Pye v. Di Trapani et. el., 2024 ONSC 2265

Full Decision

Background

In Pye v. Di Trapani et. el., 2024 ONSC 2265, the plaintiff was awarded one million dollars in a personal injury action. Notably, the amount awarded by the jury exceeded both the plaintiff’s and the defendant’s offers to settle. In this decision, Skarica J. outlined the legal principles regarding costs, offers to settle, pre- and post-judgment interest and indemnity.

Held

Total costs (inclusive of tax and disbursements) were fixed at $995,854.50. Partial indemnity costs were awarded from the commencement of the action to the plaintiff’s third offer to settle with substantial indemnity costs awarded thereafter. Pre-judgment interest was fixed at $84,933 (calculated at 3%) and post-judgment interest was fixed at $23,770 (calculated at 7%). The total to be paid was $1,104,557.50.

Issues

The issues before the Court were as follows:

(1) What was the appropriate costs amount to be awarded to the winning litigant, the plaintiff?

(2) What was an appropriate amount of pre-judgment interest?

(3) What was an appropriate amount of post-judgment interest?

Costs

Following an overview of the procedural history of the case and detailing the offers to settle, Skarica J. outlined twelve guiding considerations under the phrase “unless the Court orders otherwise” under Rule 49.10(1) of the Rules of Civil Procedure (at para 29):

“(1) [I]n reviewing a claim for costs, the Court need not undertake a line-by-line analysis of hours claimed or second guess amounts claimed unless it is clearly excessive or overreaching. A trial judge must consider what is reasonable in the circumstances and after taking into account all the relevant factors, should award costs in a more global fashion.

(2) Relative expenditures by adversaries on opposite sides of a motion is a relevant consideration where there is an allegation of excess in a particular matter but that is not conclusive.

(3) Substantial and partial indemnity rights are, approximately, 90 per cent and 60 per cent, respectively, of a full amount billed.

(4) There’s no requirement to apply out of date grid rates rather than the 55 to 60 per cent of a reasonable actual rate.

(5) A plaintiff is entitled to incur legal expenses commensurate with the amount in issue.

(6) The principle of proportionality, indemnity and access to justice may allow a costs award to exceed the damage settlement if that costs amount is reasonable on the totality of the circumstances.

(7) In the present case the defendant did not make an offer that was a “near miss”. I am not to impose a rule arbitrarily limiting the amount of costs to some proportion of the recovery where there has been a nominal offer. Rule 49 is designed to encourage settlement by attaching costs consequences for failure to make or to accept reasonable offers.

(8) Costs premium can be awarded to successful plaintiffs where the evidence involves a detailed understanding of complex scientific material.

(9) Proportionality has become an ever increasingly important factor in assessing costs. Costs awards 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 costs to the successful litigant.

(10) A Court can assess and reduce a costs award to the successful litigant where adjournments required the opposite party to redo work necessary to prepare for trial.

(11) A Court can disallow disbursements which are either unnecessary or excessive.

(12) It is accepted principle that a plaintiff requires more time to present a case than the defendant”.

Applying the above legal principles to the case, Skarica J. held “that a potential costs award that more or less equals the damages award can be awarded provided it’s fair, reasonable and appropriate in all the circumstances” (at para 55). Skarica J. identified several relevant circumstances including: (at paras 40-55):

Although liability was straightforward, the damage assessment and medical evidence was complex. There were numerous medical reports and expert reports, and both sides called expert witnesses at trial.

Both adjournments by plaintiff counsel were “entirely reasonable”. No details were provided by the defendant as to extra costs incurred because of these adjournments, e.g., duplicate work or work needing to be redone. No deductions were made.

Although lead counsel for the plaintiff was assisted by two additional lawyers (each at a $550 hourly rate), Skarica J. stated it was “clear that all three counsel worked efficiently as a highly skilled team during/throughout the trial. The result was that the trial was conducted efficiently with no down time, a rare event” (at para 43).

The disbursements incurred by the plaintiff were “reasonable and fair and appropriate given the quantum of damages sought and awarded” (at para 47). Skarica J. noted the disbursements aided the plaintiff to advance his case with regard to the complex medical evidence before the jury, e.g., trial photo boards depicting the plaintiff’s injuries. Disbursements for copies of the criminal trial transcripts were also permitted as they addressed “crucial points of evidence” (at para 48).

Looking specifically at the principles of indemnity and access to justice, defendant counsel submitted a reduction in the costs award should be made due to their partial success on some issues at trial. Notably, Skarica J. rejected this submission and emphasized the discretion of the Court to consider “any other matter relevant to the questions of costs” under Rule 57.01(1)(i).

Skarica J. held that Rule 57.01(1)(i) permits consideration of the experience of counsel. Plaintiff’s counsel in this case was called to the Bar in 1998 and billed at $925 for a full indemnity counsel fee. On the matter of counsel’s fees, Skarica J. stated (at para 58):

Mr. Wong [defendant counsel]… charges $350 per hour. Frankly, given Mr. Wong’s experience [called to the Bar in 1999] and talent level, I consider that $350 amount to be woefully inadequate given much larger fees I have seen billed by less experienced counsel for many years now.

Continuing, Skarica J. held that “effectiveness of counsel is far more important than mere experience” and praised the advocacy of the plaintiff’s lead counsel (at paras 61, 63-64):

Given the commitment and skills demanded of a truly accomplished and great — in rare cases of a great advocate, … a commanding performance conducted by an artist in advocacy is a rare and precious item… Mr. Smitiuch’s conduct in this trial qualifies as one of those very rare jewels of advocacy that it is a wonderful treat to behold.

In my opinion, Mr. Smitiuch is an advocate who is as excellent as any I’ve encountered in the 40 years of trial litigation I’ve conducted, both as a judge and as a lawyer. It is no coincidence that the jury awarded miserable, unlikeable, old Mr. Pye an award well in excess of the settlement offers.

In order to retain excellent counsel, such as this in a serious case, most litigants would gladly pay $925 an hour in order to guarantee outstanding superior representation, especially since we are talking Canadian dollars.

Interest

With respect to interest, Skarica J. fixed pre-judgment interest at the rate of 3%. Skarica J. noted the Court’s discretion pursuant to section 130 of the Courts of Justice Act to increase or reduce the rate of prejudgment interest, to change the interest period, or disallow interest altogether. In consideration of the factors under section 130(2) of the Courts of Justice Act and the fluctuating market interest rates during the relevant period, Skarica J. declined to increase the rate of pre-judgment interest to 5%.

Written by

Sarah Lawson is an employment lawyer at Harrison Pensa representing and advising both employers and employees in the full spectrum of the employment relationship including human rights complaints, allegations of discrimination or harassment, workplace safety, occupational health, and wrongful termination disputes.