Algra et al. v. Mingay et al., 2025 ONSC 183

COURT FILE NO.: CV-12-00018610
DATE: 2025-01-08
SUPERIOR COURT OF JUSTICE - ONTARIO

Parties

Plaintiffs:

• Betty Jo Lynn Algra
• Betty Jo Lynn Algra as Estate Trustee of the Estate of Danny Monteiro, Deceased
• Marissa Monteiro, Minor, by her Litigation Guardian, Betty Jo Lynn Algra
• Sierra Lynn Louise Algra, Minor, by her Litigation Guardian, Betty Jo Lynn Algra
• Austin Hank James Algra, Minor, by his Litigation Guardian, Betty Jo Lynn Algra

Defendants:

• Paul M. Mingay, The Litigation Administrator of the Estate of Andrew Comrie
• Her Majesty the Queen in Right of Canada, as represented by the Minister of Fisheries and Oceans
• Her Majesty the Queen in Right on Ontario, as represented by the Minister of Transportation for the Province of Ontario
• The Corporation of the Municipality of Leamington

Before: Jacqueline Horvat

Counsel:

• Donald W. Leschied, Counsel for the Plaintiffs
• Larry J. Abey, Counsel for the Defendant, Paul M. Mingay, The Litigation Administrator of the Estate of Andrew Comrie
• Dallas J. Lee, Counsel for the Defendant, The Estate of Danny Monteiro

Heard: In Writing

Endorsement on Costs

Background

[1] The parties in this action engaged in a pre-trial conference on November 1, 2024, along with the plaintiff in the companion action (court file number CV-13-19389). The companion action was fully resolved. All issues in this action were settled, except for the amount of costs payable to the plaintiffs. The parties agreed that I would deal with costs by written submissions.

[2] The plaintiffs seek $335,750.00 in costs, including a $125,000 premium. The defendants argue that, at best, the plaintiffs are entitled to no more than $91,331.74, representing the amount agreed to in the companion action. For the reasons that follow, I find that $146,091.74, inclusive of disbursements ($21,791.74) and HST ($14,300.00), is a fair and reasonable award of costs to the plaintiffs in this case.

[3] This action and its companion action stem from a tragic boating accident that occurred in June 2011. Three people died in the accident and the main plaintiffs in each action were seriously injured. This action was commenced in 2012 and the companion action in 2013. The joint damages of the plaintiffs in the two actions are capped at $1 million under the Marine Liability Act, S.C. 2001, c. 6. The two actions were ordered to be tried together. The position of the plaintiffs in both actions is that their damages exceed the $1 million cap.

[4] In 2021, a summary judgment motion was heard by Munroe J. on the issue of liability. He dismissed the action against the government defendants. In February 2023, Munroe J. ordered costs in the amount of $400,000, all inclusive, payable by the defendants to the plaintiffs in this action for the summary judgment motion.

[5] In December 2023, Munroe J.’s decision was upheld by the Court of Appeal in Algra v. Comrie Estate, 2023 ONCA 811, [2024] I.L.R. para. G-2902, with $10,000 in costs being awarded to the plaintiffs in this action. In considering the issue of whether Munroe J. erred in law when he found that the $1 million cap did not include claims for costs and interest, the Court of Appeal commented, at para. 40:

This case serves as a good example of the danger in stripping courts of their longstanding powers. The accident occurred over 12 years ago. To date, only liability has been determined and the issue of damages remains. As will be discussed below, on the motions for summary judgment, the assessed costs were $400,000 to Algra and $306,849.23 to Feltham. I am not being critical of any party regarding the pace of these proceedings or the legal fees incurred. My point is only that in significant, multi-party litigation, legal costs can accelerate quickly. If costs are included in a legislated cap, then defendants and their insurers are effectively playing with “house money” and have less incentive to act reasonably. [Emphasis added.]

[6] In July 2024, the plaintiffs in the companion actions engaged in a mediation, without the defendants, in an attempt to resolve a dispute that developed between them over how to divide the $1 million statutory cap in damages.

[7] The plaintiffs in this action now seek all costs of the investigation and preparation of their claim for damages since the inception of the action and costs from the December 2023 decision of the Court of Appeal until the November 2024 pre-trial conference in the amount of $335,750.00, including a $125,000 premium. The defendants argue that, at best, the plaintiffs are entitled to $91,331.74, representing the amount agreed to at the pre-trial in the companion action.

