2016 ONSC 2770 Ontario Superior Court of Justice. Gardiner v. MacDonald Estate CarswellOnt 7196, 2016 ONSC Toscano Roccamo J.

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1 2016 ONSC 2770 Ontario Superior Court of Justice Gardiner v. MacDonald Estate 2016 CarswellOnt 7196, 2016 ONSC 2770 Ben Gardiner and Samantha Gardiner, Plaintiffs and Andrew Macdonald as Litigation Administrator for the Estate of Mark MacDonald, The City of Ottawa, Raymond Richer, Ontario Ltd. (o/a Grace O'Malley's), Peter Hamilton, Geoffrey Garrett, Sean Hilliker, Tucker McCabe, The Clocktower Brew Pub Ltd., Jane Doe, John Doe, Carleton University Student's Association Inc. (o/a Oliver's Pub), Gsa Carleton Inc. (o/a Mike's Place), Intact Insurance Company (formerly known as Ing Insurance Company of Canada), Defendants and State Farm Mutual Automobile Insurance Company Added by Order pursuant to Section 258(4) of the Insurance Act, R.S.O. 1990, c. 18 Toscano Roccamo J. Judgment: April 29, 2016 Docket: Proceedings: Additional reasons, 2016 CarswellOnt 1338, 263 A.C.W.S. (3d) 269, 2016 ONSC 602 (Ont. S.C.J.) Counsel: Peter J.E. Cronyn, Jessica Fullerton, for Plaintiffs Paul Muirhead, for Defendant, Intact Insurance Company Mark Charron, Stephanie Doucet, for City of Ottawa and Raymond Richer Lawrence A. Elliot, for Third Party, State Farm Insurance Company Subject: Civil Practice and Procedure; Evidence; Public; Torts Related Abridgment Classifications For all relevant Canadian Abridgment Classifications refer to highest level of case via History. Torts XVI Negligence XVI.2 Duty and standard of care XVI.2.a Duty of care Torts XVI Negligence XVI.2 Duty and standard of care XVI.2.b Standard of care Torts XVI Negligence XVI.3 Causation XVI.3.f Miscellaneous Torts XVI Negligence Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 1

2 XVI.5 Contributory negligence XVI.5.h Apportionment of liability XVI.5.h.v Miscellaneous Headnote Municipal law Torts Toscano Roccamo J.: Overview 1 On January 26, 2016, I released my Reasons for Judgment, (Gardiner v. MacDonald, 2016 ONSC 602), in respect of the liability for claims advanced in companion actions arising out of a motor vehicle accident which occurred on January 22, The accident tragically ended the lives of three young adults: Mark MacDonald, Breanne Deschamps and Vanessa Crawford, following a collision between the SUV operated by Mr. MacDonald and the OC Transpo bus owned by the City of Ottawa and operated by Raymond Richer. The accident also resulted in catastrophic injury to Ben Gardiner. I found the late Mark MacDonald 80 percent responsible and ascribed 20 percent liability to the City of Ottawa and Mr. Richer for the accident and resulting losses. 2 The Deschamps claimants and their insurer, The Co-Operators, did not attend the eight day trial before me in September and October These parties agreed to be bound by my findings on liability after counsel for the Gardiner Plaintiffs and for the City and Mr. Richer negotiated a Statement of Agreed Facts and Issues in July and August 2015 which settled the matter of damages and the apportionment of available insurance proceeds. The agreement was ratified by all parties in both actions in the month before trial. 3 The Statement of Agreed Facts and Issues (attached as Appendix 1) reflects that the Gardiner Plaintiffs agreed to limit their claim for damages and prejudgment interest to $2,100,000 net of contributory negligence alleged as against Ben Gardiner for failure to wear his seatbelt, in the event any liability was ascribed to the City and Mr. Richer. The agreement also contained an admission of liability on behalf of the Estate of Mark MacDonald. However, by correspondence dated February 1, 2012, the liability insurer of the Estate, State Farm had already agreed to pay the minimum limits of its policy of $200,000 plus reasonable costs, based on the evidence of Mr. Gardiner's consumption of alcohol and related breach of the policy at the time of the accident. Payment of the State Farm policy limits was conditional upon agreement among all parties to advance no further claim against the Estate, and upon agreement among the Gardiner and Deschamps Plaintiffs as to disposition of the proceeds of insurance. As such, State Farm took no part in the trial after the conditions were satisfied by the Statement of Agreed Facts and Issues. 4 The trial, therefore, proceeded as a liability contest between the Gardiner Plaintiffs and their insurer, Intact, on the one hand, and the City of Ottawa and Mr. Richer on the other hand. In short, any finding of joint and severally liability as between the Estate of Mark MacDonald and the City and Mr. Richer was to relieve Intact of any contractual liability to contribute to the payment of agreed damages under the OPCF 44 underinsured coverage issued to the Gardiner Plaintiffs. The Outstanding Costs Claims 5 Within the timetable I imposed for the submissions on costs, agreement was achieved fixing the claims for costs of the Deschamps claimants and their insurer, The Co-Operators. This insurer was joined just as Intact was, in order to gain access to the underinsured coverage, in the event no liability was found against the City and Mr. Richer. More recently, the costs submissions of State Farm suggest the quantum of the claim for costs of Intact was also resolved, although that has yet to be confirmed by counsel for the City and Mr. Richer. Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 2

3 6 In light of the appeal of my trial decision by the City and Mr. Richer, the City and State Farm have agreed to defer argument concerning the apportionment of costs as between them until liability issues are finally determined. As such, this aspect of my Costs Ruling is stayed pending the appeal. 