Court File and Parties

Court File No.: CV-14-518111-00A1 Date: 2023-01-17 Ontario Superior Court of Justice

Re: Wendy Delgado-Zurita, Plaintiff -and- City of Toronto and Toronto Transit Commission, Defendants -and- Guild Electric Limited, Third Party

Before: Robert Centa J.

Counsel: Maria Oliveira, for the plaintiff Cara Davies and Amrit Sandhu (student-at-law), for the defendant the City of Toronto Sarah Merredew, for the defendant Toronto Transit Commission Nathan Fabiano, for the third party

Heard: January 16, 2023 (in writing)

Costs Endorsement

[1] On January 3, 2023, I dismissed Wendy Delgado-Zurita’s motion to vary an order that set aside a dismissal of her action and to extend the time to set her action down for trial. I found that Ms. Delgado-Zurita had not provided a reasonable, acceptable, or satisfactory explanation for her delay or the breaches of the set-aside order. She had not demonstrated that the defendants would not be prejudiced. Viewed contextually and balancing the desire to have civil actions decided on their merits with the need to have disputes determined in a timely and efficient manner, I found that the court should not give Ms. Delgado-Zurita a third opportunity to advance her claim in a timely way. I dismissed Ms. Delgado-Zurita’s motion and the action.

[2] I invited costs submissions of the parties, which I have now reviewed.

City of Toronto’s submissions

[3] The City seeks $43,195.49 in legal fees and disbursements, inclusive of HST.

[4] The City submits that it is presumptively entitled to a costs order in its favour, as both Ms. Delgado-Zurita’s motion and action were dismissed.

[5] The City notes that Ms. Delgado-Zurita claimed $1 million in an action of moderate complexity given the overlapping jurisdiction of the two defendants and the third party over the location at issue in the proceeding. The City submits that the issues were of great importance to all parties.

[6] The City emphasizes that Ms. Delgado-Zurita’s conduct during the litigation lengthened unnecessarily the duration of the proceeding. The City notes that Ms. Delgado-Zurita failed to comply with the set-aside order, failed to answer her undertakings, prolonged the motion to vary the set-aside order by unilaterally booking an inappropriately short motion, and by delivering a further affidavit after the motion was to be argued.

Toronto Transit Commission’s submissions

[7] The TTC seeks $35,739.60 in legal fees on a partial indemnity scale plus $1,168.46 in disbursements, inclusive of HST.

[8] The TTC submits that this amount was within the reasonable expectation of the plaintiff for an action that sought $1 million, was commenced in 2014, included three days of discovery, and a long motion with affidavits, cross-examinations, and a factum. Given the size of the claim, the TTC had to treat the issues raised in the case as significant and important. The TTC submits that the $240 hourly rate claimed is reasonable and notes that it has not claimed for time spent by law clerks or students, or for administrative costs. The TTC notes that the while Ms. Delgado-Zurita’s motion was not overly complex, it involved legal research, cross-examinations, and the preparation of a factum.

[9] Like the City, the TTC also places significant emphasis on the Ms. Delgado-Zurita’s conduct during the litigation. It submits that Ms. Delgado-Zurita failed to comply with the set-aside order, and four of the five timelines contained in that order. The TTC also points to Ms. Delgado-Zurita’s failure to schedule the motion to vary the set-aside order for an appropriate amount of time and her failure to deliver her notice of motion or materials promptly. Finally, the TTC points out that Ms. Delgado-Zurita delivered a further affidavit in her own name after the motion was originally to be argued, which required the TTC to do further work.

[10] Prior to discoveries, the TTC also made an offer to settle the proceeding with a without-costs dismissal, which Ms. Delgado-Zurita did not accept.

Guild Electric Limited’s submissions

[11] Guild Electric seeks $18,546.14 in costs, inclusive of its legal fees on a partial indemnity basis, disbursements, and HST.

[12] Guild Electric submits that such a costs order would be fair and reasonable for Ms. Delgado-Zurita to pay in the proceeding. Guild Electric submits that it was involved in the action for over six years, attended three days of discovery, and a mediation that Ms. Delgado-Zurita chose not to attend.

[13] Guild Electric states that it served what it describes as a “Rule 49 offer” to settle the action on a without costs basis on September 16, 2021. Guild Electric concedes that the offer expired but submits that I should still give weight to that offer because it would have allowed the plaintiff and third party to avoid further costs. Guild Electric did not include a copy of its offer to settle with its submissions on costs.