General Principles and Positions of the Parties

[8] The general principles governing costs are well established:

(a) costs are in the court’s discretion under section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43;

(b) Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides factors for my consideration in the exercise of my discretion in awarding fair and reasonable costs; however,

(c) reasonableness is the overriding principle.

[9] Primarily, the plaintiffs argue that because the defendants refused to pay any damages in advance, demanded a discount on the interest to be paid at the pre-trial (which the plaintiffs accepted), and refused to mediate, the plaintiffs should be entitled to substantial indemnity costs plus a premium of $125,000. They say that the offers to settle made by them demonstrate a genuine and continuing effort to settle this case, while the offer that the defendants made was lower than the final settlement. The plaintiffs also allege that the defendant insurers acted in bad faith. The plaintiffs rely on the decision of the Court of Appeal in Aubin v. Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre), 2024 ONCA 615, in support of their claim to a premium.

[10] The defendants respond that an award of substantial indemnity costs is not appropriate in this case because the offers made by the plaintiffs were more than the $1 million cap and did not represent a reasonable interest in compromise. The defendants argue that they were not responsible for delays in this action and that much of the delay was caused by the plaintiffs’ decision to name government actors as defendants and in appealing Munroe J.’s decision, which the defendants did not appeal. Further delay was caused as a result of the dispute between the plaintiffs in the companion actions regarding splitting the $1 million cap. The defendants also point out that prior cost awards paid to the plaintiffs, in particular the costs award of Munroe J., mean that the plaintiffs’ legal fees have been adjudicated up until the decision of the Court of Appeal in December 2023, which included a $10,000 costs award. The defendants have paid 1.5 times the $1 million damages cap in costs awards alone, prior to the damages being resolved.

[11] On advance payments, the defendants say that they could not make advanced payments in this action because there were multiple plaintiffs, including a minor plaintiff, over multiple actions and the total value of the claims exceeded the policy limits. An advance payment would have required consent of all plaintiffs, including the minor plaintiff, which would require court approval.

Analysis

[12] The vast majority of costs incurred by the plaintiffs in this action have been adjudicated by Munroe J. in 2023. In my view, the plaintiffs are entitled to their costs from the decision of the Court of Appeal in December 2023 upholding Munroe J.’s decision on the summary judgment motion, plus costs for some time spent dealing with experts on damages prior to December 2023.

[13] Applying the relevant factors identified in r. 57.01(1) to this case:

(a) The rates charged by Mr. Leschied, his associate, and his law clerk are reasonable in my view given their years of experience. The time spent by each was also generally reasonable; however, I do not find it appropriate to award costs for the time spent dealing with a dispute that developed between counsel for the plaintiffs in the companion actions over the fees of appeal counsel. Following a detailed review of the costs outline and supporting dockets submitted by the plaintiffs, in my view, they are entitled to the time spent prior to December 2023 on tasks such as corresponding with their doctors and experts and preparation for mediation. This totals approximately 28 hours of Mr. Leschied’s time. The time claimed prior to 2024 is fair and reasonable in the circumstances of this case;

(b) The amount claimed in this action was substantial and the plaintiffs recovered the maximum amount they were entitled to under the statutory cap;

(c) There is no dispute that the proceeding was complex; however, following the Court of Appeal’s decision in December 2023, the action became more focused and straightforward; and

(d) There is no dispute that the issues are of great importance to the plaintiffs.

[14] In addition to the above factors, the plaintiffs seek their full indemnity fees in the total amount of $160,475.00 because of alleged delays caused by the defendants, the defendants’ refusal to mediate, and their refusal to make advance payments.

[15] Despite the submissions of the plaintiffs, which I have considered carefully, in my view, there is no basis to award full or substantial indemnity costs in the circumstances of this case, in particular, not due to the actions of the defendants since the Court of Appeal decision in December 2023. There appear to be many reasons for delays in this case and the blame cannot be attributed to one side or one party. In my view, the previous offers to settle also do not lead me to find that substantial indemnity costs are appropriate. They were not proper r. 49 offers, and I agree with the defendants that until the plaintiffs in the companion actions resolved their differences over the split of the $1 million cap, it would be difficult for the defendants to settle the actions. Finally, I have no basis to find that the defendant insurers acted in bad faith.