7 The only ruling sought by the parties, therefore, relates to the Gardiners' claim for costs. In their Costs Submissions dated February 25, 2016, these Plaintiffs sought an order fixing costs payable to the Plaintiffs at $659,065.25, inclusive of GST and HST, inclusive of fees of $428, on a partial indemnity basis up to the date of their Rule 49 Offer dated July 7, 2015, and $230, inclusive of HST from the date of the Offer, plus disbursements of $152, inclusive of HST, for a total of $811, In their Responding Submissions on Costs dated March 22, 2016, the Plaintiffs acknowledged an error in the allotment of counsel time of hours for the preparation of costs submissions. Of those hours, 58 were reallocated to trial and trial preparation, suggesting the substantial indemnity fees for preparation of costs submissions to February 25, 2016 amount to less than $7,000 inclusive of taxes. The balance was reallocated to trial preparation and counsel fee at trial, estimated to be approximately $223,000, inclusive of taxes in round figures. The Issues 9 The concerns raised by the submissions of the parties in the Gardiner action and in particular by the City and Mr. Richer, and State Farm, suggest the following questions must be addressed: 1) How should the court exercise its discretion under s. 131 of the Courts of Justice Act in fixing costs, when considering the factors in Rule 57.01, and in particular: a) The principal of indemnity, having regard to the experience of the Plaintiffs' counsel, the rates charged and hours spent in this matter; b) The amount of costs the unsuccessful parties could reasonably expect to pay; c) The degree of complexity in these proceedings. 2) Is the Plaintiffs' claim for costs out of proportion to the costs claimed by the other parties in the Gardiner action, and awarded by the courts in other cases? 3) Should a Sanderson Order be made requiring the losing Defendants, the City and Mr. Richer and/or State Farm, to satisfy the costs of Intact? Position of the Plaintiffs 10 Simply put, the Plaintiffs maintain that the fees and disbursements they claim reflect the investment of time required by these proceedings. They submit that this ought reasonably to have been expected by the losing parties, having regard to their vigorous litigation of the issue of liability throughout, and matters which added to the cost of proceedings, including: 1) The Plaintiffs' concomitant obligation to investigate all other avenues for recovery from commercial hosts and Intact, in the event the City and Mr. Richer succeeded on the question of liability. The Plaintiffs' efforts in this regard would have either relieved the City and Mr. Richer of responsibility, or placed them in a position to negotiate contribution from other Defendants against whom the City and Mr. Richer cross-claimed; and 2) The failure by the City and Mr. Richer to comply with undertakings until compelled by motion to do so; 3) Damages estimated at between $2,100,000 and $4,000,000 remained in issue until the month prior to trial, necessitating a significant investment of time and resources to build this aspect of the claim for trial. Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 3

4 11 The Plaintiffs add that their claim for costs is objectively justified having regard to cases of a similar nature. Position of the Winning Defendant, Intact 12 Intact advances no argument in relation to the application of the factors under Rule 57.01, other than to assert that its own expert, Jamie Catania, was key to the finding of at least 1 percent responsibility for the accident as against the Defendants, the City and Mr. Richer, thereby triggering the application of the principle of joint and severally liability. In addition, Intact submits that its claim for costs was reasonable, noting that Intact was represented by only one counsel at trial, whereas all other parties had the benefit of two counsel. In the result, Intact claims its costs from either the Plaintiffs, or the City and Mr. Richer, under a Sanderson Order. Position of the Losing Defendants, The City of Ottawa Mr. Richer, and State Farm 13 These parties essentially advance the same position, although I cannot fail to observe that State Farm readily acknowledged it took a "back seat" in these proceedings and played no material role in the action, particularly after it conditionally offered to pay its limits on February 1, The City and Mr. Richer and State Farm point to the amounts claimed by the Plaintiffs for the work they performed at various stages of the litigation as being neither fair nor reasonable, having regard to the degree of complexity suggested by the standard form pleadings, the actual time devoted to the settlement discussions in mediation and a full day pre-trial conference, and the streamlining of the case as a result of the Statement of Agreed Facts and Issues. In addition, they maintain that the Plaintiffs' claim for fees and disbursements is excessive in relation to the time invested by the losing Defendants at various stages of the proceedings. While they acknowledge the expectation that the Plaintiffs would be required to devote more time to establishing the claim, they argue that the Plaintiffs' costs are well beyond the reasonable expectation of losing parties. They observe that the total hours docketed on behalf of the City and Mr. Richer represent approximately one third of the time spent on behalf of the Plaintiffs, noting the City's fees at a full indemnity rate amount to $290, and $174,000 at a partial indemnity rate throughout. Finally, these parties maintain that the Plaintiffs' claim for fees and disbursements objectively offends the principal of proportionality, particularly when compared to the costs awarded in other cases. General Principles Governing the Award of Costs 15 When fixing costs, a court should consider: (1) that the overall objective of fixing costs is to fix an amount that is fair and reasonable in the circumstances; (2) that the award of costs must be proportional; and (3) that the exercise of fixings costs does not require a line by line review of each expenditure, as required in an assessment of costs. 16 The principles which govern a Court's exercise of discretion in awarding costs were set out by the Ontario Court of Appeal in Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291, at para. 26, which held that the overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances, rather than an amount fixed by the actual costs incurred by the successful party. The Court further provided that failing to adhere to the principle of reasonableness in awarding costs can lead to a result which is contrary to the fundamental objective of access to justice (Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52). 17 Proportionality is the second factor to be considered when fixing costs. Applying the principle of proportionality, a costs award should reasonably reflect the amount of time and effort that was objectively warranted by the proceeding (Moon v. Sher (2004), 246 D.L.R. (4th) 440 (Ont. C.A.), at para. 33). Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 4

