Introduction
The following reasons for decision on costs was released by Justice G. Dow on January 4, 2023. The decision is noteworthy given the significant quantum of costs and disbursements awarded to the plaintiffs and the discussion about Sanderson Orders.
Facts
An action was started against eight defendant physicians and a defendant hospital and nurses in relation to the pregnancy and care of the primary plaintiff and her resulting cardiac arrest in the labour and delivery operating room.
The action culminated with a 42-day trial against four of the defendant physicians and the defendant hospital in which Justice Dow found that two of the defendant physicians and the defendant hospital were negligent in their care and treatment of Ms. Hemmings. At the outset of trial, the quantum of damages was approved by Justice D. Wilson at $12,000,000.
Following the trial, the parties were unable to agree on costs, leading to the present decision of Justice Dow.
The plaintiffs sought costs of $3,928,496, plus HST of $510,704.48 and disbursements of $602,052. The plaintiffs also requested that the court grant a Sanderson Order, whereby any costs that may be awarded to the two not-at-fault defendant physicians would be paid by the unsuccessful defendants.
The at-fault defendant physicians acknowledged their exposure to the plaintiffs’ costs and disbursements but disputed the quantum of the costs and the Sanderson Order. In addition, the not-at-fault defendant physicians claimed one quarter of the defendant physicians total claimed partial indemnity costs and disbursements ($1,976,122.22), for a total of $494,939.55.
Similarly, the defendant hospital acknowledged their exposure to the plaintiffs’ costs and disbursements but disputed the quantum of the costs and opposed the Sanderson Order.
Analysis
Plaintiff Costs and Disbursements
After reviewing the written submissions and listening to oral arguments, Justice Dow summarized the considerations raised by the parties. These included:
- The issues raised were of great importance to the parties;
- The proceedings involved complex medical issues;
- The experience of counsel and the rates being charged with total “billed” time of approximately $6.5 million;
- The plaintiffs discounted the damages they originally sought which was likely in recognition of the merit of arguments advanced by the defendants;
- No Rule 49 compliant offers were exchanged;
- The defendants staunchly denied liability despite concerning discovery and documentary evidence; and
- Negligence was established against the defendant hospital and two defendant physicians.
Based on these considerations Justice Dow awarded the plaintiffs partial indemnity costs of $3,200,000, plus HST of $416,000 and disbursements of $602,052, for a total of $4,218,052.
Defendant Costs and the Sanderson Order
As noted previously, the action was initially started against eight physicians, but the trial proceeded against four physicians. All defendant physicians were represented by the same counsel. It was on this basis that the successful defendant physicians claimed one quarter of the defendant physicians’ costs and disbursements for a total of $494,030.55.
Justice Dow did not agree with the quantum proposed by the not-at-fault physicians. A review of the defendant physicians’ disbursements showed that much of them dealt with damages and the care provided by the at-fault physicians. In addition, only four days of the 42-day trial dealt with the not-at-fault physicians and the evidence of one of the not-at-fault physicians was likely required in any event. Furthermore, the defendant physicians failed to separate their docketed time between the various defendants and Justice Dow commented that much of the time that was spent addressing damages was independent of the number of physicians named in the action.
As such, Justice Dow assessed the partial indemnity costs of the not-at-fault physicians to be $250,000, inclusive of fees, HST and disbursements.
To determine whether a Sanderson Order was appropriate, Justice Dow referred to the two-step analysis from Moore v. Wienecke, 2008 ONCA 162 which asks:
- Whether it was reasonable to join the several defendants in one action; and
- Whether a Sanderson Order would be just and fair in the circumstances. Factors to be considered at this stage of the test include:
a) Whether the unsuccessful defendants caused the successful defendants to be added to the action;
b) Whether the causes of action were independent of each other;
c) The ability to pay; and,
d) Whether the defendants at trial attempted to shift responsibility onto each other as opposed to concentrating on meeting the plaintiffs’ case.
Although Justice Dow answered the first question in the affirmative, he held it was not fair and just to grant a Sanderson Order. In arriving at this conclusion, Justice Dow noted the following:
- The unsuccessful defendants did not cause the successful defendants to be added to the action;
- There were independent causes of action;
- The ability to pay was not an issue given as the amount sought could be deducted from the award of costs made in favour of the defendant physicians and/or the damages payable to the plaintiffs; and
- The defendants did not try to shift responsibility to each other.
As a result, Justice Dow held that the not-at-fault defendants were entitled to recover their portion of the costs, disbursements, and HST from the plaintiffs.
