Court File and Parties

COURT FILE NO.: CV-16-552668 DATE: 20230517 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jasmine Jarvis, Jeanette Marie Jarvis and Willby Watson Jarvis, Plaintiffs AND: Stacey Oliveira, Jose M. Oliveira and Aida F. Oliveira, Defendants

BEFORE: A. P. Ramsay J.

COUNSEL: Patrick Brown and Nick Todorovic, for the Plaintiffs Donald Rollo and Symone Marlowe, for the Defendants

HEARD: In Writing

Costs Endorsement

A. Overview

[1] This case involves a pedestrian motor vehicle accident. In the summer of 2014, two teenaged girls hung out with friends at a park for the day; they were drinking. At the end of the night, the youngest of them, Jasmine Jarvis, was struck by a vehicle driven by Stacey Oliveira. Ms. Oliveira had also been out that day with her parents for dinner and they were in the car with her. Her father, a driving instructor, was riding in the front passenger seat. Ms. Jarvis had been drinking before the collision and had been running across the street with her friend when she was struck. Ms. Jarvis sustained serious injuries, including a traumatic brain injury. She has no memory of the accident. The defendants’ position is that as Ms. Oliveira came through the intersection, all of a sudden, a person was beside her vehicle, and she turned to the right to avoid the collision. The defendants maintained that Ms. Jarvis was running fast from a taxi and the accident was unavoidable.

[2] Two independent witnesses driving northbound saw the girls before the collision. The passenger of the northbound vehicle saw the girls running on the sidewalk before they ran across the street, one faster than the other. The driver saw them as well, braked and slowed down as they crossed the two lanes of traffic. Coming southbound, the defendant, Ms. Oliveira, did not see the Ms. Jarvis until she was right at the side of the car.

[3] The trial proceeded before a judge and jury for five days. At the commencement of the trial, Ms. Jarvis admitted that she was partly responsible for the accident. The sole issue to be determined by the jury was whether the defendant, Ms. Oliveira, the driver of the vehicle which struck Ms. Jarvis was also negligent. Ms. Oliveira’s parents, who owned the vehicle, and would be vicariously liable for her negligence, were party defendants to the action.

[4] After five days of trial, the jury returned a verdict finding no negligence against Ms. Oliveira. In the result, the ultimate judgment is a dismissal of the plaintiff’s action.

[5] Following the verdict, the parties were unable to resolve the issue of costs, and a timetable was set for submissions, which have been reviewed.

B. Background

[6] This matter involves a pedestrian motor vehicle accident which occurred on August 30, 2014, involving Ms. Jarvis. Her grandparents sued for damages under the relevant provisions of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”), because of the injuries she sustained.

[7] The accident occurred near the intersection of St. Clair Avenue West and Bathurst Street. Ms. Jarvis was 16 and her friend was 17 years old. The girls had exited a cab in the vicinity of Bathurst Street and St. Clair Avenue West and had run across from the east side to the west side of the road. The action proceeded through discovery, mediation and pre-trial conference. The parties’ pre-trial conference was completed on February 4, 2022.

[8] In the weeks leading up to the trial, the plaintiffs served three Rule 49 offers to settle and the defendants served one Rule 49 offer to settle.

[9] The plaintiffs made three formal offers to settle. The first offer dated March 17, 2022 was for $1,750,000 for damages and prejudgment interest, plus costs and disbursement, as agreed upon, together with HST, and remained open for acceptance until the commencement of trial. The second offer was dated March 18, 2022, was for $1,500,000 net of the statutory deductibles inclusive of prejudgment interest, plus costs and disbursement to be agreed upon and remained open for acceptance until trial. The third offer was made on March 26, 2022, for $850,000 plus costs and disbursements, and in addition, a trial on liability, and a posting of two million dollars, to which apportionment would apply. All offers to settle by the plaintiffs related to settling the claims of the principal plaintiff, being Ms. Jarvis, only.

[10] On March 3, 2022, the defendants made an offer to settle the plaintiffs’ claims for $250,000.00 for damages net of the statutory deductible and inclusive of any interest, plus costs and disbursements to be agreed upon or assessed. The offer remained open for acceptance until the commencement of trial. The plaintiffs did not accept the defendants’ offer to settle.

