Court File and Parties

Court File No.: 1777/17 Date: 2023-01-09 Superior Court of Justice - Ontario

Re: Estate of Wilma Sutherland and Robert Baker, Plaintiffs And: London Health Sciences Centre, Dr. Deric Morrison, Jane Doe/John Doe Doctors, Anne Elizabeth McAllister R.N., Rebecca Rose Pieterson R.N., Sidra Nadeem R.N., and Jane Doe/John Doe Nurses, Defendants

Before: Heeney J.

Counsel: Alexa Duggan, for the Plaintiffs A.J. Billes, for the Defendants

Heard: October 17, 2022 by videoconference; costs submissions completed November 23, 2022

Costs Endorsement

[1] There are two costs issues to be resolved. The first relates to costs of the plaintiffs’ successful motion to amend. The second relates to the defendants’ claim pursuant to r. 76.13, for costs that would not have been incurred if the claim had originally been brought under the simplified procedure.

[2] As to the first, the plaintiffs sought to amend their pleadings by limiting their claim to $200,000, so as to bring the action within the simplified procedure under r. 76.02. The reason for the amendment was the death of Wilma Sutherland in April, 2021, which served to eliminate any claim for the cost of future care. In view of that unexpected change in circumstances, plaintiffs’ counsel reassessed the value of their claim and concluded that it did not exceed $200,000.

[3] The defendants opposed the amendment, even though it would serve to reduce their exposure to damages from $950,000 to $200,000. They claimed to be prejudiced by the proposed amendment in a number of ways, including their ability to put in the entirety of the case they wished to present. I rejected each of those claims, concluding that their entire case in chief could be put in in the time it takes to file their affidavits at the outset of the trial. Conducting the trial by way of simplified procedure will, in fact, provide each side with more time to cross-examine the opposing parties’ witnesses than had they attempted to fit the entire trial under the ordinary procedure within the 7 days that had been agreed to in May of 2022.

[4] Costs normally follow the event. The plaintiffs were the successful parties on this motion and would normally be entitled to their costs. The defendants unsuccessfully opposed the motion, and their reasons for so doing were rejected by the court.

[5] The defendants argue that the plaintiffs were seeking an indulgence from the court, and for that reason should be denied their costs of the motion. I agree with the general principle that a party who is seeking an indulgence from the court should not be rewarded with costs when they are successful in obtaining it. An indulgence from the court is usually required when the party has committed an error of some kind during the course of litigation, such as failing to file pleadings on time, resulting in a default judgment which must be set aside on motion. Here, however, the motion was not brought about by reason of an error by the plaintiffs which required rectification, but rather because of an unexpected change in circumstances that substantially lowered the value of their provable claim, such that it now falls within the monetary limits for a simplified trial. To seek to amend the claim to an amount that has become lower as a result of a change in circumstances does not amount to seeking an indulgence.

[6] Furthermore, while the plaintiffs required leave of the court to bring the motion (given that the matter had already been set down for trial), it must be remembered that the motion was to amend the Statement of Claim. Under r. 26.01 of the Rules of Civil Procedure, such a motion may be brought at any stage of an action, even after the action is set down, and the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. In my reasons, I referred to the decision of Borins J. in Gloucester Organization Inc. v. Canadian Newsletter Managers Inc., [1995] O.J. No. 68 (Ont. Gen. Div.), at para. 13, where he said that such a motion compels a consideration of different principles in the exercise of judicial discretion than when leave is sought to proceed with a motion for other relief.

[7] Given the presumptive wording of r. 26.01, it seems to me that a party who opposes a motion to amend risks an adverse costs award if they are unsuccessful.

[8] The defendants also argued that costs should be denied because the plaintiffs did not bring this motion until after the matter was scheduled to proceed to trial in May 2022 but was never called. I do not find that delay to be relevant to the plaintiffs’ entitlement to costs of the motion. The motion is no less meritorious when it is brought after May, 2022 than it would have been had it been brought before. I am, however, of the view that the delay does have relevance to the defendants’ claim for r. 76.13 costs. This will be discussed below.

[9] In my view, costs should follow the event. The plaintiffs are entitled to their partial indemnity costs of the motion.

[10] As to quantum, the plaintiffs claim 33.5 hours spent by four lawyers for preparation and attendance on the motion, resulting in fees of $8,522 plus HST on a full indemnity basis. This translates into partial indemnity costs of $6,330.50 plus HST of $822.97 totalling $7,153.47. The defendants argue that this is excessive. In their own costs outline, they note that they only incurred 17.3 hours for preparation and attendance, for a total of $3,622 on a partial indemnity basis.

[11] I agree with the defendants that the amount of time incurred is excessive, and disproportionate to the relative simplicity of the motion before the court. There were no cross-examinations, and there were only two short affidavits filed in support of the motion. Costs should reflect what the unsuccessful party should reasonably expect to pay. The defendants’ cost outline serves to illustrate what the unsuccessful party felt the motion was worth, although it is clearly not determinative.

[12] In my view, an appropriate award of costs of the motion is $5,000 all inclusive.

