SUPREME COURT OF NOVA SCOTIA Citation: Richards Estate v. Industrial Alliance Insurance and Financial Services, 2019 NSSC 101 Date: 20190326 Docket: Hfx No. 445372 Registry: Halifax Between: Sandra Nicole Richards and John Paul Bartlett Richards, Executors on behalf of the Estate of Paul Thomas Richards Plaintiff/Respondent v. Industrial Alliance Insurance and Financial Services COSTS DECISION Defendant/Applicant Judge: The Honourable Justice Ann E. Smith Final Written Costs Submissions: Plaintiff/Respondent March 15, 2019; Defendant/Applicant March 11, 2019 and March 15, 2019 Counsel: Nicolle A. Snow, for the Plaintiff/Respondent Michelle C. Awad, QC, for the Defendant/Applicant
Page 2 By the Court: Introduction [1] Industrial Alliance Insurance and Financial Services Inc. ( Industrial Alliance ) sought summary judgment on evidence. That motion was granted for the reasons this Court set out in Richards Estate v. Industrial Alliance Insurance and Financial Services, 2019 NSSC 3. Industrial Alliance seeks costs of that motion. Costs [2] Costs generally follow the event. There are no reasons why that should not be the case here. [3] The issue is the amount of the costs. [4] The Tariffs of Costs and Fees under Rule 77 is the starting point in determining the quantum of costs. [5] Hunt J. recently summarized the Nova Scotia Court of Appeal s guiding principles for awarding costs as set forth in Armoyan v. Armoyan, 2013 NSCA (CanLII) in Grue v. McLellan, 2018 NSSC 151 (CanLII): [6] In Armoyan v. Armoyan, 2013 NSCA 136 (CanLII), the Nova Scotia Court of Appeal provided direction with respect to the principles to be considered when determining costs. Specifically, Justice Fichaud stated: 1. The court s overall mandate is to do justice between the parties : para. 10; 2. Unless otherwise ordered, costs are quantified according to the tariffs; however, the court has discretion to raise or lower the tariff costs applying factors such as those listed in Rule 77.07(2). These factors include an unaccepted written settlement offer, whether the offer was made formally under Rule 10, and the parties conduct that affected the speed or expense of the proceeding: paras. 12 and 13. 3. The Rule permits the court to award lump sum costs and depart from tariff costs in specified circumstances. Tariffs are the norm and there must be a reason to consider a lump sum: paras. 14-15 4. The basic principle is that a costs award should afford a substantial contribution to, but not amount to a complete indemnity to the party s reasonable fees and expenses: para. 16
Page 3 5. The tariffs deliver the benefit of predictability by limiting the use of subjective discretion: para. 17 6. Some cases bear no resemblance to the tariffs assumptions. For example, a proceeding begun nominally as a chambers motion, signaling Tariff C, may assume trial functions; a case may have no amount involved with other important issues at stake, the case may assume a complexity with a corresponding work load, that is far disproportionate to the court time by which costs are assessed under the tariffs, etc.: paras. 17 and 18; and 7. When the subjectivity of applying the tariffs exceeds a critical level, the tariffs may be more distracting than useful. In such cases, it is more realistic to circumvent the tariffs, and channel that discretion directly to the principled calculation of a lump sum which should turn on the objective criteria that are accepted by the Rules or case law: para. 18. [6] Justice Hunt in Grue v McLellan also set out the additional principles which may be relevant to the determination of costs at paras. 7 through 10: [7] I have reviewed and considered the Civil Procedure Rules and case law with respect to lump sum awards of costs. [8] Civil Procedure Rule 77.07 provides factors which are relevant to increasing Tariff costs: Increasing or decreasing tariff amount 77.07 (1) A judge who fixes costs may add an amount to, or subtract an amount from, tariff costs. (2) The following are examples of factors that may be relevant on a request that tariff costs be increased or decreased after the trial of an action, or hearing of an application: (a) the amount claimed in relation to the amount recovered; (b) a written offer of settlement, whether made formally under Rule 10 - Settlement or otherwise, that is not accepted; (c) an offer of contribution; (d) a payment into court; (e) conduct of a party affecting the speed or expense of the proceeding; (f) a step in the proceeding that is taken improperly, abusively, through excessive caution, by neglect or mistake, or unnecessarily;
Page 4 (g) a step in the proceeding a party was required to take because the other party unreasonably withheld consent; (h) a failure to admit something that should have been admitted. (3) Despite Rule 77.07(2)(b), an offer for settlement made at a conference under Rule 10 - Settlement or during mediation must not be referred to in evidence or submissions about costs. [9] Generally speaking, these have been resorted to when a tariff calculation has been found to be woefully inadequate : see for instance Urquhart v. MacIsaac, 2018 NSSC 36 (CanLII). Justice Chipman in that case offers an overview of case law on the subject. In the circumstances before Justice Chipman he concluded the Tariff was inadequate. The amount involved for purposes of applying the Tariff was $80,000.00. The hearing was six days long. The Tariff calculation in those circumstances was not reasonable. [10] In the Urquhart case the amount involved ($80,000.00) did not reflect the seriousness of the issues being tried and the interests at stake. In our present case, the amount involved ($1,000,000.00) does more accurately reflect the very serious issues and interests at play. It also results in a Tariff calculation of a different order of magnitude. [7] I note that Rules 77.02, 77.08 and 77.10(1) are also relevant and provide: General discretion (party and party costs) 77.02 (1) A presiding judge may, at any time, make any order about costs as the judge is satisfied will do justice between the parties. (2) Nothing in these Rules limits the general discretion of a judge to make any order about costs, except costs that are awarded after acceptance of a formal offer to settle under Rule 10.05, of Rule 10 - Settlement. Lump sum amount instead of tariff 77.08 A judge may award lump sum costs instead of tariff costs. Disbursements included in award 77.10 (1) An award of party and party costs includes necessary and reasonable disbursements pertaining to the subject of the award. [8] Tariff C provides: TARIFF C
