Court File and Parties

COURT FILE NO.: CV-14-59881 DATE: 2022-01-06 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Margaret Ozimkowski, Plaintiff AND Luc Raymond, Defendant

BEFORE: The Honourable Justice C.T. Hackland COUNSEL: Sean O’Connor, for the Plaintiff Michael J.L. White, for the Defendant

HEARD: In writing

ENDORSEMENT (Costs)

Overview

[1] This motor vehicle personal injury action was settled at a settlement conference held before me on November 1, 2021, which was a resumption of a settlement conference which began on October 14, 2021. The action, originally commenced in January of 2014, was scheduled for a 5-day jury trial to begin December 6, 2021.

[2] The parties agreed that the plaintiff’s damages would be settled in the sum of $300,000 inclusive of prejudgment interest and the plaintiff’s disbursements would be paid in the sum of $52,678. However, the parties were unable to agree on the amount of costs to be awarded to the plaintiff in this settlement. Rather than proceeding to trial when the sole unresolved issue was one of costs, I offered, and counsel agreed that I would fix the party and party costs i.e. the legal fees to which the plaintiff was entitled. I note that Rule 57.01(7) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”), provides that the court shall devise and adopt the simplest, least expensive, and most expeditious process for fixing costs.

[3] I assured counsel that I would make an award within the range of their respective offers and would do so based on the usual criteria as enumerated in Rule 57 and Rule 49. As agreed, the scale of costs was to be partial indemnity. Counsel have provided written submissions including a summary of their docketed time, including their billing rates.

Position of the Parties

[4] The defendant contends that a settlement such as this, arrived at in a judicial pre-trial or settlement conference, should attract the commonly used formula or guideline of 15 – 10 – 10, which when applied to a damages settlement of $300,000 would suggest a costs award of $35,000 (plus HST and disbursements). Defendant’s counsel suggests that this approach is proportional, fair and well understood and facilitates out-of-court pre-trial settlements and should be encouraged.

[5] The plaintiff responds that the formula suggested by the defendant, while suitable for settlements at an early stage of proceedings (such as at mediations), is not adequate for a complex case that has gone on for a period of years, involved contested interlocutory proceedings and is resolved essentially on the eve of trial. With these circumstances in mind, the plaintiff submits that fees should be fixed on a partial indemnity basis which is roughly 60% (the plaintiff says 63%) of the reasonably docketed time. The plaintiff seeks an award of partial indemnity costs in this matter, in the sum of $97,749 plus HST and disbursements.

Analysis

[6] In my view, there is sufficient complexity to this case, and it was resolved only a month before trial, such that the usual formula for calculating fees on a negotiated settlement can be departed from. Nevertheless, the goal of proportionality which underlies the usual formula, remains a relevant and indeed important consideration, but it is certainly not the only relevant consideration in the circumstances of this case.

[7] This is a chronic pain case arising out of a relatively minor rear end collision which occurred in icy winter highway conditions. The plaintiff’s chronic pain involved the usual medical complexities concerning causation and level of disability suffered by the 64-year-old plaintiff, and of the chronicity of her disability and the implications relative to her future ability to work.

[8] In the normal course, personal injury cases involving soft tissue injuries causing chronic pain are contentious and take some time to resolve because only when the pain and disability is shown to be permanent and seriously disabling is the statutory threshold met and only then can it be appreciated whether a future income loss will arise. This normally requires medical assessments over a substantial period of time. As to liability, there is seldom a true liability issue in a rear end collision because such a collision normally involves a breach of the Highway Traffic Act, R.S.O. 1990, c. H.8, creating a reverse onus on the defendant driver to disprove negligence. As a generalization, most of the contentious issues resolve with the necessary passage of time, often with the assistance of a settlement conference.

[9] Unfortunately, in this case both parties saw fit to embark on aggressive litigation tactics early on in the action, with a predictable increase in legal fees.

[10] Notwithstanding that the plaintiff was the victim of a rear end collision, the plaintiff saw fit to attempt to resolve the issue of liability by way of a motion for partial summary judgement, which involved significant expenditures for engineering reports. The defendant, meanwhile, launched a Third-Party Claim against a municipality due to an alleged failure to maintain safe road conditions. The municipality filed a Statement of Defence to the plaintiff’s claim in the main action. Ultimately, the Third-Party Claim was settled, with the Third-Party agreeing to pay the plaintiff $10,000 in costs in consideration to her consent to the dismissal. The plaintiff succeeded in her motion for partial summary judgement, the motion judge holding that in view of the rear end collision there was no contributory negligence issue requiring a trial. The defendant appealed this discretionary ruling unsuccessfully to the Ontario Court of Appeal.

[11] In summary, as a result of this preliminary litigation, the plaintiff has already received $50,000 in costs awarded by the motion judge on the motion for partial summary judgement, a further $15,000 awarded by the Ontario Court of Appeal and a further $10,000 paid by the Third-Party as a component of the withdrawal of the Third-Party proceeding, for a total of $75,000.

