This article will go over an application in the ONSC to determine the Plaintiff’s assessment of costs post jury trial. The case is referenced as Brophy v. Harrison, 2019 ONSC 4377 (CanLII). The Defendant in this case played “hard ball” by refusing to make any offers during the litigation process, and in this case it backfired with a significant costs award to the Plaintiff.
While the trial decision is not published, the facts as noted in the costs hearing state that the Plaintiff did not beat her formal offer of $75,000 plus taxable costs and disbursements at trial. However, as the plaintiff was successful against the Defendant on both damages and liability, the Court was of the opinion that the Plaintiff was entitled to an award of costs totalling $275,456.60.
As a brief history, the Plaintiff in this case was seeking damages in the range of $996,900.89 to $1,150,700.89. The defence took the position that the range of damages was in the range of $5,000 to 10,000. The Plaintiff was awarded damages totaling $62,628.75 after a 10-day trial that proceeded to trial by jury. With the statutory deductible and taking into consideration the accident benefits settlement, the Plaintiff’s net judgment amount was $17,688.64.
The defence’s strategy in playing hard-ball however were clearly a factor of consideration in the Court’s discretionary authority in awarding significant costs in this case. The Court states:
The defendant took what I would view to be a hard-ball approach to this claim, and now must accept the consequences of that decision.
Cases referenced in this decision are noted below.
Costs of a proceeding are in the absolute discretion of the court: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1).
When fixing costs, the court is to consider the facts and circumstances of the particular case. A judge is not to conduct a line-by-line assessment, but rather make a determination of what the services devoted to the action were: Apotex Inc. v. Egis Pharmaceuticals, 1991 CanLII 2729 (ON SC),  O.J. No. 1232.
A judge is also to consider the factors set out in Rule 57.01 of the Rules of Civil Procedure.
While the individual factors set out in Rule 57 provide guidance when assessing and fixing costs, as Boswell J. held in Nesbitt v. Jeffery, 2018 ONSC 6448 (CanLII).
Regardless of the particular factors considered relevant by the court on any given assessment, it is now well-settled that the overarching principles to be observed in the exercise of the court’s discretion to fix costs are fairness, proportionality and reasonableness: see Beaver v. Hill, 2018 ONCA 840 (CanLII); Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); and Moon v. Sher (2004), 2004 CanLII 39005 (ON CA), 246 D.L.R. (4th) 440 (C.A.).
Brief Litigation Facts
- Discoveries were held
- Pre-trial conferences were also held
- September 2017
- November 2018
- April 2019
- Plaintiff presented various settlement offers
- Defendant did not make any offers
- Plaintiff had no alternative but to proceed to trial
- Trial was adjourned twice at the request of defence counsel
- Expert not available
- Counsel had conflict due to another trial booking
- Formal offer of the Plaintiff $75,000 plus costs and disbursements (did not beat)
- Rule 49 was not relevant
- Plaintiff is entitled to a partial indemnity due to success against the Defendant – award $62,628.75
- Plaintiff seeks costs totaling $283,456.60 and disbursements of $64,869.40 includes HST
- Included are the plaintiff’s costs thrown away for each adjournment
- Defendant disagrees with costs thrown away as Plaintiff consented to the adjournment
- Costs for these adjournments were not addressed
- Defendant states $70,000 is more appropriate
- Defendant states Plaintiff’s award is within the jurisdiction of the Small Claims Court
- Defendant relies on Louws Kitchen Designs Ltd. v. France,  O.J. No. 521
- Defendant relies on rules of proportionality between amount recovered and the cost award
- Plaintiff states costs she incurred related to accident benefits settlement and should be awarded as legal costs
The Court’s Analysis
- The Court generally took no issue with the Plaintiff’s Bill of Costs
- The hourly rate of counsel at $225. And $200. were deemed reasonable
- Defendant took the position that the individuals involved in the action was excessive
- Court disagreed – stated there was value in interviewing witnesses, preparing experts and strategizing for trial
- Pre-trial costs were reduced by the court as the Plaintiffs proposed assessment was deemed excessive (from 23K to 8K)
- Plaintiff’s disbursements were deemed reasonable
- Court stated that the experts contributed to the case and their costs were reasonable keeping proportionality to the economic value and risk in mind. Hamfler v. Mink, 2011 CanLII 8246(ONSC)
- The Court was of the view that it was reasonable to commence this action in the Superior Court
- It was reasonable to proceed to trial as the Defendant did not make any offers
- The Court did not agree that a Small Claims award should be ordered due to the ultimate verdict falling less than the limits of the Small Claims Court
The Court’s comments:
[23} In terms of proportionality, I look to the decision of Hackland J. in Corbett v. Odorico, 2016 ONSC 2961 (CanLII), in which he held that:
In my view, to impose a rule arbitrarily limiting the amount of costs to some proportion of the recovery when there has been no offer of settlement, or only a nominal offer as in this case, would undermine the purpose of Rule 49, which is to encourage settlement by attaching costs consequences for failure to make or accept reasonable offers. It would also encourage the type of “hard ball” approach to settlement employed in this case.
[24} Justice Hackland also refenced Aacurate v. Tarasco, 2015 ONSC 5980 (CanLII), where McCarthy J. comments that declining to make realistic costs awards in modest cases would 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.
 I find favour with McCarthy J.’s conclusion that limiting the losing party’s exposure to costs proportionate to the size of the claim would encourage those resisting legitimate but modest claims to take unreasonable positions.
 The defendant urges that if the court is not prepared to award costs within the jurisdiction of the Small Claims Court, then proportionality should be the yardstick against which costs are measured.
 To accede to this argument would unduly shave the plaintiff’s costs, based solely or primarily on an undue emphasis on the application of proportionality: Persampieri v. Hobbs, 2018 ONSC 368 (CanLII), at para 95.
 When assessing costs, not only are the reasonable expectations of the successful party to be considered, the court must also look to the reasonable expectations of the unsuccessful party: Boucher.
 Despite my direction that a Bill of Costs was to be included with written submissions, the defendant chose not to do so. Without knowing what the defendant’s costs were for this trial, I cannot complete the “reasonable expectation” analysis. The inference to be drawn is that the quantum of the defendant’s costs approaches those of the plaintiff.
 The defendant took what I would view to be a hard-ball approach to this claim, and now must accept the consequences of that decision.
 After considering all of the above, the plaintiff is awarded costs in the amount of $210,587.20, plus disbursements of $64,869.40 (both figures inclusive of HST), for a total of $275,456.60. There has been no reduction for costs thrown away for trial preparation.
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