DATE: 20241125 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Lisa Jagan Plaintiff
AND
The Personal Insurance Company and John Doe Defendants
BEFORE: C. STEVENSON J.
COUNSEL: Chris Cheung, for the Plaintiff Loretta De Thomasis, for the Defendant, The Personal Insurance Company No-one appeared for the Defendant, John Doe
HEARD: IN WRITING
COSTS ENDORSEMENT
Introduction
1This action was commenced on Sept 22, 2022.
2The claim arises from the Plaintiff’s (P) bicycle accident on May 23, 2022 when she collided with an illegally parked motor vehicle. The P was unable to identify the driver or owner of the vehicle. The P is an eye surgeon. She has been unable to return to performing cataract surgery. She claims lost income of more than $1mm.
3At the time of the accident the P was insured by the Defendant (which is referred to as D in these reasons). The P claims under her own insurance policy with the D for injuries caused by the unidentified vehicle.
4At CPC on Aug 8, 2023 the D scheduled a summary judgment motion (to summarily dismiss the claim) to be argued at a 4 hrs appointment on Jan 23, 2025.
5This motion was subsequently not allowed to proceed because the evidence filed established that it was doomed to fail. There are clearly genuine issues which require a trial. The current motion is to determine the cost consequences of the aborted s/j motion.
Background
6The D obtained a date for its proposed s/j motion on the basis that a motions judge would be able to determine summarily the issue of whether the P failed to take reasonable steps to identify the unidentified, illegally parked vehicle at the bicycle/vehicle accident on May 23, 2022.
7On Jan 26, 2024 the D Insurer delivered its s/j motion record. The insurer’s Motion record comprised 209 pp. The D added an issue of whether the P failed to report the accident within the applicable timelines.
8On June 3, 2024 the P delivered her Responding Motion Record which contained six affidavits. These were from the P (17 pages + 11 exhibits of 59pp), a witness (4pp), two investigators (4pp) and two experts namely an orthopaedic surgeon (2pp + 1 exh of 29 pp) and a forensic accounting expert (2pp + 1 exh of 25 pp).
9Upon reviewing the Responding Motion Record, the insurer abandoned its initial motion but proposed to amend its n/m to argue instead that the action should be dismissed on the basis that the Unidentified Vehicle did not cause or contribute to the accident. The P consented to the D amending its n/m provided she could file an engineering report which she did.
10The D insisted that the Jan 23, 2025 motion date should be adjourned. The P (responding party) did not agree. The parties then attended a second CPC court.
11At the CPC on Oct 1, 2024 Koehnen J. vacated the motion date of Jan 23, 2025 on the basis that the motion for s/j was not appropriate given the issues and the evidence.
12The P wants costs “thrown away” as a result. Koehnen J. set a schedule for this costs motion to be heard in writing to determine that issue.
Argument
13The P requests costs thrown away, on a full indemnity basis, in the amount of $56,336.54 payable forthwith. The P says it was unreasonable for the D to have brought the s/j motion.
14In respect of the cost of the expert evidence the P filed, and the legal work her counsel did on the motion, the P says she reasonably had to put her best foot forward given the high stakes of the potential dismissal of her entire claim. Furthermore, by filing extensive affidavit evidence, the P says she shut down this ill-conceived motion quickly and ultimately saved costs by avoiding cross examinations, factums and arguing the actual motion.
15The P argues that it should have been readily apparent at the outset and certainly after receipt of the responding material that the main issue turns on the credibility of both the P and a witness who was at the scene of the accident. Therefore, the D knew or should have known this case was never suitable for a motion for s/j.
16The D acknowledges it should pay “something” but says the costs requested are excessive. No factums were exchanged. There were no cross-examinations. The only court attendances were two virtual CPC attendances.
17Furthermore, the D says that not all the costs incurred by the P were wasted and some of the work, such as the experts’ reports relating to income loss and the Orthopaedic report, were not necessary for the motion because they dealt with damages and not liability. The D says that in any event the reports will be repurposed and used in the continuing litigation. The same applies to the discovery transcripts.
