The Ontario Rules of Civil Procedure (the “Rules“) dealing with the assessment and award of costs following litigation are designed to advance several purposes in the administration of justice.

1. To indemnify successful litigants. That purpose is evident and leads to the second purpose;
2. To facilitate access to justice. Rules regarding the assessment of costs are also designed to discourage frivolous claims and defences.  The overall objective is to fix an amount that is fair and reasonable, bearing in mind the broad range of factors articulated in Rule 57.01.  The failure of a judge assessing costs to consider the “overriding principle of reasonableness” can result in a denial of access to justice.

In some cases, a party may reject attempts to settle a matter, or refuse to concede certain points, leading to a longer and more drawn-out trial. In such cases, this behaviour could end up reducing costs owing to them, even if they ultimately are the more successful party. A recent decision of the Ontario Superior Court of Justice (ONSC) demonstrated this when a person sued a municipality for damages and the municipality refused to concede some of the plaintiff’s claims.

Municipality Sued for Negligence

The ONSC had to assess the costs to be awarded to the defendant municipality after a five-day trial without a jury. A claim for negligence had been brought against the municipality and its security service for failing to provide a secure and safe parking garage. The plaintiff had parked in the garage while at work. As he was returning to his vehicle, he was assaulted by two men in the stairwell. The assailants fled when the plaintiff began to defend himself. The assault lasted only seconds but did cause injury to the plaintiff, as he had been repeatedly hit in the face. The damages were agreed upon by the parties, but the amount was not revealed in the judgment at Teglas v. City of Brantford et al.. It was disclosed in the follow-up reasons for the cost award that the damages had been determined to be approximately $100,000.00.

The plaintiff had been required to prove the following:

• That the municipality owed him a certain duty of care;
• The city had breached its duty; and
• The breach was the cause of the damages he had suffered, which were reasonably foreseeable in the circumstances.

He was successful in demonstrating each of the above points with the exception of establishing causation. He could not satisfactorily prove that the city’s breach of duty had resulted in the damages. The judge was persuaded that with such an unexpected, sudden and short assault that there was little anyone could have done to prevent it. In other words, the result (damages) would have been the same even if all of the necessary safety precautions had been in place.

City Claims $60,000 in Costs

The defence sought costs on a partial indemnity scale at $60,000.00 for fees and disbursements. The judge reviewed the efforts, or lack thereof, of the defence to resolve or simplify the matter. He did acknowledge that the defence had at least agreed on the amount of total damages. What concerned him was the following:

• The defence had not made any offer to settle the matter under Rule 49 or otherwise;
• The defence had twice been invited to mediate but refused both times; and
• The defence refused to offer anything to resolve the case; even a low-ball amount to allow the plaintiff to walk away with something.

The Court acknowledged that hard-ball stances are taken by insurance companies on behalf of defendants as part of the process but that should not mean that in every case they will be awarded costs following a successful defence. The judge was clearly sympathetic to the plaintiff’s plight.

The Principles Behind a Costs Award

The judge then mentioned the principles behind cost awards repeating the well-known phrases that they are “in the discretion of the court”. That overall discretion given in the Courts of Justice Act is further guided by Rule 57.01 which also instructs judges to review the results of the proceeding and any offers to settle as well as setting out the factors to be considered when awarding costs.

Here the judge then reviewed the costs claimed and found:

• The plaintiff had been successful on many complex issues
• The damages were moderate at $100,000.00
• The claim was not frivolous and had significant merit
• There were costs thrown away that followed two defence-requested adjournments resulting in a set-off of $25,000.00
• The defence should have conceded a duty, the breach and that the damages were reasonably foreseeable

In the end, although the defendant’s costs were assessed at $60,000.00, they were reduced by the set-off for costs thrown away, the cost of the plaintiff’s medical expert, and a final reduction of fifty percent due to there being divided success at trial. Ultimately, the plaintiff was ordered to pay the defendant a total of $13,743.92 in costs.

At Milosevic & Associates, our team of Toronto corporate commercial lawyers regularly represent clients in complex commercial litigation matters ranging from straightforward contract and partnership disputes to complex multi-party commercial claims. Over the years, our team of exceptional litigators has seen it all and has successfully fought for our clients’ rights. Our impressive track record speaks for itself.  Call us at 416-916-1387 or contact us online to schedule a consultation.