Court File and Parties

COURT FILE NO.: CV-20-21

DATE: 2022/12/05

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Mehari Kesete, Plaintiff

AND:

Amanda Gaspar, Defendant

BEFORE: G. E. Taylor, J.

COUNSEL: Mark Stoiko, Counsel for the Plaintiff

Michael Kennedy and Garett Harper, Counsel for the Defendant

HEARD: October 24 – 27, 31, November 1 – 4, 7, 8, 14 – 16, 2022

Costs ENDORSEMENT

Introduction

[1] This action arose out of a motor vehicle accident that occurred on November 14, 2014. The plaintiff claimed $1,000,000 in damages for the injuries he claimed were suffered as a result of the accident. After a 14-day trial, based on the jury’s answers to questions, judgment was granted in favour of the defendant dismissing the action.

[2] The parties have made written submissions with respect to the costs of the action.

Positions of the Parties

[3] The position of the defendant is that she should be awarded partial indemnity costs to September 28, 2022, which was the date on which the defendant made an Offer to Settle, and substantial indemnity costs thereafter.

[4] The position of the plaintiff is that the plaintiff is impecunious and therefore the defendant should be awarded no costs, or at most, costs of $2,000.

Impecuniosity of the Plaintiff

[5] The evidence presented at trial is that the plaintiff’s current source of income is the Ontario Disability Support Program. The evidence was that the plaintiff’s income in 2021 was approximately $21,000. There is no other evidence about the ability of the plaintiff to satisfy an award of costs made against him.

[6] The plaintiff relies on the decision in Baines v. Hehar, 2013 ONSC 849 which held that there was no utility to making an award of costs against an unsuccessful plaintiff who did not have the financial ability to pay an award of costs and would be unlikely to achieve the financial ability to pay an award of costs in the future. In Baines, the plaintiff was self-represented at trial.

[7] The defendant relies on the decision of the Divisional Court in Nassab (Litigation Guardian of) v. Erinoakkids, 2017 ONSC 2740 where the Court stated at paragraph 35:

There are also circumstances in which the inability of a party to pay costs may be a relevant factor in determining whether an adverse costs award should be made (see, for example, Baines v. Hehar (2013), 2013 ONSC 849, 114 OR (3d) 551 (SCJ)). Such cases will be few and far between and generally require evidence not only that a party against whom costs would otherwise be awarded does not currently possess the financial wherewithal to pay an award of costs, but that it is most unlikely that they will ever acquire the ability to meet a costs burden arising from the case. (emphasis added)

[8] The defendant’s Reply Submissions attach a copy of the disbursements ledger from the plaintiff’s lawyer which was sent to the defendant’s lawyer in July 2021. In this disbursements ledger is an item “Case Mark Financial After the Event Insurance Premium” which suggests that there is some insurance available to the plaintiff to pay some or all of any cost award made against him.

[9] I do not read Baines as standing for the proposition that a plaintiff whose income is from social assistance is insulated from paying costs of an action in which the plaintiff was unsuccessful. Baines involved a plaintiff who represented herself at trial and there is a suggestion that there might have been mental health issues affecting the plaintiff. That is to be contrasted with the present case with the plaintiff being represented throughout by counsel. It is appropriate to assume that the plaintiff and his lawyer discussed the possibility of an unsatisfactory outcome after trial and the possibility of an adverse cost award being made. This would be particularly applicable to the circumstances surrounding the rejection of the defendant’s Offer to Settle shortly before the trial.

[10] The decision in Nassab is on point. There is no evidence about the plaintiff’s future prospects and ability to pay an award of costs. To the contrary, there is evidence which suggests the plaintiff may have access to an insurance policy to pay the costs of the action. In any event, this is not one of those rare cases where the inability of a party to pay costs should be a factor in deciding whether such an award should be made.

[11] The long-standing general rule is that costs follow the event. I see no reason to deviate from that rule in this case and deprive the successful party of costs.

[12] Other than asserting the position that the defendant should not be entitled to any costs, the plaintiff made no submissions about the quantum of costs sought by the defendant. The plaintiff did not provide his own Bill of Costs from which I conclude that the plaintiff’s costs of the action are not completely dissimilar to the costs of the defendant.

Entitlement to and Scale of Costs

[13] In Davies v. Clarington (Municipality), 2009 ONCA 722, the Court held that an award of substantial indemnity costs can be made in two circumstances. The first is when there is reprehensible conduct on the part of the party against whom the award of costs is sought and the second is when the requirements of Rule 49.10 of the Rules of Civil Procedure have been met (para. 41).

[14] The applicable sub-rule is Rule 49.10(2) which reads 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.

[15] This rule provides that a defendant who makes an offer to settle and obtains a result which is more favourable than the result at trial, is entitled to partial indemnity costs from the date the offer was served. In the present case, because the judgment was granted in favour of the defendant, she is also entitled to partial indemnity costs to the date of the offer. In Davies the Court held that substantial indemnity costs cannot be awarded to “reward” a defendant for making a legitimate attempt to curtail litigation by making an offer to settle which turns out to be more favourable to the plaintiff than the result at trial (para. 48).

[16] There was no reprehensible conduct on the part of the plaintiff that would justify an award of substantial indemnity costs.

[17] I therefore find that the defendant is entitled to partial indemnity costs of the action.