[14] Guild Electric submits that as a result of Ms. Delgado-Zurita’s conduct and delay in the proceeding, the complexity and importance of the issues in dispute, Ms. Delgado-Zurita “would reasonably expect to pay the third party’s costs.”

Ms. Delgado-Zurita’s submissions

[15] Ms. Delgado-Zurita submits that “the costs of this action be fixed at $500.00 to be split among the defendants in any way they agree upon.”

[16] Ms. Delgado-Zurita submits that the overriding consideration is the reasonableness of the costs award and that the court should only award costs that are fair and reasonable for the unsuccessful party to pay in the circumstances of this case. Ms. Delgado-Zurita submits as follows:

Ms. Delgado-Zurita’s expectations when she started this action were simply to get compensated for the pain and suffering caused by the incident suffered on September 10, 2013. Although Ms. Delgado- Zurita was made aware of the risks of a litigation, it is undeniable that the incident occurred and that it was caused by the negligence of the defendants, therefore, Ms. Delgado-Zurita had a legitimate cause of action and as such she expected fair compensation. …

Although there was no decision about the liability of this case, the plaintiff suffered permanent and serious injuries as a result of the negligence of the defendants.

[17] I note that a trial would be required to determine if the incident occurred as described by Ms. Delgado-Zurita, if it was caused by the negligence of the defendants, and what, if any, injuries she suffered.

[18] Ms. Delgado-Zurita submits that she works as a nurse earning $19.77 per hour, filed for divorce in October 2022, and lives in Toronto with its well-known high cost of living. She submits that “any amount” she is requested to pay will have a “punitive character.” She submits:

When Ms. Delgado-Zurita started this litigation, she accepted the risk of having to pay a feasible amount, but not the risk of becoming unable to support herself and her dependants due to this litigation. If every plaintiff were to face the risk of bankruptcy as a result of a litigation, this would deeply compromise the access to justice.

[19] Finally, Ms. Delgado-Zurita submits that she should not be required to pay the costs of Guild Electric, a third party that the City brought into the action: Marshall v. Shaw, 2016 ONSC 7436, at paras. 4 and 5.

Applicable principles

[20] In Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, at paras. 59 to 66, the Court of Appeal for Ontario restated the general principles to be applied when the court exercises its discretion to award costs. Fixing costs is a discretionary decision under section 131 of the Courts of Justice Act, R.S.O. 1990, c C.43. In exercising my discretion, I may consider the factors listed in rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg 194. These factors include the result achieved, the amounts claimed and recovered, the complexity of and importance of the issues in the proceeding, the principle of indemnity, the reasonable expectations of the unsuccessful party, as well as any other matter relevant to costs.

[21] In 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, at para. 10, Perell J. helpfully identified five purposes served by modern costs rules:

Modern costs rules are designed to advance five purposes in the administration of justice: (1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements [internal citations omitted]

[22] A proper costs assessment requires the court to undertake a critical examination of the relevant factors as applied to the costs claimed and then “step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable”: Apotex, at para. 60, Restoule v. Canada (Attorney General), 2021 ONCA 779, 466 D.L.R. (4th) 2, at para. 356, citing Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (C.A.), at para. 24. The overarching objective is to fix an amount of costs that is objectively reasonable, fair, and proportionate for the unsuccessful party to pay in the circumstances of the case, rather than to fix an amount based on the actual costs incurred by the successful litigant: Apotex, at para. 61; Boucher, at para. 26.

[23] While the reasonable expectation of the parties concerning the amount of a costs award is a relevant factor that informs the determination of what is fair and reasonable, it is not the only, determinative factor and cannot be allowed to overwhelm the analysis of what is objectively reasonable in the circumstances of the case. To hold otherwise would result in the means of the parties artificially inflating costs with the concomitant chilling effect on access to justice for less wealthy parties: Apotex, at para. 62.

[24] Costs that are reasonable, fair, and proportionate for a party to pay in the circumstances of the case should reflect what is reasonably predictable and warranted for the type of activity undertaken in the circumstances of the case, rather than the amount of time that a party’s lawyer is willing or permitted to expend: Apotex, at para. 65. The party required to pay the successful party’s costs “must not be faced with an award that does not reasonably reflect the amount of time and effort that was warranted by the proceedings”: Gratton-Masuy Environmental Technologies Inc. v. Building Materials Evaluation Commission (2003), 170 O.A.C. 388 (Div. Ct.), at para. 17.