5 18 Where significant amounts of time are being claimed, dockets can be of assistance to the court in ascertaining the distribution of tasks and assuring itself that there was minimal duplication (Hoang v. Vicentini, 2014 ONSC 5893, 40 C.C.L.I. (5th) 231, at para. 75). 19 Two recent decisions, although expressly considering the need for proportionality in the fixing of costs, have raised concerns about giving too much weight to this factor: Aacurate v. Trasco, 2015 ONSC 5980, and Interborough Electric Inc. v Ontario Ltd., 2016 ONSC 1115, at paras In paragraph 16 of Aacurate, Justice McCarthy cautioned: An over-emphasis on proportionality may serve to under-compensate a litigant for costs legitimately incurred. Assuming, as is often the case, that a successful Plaintiff's lawyer is working on an actual fees basis (as opposed to a contingency agreement), this will inevitably result in the Plaintiff having to fund her successful litigation out of the proceeds of judgment that a court found she was entitled to. This is patently unfair to litigants who have been wronged and who choose to invest their hard-earned resources into pursuing a legitimate claim. One does not say to one's lawyer, "I have only a modest claim. I am instructing you to do a mediocre job in advancing it." Few litigation lawyers would be attracted to a litigation landscape where they could not recommend giving a matter the time and effort it requires to be properly advanced because the principle of proportionality predestines a costs award that promises to turn a successful result in court into a net financial loss for their client. A pattern of such outcomes would result in an unintended but nonetheless real denial of access to justice; it will send a message to litigants that it is not worth one's while to pursue legitimate claims in court because one cannot possibly make it cost effective to do so. This is a denial of justice in the most fundamental sense. It tends to encourage those resisting legitimate but modest claims to take unreasonable positions, the logic being that any exposure to costs will be limited because of the size of the claim, regardless of the time and expense necessary to extract a judgment. At the same time, legitimate claimants will be left without cost effective remedies. 20 In Interborough, at para. 57, Justice Vallee made a similar observation: In this case, it seems completely unfair and unreasonable to deny Interborough a large share of its costs on the basis that the amount is not proportionate to the result. Maple's refusal to pay anything resulted in a lengthy trial. If a results-based view of proportionality were to be applied here, a serious injustice would occur. The principle of indemnity is important in this matter. If Interborough were to be awarded significantly less than the costs to which it is entitled pursuant to Rule 49, then the entire exercise would be for nothing. Interborough had two choices prior to trial. It could have thrown in the towel and walked away from money to which it was entitled. If this had happened, Maple certainly would have requested costs and might have still proceeded with its counterclaim. The other choice was to proceed to trial to present a legitimate claim. 21 In considering the proportionality of costs, a court should avoid inconsistency with comparable awards in other cases, and can consider cases that have similarities in terms of considering whether the number of hours claimed are excessive (Murano v. Bank of Montreal (1998), 41 O.R. (3d) 222 (C.A.), at para. 102; Hoang, at para. 95). In undertaking such an exercise, the court must not lose sight of the unique facts before it: there is no formula that can be used to determine the appropriate quantum of fees (Hoang, at para. 95). 22 Finally, it is worth repeating that the exercise of fixing costs is different than the exercise of assessing costs. In Mader v. Hunter, 2013 ONSC 2336, at para. 32, Justice Wilson commented on the process of fixing costs as follows: In fixing costs, the court need not attempt a line by line analysis of the bill of costs under consideration nor should the process become a mathematical exercise of applying hourly rates to docketed hours. There must be a balance achieved between recovery of a fair and reasonable amount for services rendered and disbursements incurred considered in the context of the particular case and the reasonable expectations of the party called upon to pay the amount to be fixed. 23 Other judges have commented that the role of the court in fixing costs is not to achieve the level of detailed analysis that occurs in an assessment, where dockets are reviewed in minute detail. In Cobb v. Long Estate, 2015 ONSC 7373, 2015 CanLII 90544, Justice Belch quoted and relied on an extract from Ontario Superior Court Practice 2016 to remind counsel that: Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 5

6 The fixing of costs by a judge is not an assessment. It is not the role of the judge to minutely examine and dissect docket entries or to second-guess the utilization of personnel and resources by counsel. The costs should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual cost to the successful litigant... While judges, in fixing costs, are not expected to conduct an item-by-item assessment according to the tariffs, as would be done by an assessment officer, they must review the breakdown into items describing the services performed and the amount charged for them along with the overall total. The fixing of costs still requires a critical examination of the work undertaken in order to determine that the costs claimed have been reasonably incurred and would reflect what the court considers to be proper and appropriate in the circumstances given the complexity and significance of the proceedings. However, an overall sense of what is reasonable may be factored in to determine the ultimate award. 24 I cannot help but note that the only detailed Bill of Costs received from the parties was that of the Plaintiffs. State Farm produced no Bill of Costs at all, and the Bill of Costs produced on behalf of the City of Ottawa and Mr. Richer in the Gardiner action lays out no allocation of fees incurred in relation to the various stages of the litigation, either before or after the Plaintiffs delivered an Offer to Settle. Nevertheless, the losing Defendants argue the Plaintiffs' pleadings were in standard form; the productions were not voluminous; oral examinations for discovery took place over the course of only 24 hours; mediation took approximately 4 hours; the pre-trial conference took a full day; and, following the Agreed Statement of Facts and Issues, only 8 days were required to complete the trial. 