[11] At the time the parties delivered their respective offers, both damages and liability were in dispute. All offers to settle by both sides involved an amount to settle damages. The parties discussed bifurcating the trial in the days before the trial, without arriving at an agreement.

[12] On the eve of trial, the parties settled the issue of damages and agreed on the remaining issues to be tried.

[13] The plaintiffs submit that the parties entered into an agreement memorialized in a letter dated March 27, 2022, from counsel for the plaintiff, Patrick Brown, to counsel for the defendants, Don Rollo. The defendants have not contested or challenged the plaintiffs’ characterization of their agreement. The relevant portion of the letter states: “…this is to confirm our understanding as to t he resolution of issues between the parties and issues remaining for the purpose of trial, which is to commence with jury selection on Monday.” Further, the letter outlined:

1. The parties agree that they shall move forward on the issue of liability only. The issue of damages shall not.
2. The parties agree that $1,500,000 shall be the amount available in the event that an award is to be made to the Plaintiff based on a finding of liability against the Defendants. Any percentage or apportionment of liability against the Defendants shall be the percentage and/or apportionment attached to the $1,500,000 amount. [emphasis added.]

[14] Since Ms. Jarvis had no memory of the accident, the plaintiffs brought a motion to use demonstrative evidence and to show the jury photographs of Ms. Jarvis’ head to explain her lack of memory. Ms. Jarvis was partially successful on the first motion and entirely successful on the second motion.

[15] The defendants brought a motion to reverse the order of presentation, which was dismissed. Both parties each took two days each to complete their case with the plaintiffs calling four witnesses and the defendants calling five witnesses.

[16] The cab driver was not called, by either party as a witness at trial. Two witnesses, a driver and her passenger, travelling in the opposite direction, both saw the girls on the sidewalk before they ran across the road. The friend that Ms. Jarvis was with, also a minor at the time, testified at the trial. Ms. Jarvis’ friend admitted that she was very drunk at the time and perhaps “very very drunk”. The girls were wearing dark clothing that night. Aside from Ms. Jarvis and Ms. Oliveira, and her father, who was a passenger in the vehicle, and the two independent witnesses, both sides called experts to testify at the trial.

C. Positions of the Parties

i. The Defendants

[17] The defendants submit that as the action was dismissed on liability, the defendants are entitled to their costs throughout, with costs on a partial indemnity basis up to the date of their offer to settle, and on a substantial indemnity basis thereafter. The defendants rely on their offer settle and the decision of S & A Strasser Ltd. v. Richmond Hill (Town) (1990), O.R. (3d) 243 (C.A.).

[18] The defendants’ Bill of Costs sets out legal fees in the amount of $194,805.81 and disbursements in the amount of $10,871.75. The defendants submit that it was known that the action would take approximately four to five weeks of trial time. The defendants argued there was preparation to examine 10 witnesses and to cross examine 18 of the plaintiff’s witnesses. The defendants submit that the plaintiffs did not make any offer to settle at the pre-trial conference.

[19] The defendants submit that Ms. Jarvis’ injuries were severe, and, in the result, the issue of damages was complicated. The defendants also submit that the issue of liability was very complicated as the defendants’ position was that of zero percent liability and the inability to avoid the collision. The defendants submit that as the agreement to bifurcate was only reached on March 27, 2022, they were required to prepare for a trial on both liability and damages. The defendants further submit that the plaintiffs’ three motions at the commencement of trial delayed the trial by two days. The defendants are of the view that the plaintiffs’ motions delayed the trial by two days. The defendants argue that their cost award ought not to be limited because the plaintiffs took a risk which did not result in a favourable outcome.

ii. The Plaintiffs

[20] Ms. Jarvis submits that although the defendants were successful, the court ought not to award costs, or costs should be significantly reduced. In reliance upon this position, the plaintiffs submit that the court should consider the following factors:

i. the chronology of the litigation, the reasonableness and proportionality of costs for a liability trial; ii. the inability of the plaintiffs to accept the defendants’ rule 49 offer to settle after the parties agreement; iii. Ms. Jarvis’ tragic claim; and that iv. the defence elicited evidence that the plaintiff was fleeing paying a taxi fare in front of the jury; and that v. Ms. Jarvis had a valid claim.

