On August 20, 2018 the Ontario Superior Court released its judgment on costs following trial in Bukshtynov v. McMaster University, 2018 ONSC 4819.

Background

The costs judgment was released following a personal injury jury trial arising from a collision between the plaintiff and another runner on an indoor university running track. The plaintiff, his wife, and their daughter commenced an action against the other runner (the Defendant Runner), the Defendant Runner’s running club and coach, and the university.

At trial, the court found no liability on the part of the university and the Defendant Runner. The running club and coach were found 60 per cent liable for the plaintiffs’ damages, which were assessed at approximately $102,000 in total and discounted by approximately 40 per cent, to reflect the plaintiff’s contributory negligence.

Settlement Discussions

The parties exchanged Rule 49 offers two weeks before the trial. The defendants jointly offered to settle the action for $180,000 in damages (the Defence Offer). The plaintiffs offered to settle for over $1.2 million in damages and pre-judgment interest (the Plaintiffs’ Offer).

On May 14, 2018, a few days into the trial, the judge suggested twice that the parties engage in a mid-trial “pre-trial”. The judge indicated that it was apparent general damages would fall in the range of $100,000 to $125,000, a far cry from the plaintiffs’ Rule 49 offer, and it was also likely that the plaintiffs would experience a “Pyrrhic” victory with the mounting costs for all parties. However, the plaintiffs refused.

Proposed Sanderson Order

The judge addressed quantum of costs and the issue of whether it would be appropriate to grant the plaintiffs’ request for a Sanderson order, such that the unsuccessful defendants (the running club and coach), rather than the plaintiffs, would pay the costs of the successful defendants — the university and the Defendant Runner.

With respect to the proposed Sanderson order, the court found that:

  1. The defendants did not try to shift responsibility onto each other.
  2. The unsuccessful defendants did not cause the successful defendants to be added as parties.
  3. The actions of all the defendants were intertwined.
  4. The plaintiffs had the ability to pay for, but failed to obtain, adverse costs insurance despite agreeing to do so at an early stage in the action.

The court found it was not fair and reasonable for there to be a Sanderson order particularly given the plaintiff’s “irresponsible litigation behaviour.”

Costs Awarded

As the defendants’ joint Rule 49 offer was greater than the verdict, each of the defendants was entitled to the cost benefit under the rule and the successful defendants were also awarded some of their costs incurred prior to the date of the offer.

The court awarded the university its partial indemnity costs from the date of the Defence Offer to May 14, 2018, the day the mid-trial pre-trial was recommended, and substantial indemnity costs from May 14 until the end of trial, for a total post-Defence Offer costs award of $70,000.

The successful Defendant Runner, the running club and coach were represented by one counsel. The plaintiffs were ordered to pay $69,000 in respect of these defendants’ costs.

The court ordered the unsuccessful defendants to pay the plaintiffs’ costs fixed at $43,000 (being their partial indemnity costs to the time of the Rule 49 offers) which were to be deducted from the costs payable by the plaintiffs to the defendants.

Ultimately, the plaintiffs were awarded $61,000 in damages and $43,000 in costs, but were ordered to pay a combined $164,000 in costs to the defendants, for a net loss of $60,000.

Considerations

The court attributed the plaintiffs’ Pyrrhic victory to their “reckless and pernicious” refusal to settle. Notably, the court described the Plaintiffs’ Offer as so extreme that it effectively was a message that there was no way that this matter would settle and that it was a “red flag” for the plaintiffs’ behaviour in the litigation.

The court was particularly critical of the plaintiffs’ refusal to engage in the suggested mid-trial pre-trials.

The judgment emphasizes the court’s commitment to encouraging reasonable resolution of cases whenever possible and underscores the importance of each party’s ongoing reflection on their chance of success and costs associated with the pursuit of litigation, as well as the need to take a “clinical, objective approach to what they are embroiled in”.

The plaintiffs have indicated that they will be appealing the jury’s decision and may also be appealing the costs judgment.

Authors

Jeremy Ablaza 
JAblaza@blg.com
416.367.6304

Kathryn Kirkpatrick 
kkirkpatrick@blg.com
416.367.6337

Expertise

Insurance and Tort Liability