25 The losing Defendants urge me to draw a negative inference from the Plaintiffs' failure to produce dockets to allow them to better evaluate the Plaintiffs' claim for costs. In responding, counsel for the Plaintiffs have confirmed their willingness to offer their dockets, if ordered to do so; however, these would require significant redaction, having regard to matters of solicitor/ client privilege contained in the dockets, particularly pending the outstanding appeal. 26 Had I been inclined to undertake a detailed review of dockets, I would have required all parties to deliver their dockets. Instead, I shall undertake a more holistic assessment of the applicable Rule 57 factors, including a consideration of the hourly rates and hours spent on behalf of the Plaintiffs in these proceedings. Moreover, I would decline to draw any negative inference having regard to the omission on the part of the City and Mr. Richer to produce a Bill of Costs which provides any categorization of work performed, or even divided by year, other than "work billed to date" and "work in progress." 27 Finally, it is likely the case that some of the fees and disbursements incurred on behalf of the City and Mr. Richer in resisting liability for the accident would have been allocated to the companion Deschamps action. Although these costs would have been modest by reference to the costs incurred in the Gardiner action, counsel for the Plaintiffs in the Gardiner action undoubtedly carried the day in developing the case on liability vis-à-vis the City. The Factors in Rule ) Result Achieved and Offers to Settle 28 The Plaintiffs were successful at trial in the claim against the City of Ottawa and Mr. Richer. Intact may also be viewed as successful, insofar as its policy was not triggered by any shortfall of available monies to cover the Plaintiffs' damages. 29 The City of Ottawa and Mr. Richer, State Farm and the Estate of MacDonald (that admitted liability), are all unsuccessful parties. 30 The Defendants City of Ottawa and Mr. Richer did not serve any offers to settle the action. 31 As early as 2012, State Farm offered to pay its limit of $200,000. However, until the parties in the Gardiner and Deschamps actions had any sense of the damages in their respective cases, there was no ability to determine how to share the policy proceeds on a pro rata basis. Also, the offer did not include any certainty as to State Farm's contribution to costs. Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 6

7 32 On July 7, 2015, the Plaintiffs delivered a Rule 49 Offer to Settle to the Defendants, their insurers and/or State Farm for $1,750,000 dollars, inclusive of damages and pre-judgment interest, and for costs in keeping with the Rule 49 offer. 33 Only the Plaintiffs bettered their offer at trial, having regard to my findings of liability and the agreement to limit damages inclusive of pre-judgment interest to $2,100,000. Therefore, I see no reason to deprive the Plaintiffs of the application of Rule 49 entitling them to partial indemnity costs to the date of the Offer, and substantial indemnity costs from the date of the Offer. The losing Defendants failed to address this issue in their submission of costs, and failed to provide any breakdown of their fees before and after the Plaintiffs' Offer to Settle. 2) Principle of indemnity: i.e experience of the lawyers, rates charged and hours spent 34 As many as 7 lawyers, along with paralegals and students, represented the Plaintiffs in this matter, although 4 main counsel acted for the Plaintiff's over time. Hourly rates for paralegals or students ran from $125 to $180 per hour. The hourly rates and experience of the principal lawyers on the file is set out below: Peter Cronyn was called in 1979 and has extensive experience in personal injury matters and as a trial lawyer. His hourly rates range from $400 to $550 per hour. Stacey Cronyn was called in 1996 and has since retired from the practice of law. She had extensive experience in personal injury matters. Her hourly rates ranged from $270 to $320 per hour. Jessica Fullerton was called in 2008 and has experience in personal injury matters. Her hourly rates range from $120 during her articling period to $170 to $250 per hour following her call. Leanne Storms was called in 2011 and has experience in personal injury matters. Her hourly rates range from $185 to $200 per hour. 35 The following chart summarizes the amounts claimed by the Plaintiffs at the various phases in litigation: Phase Total Hours Lawyer Hours Paralegals and Students Partial Indemnity Substantial Indemnity 1. Investigation and claim 1, , $228, $311, Discovery Process $112, $153, Mediation/Settlement $22, $31, Conferences 4. Pre-Trial Conferences $20, $27, Trial Preparation $114, $152, Counsel Fee Trial $28, $38, Costs $13, $20, There can be no question that the experience of counsel for the Plaintiffs resulted in a much more streamlined process, and helped to pare this case down from a 6 week trial to an 8 day trial, due to the negotiation of an Agreed Statement of Facts and Issues signed by all parties in the month prior to trial. 37 Moreover, the Plaintiffs' success in resisting Intact's motion for summary judgment and securing coverage under Intact's OPCF 44 endorsement resulted in Intact's participation at trial, and opened the door to a negotiated settlement among the City and the participating insurers, had these parties been inclined to resolve the case. 38 No issue was taken in respect of the rates of senior and junior counsel at trial; however, the rates charged for the other timekeepers, notably paralegal and student timekeepers, were beyond the guideline amounts. The differential between the hourly rates charged and the guideline amounts for students and paralegals alone resulted in an increase to the Plaintiffs' claim for costs to the tune of $44,469. This, and the fact that as many as seven lawyers participated in advancing the Plaintiff's claim, Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 7