Fees

[18] The general principles governing the exercise of the discretion to award costs are contained in Rule 57.01(1) and include the following:

a) indemnity for the fees charged by the lawyer for the party entitled to the costs;

b) the amount of costs the unsuccessful party could expect to pay;

c) the amount claimed and recovered;

d) the apportionment of liability;

e) the complexity of the proceeding.

[19] Senior counsel for the plaintiff was called to the bar in 2009. Junior counsel was called to the bar in 2015. The partial indemnity rates proposed are, in my view reasonable. The rate for senior counsel increased from $126.00 per hour at the start of the file to $165.00 at the time of the trial. The rate for junior counsel is $129.00 per hour. Other persons worked on the file from time to time but, with one exception, their involvement was not significant.

[20] The plaintiff sought damages of $1,000,000. In his address to the jury, plaintiff’s counsel suggested damages be assessed at $120,000 to $150,000. It would be expected that when facing a claim for damages of $1,000,000, a vigorous defence would be mounted. Although the amount ultimately suggested to the jury as an appropriate amount of damages was much less than what was sought in the Statement of Claim, it was still a significant amount.

[21] The amount sought as partial indemnity fees for pleadings, discovery, mediation, retaining experts and pre-trial conference is $18,255.00. This amount is generally reasonable.

[22] The amount sought as partial indemnity fees for trial preparation is $62,873.10. The time spent in trial preparation was significant, but the defence case was presented very efficiently. According to the Bill of Costs, there were 10 different timekeepers who assisted with trial preparation. It is not clear what tasks the different timekeepers performed. I conclude however, that there was some amount of duplication with that number of people involved in trial preparation. There is an amount claimed of almost $7,000 for a law clerk in trial preparation with no indication what work was involved. The amount claimed for trial preparation is, in my view, more than an unsuccessful party would expect to pay in party and party costs.

[23] There is no evidence about the costs incurred by the plaintiff, but I am of the view that the plaintiff would have expected to pay a significant amount in costs in the event he was unsuccessful in the action.

[24] The plaintiff succeeded in proving the defendant solely responsible for the accident in question, but by far the majority of trial time was devoted to damages.

[25] There was nothing particularly complex about this case but there are complexities in all cases of this nature involving medical and other expert evidence.

[26] I am fixing costs. I am not assessing costs. The costs awarded to the defendant must be fair and reasonable to both parties. In my view, a reasonable amount to require the plaintiff to pay as partial indemnity costs for fees is:

Pleadings, discovery and mediation $15,000

Preparation for trial $40,000

Counsel fee at trial $35,000

Total $90,000

Disbursements

[27] The defendant seeks reimbursement for disbursements in the total amount of $98,671.08.

[28] The largest component of the disbursements is the amounts paid to various experts. The total amount paid to experts is $71,119.05 of which $54,635.88 was paid to three medical experts who testified at trial.

[29] Each of the doctors charged between $7,000 and $8,000 to assess the plaintiff and write their reports, between $1,300 and $3,000 in trial preparation and between $7,000 and $10,000 for attending at the trial. None of the medical experts testified for more than half a day. These amounts are much greater than an unsuccessful litigant would expect to pay. In my view the amount for which the defendant should be reimbursed for medical experts who testified is $30,000.

[30] The amount charged by the defendant’s accident reconstructionist was $5,229.42. He testified for less that two hours. A reasonable amount to be allowed for his expert testimony is $5,000 (he did not submit a bill for attendance at trial).

[31] The defendant retained two additional experts who prepared reports but did not testify at trial because the plaintiff did not lead any evidence about the loss of future income or the cost of future care. When these experts were retained, the defendant reasonably believed the plaintiff would advance these claims. The total amount billed by these two experts was $11,253.75 which includes the amount of $2,452.95 for trial preparation. I do not think it is reasonable to require the plaintiff to reimburse the defendant for trial preparation when the witness did not testify. A reasonable amount for these two experts to prepare reports is $8,000.

[32] The defendant conducted surveillance of the plaintiff in October 2015, October 2017, June 2021 and July 2022. No surveillance evidence was called at trial. The total amount paid for surveillance was $8,414.80. The plaintiff should not be required to reimburse the defendant for the cost of obtaining evidence which was not presented at trial.

[33] The defendant incurred witness fees for 10 witnesses who did not testify. The plaintiff should not be required to reimburse the defendant for this expense which totals $646.40. The defendant also paid $1,650 for service of all summons forms. The plaintiff should not be responsible to pay for service of summons to persons who did not testify.

[34] To repeat what I said earlier in this Endorsement, I am fixing, not assessing costs. The amount fixed for disbursements must be an amount that an unsuccessful litigant would expect to pay. Although I do not have details about the plaintiff’s disbursements, I conclude they were significant. The plaintiff called three medical experts and an accident reconstructionist. The plaintiff must have contemplated the risk of being responsible for significant disbursements incurred by the defendant. The amount must also be fair and reasonable to both parties.

[35] The defendant’s disbursement total $98,671.08. After taking into consideration the reduction in disbursements as set out above, I have concluded that a reasonable amount to be allowed for disbursements is $55,000. I assume all disbursements were either HST exempt or included HST.

Conclusion

[36] The plaintiff is ordered to pay to the defendant as partial indemnity costs of the action, the following:

Fees $90,000

HST on Fees $13,000

Disbursements $55,000

Total $158,000

These costs are payable forthwith.

G. E. Taylor, J.

Date: December 12, 2022