COURT FILE NO.: CV-15-0665-00 / CV-15-1892-00
DATE: 2022 06 27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PHYSICIANS’ DIALYSIS CENTER INC.
Plaintiff
- and -
THE CREDIT VALLEY HOSPITAL AND TRILLIUM HEALTH CENTER and DAVID PERKINS
Defendants
AND B E T W E E N:
DAVID PERKINS
Plaintiff by Counterclaim
- and –
PHYSICIANS’ DIALYSIS CENTER INC.,
GEORGE WU, and GORDON K. T. WONG
Defendants by Counterclaim
ARTURO WADGYMAR and DONALD KIM
Defendants by Counterclaim
AND B E T W E E N:
PHILIP BOLL
Plaintiff
- and -
PHYSICIANS’ DIALYSIS CENTER INC. TRILLIUM HEALTH PARTNERS, GEORGE WU, and GORDON K.T. WONG
Defendants
ARTURO WADGYMAR and DONALD KIM
Defendants
Douglas Christie, for the Plaintiff
Michael McWilliams and Ryan Wilson, for the Defendants
Michael McWilliams and Ryan Wilson, for the Plaintiff by Counterclaim
Douglas Christie for the Defendants by Counterclaim
Mark A. Ross for the Defendants by Counterclaim
Michael McWilliams and Ryan Wilson, for the Plaintiff
Douglas Christie for the Defendants
Mark A. Ross for the Defendants
HEARD: May 9-13, 16-18, 20, 24
REASONS ON COSTS
MANDHANE J.
OVERVIEW
[1] The parties appeared before me for an 11-day trial: Perkins, Boll v. Physicians Dialysis Centre Inc. et al., 2022 ONSC 3640. In my trial decision, I found in favour of Perkins and Boll (the “Plaintiffs”), who are prima facie entitled to costs.
[2] The parties made written submissions as to costs. The Plaintiffs ask met to order PDC, Wu and Wong (the “Defendants”), to pay costs in the amount of $737,986.35, at a substantial indemnity rate from the commencement of the litigation.
[3] I have a broad discretion when it comes to awarding costs: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1). I must consider the factors set out in Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194, including but not limited to: offers to settle, the complexity and importance of the matter, the conduct of any party during the litigation, the principle of indemnity, and the amount that an unsuccessful party could reasonably expect to pay.
[4] While the legal issues in this matter were relatively straightforward, I agree with the parties that the factual matters were complex. There were multiple actions and parties, pleadings and counter-pleadings, discoveries and undertakings, and preparation of expert reports. The issues were significant to the parties and more broadly to the public, insofar, as I found that the Defendants misused public funds.
[5] While the Defendants counsel was professional at all times, the positions he advanced on behalf of his clients lacked any credible foundation in the evidence. The Defendants first said they were entitled to retain the funds as leaseholders, while admitting at trial that they did not pay for the rent exclusively and did not sign any lease. In written submissions, the Defendants said that the Plaintiffs were not entitled to the MOU Funds because it would constitute impermissible “double-billing,” without explaining why Wu, Wong, Wagymar and Kim retained their entitlement. As I stated in my decision, the “inescapable” conclusion in this case was that PDC received the Funds on behalf of the partnership. The Defendants persistence in bringing this matter to trial was unreasonable.
[6] On the principle of indemnity, both counsel were present in court for 11 days. The matter had originally been scheduled for 20 days and the parties worked cooperatively to streamline their presentation of the evidence to save court time. The costs are high but reasonable given the length and complexity of the proceedings, and the seniority of the counsel involved. The Plaintiffs’ costs reflect work by two counsel, preparation of an extensive and complicated expert report, and preparation of a detailed Agreed Statement of Facts and Joint Book of Documents. Finally, I note that the parties’ total quantum of costs is very comparable.
[7] The most significant Rule 57.01(1) factor in this case are the Plaintiffs’ offers to settle. Pursuant to Rule 49.10(1), where a plaintiff makes an offer to settle that is sent at least seven days before trial, is not withdrawn, does not expire before the commencement of trial, and is not accepted by the defendant, and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, then the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date.
[8] In total, the Plaintiffs received $433,057 from Wu, Wong, Wagymar, and Kim, with $260,000 going to Perkins, and $173,077 going to Boll. I arrive at these totals as follows. Prior to trial, Perkins and Boll negotiated a partial settlement with Wadgymar and Kim, receiving $125,000 (or $62,500 each). At trial, I ordered the Physicians Dialysis Centre Inc. (“PDC”), Wu and Wong, to pay the Plaintiffs a total of $308,057 in compensatory and punitive damages, plus applicable interest: Perkins, para. 65.
[9] Dr. Perkins and Dr. Boll made a number of valid offers prior to and throughout the course of the litigation. Prior to the commencement of the litigation, by way of letter dated September 17, 2014, Perkins and Boll proposed that the 2013 MOU Funds be divided between the partners who contributed to expenses but who had not received any of the MOU Funds. While the pre-litigation offer is not relevant under Rule 49.10(1), it is part of the overall factual matrix that I can consider when weighing the factors set out in Rule 57.01: Scanlon v. Standish, 2002 CanLII 20549 (ON CA), 57 O.R. (3d) 767, [2002] O.J. No. 194 (C.A.).
[10] The Plaintiffs made two valid Rule 49 offers after commencement of the litigation. On February 29, 2016, Plaintiffs’ counsel sent a letter to counsel for Wu, Wong, Wadgymar and Kim, offering to settle the matter for a payment of $404,979.10, plus interest and costs, which the Plaintiffs said represented their “proportionate share of the MOU funds.”
[11] On April 13, 2022, after negotiating a partial settlement with Wadgymar and Kim, Plaintiffs’ counsel sent a letter to Defendants’ counsel offering to settle for $187,269.30, plus interest and costs. The offers all remained open until trial, and none were accepted.
[12] Clearly, the Plaintiffs did better at trial than either of their Rule 49 offers to settle.. Based on Rule 49.10(1), the Plaintiffs are entitled to substantial indemnity costs from February 29, 2016 onward. The Plaintiffs reasonable approach to the litigation, when contrasted with the approach taken by the Defendants, further justifies a substantial costs award.
[13] The Defendants, PDC, Wu, and Wong, shall be jointly and severally liable to pay the Plaintiffs $724,850.49 in costs.
MANDHANE J.
COURT FILE NO.: CV-15-0665-00 / CV-15-1892-00
DATE: 2022 06 27
ONTARIO
SUPERIOR COURT OF JUSTICE
PERKINS, BOLL
– and –
PHYSICIANS’ DIALYSIS CENTER INC.,
GEORGE WU, GORDON WONG
REASONS ON COSTS
MANDHANE J.
Released: June 27, 2022