amount of $110,362 plus HST of $14,347.06 for a total of $124,709.06 in fees. The plaintiff also seeks disbursements of $36,623.48 plus HST of $3,657.45 for a total of $40,280.93.
[34] In the Bill of Costs filed, the total fees incurred were $210,272 plus HST of $27,335 for a total of $237,607. Thus, the fees being sought represent approximately 52% of the actual fees incurred which is an appropriate amount to seek on a partial indemnity basis.
[35] The plaintiff’s position is that had this matter not been delayed by the defendants, Ms. Block would have been able to proceed to trial and accurately recall the history of her pre-accident health and the ongoing nature of her accident-related injuries distinct from her age-related problems. Her cognitive decline made it impossible for her to testify at trial, thus necessitating the acceptance of an offer that is significantly less than what she is entitled to or would have been awarded at trial.
[36] The defendants rely primarily on the principle of proportionality and say that costs of $10,000 and disbursements of $30,000, inclusive of HST is the appropriate quantum to be awarded given the amount of the final settlement.
Legal Framework
[37] Following my review of the written submissions filed by counsel, I requested further submissions with respect to whether I should consider any sort of Contingency Fee Arrangement (“CFA”) between the plaintiff and her lawyer in my determination of the appropriate quantum of costs. I also provided counsel with the recent decision of my colleague Daley J. in Estate of Diane Tsialtas v. Munroe, 2022 ONSC 1207. That decision also addressed the issue of costs to be paid to the plaintiffs after they settled their claim for damages flowing from the fatal injuries sustained by Ms. Tsialtas in a pedestrian/motor vehicle collision.
[38] Counsel provided me with further written submissions which I have now reviewed.
[39] The fixing of costs is an exercise of discretion. The starting point in determining costs is s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), as amended which states that subject to the provisions of an Act or rules of court, the court had discretion to determine by whom and to what extent the costs shall be paid.
[40] Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”), sets out the factors to be considered by the court in exercising its discretion with respect to costs in accordance with s. 131 of the CJA. The factors relevant to this case are:
(a) the result of the proceeding;
(b) any offer to settle;
(c) the principle of indemnity;
(d) the reasonable expectations of the unsuccessful party;
(e) the complexity of the proceeding;
(f) the importance of the issues; and
(g) other issues relevant to the question of costs.
[41] The focus of the defendants’ argument is based on the principle of proportionality. While the claim settled for $25,000, the plaintiff is seeking over four times that amount in costs. The defendants rely on r. 1.04(1.1), of the Rules, which states that in applying the rules, the court is to make orders that are propionate to the importance and complexity of the issues and to the amount involved.
[42] I am mindful that I am being asked to fix costs where the evidence was not weighed and no trier of fact has determined what amount, if any, the plaintiff should receive for her injuries. A complicating factor is the plaintiff’s submission that she accepted the offer of $25,000 only because her declining health that prevented her from proceeding to trial.
[43] The Court of Appeal addressed the issue of proportionality, and other cost-related issues, in Bondy-Rafael v. Potrebic, 2019 ONCA 1026, 441 D.L.R. (4th) 658. The court commented that while partial indemnity fees represent a portion of full indemnity costs, there is no fixed mathematical formula to apply. Generally, partial indemnity costs are more than 50% but less than 100% of full indemnity fees. The court also found that the amount recovered by the plaintiff is only one factor to be considered in assessing costs. A “more nuanced approach” is necessary to properly apply the principle of proportionality in the unique circumstances of each case to arrive at an amount that is fair and reasonable for the unsuccessful party to pay: Bondy-Rafael, at para. 60. Determining what is fair and reasonable is more of an art than an exact science.
[44] The overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); Davies v. Clarington (Municipality) et al., 2009 ONCA 722, 100 O.R. (3d) 66.
