Released May 3, 2016 | Full Decision [CanLII]
The plaintiffs succeeded at a six-week trial and sought to recover their costs on a substantial indemnity basis.
At trial, the jury awarded damages in the amount of $141,500 before statutory deductions and collateral benefits.
Neither party matched or bettered their respective Rule 49 offer to settle. The plaintiffs’ last offer to settle was $250,000 plus costs and disbursements. The defendant’s last offer to settle, after statutory deductibles, was $6 for the claim and $1 for costs.
The plaintiffs’ costs were calculated at $159,249.90 on a partial indemnity basis, and $242,521.50 on a substantial indemnity basis.
The plaintiffs sought their costs on a substantial indemnity basis because of the manner by which they alleged that defence counsel had conducted the trial.
The court found that the trial was an acrimonious one, and communication and cooperation between counsel were minimal. Considerable time was wasted arguing over pre-trial issues. However, the court found that both sides shared responsibility for these problems and therefore refused to award the plaintiffs’ costs on a substantial indemnity basis.
The defence also argued that an award of costs should be proportional to the award of damages recovered at trial. The Court held that an over-emphasis on proportionality may serve to under-compensate a litigant for costs legitimately incurred. This would be an injustice to the plaintiffs by depriving them of otherwise appropriate and reasonable award of costs due to a modest recovery at trial, especially in the face of a $7 offer from the defendant.
Accordingly, Justice Hackland awarded the plaintiffs’ costs on a partial indemnity basis for the sum of $159,249.90.
Counsel for the Plaintiffs: Frank E. McNally and Jaime J. Wilson
Counsel for the Defendant: Todd J. McCarthy