Decision
18The parties agree that my discretion to award costs is based on s. 131 of the CJA, and I should have regard to the factors set out in rule 57.01. The D says the most important factors to consider here are the reasonable expectations of the parties as to costs, the relatively low complexity of the proceedings and whether any costs have been truly wasted.
19Costs “thrown away” are costs incurred by one party which have been wasted in unnecessary preparation because of steps taken inappropriately by another party. Such costs are generally payable on a full or substantial indemnity basis. See Oz Merchandising Inc. v. Canadian Professional Soccer League Inc. 2016 ONSC 4272 at para 5; Doef v. Hockey Canada 2022 ONSC 4273 at paras. 10-12. As the court said in Nelson v. Chadwick 2019 ONSC 4544 (SCJ Ont.) at para. 27 after confirming that basis principle; assessing the quantum of such costs is “an intuitive exercise that is not performed with exacting precision.”
20The costs must, however, be reasonable and an award should be within the reasonable expectations of the parties. They are not to be punitive. Most importantly here, the costs must genuinely have been wasted and not incurred for work that will still be usable for other purposes in the continuing action.
21I agree with the D that I am not determining the merits of a motion that did not proceed. But the point is that the motion was not reasonably brought having regard to the nature of the issues to be decided. This should have been readily apparent from the pleadings as supplemented by the discovery transcripts. The D wisely concedes that the P is entitled to “some costs” and I will now set out the basis for my decision.
22I agree that the reports and in particular the Orthopaedic Report and the Income Loss Report will be important to the P as the action proceeds. Nonetheless, these reports have had to be prepared sooner than usual and will require more than the usual updating prior to the pretrial conference. The P is entitled to be reimbursed for part of this cost, but I will not allow the full cost of these reports. I note that some reports (such as the one on income loss) did not deal with liability but it was to be used to deal with the late reporting issue (which was tied to the relief from forfeiture argument). In any event, this report will still be very useful in preparing a final report on damages for the pretrial/trial.
23The P says the Engineering Report will not be useful because she likely will not use this evidence at trial. That remains to be seen. At this point it appears to have potential value for the trial.
24In the exercise of my discretion and applying all the factors in rule 57.01 and especially the factors noted above I grant the P 25% of her cost for all experts, with responsibility for the balance (75%) of the cost to be determined by the trial judge.
25I do not award any part of the costs of the discovery transcripts which will still be used in the rest of the proceeding.
26Consequently, I have adjusted the cost of the experts’ reports disbursements by this discount factor of 25% to come up with a total sum payable by the D for the P’s wasted disbursements of 25% of ($8,469.35 + $5,708.85 + $3,288.35 + $9,989.22) which is $6,863.94.
27I will also allow only a portion of the P’s lawyer’s work on the motion for the same reason, although I accept that more than 25% of that work represents costs thrown away and is directly attributable to a motion that should not have been brought and which did not proceed. The P had to respond fully to a potentially dispositive motion to protect his client’s interests. I award $12,000 for fees “thrown away” i.e., truly wasted, which is approx. 50% of the fees claimed on a full indemnity basis.
28I do not award any extra costs based on the argument that the D’s lawyer, Ms. Sdao, acted improperly. While her beliefs (expressed in the affidavits) may not have been relevant, she was clearly trying to put the issues before the court without purporting to have direct knowledge. This issue of alleged lawyer’s misconduct is not a relevant factor for my costs award and accusations of breach of the LSO rules of professional conduct are not helpful. All counsel will hopefully focus on the merits of the case going forward, while complying with the rules of procedure and evidence.
29In conclusion, I order that the D shall pay the P within 30 days the sum of $12,000 + $6,863.94 plus HST on both sums (HST will be added, unless HST was already included in any of the numbers in the P’s bill of costs or an item is HST exempt).
________________________ Justice C. Stevenson
Released: November 25, 2024