8 would, in my opinion, have resulted in some duplication of effort. I note these concerns were not addressed by the Plaintiffs' Responding Submissions on Costs. 39 As a result of the inflated hourly rates for paralegals and students, I would reduce the award of costs by $45, As a result of the duplication of effort among lawyer timekeepers, I would further reduce the award of costs by a global amount of $60,000. 3) Apportionment of Liability 41 My Reasons for Judgment apportioned liability as between the Estate of the late Mark MacDonald, and the City and Mr. Richer. Again, I acknowledge that the skill and experience of Plaintiffs' counsel resulted in the reduction of trial time by arriving at an agreement to limit the Plaintiffs' claims for damages and pre-judgment interests to $2,100,000 net of any apportionment of contributory negligence as against Ben Gardiner. 4) Complexity of proceedings 42 This was a complex case that involved a number of experts and a large body of complex information. The parties were required to retain accident re-constructionists and interpret large quantities of technical information. This case involved five days of oral discovery, and a significant volume of documentary discovery. It was originally scheduled for six weeks of trial. 43 Many of the potential witnesses died in the incident, while others had limited recollection of the events leading up to and including the incident. This complicated the investigation efforts of the Plaintiffs. 44 The investigations were further complicated by the need to explore the possibility of recovery against social hosts, and by the ensuing difficulties associated with identifying one of the social hosts, and the matter of the bankruptcy and underinsurance of a second social host. 45 Finally, the potential range of recovery was not resolved until August 2015, when an amount was agreed upon by the parties. Given Mr. Gardiner's youth and brain injury, the Plaintiffs had to engage a large number of experts to establish the quantum of damages, with estimated damages ranging from $2,100,000 to over $4,000,000. 5) What an unsuccessful party would reasonably be expected to pay 46 As expressed by the Divisional Court in Culligan Springs Ltd. v. Dunlop Lift Trucks (1994) (2006), 211 O.A.C. 65, at para. 33: The principles of proportionality and the reasonable expectations of the parties are, to a degree, intertwined. The principle of proportionality engages a more objective analysis given the issue and the amount in dispute, whereas the reasonable expectation principle requires the judge to examine the particular facts of the case and the subjective expectations of the parties. 47 In assessing whether the costs claimed by a successful party are reasonable, the time spent by opposing parties on the piece of litigation is a relevant consideration. Although made in the context of a motion, Justice Winkler in Risorto v. State Farm Mutual Automobile Insurance (2003), 64 O.R. (3d) 135 (S.C.), at para. 10, stated as follows: In my view, the relative expenditures, at least in terms of time, by adversaries on opposite sides of a motion, while not conclusive as to the appropriate award of costs, is still, nonetheless, a relevant consideration where there is an allegation of excess in respect of a particular matter. 48 However, when parties place different values on the claim, there may be a significant discrepancy between the time spent by opposing counsel on a case. In these situations, considering the time spent by the defendant's counsel may be of little Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 8

9 or no assistance in determining the proper fees that should be fixed for the plaintiff's costs (See e.g. Gardner v. Hann, 2012 ONSC 2006, at para. 42). 49 The Plaintiffs recognize that they have incurred greater costs than the Defendants in this case. However, they claim that these costs are justified. Counsel for the Plaintiffs, who have had charge of the matter for over seven years, argue that they have had to invest significant time in the investigation phase to produce the necessary evidence to establish damages and liability, deal with companion actions, multiple defendants, contributory negligence, and insurance coverage issues. They emphasise that they have acted reasonably at each stage and have worked to streamline the litigation. 50 The Plaintiffs further note that a comparison of legal fees between Plaintiffs and Defendants is complicated by the Defendants failure to provide a detailed Bill of Costs that breaks down the costs incurred by year or stage of litigation. As noted, the cost submissions of the City only provides categories for fees "Billed to Date" and "Work in Progress". 51 The Defendants City of Ottawa and Mr. Richer submit that the amounts claimed by the Plaintiffs are grossly excessive. These Defendants docketed approximately one third the time spent by the Plaintiffs. While acknowledging that Plaintiffs' counsel is generally required to spend more hours on a file, the Defendants submit that this discrepancy is unacceptable. They maintain that the Plaintiffs' costs exceed what an unsuccessful party could reasonably be expected to pay. 52 The Defendant State Farm echoes these submissions, and notes in particular that 680 hours for discovery, 524 hours of trial preparation, and 90 hours (initially claimed) for preparation of Costs Submissions is well beyond what an unsuccessful Defendant would be expected to pay in the context of an 8 day trial. The City's fees calculated at a full indemnity rate amount to $290,222.97, which is less than half of the amount claimed by the Plaintiffs on a partial indemnity scale. State Farm also takes issue with the claim for costs for pre-action services in excess of over 1,400 hours for investigating the case and issuing the Statement of Claim. 53 While I accept that the Plaintiffs' counsel acted reasonably in the steps taken to investigate and build the case for damages, I am not persuaded that this fully answers the concerns appropriately expressed on behalf of the City and Mr. Richer and State Farm with respect to the enormous investment of time in the investigation of the claim and other services performed before the discovery process. I am similarly concerned that excessive time was devoted to the preparation and attendance at mediation and the pre-trial conference, by which date the nature of the claim and damages sustained would have been crystallized by the efforts of building the case to that point. I fail to understand how the hours spent for these stages of the litigation could so significantly depart from the times for attendance revealed by the Costs Submissions prepared on behalf of State Farm. This, too, warrants some discount over and above the discount for the hourly rate differential of students and paralegals, and the duplication of efforts among timekeepers previously noted. I would further reduce the costs award by approximately $10,000 to account for this variance. 