Analysis
[45] With these principles in mind, I will now review the various factors to consider when assessing costs.
a. The Result of the Proceeding
[46] The matter resolved with the defendant paying the plaintiff a modest amount. I note, however, that the amount was more than the defendants were prepared to pay for several years. In addition, while maintaining that the defendants were not at fault, on the eve of trial, the liability issue was ultimately resolved with the defendants conceding they were at fault. This did not occur, however, until after the plaintiff incurred the cost for an engineering expert to address the issue.
b. Offers to Settle
[47] Offers to settle were exchanged. The plaintiff accepted the last offer for an amount that her lawyer considers to be significantly too low but, given the plaintiff’s health, the matter could not proceed to trial. None of the offers triggered any r. 49 cost consequences.
c. The Principle of Indemnity
[48] When considering the principle of indemnity, I am required to consider the Bill of Costs, including the time spent by counsel and the rates charged. The plaintiff’s Bill of Costs sets out the tasks performed, the time spent, and the fee charged. The total hours were 447.4. Of that, 163.8 hours is the time docketed by the plaintiff’s lawyer, Mr. Strype. He was called to the bar in 1979 and his hourly fee on a full indemnity basis is $1,000 and on a partial indemnity basis is $400 per hour. There was also work done by other lawyers with calls between 2007 and 2016. There were several others who worked on the file who I presume were law clerks as there was no year of call listed for them.
[49] When I consider the fees being sought of $110,362 and the total docketed hours at 447.4, the total blended hourly rate is $271.15.
[50] In determining what is a fair and reasonable quantum of costs, I should not be embarking on a line-by-line review of the docketed time. I have, however, reviewed the dockets and while some entries were vague, such as describing “legal drafting”, I did not see any duplication or excessive time. I would expect that if there were any such anomalies, defence counsel would have identified that, which they did not.
[51] The defence raises two issues with the Bill of Costs. First, in another Bill of Costs, Mr. Strype submitted for a motion, his full indemnity rate was listed as $400 per hour and $240 on a partial indemnity rate, which is significantly less than he is claiming in the Bill of Costs filed with these cost submissions.
[52] As noted in para. 59 of Tsialtas, a guideline was established by the Costs Subcommittee of the Civil Rules Committee that made recommendations for suggested partial indemnity hourly rates. Theses rates are not binding but indicate a range of indemnity rates based on years of experience. For lawyers at the bar 10 years or less, the maximum hourly rate is $225. For lawyers with 10 but less than 20 years at the bar, the hourly rate is $300 and for those with over 20 years, the maximum hourly rate is $350 per hour. Thus, given Mr. Strype’s experience, I take no issue with using $400 per hour as his partial indemnity rate even though he used another rate for cost purposes on a motion.
[53] The defence also argues that two of the timekeepers, Maria Guido and Sharon Denesi, are legal assistants who cannot claim for their time. The time they docketed was 65.5 hours in total at hourly rates of $90 and $150 per hour for a total of $8,403. The plaintiff did not dispute this.
[54] I also note in the Bill of Costs, that while Mr. Strype’s hourly rate was reduced to calculate the partially indemnity fee, that was not done for all timekeepers. For some, the partial indemnity fees are the same as full indemnity rate. For example, Ms. Amanda Neves is a 2012 call. The full and partial indemnity fees are the same at $3,046. With 9.7 hours of work, that is an hourly fee of $314. For the next timekeeper, Charles Fuhr, a 2020 call, an hourly fee of $140 is used for both full and indemnity fees of $13,662. Next to Mr. Strype, he docketed the most time. In total, of the 14 timekeepers who recorded hours worked, only five showed their fees reduced as between full and partial indemnity. No explanation was provided about why those fees were not reduced.
d. The Reasonable Expectations of the Unsuccessful Party
[55] The overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the circumstances, rather than an amount fixed by actual costs incurred by the successful litigant.
[56] The defendants did not produce any information regarding the time they incurred to defend the file, nor their hourly rates charged. This would have been helpful in assessing the reasonable expectations of the parties which is a factor I am to consider when fixing costs.
[57] As this action was commenced in July 2017, I am certain that the defence has incurred significantly more than $10,000 in fees in defending the claim. Counsel for the defendants ought to have filed information about fees the defendants incurred for me to consider in determining what costs are in the reasonable contemplation of the unsuccessful party or the party paying the costs.
e. Complexity of the Proceeding
[58] This matter was of moderate complexity. When a pedestrian is struck by a vehicle, there is a reverse onus that shifts the burden of proof to the defendant to prove they were not at fault. In this case, the defendants maintained their denial of liability for five years and only changed their stance on the eve of trial when served with an engineering expert report from the plaintiff. Had the defendant retained its own expert early in the litigation, the issue could have been resolved much sooner. Rather than doing that and obtaining objective evidence relating to the timing of the traffic lights, which would have assisted in determining whether the plaintiff crossed on a green or red pedestrian crossing light, the defendant relied on the evidence of the bus driver.
