Bridgewater v. James, 2006 CanLII 38231 (ON S.C.)

Please refer to:   http://www.canlii.ca/on/cas/onsc/2006/2006onsc16583.html

COURT FILE NO.:  00-CV-188550

DATE:  20061114

SUPERIOR COURT OF JUSTICE - ONTARIO

E N D O R S E M E N T  ON  C O S T S

[1]          The plaintiff was unsuccessful in this personal injury action and received no damages.  The defendant is therefore entitled to its reasonable costs of the action.

[2]          The defendant submitted a bill of costs on a partial indemnity basis totalling $63,540.71, comprised of a claim for fees totalling $50,531, before GST, disbursements of $6,972.54, inclusive of GST, and an amount of $2,500 on account of the cost submissions.  However, total legal fees actually billed to the defendant totalled only $47,611.73.  Accordingly, the defendant seeks costs on a partial indemnity basis that exceed the amount that represents total indemnification.  This result is achieved by increasing the rates used in the calculation of the bill of costs to the maximum permissible rates under the grid.

[3]          This approach to the calculation of costs displaces the basic principles of costs.  The Court awards complete indemnification by an award of substantial indemnity costs.  Absent the operation of Rule 49.10 of the Rules of Civil Procedure R.R.O. 1990, Reg. 194, as amended, an award of substantial indemnity costs is only made in special circumstances related principally to the conduct of the litigation by the unsuccessful party.  There is, however, no suggestion that such circumstances are present in this litigation.  In contrast, partial indemnity costs are not intended to provide complete indemnification to a litigant, much less generate a profit.  I am not aware of any authority for an award of costs in excess of the actual fees billed by a litigant’s counsel to its client.  A cost award is not a means by which counsel can obtain a higher rate from the unsuccessful litigant than the rate to which it agreed, however reluctantly, with its client.

[4]          The plaintiff says the costs claimed are excessive and unreasonable.  She makes four submissions.

[5]          First, she says that the circumstances of this action and the defendant’s conduct of the proceeding do not support either the time set out in the bill of costs or the maximum rates used in the calculation of the defendant’s claim.  Second, the plaintiff says that the defendant’s conduct resulted in additional costs being incurred by the plaintiff.  Third, the plaintiff says it was not the reasonable expectation of the parties that costs would be as significant as submitted by the defendant.  Last, the plaintiff objects for various reasons to specific items included in the defendant’s disbursements.  I will address each of these submissions in turn.

[6]          First, as stated above, there is no basis for an award of substantial indemnity costs in this action.  I also agree with the plaintiff that the action did not involve novel or complex legal or factual issues.  The action concentrated on the plaintiff’s general damages with a small number of witnesses.  The defendant did not seriously pursue liability as an issue at trial.  As a result, I have adjusted the partial indemnity rates to reflect the complexity of this action. 

[7]          Second, the plaintiff says that the defendant caused undue delay in this action that resulted in additional costs being incurred by the plaintiff.  The plaintiff says that the defendant failed to produce its client for examination for discovery on three occasions necessitating a motion before Master Clarke to strike the Statement of Defence.  The plaintiff also says that the defendant’s counsel did not advise of the intention to call the defendant to testify as to the accident until the first trial adjournment, necessitating an examination for discovery of the defendant.  Lastly, the plaintiff says that the refusal to admit liability and the defendant’s decision to raise an alternative argument of causation at trial increased costs unnecessarily given the lack of merit of this defence.  The defendant did not address any of these submissions in its cost submissions.

[8]          The motion before Master Clarke proceeded on consent.  While Master Clarke reserved costs for the trial judge, there is no guidance in the Master’s Endorsement to indicate the quantum of costs referable to the motion, the relevant factors to be considered by the trial judge or specific actions that he found objectionable.  Counsel for the plaintiff sought costs for the motion before Master Clarke but was unable to provide support for the plaintiff’s position, as she did not represent her at the time.  I have therefore concluded that the costs for this motion should be disregarded.  I agree with the plaintiff, however, that the decision to call the defendant at trial to explore the possibility of a defence to the liability issue prolonged the trial somewhat.

[9]          Third, the plaintiff says the costs sought exceed the reasonable expectations of the parties for a five-day trial.  However, it would not be unexpected to have costs approach $40,000 after a five-day jury trial, even if that amount is at the high end of the range.  On the other hand, I agree that an unsuccessful litigant would not expect to be responsible for time spent preparing a litigation budget for the insurer or for participation in trial committee meetings of the insurer, although these are not large amounts.

[10]       Lastly, I agree that the cost of surveillance should be excluded in view of the fact that the surveillance evidence was not used at trial.  This includes both the actual disbursements as well as counsel’s time in respect of the surveillance.  On the other hand, I think that the defendant is entitled to the disbursement claimed in respect of Dr. Clements.  While Dr. Clements did not provide an expert report, his testimony was of considerable significance in assessing the credibility of the plaintiff and had an important bearing on the outcome of the action.  In view of the short notice given to Dr. Clements, as a result of timing of the delivery by the plaintiff of the file disclosing his involvement, I also do not expect the defendant had any ability to minimize his attendance fee. 

[11]       The plaintiff’s principal submission is, however, one of equity.  The plaintiff has endured personal tragedies immediately prior to and following the motor vehicle accident giving rise to this litigation. She has persevered and raised a child on her own on a very modest income.  A substantial cost award will only add substantial hardship to the plaintiff.

[12]       I think this is an important consideration in the present circumstances.  On the other hand, the Court should also recognize that the costs of both parties could have been avoided if the plaintiff and her counsel had addressed the merits of her claim more realistically at an earlier stage in the proceedings, particularly given the position she had taken in the subsequent motor vehicle accident.  Accordingly, while I think the plaintiff’s personal circumstances support a reduction in the cost award, I do not think it is appropriate to make no award in favour of the defendant.

[13]       Based on the foregoing, I find that fair and reasonable costs are $20,000, plus GST.  In addition, the defendant is entitled to disbursements in the amount of $4,017.32 inclusive of GST.

___________________________

H.J.W. Siegel J.

 DATE:            November 14, 2006