6) Importance of the Issue 54 There can be no question as to the importance of the proceedings. It is clear that Ben Gardiner's damages are considerable. Absent the efforts pursued in this litigation, he would have shared with the Deschamps claimants the minimum limits of $200,000 from the State Farm Policy. In addition he would have had access to the excess policy limits of Intact in the amount of $200,000. Therefore, the trial came down to whether he would receive $980,000 or $2,100,000, clearly an important difference in terms of his ability to provide for himself for the rest of his life. 7) Conduct of any Party 55 The Plaintiffs submit that the City of Ottawa and Mr. Richer increased the costs of this litigation and delayed the litigation by: (a) the piecemeal manner in which they answered undertakings arising out of the October 28, 2010 Examination for Discovery; and Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 9

10 (b) a long list of refusals to questions ultimately found to be reasonable on a motion. 56 The Plaintiffs note that they spent more than a year embroiled in detailed and ongoing follow-up with the City of Ottawa on these issues. With respect to the refusals, the issues culminated in a motion heard on May 17, 2013 by Justice Minnema. 57 The Plaintiffs were successful on this motion with respect to discovery issues. All costs received have been deducted from the current claim. However, this resulted in some delay, and the Plaintiffs claim costs for the shortfall between what they billed and what they received at the motion. 58 I am satisfied that the conduct of the discovery process on behalf of the City and Mr. Richer would have resulted in some additional expenditure of time by the Plaintiffs. I also find that there were no steps taken by the plaintiffs that were unnecessary or out of an excess of caution. However, the degree of effort invested by as many as seven counsel, not to mention students and paralegals on behalf of the Plaintiffs, is previously noted to be excessive. In addition, I note that the Plaintiffs are attempting to recover a shortfall for the detailed, ongoing follow-up required by the Plaintiffs on the issue of undertakings and refusals. The costs associated with the undertakings were fixed on the motion by the hearing justice, and I decline to award further costs in relation to the matter. I would, therefore, reduce the associated costs claimed by $15,000, having regard to the recovery of costs previously fixed by the court. Proportionality of the Plaintiffs' Claim for Costs Having Regard to the Award of Costs in other Cases 59 The parties have provided a number of charts setting out the cost awards made in other cases. These charts are attached as Appendices 2 to 4 to these Reasons. After reviewing these submissions, I have come to the conclusion that the cases provided by the Plaintiffs are generally of greater assistance in providing an objective measure of costs proportional to the amount claimed and the results achieved. 60 The Plaintiffs identified a number of personal injury cases which resulted in significant cost awards. These cases shared some important features with the case before me. 61 In Gardner v. Hann, the court awarded $2,000,000 in damages and costs of over $700,000, exclusive of disbursements or tax. Both liability and damages were in issue, the hours of the Plaintiff's counsel doubled or tripled that of defence counsel, and the Plaintiffs bettered their Rule 49 offer at trial. 62 In Mader v. Hunter, the court awarded nearly $800,000 in damages and over $400,000 in costs, exclusive of disbursements or tax. Plaintiff's counsel again docketed significantly more time than the Defendant's counsel, and again the result exceeded the Rule 49 offer. 63 In Rochon v. MacDonald, 2014 ONSC 591, 118 O.R. (3d) 491, the court awarded $1,900,000 in damages, and approximately $400,000 in costs, inclusive of tax, but exclusive of disbursements. Damages were complex, and the Plaintiff claimed against multiple Defendants. In Rochon, there was no Rule 49 offer. 64 Together, these cases demonstrate that cost awards exceeding the $200,000 to $250,000, exclusive of disbursements proposed by the Defendants before me, are appropriate in lengthy and complex personal injury cases. 65 Finally, I echo the sentiments of McCarthy J. in Aacurate, to the effect that a court should refrain from allowing "proportionality" to override the unique features of the case before it. An undue focus on proportionality ignores the principles of indemnity and access to justice. Conclusions 66 I conclude that the Plaintiffs' comparative analysis of awards of other cases would warrant an award of costs well in excess of the range of $200,000 to $250,000, exclusive of disbursements, proposed by or on behalf of the City and Mr. Richer, and State Farm. I also find that some reduction of the Plaintiffs' fees is in order, particularly as they relate to services subject Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 10

11 to a partial indemnity rate as set out in the Bill of Costs, due to the billing rate employed for students and paralegal outside of the guideline rates; duplication of effort among seven timekeepers; and the Plaintiffs' attempt to claim "shortfall" of fees billed in respect of the summary judgment motion, and the motion to compel answers to undertakings, which costs were previously fixed by the hearing justices. While I have not forgotten the submissions made on behalf of the City and Mr. Richer that they took no part in the motion for summary judgment in relation to the underinsured coverage available to the Plaintiffs under the Intact policy, it cannot be said that these Defendants received no benefit from the Plaintiffs' success on the motion, in that the result opened up the field for a potential contribution to a settlement, had the parties been so inclined. 