[59] The defendant took a hard-line approach on the liability issue which, in my view, delayed a timelier resolution of the liability issue.
[60] Given the age of the plaintiff, there was added complexity with the nature of the injuries she sustained. The issue was whether her cognitive decline was caused or hastened by the injuries she sustained, or if it was the natural progression of decline attributed to her age and other unrelated health issues. Competing expert reports were exchanged.
[61] The difficulty is that there has been no determination of this issue. The plaintiff’s position is that she essentially had no option but to accept the defendant’s offer given her health decline and the concern about the negative impact of a trial on her health. The plaintiff’s position is that her claim is worth much more than the final settlement, but circumstances forced her to accept the low offer.
[62] In fixing costs, it is not my role to assess whether the settlement was fair and reasonable in all the circumstances. It is not my role to conduct a review and examination of all the medial evidence; and, in any event, I have very little medical material. It is not possible, nor is it my role, to determine whether the plaintiff would have recovered more or recovered less had this matter proceeded to trial.
[63] In Tsialtas, Daley J. had to fix costs after an action had settled. As in this case, the claim involved damages flowing from injuries sustained by a pedestrian struck by a car. In that case, the pedestrian sustained fatal injuries so the claimants, who were family members, advanced claims for their loss of care, guidance, and companionship because of the death of the pedestrian. In that case, there was no issue that the settlement was not fair and reasonable. The total settlement was $253,000 and the costs claimed were $134,678 in fees, $17,508 in HST, $20,830 in disbursements for a total of $173,017. The defendants’ position was that costs should be fixed in the range of $36,000 to $43,000, plus HST and disbursements. In that decision, Daley J. ordered the defendants to pay the plaintiffs the full amount sought of $173,070. He found that this amount was fair, reasonable, and proportionate even though the total recovery was only $253,000.
[64] Justice Daley was not faced with a similar submission that the final resolution was not fair or reasonable. He was not faced with a situation where the fees being sought were over four times the ultimate settlement.
f. Importance of the Issue
[65] There is no doubt this issue was of importance to both parties, but I suspect more so for the plaintiff who was injured in this accident.
g. Other Issues
I. Contingency Fee Agreement (“CFA”)
[66] CFAs are common in personal injury actions. The plaintiff signed such an agreement in this matter, but a copy was not filed. CFAs are a way to ensure access to justice to innocent victims who are injured in accidents but do not have funds to pursue a claim. This is so particularly when the defendant has an insurer who then funds the litigation. If the plaintiff had to fund the litigation, there would be few injured plaintiffs who could afford to take on an institutional client with deep pockets. This is the advantage of CFAs.
[67] Typically, CFA’s will stipulate that the plaintiff does not have to pay any fees until the matter is resolved, either by way of a trial or settlement. These agreements may also set out that fees are to be paid based on a certain percentage of the amount ultimately recovered, and what fees must be paid if the CFA is severed before the matter is resolved.
[68] The plaintiff’s position is that r. 57 makes no reference to CFAs as a factor in assessing costs and that whatever agreement counsel entered with a client is not relevant in assessing costs. The plaintiff also points to Tsialtas, where Daley J. did not require or request a copy of the CFA before fixing costs.
[69] Defence counsel filed two cases where the court found that an award of costs should not be made using an hourly rate that amounts to more than what is charged to a client, and that such special fee arrangements should be disclosed: see TransCanada Pipelines Ltd. v. Potter Station Power Ltd. (2003), 2003 CanLII 32897 (ON CA), 172 O.A.C. 379 (C.A.); Lawyer’s Professional Indemnity Co. v. Geto Investments Ltd. (2002), 17 C.P.C. (5th) 334.