[16] The plaintiffs are entitled to their costs on a partial indemnity basis, which they claim in the amount of $127,077.50, not including HST. Adding a discount for the time spent by Mr. Leschied and Ms. Boyd on the dispute over Mr. Shulgan’s fees, and other tasks that should have been properly claimed before Munroe J., including amending the Statement of Claim, and adjusting the time claimed for preparation of the written costs submissions, which I find excessive, in my view, an award of costs on a partial indemnity basis of $110,000 plus HST ($14,300) is fair and reasonable in all of the circumstances of this case.

[17] While I agree with the defendants that the amount of costs agreed to in the companion action is a factor to be considered, in my view, it is not a high bar for what may be awarded to the plaintiffs in this action. The amount of costs agreed to in the companion action was just that: an agreed to amount. My discretion to award fair and reasonable costs in this action remains.

[18] Turning now to the issue of an award of a premium on costs. The plaintiffs seek a premium of $125,000 and rely on the decision of the Court of Appeal in Christian Brothers of Ireland in Canada (Re), 68 O.R. (3d) 1. In this decision, at para. 17, the court identified the factors that should be considered in deciding whether the lawyers should be entitled to a premium over hourly rates, including: “the difficulty and complexity of the case, the responsibility assumed by the lawyer, the amount in issue, the importance of the case to the client, the skill shown by the lawyer, the result achieved, the client's ability to pay and the lawyer’s corresponding financial risk”. With respect to the plaintiffs, I have no evidence before me that would distinguish the present action from any other boating accident or personal injury case and justify an award of a premium based on financial risk or any other factor. Further, using the plaintiffs’ own argument, the decision in Christian Brothers of Ireland in Canada (Re) was decided before the July 2005 amendments to r. 57.

[19] The plaintiffs also rely on the recent Court of Appeal decision in Aubin in support of the awarding of a premium. In this case, the court dealt with the correct analytical approach to the application of the five per cent presumptive prejudgment interest rate on non-pecuniary damages and to the exercise of the court’s discretion to deviate from the presumptive prejudgment interest rate for both non-pecuniary and past pecuniary losses under the Courts of Justice Act. The decision makes it clear that courts should only deviate from the presumptive rate in rare circumstances and, even then, only where there is a sufficient evidentiary foundation for what prevailing market interest rates are. The court in Aubin does not address the appropriateness of awarding a premium on costs, as the plaintiff urges me to do in this case. While awarding a premium on costs may be appropriate in certain situations, I do not find that the present case qualifies as such for the reasons already outlined.

[20] Finally, the plaintiffs place great reliance on words used by the Court of Appeal in its December 2023 decision and argue that the defendant insurers were “playing with house money and have less incentive to act reasonably.” With respect, the plaintiffs take these words out of context. The full quote, at para. 40, reads:

I am not being critical of any party regarding the pace of these proceedings or the legal fees incurred. My point is only that in significant, multi-party litigation, legal costs can accelerate quickly. If costs are included in a legislated cap, then defendants and their insurers are effectively playing with “house money” and have less incentive to act reasonably.

[21] Based on my reading of the decision, the court was speaking about insurers generally while dealing with the issue of whether Munroe J. erred in law when he found that the $1 million cap did not include claims for costs and interest. These comments were not directed at these defendant insurers and, even if they were, in my view, the actions of the defendant insurers since the December 2023 decision of the Court of Appeal cannot be said to be of the kind that should attract the awarding of a premium on costs.

[22] The disbursements submitted by the plaintiffs appear reasonable and should be paid by the defendants in the total amount claimed of $21,791.74. The defendants did not dispute this amount.

Conclusion

[23] Considering all the factors set out in r. 57.01(1), the principles enunciated in the case law, and of all the facts and circumstances of this case, including those reviewed above, in my view, a fair and reasonable costs award to the plaintiff is $146,091.74, inclusive of disbursements ($21,791.74) and HST ($14,300.00).

Jacqueline Horvat
Date: January 8, 2025