D. The Issues to be Determined

[21] The following issues are to be determined:

i. If the defendants’ r. 49 offer applies, are the defendants entitled to elevated costs? ii. Should the losing party, Ms. Jarvis, be exempt from paying the costs of the successful defendants?

E. Disposition

i. The defendants would not be entitled to elevated costs, if costs were awarded, for the reasons set out below. ii. Ms. Jarvis is not liable to indemnify the defendants for costs, for the reasons set out below. iii. There shall be no order as to costs against the grandparents, the FLA claimants, for the reasons below.

F. Analysis

i. If the defendants’ r. 49 offer applies, are the defendants entitled to elevated costs?

a. Scale of Costs

[22] The defendants seek costs on a substantial indemnity basis from the date of their offer. The plaintiffs have not challenged the claim of entitlement to an elevated rate charged, but rather contend that the plaintiffs could not have accepted the offer to settle in light of the agreement by the parties to proceed with a trial on liability only and the defendants posting $1.5 million dollars of their policy limits.

[23] The party who wishes to rely on an offer has the onus of proving that the offer meets the requirements of r. 49.10(3).

[24] I disagree that the defendants would be entitled to elevated costs. First, the defendants’ offer to settle does not fall within the ambit of r. 49 in this case, as the jury verdict resulted in a dismissal of the plaintiffs’ action. Second, the defendants have not set out any circumstances involving the conduct or behaviour of the plaintiffs which would warrant an award of costs on a substantial indemnity scale.

[25] Under r. 49.10(2), the costs consequences flowing from a defendant’s offer to settle depends on the judgment obtained. If the plaintiff obtains a judgment as favourable or less favourable than the defendant’s offer, the plaintiff is entitled to costs of the litigation on a partial indemnity basis until the date of the offer and the defendant is indemnified for partial indemnity costs from the date of the offer. Rule 49.10(2) provides as follows:

(2) 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.

[26] In this case, the defendants’ offer to settle was for a lump sum monetary amount to all plaintiffs to settle the claims of all the plaintiffs. As a result of the jury’s verdict in the liability trial, Ms. Jarvis’ action was dismissed. It stands to reason that the defendants would have no obligation to indemnify her, monetarily under the agreement. However, the key question initially, is even assuming the defendants are correct that their offer to settle applies, notwithstanding the agreement, the issue is whether the costs consequences which flow from r. 49.10(2), applicable to offers made by defendants, would apply in the circumstances.

[27] There is a well-established body of appellate jurisprudence in Ontario which stands for the principle that r. 49.10(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), applies where a defendant exceeds his or her offer to settle and where the plaintiff has recovered a judgment of some value: Strasser; Scapillati v. A. Potvin Construction Ltd. (1999), 1999 1473 (ON CA), 44 O.R. (3d) 737 (C.A.); Dunstan v. Flying J Travel Plaza, 2007 44819 (Ont. S.C.); Schwark v. Cutting, 2010 ONCA 299, 57 E.T.R. (3d) 1. Stated another way, where a defendant delivers an offer to settle, and the plaintiff’s claim fails because the plaintiff has not recovered a judgment, r. 49.10 has no application. In Strasser, Carthy J.A. awarded substantial indemnity costs to a defendant against him, and the action was dismissed. The defendant had made an offer to settle. Justice Carthy held that the intent of r. 49.10(2) was to award partial indemnity costs to the plaintiff up to the date of the defendant’s offer where the plaintiff had obtained some relief but was awarded less than the amount of the defendant’s offer to settle, and partial indemnity costs to the defendant from the date of the defendant’s offer to settle.