[70] The Court of Appeal seems to have modified its views in that regard as in 1465778 Ontario Inc., v. 1122077 Ontario Ltd. (2006), 2006 CanLII 35819 (ON CA), 82 O.R. (3d) 757. There, the Court of Appeal awarded costs even though the successful party was represented by pro bono counsel finding that there should be no prohibition on an award of costs in favour of pro bono counsel in appropriate cases. The court reasoned that a defendant should not reap a windfall because the lawyer acting for the plaintiff agreed to charge them no fees. This appears to differ from TransCanada, where the court said it is not appropriate for counsel to seek costs more than amounts charged to the client.
[71] In another more recent decision, Aitken J. fixed an award of partial indemnity costs that was almost equal to the actual costs charged by the successful party to their client: see Geographic Resources Integrated Data Solutions Ltd. v. Peterson, 2013 ONSC 1041. In that case, Aitken J. did not reduce the costs and found that the task of the court was to assess the reasonable partial indemnity costs and it was not unfair if that amount was close to the full indemnity charged to the client.
[72] I consider these two decisions to be of assistance. In both, the court did not start with considering what the lawyer billed the client but first considered what were reasonable partial indemnity costs, considering the work performed and the appropriate hourly rate considering the experience of the lawyer.
[73] The defence also relies on Donleavy v. Ultramar Ltd., 2018 ONSC 7142, in support of their position that the CFA should be filed with the court to consider when assessing costs. In that case, the plaintiffs had commenced a claim seeking damages to their home caused by an oil spill. The plaintiffs were successful at trial but were found to be 40% at fault. The claim was mostly a subrogated claim by the homeowner’s insurer. There was also a smaller amount claimed by the homeowner personally.
[74] Plaintiffs’ counsel disclosed that there was a fee arrangement between counsel and the subrogating insurer, and that no accounts had been rendered pending a successful outcome of the proceeding. A copy of the fee agreement was not filed with the court. Justice Corthorn found that evidence was required as to the terms of the fee agreement that addressed the basis upon which fees payable are calculated, the rates charged by the plaintiffs’ counsel, and the rates that would be charged in the absence of a fee agreement. She ordered that the fee agreement be produced.
[75] In her second decision, Donleavy v. Ultramar Ltd., 2019 ONSC 2985, Corthorn J. noted that there was no fee agreement in writing but that it was agreed that plaintiff’s counsel would not render an account to the insurer until the matter was completed. Justice Corthorn concluded that the oral fee agreement did not amount to a CFA and was, therefore, not considered.
[76] I was not directed to any case with respect to how a CFA could impact or have any bearing on the quantum of costs to be awarded. In this case, the defendants have agreed to pay costs. The only issue is quantum. A CFA is an agreement between a client and their lawyer. Just as a pro bono agreement should not be used to the advantage of a party being required to pay costs, I view the contents of a CFA in a personal injury matter to also have little impact on what I consider to be fair and reasonable costs for the defendants to pay in this action.
ii. Conduct of the Parties
[77] Based on the written submissions from counsel, I am not satisfied that either side was more at fault for any delays in this action. While the liability issue ought to have been addressed much sooner, this action was set for trial in January 2022, about 4.5 years after it was commenced. For a personal injury action, that is a timely trial date, particularly when I consider the delays caused by COVID-19. I do not consider that the defendants caused any undue delays in this litigation that would factor into my cost assessment.
[78] Furthermore, the defendants did not take an unmeritorious defence to the plaintiff’s claim. Given her age and other health issues, I anticipate that if this matter had proceeded to trial, causation for her current cognitive and other deficits would have been one of the main issues for the trier of fact to determine. Advancing a defence, supported by medical information, that the plaintiff’s current condition was not caused by the accident is not taking an unmeritorious defence to the plaintiff’s claim.
iii. Proportionality
[79] The issue of proportionality is at the heart of this dispute regarding costs. The defendants assert that the fees sought by the plaintiff are disproportionate to the amount recovered. As I have already noted, the plaintiff is seeking costs of over four times the amount of the settlement.
[80] Proportionality is clearly a factor, although it is not the sole factor to consider when assessing costs. In Bonaiuto v. Pilot Insurance Co, 2010 ONSC 1248, 101 O.R. (3d) 157, the plaintiff recovered $5,000 after a jury trial, for theft and damage to her car. At para. 7, Harvison Young J. found that while costs must be fair and reasonable, the mere fact that costs exceed the damages does not render an award inappropriate. She awarded the plaintiff costs of $75,932, which was 15 times the amount of the recovery at trial. In that case, the defendant’s unsuccessful theory was that the plaintiff committed fraud.