67 I find the areas of concern raised by or on behalf of the City and Mr. Richer and State Farm warrant a global reduction in the Plaintiffs' claim for costs in the amount of $130,000 inclusive of taxes. In my opinion, such adjustment applies the principle of proportionality by reflecting the amount of time and effort that would be objectively warranted by the proceedings. Disbursements 68 I agree with the submissions made on behalf of the City and Mr. Richer and State Farm that no amount should be allocated for the expert fee for preparation of a report by Jenish and Associates, in that the report was never provided to the Defendants and was not used at trial. In addition, some reduction is warranted with respect to the Plaintiffs' claim for photocopies in the amount of $19, Although the Plaintiffs' claim would certainly exceed that of the losing parties, given the requirement to build the case on damages and make disclosure of the Plaintiffs' treatment records, I would note that this is well in excess of what I would expect in comparison to the fees incurred by the City and Mr. Richer at $5,975.50, representing less than one third of the costs incurred by the Plaintiffs. I would reduce the amount claimed by the $3, claimed for the preparation of the expert report of Jenish and Associates, and by a further $5, representing excessive photocopying costs. Sanderson Order 69 The general rule is that the plaintiff is entitled to costs against the unsuccessful defendant, and the successful defendant is entitled to costs against the plaintiff. In some circumstances, this can lead to an unjust result. A Sanderson Order allows a court to order the unsuccessful defendant to pay the successful defendant's costs directly. 70 The Ontario Court of Appeal set out the two-step test for a Sanderson Order in Moore v. Wienecke, 2008 ONCA 162, 90 O.R. (3d) 463, at para. 41: "First, courts ask a threshold question: whether it was reasonable to join the several defendants together in one action. If the answer to that question is Yes, courts must use their discretion to determine whether a Sanderson order would be just and fair in the circumstances." 71 The Court went on to identify four relevant factors for the second step of the test, noting that these factors "need not be applied mechanically in every case" (at paras ): a) Did the unsuccessful Defendant try to shift responsibility on the successful Defendant? b) Did the unsuccessful Defendant cause the successful Defendant to be added as a party? c) Are the causes of action independent of each other? d) Who has the ability to pay costs? 72 In my opinion, it was appropriate for the Plaintiffs to join the Defendants in a single action. The claims arose from the same incident and necessarily shared many common elements. After considering the success of the Defendant Intact, along with the above factors and the circumstances of the case as a whole, I find that a Sanderson Order is fair and just in the circumstances. In addition, I note that the City of Ottawa formally cross-claimed against Intact, and both the City of Ottawa and State Farm have the ability to pay costs. Orders Made Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 11

12 73 In arriving at the award for costs, I have recognized the reallocation of amounts erroneously included for preparation of the Plaintiffs' claim for fees properly related to trial preparation and counsel fee at trial. The costs incurred by the Plaintiffs for the preparation of costs submissions were included in the total amount claimed. As such, having regard to the partial success of the City and Mr. Richer, and State Farm's submissions in relation to aspect of the Plaintiffs' claim for costs, I would further reduce the global cost award by the sum of $2,000, inclusive of taxes. 74 In the result, the City and Mr. Richer and/or State Farm are ordered to forthwith pay to the Plaintiffs in respect of their partial indemnity and substantial indemnity Bill of Costs and fees for the preparation of costs submissions the global amount of $527, inclusive of taxes, plus $143, in disbursements inclusive of taxes. 75 A Sanderson Order is made requiring the City and Mr. Richer and/or State Farm to forthwith pay to Intact its agreed costs in these proceedings. 76 The allocation of the total award of fees and disbursements including taxes of $670, as between the City of Ottawa and State Farm, is left to their determination, as proposed. Court File No ONTARIO SUPERIOR COURT OF JUSTICE Appendix 1 Between: Ben Gardiner and Samantha Gardiner Plaintiffs -and- Andrew MacDonald as Litigation Administrator for The Estate of Mark MacDonald, The City of Ottawa, Raymond Richer, Ontario Ltd. (o/a Grace O'Malley's), Peter Hamilton, Geoffrey Garrett, Sean Hilliker, Tucker McCabe, The Clocktower Brew Pub Ltd., Jane Doe, John Doe, Carleton University Students' Association, Inc. (o/a Oliver's Pub), GSA Carleton Inc. (o/a Mike's Place), Intact Insurance Company (formerly known as Ing Insurance Company of Canada) Defendants -and- State Farm Mutual Automobile Insurance Company Added by Order pursuant to Section 258(14) of the Insurance Act, R.S.O. 1990, c. I.8 Third Party Court File No ONTARIO SUPERIOR OURT OF JUSTICE Between: Heathr Deschamps, Stephen Deschamps and Brooke Alexandra Deschamps Plaintiffs -and- Allan D. Brock, Ontario Ltd. (o/a Grace O'Malley's), Peter Hamilton, Geoffrey Garrett, Sean Hilliker, Tucker McCabe, The Clocktower Brew Pub Ltd., Carleton University Students' Association, Inc. (o/a Oliver's Pub), GSA Carleton Inc. (o/a Mike's Place), Co-Operators General Insurance Company, Mark MacDonald, Estate of Mark MacDonald, the Corporation of the City of Ottawa and Raymond Richer Defendants Statement of Agreed Facts and Issues Accident of January 23, These actions pertain to a motor vehicle accident that occurred on January 23, 2008 at the intersection of Heron Road and Riverside Drive in Ottawa, Ontario. 2. The precise time of the accident is not known but it occurred at approximately 1:53 or 1:54 a.m. 3. The accident involved two vehicles: a Black 1992 Toyota 4-Runner SR5 four-wheel drive SUV ("Black SUV"), owned and driven by Mark MacDonald ("MacDonald"), deceased, and a 2005 New Flyer D40i 6000 Series OC Transpo bus ("the bus"), owned by the City of Ottawa and driven by Raymond Richer ("Richer"). Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 12