[28] And, while the defendants rely on Strasser in support of their position for substantial indemnity costs based on the strength of their r. 49 offer to settle, the Ontario Court of Appeal has gone on to clarify the Court’s decision in Strasser in a series of cases making it clear that the law has evolved and egregious conduct on the part of the party against whom costs is sought is required. For instance, in Scapillati, Austin J.A., speaking for the Court, commented that the “the principle upon which solicitor and client costs were awarded in Strasser is a very narrow one.” In Iannarella v. Corbett, 2015 ONCA 110, 124 O.R. (3d) 523, at paras. 138-139, Lauwers J.A. speaking for the Court stated:

The trial judge stated that he was exercising his discretion under this court's decision in S& A Strasser Ltd. v. Richmond Hill (Town) (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243 (Ont. C.A.). In that case the court cited rule 49.13, which provides that notwithstanding rule 49.10, in assessing costs a court "may take into account any offer to settle made in writing."

The development of this court's approach to awards of substantial indemnity costs has evolved since Strasser, as this court noted in Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66. Outside of rule 49.10, to make such an award as a matter of judicial discretion the court must find that the party has been guilty of egregious misconduct in the proceeding. See St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, at para. 92 and McBride Metal Fabricating Corp. v. H. & W. Sales Co. (2002), 2002 41899 (ON CA), 59 O.R. (3d) 97 (Ont. C.A), at para. 39.

[29] In this case, Ms. Jarvis did not establish liability against Ms. Oliveira and in the result, the plaintiffs’ action against the defendants is dismissed. The costs consequences which flow from r. 49.10 therefore have no application in the circumstances. I find that the defendants would not be entitled to elevated costs solely based on their offer to settle.

[30] Apart from the operation of r. 49.10, elevated costs are only warranted where the party against whom the costs award is to be made has engaged in conduct worthy of sanction. In Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p. 134, McLachlin J. described the circumstances when elevated costs are warranted as "only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties". Ontario’s highest court has consistently stated that apart from the operation of r. 49.10, elevated costs should only be awarded where there is a clear finding of reprehensible conduct on the part of the party against whom the costs award is made: Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at paras. 28 and para. 40; St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, 319 D.L.R. (4th) 74, at para. 92; and McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), 2002 41899 (ON CA), 59 O.R. (3d) 97 (C.A.), at para. 39; and Walker v. Ritchie (2005), 2005 13776 (ON CA), 197 O.A.C. 81 (C.A.), at para. 105, rev’d 2006 SCC 45, [2006] 2 S.C.R. 428.

[31] In the case before me, the defendants have not suggested that Ms. Jarvis, or any of the plaintiffs, engaged in egregious conduct worthy of sanction in the form of elevated costs.

b. The court’s discretion with respect to costs

[32] Notwithstanding the fact that an offer to settle may not meet the requirements mandated by r. 49.10, “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”: see r. 49.13; Elbakhiet v. Palmer, 2014 ONCA 544, 121 O.R. (3d) 616. In this case, both parties delivered offers to settle when the issue of liability and damages were on the table. I disagree with counsel for the plaintiffs that the defendants offer to settle was not capable of being accepted – that is to say, the defendants’ r. 49 offer to settle had to be withdrawn in writing, and it was not in this case, therefore it remained capable of being accepted: see r. 49.04(1); Hashemi-Sabet Estate v. Oak Ridges Pharmasave Inc., 2018 ONCA 839; York North Condominium Corp. No. 5 v. Van Horne Clipper Properties Ltd. (1989), 1989 4375 (ON CA), 70 O.R. (2d) 317 (C.A.). That does not end the debate however, as I gather based on the plaintiffs’ submissions that the court must take into account the intervening agreement when determining the issue of costs.

[33] As for the impact of the agreement reached by the parties with respect to “the resolution of issues between the parties and issues remaining for the purpose of trial”, the defendants have not made any submissions. Neither party has provided any authority on the impact of the parties’ settlement agreement on the defendants’ offer as it pertains to costs. As stated above, it appears the defendants offer was still open for acceptance. The defendants have not made any submissions on the impact of the parties’ agreement on the defendants’ offer to settle. The agreement is silent on the issue of costs.