[81] I agree with the comments of McCarthy J. at para. 15 in Accurate General Contracting Ltd. v. Tarasco, 2015 ONSC 5980 that proportionality should not be “routinely invoked to save litigants form the real costs of the proceedings in circumstances where those litigants have put forth an unmeritorious defence to a legitimate claim or have caused the proceedings to become unduly prolonged or complicated”. This decision has been adopted or approved in several other cost decisions.
[82] I note that in these reasons, I have made no findings that the defendants advanced an unmeritorious defence or unduly protracted or complicated the matter, other than the late acknowledgement that liability was not an issue.
[83] While proportionality is a factor to consider, an award of costs must ultimately be one that is fair and reasonable, having regard to all the circumstances.
[84] In McNamee v. Oickle, 2020 ONSC 5078, following a lengthy jury trial, the plaintiffs were awarded $61,340. After applying the deductible and collateral benefits, the net amount the plaintiffs recovered was $5,000. The plaintiffs recovered less than what was offered by the defendants to settle but sought costs on a partial indemnity basis to the date of the offer of $350,617, significantly more than the amount recovered at trial. The defendant sought costs of $212,633.
[85] In his cost decision, Beaudoin J. considered the principle of proportionality and referred to McCarthy J.’s decision in Tarasco. He fixed the plaintiff’s costs at $100,000, even though they were only awarded $61,0340 at trial which was reduced to $5,000. He also found that the defendants were entitled to costs of $200,000 leaving a net amount owing by the plaintiff of $100,000.
[86] In a recent decision, Gilbank v. Cooper and English, 2022 ONSC 132, Trimble J. awarded costs of $45,000 to the plaintiff following a nine-day trial in which he awarded the plaintiff $54,365, less $4,500 owing to the defendants for their claim. Justice Trimble set out in detail the legal principles to consider when assessing costs. He noted at para. 19, that when considering the principle of proportionality, the overarching consideration is determining whether the costs incurred were justified in all the circumstances. Furthermore, a costs award may be appropriate even if it exceeds a damages award.
[87] At para. 20, Trimble J. noted that an undue focus on proportionality ignores the principles of indemnity and access to justice: Gardiner v. MacDonald Estate, 2016 ONSC 2770, at para. 65. Ultimately, an award of costs must be fair and appropriate.
What is Fair and Reasonable for the Defendant to Pay?
[88] My role as a judge is not to sit as an assessment officer assessing costs. I will not engage in a line-by-line assessment of the Bill of Costs submitted. Rather, I will look at the matter in its entirety and determine what is a reasonable amount for the unsuccessful party to pay. I have also considered the principle of proportionality but not to the exclusion of the principles of indemnity and access to justice.
[89] When I consider the totality of the factors set out herein, costs should be fixed on a partial indemnity basis in the amount of $50,000.00, plus HST of $6,500 and disbursements of $36,623.48 plus HST of $3,657.45 for a total of $96,780.93. Those costs shall be paid by the defendants to the plaintiff forthwith.
[90] While this cost award exceeds the damage settlement, it is an appropriate amount, given the totality of the circumstances. Given the defendant’s approach to liability and damages, the plaintiff was required to secure expert reports. As the matter settled on the eve of trial, counsel would have been preparing for trial and incurred costs doing so.
[91] In my view, this cost award is justified, even though the settlement was for an amount considerably less than the plaintiff’s last offer.
[92] While I have not heard any submissions with respect to the costs associated with respect to this cost dispute, the plaintiff should be awarded costs which I fix at $5,000, all in. If there are Offers to Settle costs which I should consider or if counsel is of the view that there should be further cost submissions, they are to contact the trial co-ordinator by June 13, 2022, to schedule a 30 minute hearing, by zoom, before me.
Released: May 30, 2022
COURT FILE NO.: CV-20-00000521-0000
DATE: 05 30 2022
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARILYN ANN BLOCK
Plaintiff
– and –
WINSTON BROWN and THE CORPORATION OF THE CITY OF MISSISSAUGA
Defendants
COST ENDORSEMENT
L. Shaw J.
Released: May 30, 2022