13 4. At the time of the accident and in addition to MacDonald who was driving, there were four passengers in the Black SUV: Ben Gardiner ("Ben"), Monica Neascu ("Monica"); Brianne Deschamps ("Brianne"); and Vanessa Crawford ("Vanessa"). 5. At the same time, Richer was driving the bus and he had one passenger, another OC Transpo driver, Derek Moran. Events Leading Up to the Accident 6. The events leading to the accident include the evening of January 22, 2008 and into the early morning hours of January 23, MacDonald and all of the occupants of the Black SUV were students at Carleton University. 8. On January 22, 2008 at around 6:30 or 7:30 p.m., MacDonald and Ben went to Oliver's Pub, which is located on the campus of Carleton University and most likely had something to drink while there. 9. At the time of the accident, Ben shared an apartment with Nathan Mask located at 2049 Baseline Road. After leaving Oliver's Pub, MacDonald and Ben went to Ben's apartment where they had a few drinks. 10. In the hours prior to the accident, Monica, Vanessa and Brianne, attended at Mike's Place, another bar located on the campus of Carleton University, for karaoke and drinks. 11. After leaving Ben's apartment, MacDonald and Ben went to Mike's Place to pick up Monica, Vanessa and Brianne. All five of them left Mike's Place together at approximately 10:30 p.m. on January 22, MacDonald drove himself and the four occupants of the Black SUV to Grace O'Malley's, a bar located on Merivale Road in Ottawa. 13. They all remained at Grace O'Malley's until the early hours of January 23, They left Grace O'Malley's, again with MacDonald driving the Black SUV and went to an unknown bar located on Bank Street. 14. After a brief stay, they then left that bar with MacDonald operating the vehicle. According to Monica, the plan was to drive Vanessa, Brianne and Monica back to their residence located on Ridgewood Avenue, which is off of Riverside Drive south of the intersection of Heron Road and Riverside Drive. 15. Other than the time of leaving Mike's Place on the Carleton campus, the parties are unable to place any precise times on these subsequent events. 16. Following the accident, a toxicology report completed as a part of the autopsy of MacDonald demonstrated he had a blood alcohol level of 221 mg per percent with a urine ethanol of 289 mg per percent. The Accident 17. As indicated above, the accident occurred at the intersection of Heron Road and Riverside Drive at approximately 1:53 or 1:54 a.m. 18. MacDonald was driving the Black SUV and approached the intersection westbound on Heron Road. Monica was in the front passenger seat and Vanessa, Brianne and Ben were all in the rear seats. 19. Richer was driving the OC Transpo bus and approached the intersection northbound on Riverside Drive. His only passenger was Derek Moran, who was standing near the front of the bus. The bus Richer was driving was "Out of Service" and he was driving Moran back to the OC Transpo garage on St. Laurent Blvd. 20. The accident was fatal for Vanessa, Brianne and MacDonald. Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 13

14 21. Monica sustained relatively minor injuries. Monica has limited recollection of the evening in question and no meaningful evidence in regard to the issues that are disputed between the parties. 22. Ben was seriously injured and was taken by ambulance to the Ottawa Hospital, Civic Campus. Ben has no recollections whatsoever of the evening or the accident. 23. Accordingly, neither Monica nor Ben will testify at the trial and all counsel have agreed that no adverse inference should be drawn by virtue of their not testifying. Liability 24. The Defendant, the Estate of Mark MacDonald has admitted liability. 25. All parties have agreed to the dismissal of all claims and crossclaims against all of the commercial host defendants, without costs. There was either insufficient evidence to establish liability and/or no available insurance or assets to respond to a Judgment on the part of these defendants. 26. The Third Party State Farm Mutual Automobile Insurance Company denied coverage to Mark MacDonald on the basis that as the holder of a G2 driver's licence, he was not permitted to have any alcohol in his blood while driving. However, State Farm has confirmed that the mandatory minimum limits of $200,000, plus its reasonable share of costs, are available to the Plaintiffs in these actions. 27. Given the agreements in regard to damages referred to below, the parties have agreed that the State Farm insurance proceeds, before costs, are to be paid out as follows: a. To the Plaintiffs in the Gardiner action: $180,000 b. To the Plaintiffs in the Deschamps action: $20, In the case of Ben Gardiner, a claim was advanced against the Defendant Intact Insurance Company who had issued an automobile insurance policy to Ben's mother Denise Silson, with limits of $1,000,000. The claim against Intact is under OPCF 44 for underinsured coverage. 29. Initially, Intact declined coverage to Ben on the basis that he was not an eligible claimant under OPCF 44 of his mother's policy. That issue was determined by way of Summary Judgment rendered on January 12, 2015 by Justice Patrick Smith who ordered that Ben is an eligible claimant under the Intact policy. 30. By virtue of the terms of OPCF 44, in the event that the Plaintiffs in the Gardiner case are unable to recover any amounts from the Defendants the City of Ottawa and Raymond Richer, then in addition to the State Farm amount referred to above, they are entitled to recover $800,000 from Intact, being the difference between the limits of coverage in the State Farm policy ($200,000) and the Intact policy ($1,000,000), plus costs. 31. In the Deschamps action, the Plaintiffs also advanced a claim against their automobile insurer, Cooperators General Insurance Company under the OPCF 44 coverage. In the event that the Plaintiffs in that action are unable to recover any amounts from the Defendants the City of Ottawa and Raymond Richer or their insurers, then in addition to the State Farm amount referred to above, the Deschamps Plaintiffs are entitled recover the balance of their agreed upon damages from Cooperators, plus costs. 32. In the event that the Defendants the City of Ottawa and Raymond Richer are found to have any liability for this accident, then by virtue of the provisions of the Negligence Act, they will be liable as follows: a. In the Gardiner case, to pay the difference between the State Farm amount referred to above and the total of the agreed upon damages; and Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 14