Page 5 Tariff of Costs payable following an Application heard in Chambers by the Supreme Court of Nova Scotia For applications heard in Chambers the following guidelines shall apply: (1) Based on this Tariff C costs shall be assessed by the Judge presiding in Chambers at the time an order is made following an application heard in Chambers. (2) Unless otherwise ordered, the costs assessed following an application shall be in the cause and either added to or subtracted from the costs calculated under Tariff A. (3) In the exercise of discretion to award costs following an application, a Judge presiding in Chambers, notwithstanding this Tariff C, may award costs that are just and appropriate in the circumstances of the application. (4) When an order following an application in Chambers is determinative of the entire matter at issue in the proceeding, the Judge presiding in Chambers may multiply the maximum amounts in the range of costs set out in this Tariff C by 2, 3 or 4 times, depending on the following factors: (a) the complexity of the matter, (b) the importance of the matter to the parties, (c) the amount of effort involved in preparing for and conducting the application. (such applications might include, but are not limited to, successful applications for Summary Judgment, judicial review of an inferior tribunal, statutory appeals and applications for some of the prerogative writs such as certiorari or a permanent injunction.) Length of Hearing of Application Less than 1 hour More than 1 hour but less than ½ day More than ½ day but less than 1 day 1 day or more Range of Costs $250 - $500 $750 - $1,000 $1,000 - $2000 $2000 per full day [9] This motion was heard in approximately one and a half days. The initial Tariff provides for $3,000 in costs. [10] This Court s February 5, 2019 decision was determinative of the entire matter. Therefore paragraph (4) of Tariff C is triggered. That results in costs between $6,000 and $12,000 depending on which multiplier is used.
Page 6 [11] As this Court noted in Tri-Mac Holdings Inc. v. Ostrom, 2019 NSSC 44, Courts will depart from Tariff C amounts when the award of costs under the Tariff will not adequately serve the principle of substantial, but not complete indemnity, for legal fees of the successful party. [12] Counsel for Industrial Alliance has indicated in her affidavit that actual legal fees incurred in advancing the wholly successful motion were $125,000. Her affidavit sets out those fees and provides a breakdown of the steps in the action and motion. [13] Industrial Alliance claims costs of $22,000 (lump sum). The Tariff C amount using the highest multiplier (4) would amount to $12,000. [14] There was some complexity to the issues raised on the motion, including the interpretation of the policy of insurance and the interpretation of sections 206 and 209 of the Nova Scotia Insurance Act, R.S.N.S. 1989, c. 231. Post-trial submissions were requested by the Court. [15] A payment of $12,000 does not amount to substantial yet incomplete indemnity. The Plaintiffs submit that costs of $2,500 are appropriate, largely because of what they say is the public interest aspect of the statutory interpretation required by the Court to deal with the various issues raised by the Plaintiffs in responding to the motion. [16] If the public interest is engaged, that is but one factor for this Court to consider in determining costs. It could equally be said that a question of law was unsettled relating to the applicable sections of the Insurance Act. Industrial Alliance was tasked with responding to each of the issues raised by the Plaintiffs. [17] This is a case in which the successful defendant is entitled to a costs award in order to provide a level of indemnity that approaches substantial. [18] The $22,000 costs award that Industrial Alliance seeks is about 17.5% recovery. The claim is entirely reasonable. It is also just and appropriate in all of the circumstances. Disbursements [19] Industrial Alliance claims disbursements of $2,196.93 supported by counsel s affidavit.
Page 7 [20] I have carefully reviewed the disbursements claimed and find most of them to be reasonable. This includes expenses associated with the discovery held in Toronto, of an Industrial Alliance employee. [21] However, the photocopies and printing expenses of $602.40 plus taxes are reduced to $301.20 plus taxes ($346.38) in accordance with Practice Memorandum No. 10. [22] Courier charges for deliveries to Industrial Alliance are removed from the total courier charges claimed of $198.53, also in accordance with Practice Memorandum No. 10. The total courier charges allowed are $54.14. [23] The total disbursements allowed are therefore $1,706.16 (inclusive of HST). Conclusion [24] Lump sum costs of $22,000 and disbursements in the amount of $1,706.16 are awarded. [25] I ask Ms. Awad to prepare a draft form of Order reflecting the Court s decision. Smith, J.