Result

[25] I agree with Ms. Delgado-Zurita that she should not be responsible for paying costs to the third party. Generally, an unsuccessful plaintiff will not be held liable for costs incurred by third parties. Ms. Delgado-Zurita did not sue Guild Electric, did not want it in the action, and is not responsible for it being brought into the action: Sanofi Pasteur Limited v. UPS SCS, Inc., 2015 ONCA 88, 124 O.R. (3d) 81, at para. 77.

[26] Whether or not an unsuccessful plaintiff should be ordered to pay costs to a third party depends on the circumstances of the case and the discretion to make such an order must be exercised judicially: Guarantee Co. of North America v. Resource Funding Ltd. (2009), 82 C.P.C. (6th) 258 (S.C.J.), at para. 5. I do not see this as a case where the third party proceeding followed naturally and inevitably upon the institution of the plaintiff’s claim: Greater Toronto Airports Authority Assn. Inc. v. Foster Wheeler Ltd., 2011 ONSC 3377, at para. 53.

[27] In the circumstances of this case, and mindful of Ms. Delgado-Zurita’s submissions regarding her limited means, I do not order her to pay costs to Guild Electric.

[28] However, I order Ms. Delgado-Zurita to pay costs to the City and the TTC largely in the amounts claimed, with a 10% reduction to recognize Ms. Delgado-Zurita’s financial situation. I do so for the following reasons.

[29] First, the City and TTC were completely successful on the motion and in having the action dismissed. They are presumptively entitled to a costs award in their favour.

[30] Second, the principle of indemnity favours granting a costs award to the City and the TTC. The rates charged for the lawyers engaged on this matter are reasonable and the amount of time spent by those lawyers are reasonable. I find that the total amount requested by each defendant is appropriate. Indeed, Ms. Delgado-Zurita did not suggest otherwise.

[31] Third, Ms. Delgado-Zurita could reasonably expect to pay the amounts claimed by the defendants as their costs for defending this action. Having sued two defendants, Ms. Delgado-Zurita could reasonably expect that she would be required to pay the costs of both defendants if she was not successful: Harris v. Leikin Group, 2011 ONSC 5474, at para. 31. She made a very significant claim against the defendants. She sought $1 million in damages. She asserted that defendants caused her to suffer "severe internal and external injuries" and that her "enjoyment of life has been lessened, life expectancy has been shortened and she has been permanently injured," and that her ability to work and her earning capacity were permanently impaired. She had to expect a vigorous defence.

[32] Fourth, Ms. Delgado-Zurita’s conduct of this litigation lengthened it unnecessarily for the defendants. As noted above, one of the purposes of the costs regime is to discourage inappropriate behaviour by litigants in their conduct of the proceedings: 394 Lakeshore Oakville Holdings, para. 10. I rely on but will not repeat the findings I made when I dismissed her motion to vary the set aside order. Ms. Delgado-Zurita’s conduct in this litigation is a very important factor in this case and justifies a significant costs order.

[33] Fifth, Ms. Delgado-Zurita received but did not accept an offer to settle from the TTC. She had the opportunity to obtain a dismissal without costs as late as February 19, 2019. She chose not to accept this offer.

[34] Sixth, Ms. Delgado-Zurita did not provide sworn evidence as part of her submissions on costs. There was no opportunity for the defendants to cross-examine Ms. Delgado-Zurita on her financial means to pay a costs award. I have given weight to the pay stubs and medical evidence that was attached to her submissions on costs, but those documents may or may not tell the whole story. I have considered Ms. Delgado-Zurita’s financial situation as an important factor to be considered when I fix the costs of this proceeding, but it is not a complete defence to an award of costs.

[35] Stepping back, my overarching objective is to fix an amount of costs that is objectively reasonable, fair, and proportionate for Ms. Delgado-Zurita to pay in the circumstances of this case, rather than to fix an amount based on the actual costs incurred by the successful litigant: Apotex, at para. 61; Boucher, at para. 26. For this reason, I reduce the amount claimed by the City and the TTC by approximately 10%.

[36] In all the circumstances, I fix and order that Ms. Delgado-Zurita pay costs in the following amounts within 30 days of this order:

a. to the City, $39,000, inclusive of legal fees, disbursements, and HST; and b. to the TTC, $33,000, inclusive of legal fees, disbursements, and HST.

Robert Centa J. Date: January 17, 2023