[13] The other issue is the defendants’ claim for costs under r. 76.13 of the Rules of Civil Procedure. That rule provides as follows:

76.13 (1) Regardless of the outcome of the action, if this Rule applies as the result of amendment of the pleadings under subrule 76.02 (7), the party whose pleadings are amended shall pay, on a substantial indemnity basis, the costs incurred by the opposing party up to the date of the amendment that would not have been incurred had the claim originally complied with subrule 76.02 (1), (2) or (2.1), unless the court orders otherwise.

[14] That rule is clearly applicable here. The simplified procedure rule now applies by reason of the amendment of the Statement of Claim to reduce the claim to $200,000. In such circumstances, the presumption is that, regardless of the outcome, the plaintiffs shall pay, on a substantial indemnity basis, the costs incurred by the defendants that would not have been incurred had the claim originally been brought under the simplified procedure, unless the court orders otherwise.

[15] The rule provides no guidance as to the circumstances under which the court might “order otherwise”, nor have the plaintiffs provided any authorities that do so.

[16] The defendants rely on Hewitson Holdings Inc. v. Bur-Met Contracting and Concrete Walls, 2021 ONSC 3197. In that case the plaintiff originally claimed damages exceeding $500,000, but then sought to reduce its claim to $60,461, which meant that the trial would proceed under the simplified procedure. The defendant’s claim for r. 76.13 costs was allowed. In arriving at that decision, Pierce J. found, at para. 46 of her reasons, that a reasonable range of the plaintiff’s damages had “crystallized” at just under $60,000 prior to the issuance of the Statement of Claim in 2017, when the plaintiff had opted for ordinary procedure.

[17] Here, the plaintiffs cannot be faulted for having selected ordinary procedure when the claim was commenced, because Wilma Sutherland was alive, as was her claim for the cost of future care. It was her death that led to the motion to amend, which happened on April 4, 2021, well after the Statement of Claim was issued.

[18] However, the parties proceeded to set and prepare for a seven-day ordinary trial scheduled for May 2022, which was never called. It was only thereafter that this motion was brought. In my view, that delay is relevant to the defendants’ claim for r. 76.13 costs, because it resulted in costs being incurred in preparing for an ordinary trial that could have been avoided had the motion been brought earlier.

[19] Once Wilma Sutherland died, her claim “crystallized” at an amount that was $200,000 or less. The plaintiffs could have and should have brought their motion immediately. Had they done so, there is no reason they necessarily would have had to give up their May, 2022 trial date. Indeed, a simplified five-day trial would be two days shorter than the seven-day ordinary trial that had been scheduled for that time slot.

[20] The defendants’ costs outline claims preparation time that was incurred in preparing witnesses for an ordinary trial, where the evidence-in-chief would have gone in by viva voce evidence, that would not have been incurred in a simplified trial, where the evidence-in-chief goes in by affidavit. Their costs outline shows that total fees of $21,523 plus HST were incurred, on a substantial indemnity basis. This was generated by two lawyers spending a total of 79 hours preparing witnesses for giving testimony.

[21] The defendants argue that they were, in effect, forced to prepare for two trials: one under regular procedure where all of the evidence is viva voce, and one under the simplified procedure, where the evidence-in-chief goes in by affidavit.

[22] They concede, though, that at least some of the costs relating to witness preparation would have been incurred in any event in preparing for a simplified trial. Accordingly, they discount their claim to $12,169.78 on a substantial indemnity basis, representing one-half of the costs relating to witness preparation.

[23] The plaintiffs argue that witness preparation time should be proportional to the length of trial, irrespective of whether it proceeds under the simplified or ordinary procedure. The May, 2022 trial was agreed by counsel to take only seven days. However, the defendants appear to have prepared for a trial of 15 days or longer.

[24] I agree with this submission. A seven-day trial, assuming a normal sitting day of five hours of evidence, amounts to a total of 35 hours. At most, only half of that time, or 17.5 hours, would be allocated to the case for the defendants. After deducting time for opening and closing submissions, the defendants’ witnesses would have been testifying for only about 15 hours in total. Spending 79 hours to prepare for 15 hours of testimony is clearly excessive.

[25] Furthermore, some preparation time would have been required even for a simplified trial. While the evidence-in-chief goes in by affidavit, the witnesses will still be subjected to oral cross-examination, and need to be prepared for that. I also agree with the plaintiffs that the notes taken during witness preparation can be used as the basis for preparation of the affidavits for a simplified trial, so that time does not, in total, constitute costs that would not have been incurred had the trial been switched to a simplified trial in advance of the May 2022 trial date.

[26] Having said that, I do accept that some of the preparation time would not have been incurred had that change occurred on a timely basis, not only because the evidence-in-chief would be going in by affidavit, but also because the Statement of Claim, prior to the recent amendments, claimed $950,000 in damages, whereas it now claims $200,000. Counsel can be expected to spend proportionately more preparation time when the amount in dispute is almost five times as large.

[27] There is no scientifically accurate approach to determining how much preparation time was unnecessarily incurred. The defendants chose an arbitrary discount of 50%. I am of the view that the discount should be higher, to reflect the points just discussed.

[28] I conclude that a reasonable allowance for the defendants’ costs under r. 76.13, on a substantial indemnity basis, is $8,000 all inclusive.

[29] After deducting the plaintiffs’ entitlement to costs of $5,000, the net result is an award to the defendants fixed at $3,000. Those costs shall be payable within 90 days.

Mr. Justice T. A. Heeney Date: January 9, 2023