[34] In reviewing the agreement, I would tend to agree with counsel for the plaintiffs that this was a liability trial only and in the result the costs are not reasonable and are disproportionate. The jury was not asked to determine the question of damages. In order for the court to enforce an offer to settle, the terms of an offer to settle must be clear, definite, and unequivocal as to what is being offered so the other side is aware of what is being accepted: Yepremian v. Weisz (1993), 1993 5483 (ON SC), 16 O.R. (3d) 121, 20 C.P.C. (3d) 357 (Gen. Div.); Stetson Oil & Gas Ltd. v. Stifel Nicolaus Canada Inc, 2013 ONSC 5213, at paras. 2-8. In this case, the only offers to settle before the court relate to settling damages. In light of the parties’ agreement, the court cannot divine the intentions of the parties, and it would be unfair to the plaintiffs to compare the defendants’ offer to settle with the ultimate judgment following a liability only trial. If I am wrong, I am persuaded by Ms. Jarvis’ arguments that she should not be liable for the defendants’ costs for the reasons below.

[35] The defendants also submit that the plaintiffs did not make any offer to settle at the pre-trial conference. The defendants have not provided any authority to indicate this fact would be an appropriate consideration considering the requirement for confidentially mandated by r. 50.09 of the Rules at pre-trial conferences. And, in this case, both sides contributed to the lengthening of the trial by bringing motions which were not part of the Trial Management Report to the trial judge signed by the pre-trial judge.

ii. Should the plaintiffs be exempt from paying the costs of the successful defendants?

a. Courts’ discretion with respect to costs

[36] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, governs the court’s jurisdiction to award costs and provides that:

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[37] The relevant factors which the court must consider in exercising its discretion to award costs are set out in r. 57.01(1) of the Rules. The court does have some latitude in exercising its discretion with respect to costs, and may consider any offer to settle made in writing, the date the offer was made and the terms of the offer: rr. 49.03, 49.10 and 49.11; Elbakhiet.

[38] The plaintiffs submit that the interests of justice would not be served by awarding the defendants costs in such tragic circumstances. The defendants have not responded to this argument. The defendants, however, argue that the costs are of no surprise to the plaintiffs and that plaintiffs’ counsel are sophisticated litigants who understand the significant costs associated with proceeding to trial. The defendants have not provided any authority to support the argument that the court can take these factors into account when considering costs. However, I am not persuaded by these arguments as Ms. Jarvis was a minor at the time of the accident and based on her significant head injuries and her testimony at trial, she was far from a “sophisticated litigant”. It is a party who is ultimately responsible for costs, not their lawyer, absent any order sought under r. 57.07 of the Rules, on notice to the lawyer against whom a costs award is to be made, which is not the case here.

[39] I would not give credence to the plaintiffs’ argument that Ms. Jarvis had a valid claim. There are countless cases where litigants may have valid claims but are unsuccessful. While this factor may be considered in appropriate cases, there is no indication that such a factor is of general application. In my view, this would only undermine the longstanding common law principles of indemnification of costs in proceedings. That is, in the absence of misconduct, a successful litigant has a reasonable expectation that his or her costs will be paid by the unsuccessful party: B. (R.) v. Children's Aid Society of Metropolitan Toronto, 1995 115 (SCC), [1995] 1 SCR 315, at p. 404; Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.). The general principle is that a successful party is entitled to his or her costs is of long standing and should not be departed from except for very good reasons: Macfie v. Cater (1920), 1920 401 (ON SC), 57 D.L.R. 736 (Ont. S.C.), aff'd (1921), 1921 528 (ON CA), 64 D.L.R. 511 (Ont. C.A).

b. The tragic nature of the case and the ability of the party to pay costs

[40] The court’s discretion to exempt an unsuccessful party from indemnifying the successful party for costs is unfettered, provided that it is exercised judicially: Orkin, for example, notes this in Mark M. Orkin, Robin G. Schipper, Orkin on the Law of Costs, 2nd ed., (Canada: Carswell 1987), at p. 2-20; Williams v. Thunder Bay (City), [1993] O.J. No. 2531 (Gen. Div.).