[12] It may well be that the costs awarded to the plaintiff as a result of her success on the motion for partial summary judgement, and on the appeal from that decision, do not fully indemnify her for her legal expenditures connected with this motion. This is one of the reasons that the Court of Appeal has discouraged the bringing of motions for partial summary judgement when the balance of an action must proceed to trial in any event. In motions for partial summary judgement there is likely to be no financial benefit to even a ‘successful’ moving party and the present case may well be an example of such an outcome.

[13] The plaintiff’s counsel comments in the plaintiff’s written submission, “It is submitted that while considerable time was spent on the liability issue the major issue in this action has always been damages and that the dispute over whether the plaintiff has suffered a life altering permanent injury consuming most of the time of counsel. It was for this reason that the motion partial summary judgement was brought - to focus the dispute on the real issue in the case.” Unfortunately, it can be seen from plaintiff’s counsel’s narrative of events that the motion for partial summary judgement occupied a great deal of time, particularly with regard to adjournments and case conferences and the principal focus of the case switched away from the issue of damages and away from any serious attempts at settlement.

[14] In any event, I accept the defendant’s submission that the plaintiff is not entitled to any further award of costs for any of the liability issues which have previously been resolved, with costs already paid to the plaintiff. On the other hand, the defendant’s actions in vigorously contesting complete responsibility for this rear end collision were, in my respectful opinion, unreasonable.

Offers to Settle

[15] Rule 49.13 of the Rules provides a discretion to the court, as it relates to costs, to take into account any offer to settle made in writing, the date the offer was made and the terms of the offer. On my review of the offers, both sides were reluctant to adopt realistic positions until the case was finally settled for $300,000 (with no assignment of collateral benefits), which incidentally was the settlement figure recommended by Roger J. at a judicial pre-trial in October of 2018.

[16] In February 2016, the defendant delivered an Offer to Settle in the amount of $15,000.00 for general damages, with $0 for special damages and requiring an assignment of collateral benefits. At the mediation on April 28, 2017, the defendant made no new offer, but shortly thereafter served a Rule 49 offer totaling $136,000.00 plus interest and partial indemnity costs and requiring an assignment of collateral benefits. On March 4, 2020, the defendant delivered a final Rule 49 offer totaling $170,000.00 plus interest and partial indemnity costs. This was followed by their final settlement offer in the amount of $300,000 for damages exclusive of costs and disbursements and without an assignment of collateral benefits. As noted, the disbursements were agreed upon in the amount of $52,678.

[17] Until the case was finally settled, the plaintiff does not appear to have made any monetary offer. On May 1, 2017, the plaintiff served an offer to settle the issue of whether the plaintiff satisfied the threshold requirement in section 267.5 of the Insurance Act, R.S.O. 1990, c. I.8. This offer proposed that the threshold issue be settled by the defendant admitting that the plaintiff’s injuries met the threshold. This unusual communication should have been put in a Request to Admit, as it is not an offer to settle.

[18] It is apparent from the plaintiff’ counsel’s narrative of his activities that extensive time was invested in trying to force the SABs insurer and the LTD insurer to live up to their obligations to the plaintiff. This included two FSCO mediations and an unsuccessful application to obtain a catastrophic injury designation for SABs benefits. Some of these efforts impact on the plaintiff’s entitlement to tort damages but most of these fees can not be charged to the tort defendant.

[19] I do acknowledge that there was a mandatory mediation and there were four case conferences, three discoveries of the plaintiff, as well as two defence medicals, three trial management appearances and there were three judicial pre-trial sessions. The COVID-19 pandemic also caused both sides significant disruption in trial scheduling, including a motion by the plaintiff to dispense with the jury. In short, this was undoubtedly a complex and legally time-consuming case for both parties. The plaintiff ultimately obtained a result which was very positive for her and much better than she could have obtained by any earlier settlement.

[20] Plaintiff’s counsel, Mr. O’Connor, is an experienced senior counsel and his billing rate of $425 per hour is appropriate in a matter of this complexity. He and his clerk and student have a total of $155,000 docketed time. Defence counsel have docketed time of about $119,000. Counsel for both sides were docketing reasonably and appropriately in my respectful opinion.

Conclusion

[21] I am of the view that this case is sufficiently complex and has carried on for nearly 7 years and only settled on the eve of trial, such that special circumstances are made out to justify awarding costs in excess of the basic settlement formula referred to previously. On the other hand, I recognize that costs are being fixed herein in the context of a settlement.

[22] The plaintiff is awarded fees in the sum of $65,000 plus HST together with disbursements as previously agreed in the sum of $52,678, which amounts are to be paid by the defendant to the plaintiff within 30 days of the release of this endorsement.

Date: January 6, 2022

COURT FILE NO.: CV-14-59881 DATE: 2022-01-06

ONTARIO SUPERIOR COURT OF JUSTICE

RE: Margaret Ozimkowski, Plaintiff AND Luc Raymond, Defendant

COUNSEL: Sean O’Connor, for the Plaintiff Michael J.L. White, for the Defendant

ENDORSEMENT (costs) Justice Charles T. Hackland

Released: January 6, 2022