[41] One of the factors which I have considered in exempting the plaintiff from liability to pay costs is the tragic nature of the case. It is now established that court may take into account the tragic circumstances of a case when exercising its discretion with respect to costs: Orkin on the Law of Costs, 2nd ed., at p. 2-35; Byers (Litigation Guardian of) v. Pentex Print Master Industries Inc (2002), 2002 49474 (ON SC), 59 O.R. (3d) 409 (S.C.), aff’d (2003), 2003 42272 (ON CA), 62 O.R. (3d) 647 (C.A.); Cheetham v. TD Life Insurance Co., 2013 ONSC 4892.

[42] In some cases, the court has considered both the tragic circumstances and the ability of the losing party to pay costs: Hashemi-Sabet Estate v. Mazzulla, 2015 ONSC 5784, 23 C.C.L.T. (4th) 172, at para. 5; Williams v. Thunder Bay (City), 1993 CarswellOnt 4361 (Ont. Gen. Div.); King v Skyview Financial Advisors, 2006 CarswellOnt 4265 (Ont. S.C.). In Byers (Litigation Guardian of), Sachs J. concluded, at para. 20, the plaintiffs should not be liable to pay the defendants’ costs because of their limited financial resources and the fact that they were coping with the effects of their daughter’s injury, despite the fact that the action was dismissed against the defendants. In Walsh v. 1124660 Ontario Limited, 2007 4789 (Ont. S.C.), Lane J. declined to award costs after a lengthy jury trial resulting in the dismissal of an action after a lengthy jury trial.

[43] Ms. Jarvis submits that she has significant, ongoing medical care that will continue for the rest of her life. She requires ongoing attendant care and will likely never work in any capacity or meaningful way because of her brain injury. Ms. Jarvis argues that she is being cared for by her elderly grandparents who have little financial resources.

[44] In my view, this is an appropriate case for the court to take into consideration the tragic circumstances of the case in assessing whether the losing party should pay costs in the present circumstances. Ms. Jarvis was a 16-year-old minor who suffered a severe traumatic brain injury. She requires significant, ongoing medical care that will continue for the rest of her life. She requires ongoing attendant care. She testified that her “skull broke” and she has had “four brain surgeries to fix it”. Counsel for the defendants elicited evidence from her at the trial, that she continues to receive her statutory accident benefits. At the trial, her testimony was slow, at times halting. She is going to George Brown College, but I agree with the plaintiffs that she will likely never work in any capacity or meaningful way. At trial, counsel for the defendants asked her if she was receiving any accident benefit money monthly, which elicited the response “I am pretty sure”. The question was not relevant to the issue of liability. She has lived with her grandparents since the age of eight. She has no recollection of what happened to her in the car accident nor any memory of that night. She has no memory for a month before the accident.

[45] I am persuaded by Ms. Jarvis’ argument that she should be exempt for costs based on the tragic circumstances. I am further persuaded by another factor, and that is, on the evidence and admissions elicited by defence counsel at the trial, the prospect of Ms. Jarvis being able to pay the costs award is dim. In my view, this is an appropriate case to take into consideration not only Ms. Jarvis’s tragic circumstances but the ability of Ms. Jarvis to pay costs.

c. Failure to conduct the trial fairly

[46] There is another factor which the plaintiffs have urged the court to consider, which in my view speaks to trial fairness.

[47] Ms. Jarvis points to the fact that the plaintiffs had brought a motion to prohibit the defendants from advising the jury that Ms. Jarvis had been fleeing a taxi fare moments before the collision, but the defendants elicited that evidence from the plaintiffs’ forensic engineer in front of the jury before a ruling had been made. The defendants have not responded to the plaintiffs’ submission on this point. At trial, the plaintiffs argued that such evidence before the jury was based on bad character, that Ms. Jarvis did not pay, was fleeing the taxicab, was engaged in a criminal activity, and would suggest that they were “bad girls”. During the cross-examination of the plaintiffs’ engineer, counsel for the defendants put to him the motor vehicle accident report and had him read passages into the record. The police officers were not called nor was the taxicab driver.

[48] While counsel for the defendants argued that it was similar fact evidence as the girls had engaged in this conduct before, I ruled that evidence that the girls had been running before the collision could be part of the narrative, but evidence to suggest that Ms. Jarvis was fleeing the cab to avoid paying the cab fare was character evidence and was not relevant to the issue of liability. While not raised by the plaintiffs, the issue arose once again during the course of the trial which led to me removing the jury form the courtroom. During the evidence in chief of Mark Paquette, the defendants’ expert, counsel for the defendants placed on an Elmo, projected before the jury, a diagram that included the narrative: “P1 was in the taxi and attempts to flee taxi fare, runs…” The information was that of an officer who was not called to testify.

[49] In the decision of John Doe v. Ontario, 2007 50279 (Ont. S.C.), at para. 10, Perell J. explained the purpose of awarding costs as follows:

The court's discretion to award costs is designed to further three fundamental purposes in the administration of justice: (1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behaviour by litigants in their conduct of the proceedings: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 (S.C.C.); Fong v. Chan (1999), 48 O.R. (3d) 330 (Ont. C.A.); Fellowes, McNeil v. Kansa General International Insurance Co., (1997), 1997 12208 (ON SC), 37 O.R. (3d) 464 (Ont. Gen. Div.).

[50] In appropriate cases, the court has ordered those costs should not be paid by the losing party in the face of misconduct by the successful party: Capela et al. v. Rush et al. (2002), 2002 49470 (ON SC), 59 O.R. (3d) 299; Maher v. Great Atlantic & Pacific Company, 2010 ONSC 1310. While I do not believe the actions of the defendants rose to the level of “misconduct”, I am satisfied, based on what unfolded at the trial that the end result, intentional or careless, the result is the same – that is there was “inappropriate behaviour by litigants” which resulted in unfairness in the conduct of the proceedings to Ms. Jarvis who had no memory of the accident, the evidence was not put to her, the friend she was with admitted that she had been “very very drunk” that night, and neither the taxicab driver nor police officer were called. The character evidence was elicited and reinforced a second time in the sketch with the challenged narrative projected before the jury. As noted by Mr. Brown at the trial, such evidence before the jury based on bad character, that Ms. Jarvis did not pay, was fleeing the taxicab, was engaged in a criminal activity, would suggest to the jury that they were “bad girls”. I find that to have it reinforced during the chief of the defendants’ expert after being elicited through the testimony of the plaintiffs’ expert resulted in procedural unfairness to Ms. Jarvis.

d. Presumption re costs

[51] Although I have concluded that the plaintiff is not liable to indemnify the defendants for costs, I would agree with the plaintiffs that the defendants’ Bill of Costs of over $205,0000 is excessive and not reasonable for what was essentially a five-day trial. While the defendants argue that the agreement to bifurcate the trial was reached on the eve of trial, the agreement clearly indicates that the parties intended to resolve all issues except for the issue of liability which was to be tried. The jury did not have to determine the question of damages. Even if the plaintiff succeeded on liability, the issues of damages were settled. I also note that the defendants have not produced any dockets. Both sides have senior counsel involved, and the issue of liability was not complicated. It is also not clear from the defendants’ submissions why the issues of damages was complicated.

e. Multiple Plaintiffs

[52] I decline to award costs against Ms. Jarvis’ grandparents who are the FLA claimants. Ms. Jarvis is the principal plaintiff, and their claims are derivative. The defendants’ offer to settle was a global one and was not severable and neither party has addressed whether the FLA claimants could have accepted the offer to settle, given their derivate claims, nor the impact of the agreement on the claims of the FLA claimants. The agreement suggests that all claims were being resolved, save for liability to be tried. There is no indication before me that any value was ever attached to the claims of the FLA claimants. The agreement makes no reference to the apportionment of any amount to the claims of the FLA claimants. The FLA claimants did not participate in the liability trial. The defendants have not argued that the grandparents should be liable for costs. And, based on the submissions of the plaintiffs’ the grandparents, which was unchallenged by the defendants in their reply submissions, the grandparents are elderly with little financial means.

A. P. Ramsay J. Date: May 17, 2023