In Cairns v Ellis, 2025 ONSC 2303, Regional Senior Justice Tzimas assessed the costs claim of the Defendant arising from trial. The matter pertained to a January 6, 2016 motor vehicle accident, with trial commencing May 13, 2024 (jury selection) and concluding on June 10, 2024. The jury awarded the Plaintiff, Rexine Cairns, $17,500 for net general damages and $1,280 for past loss of income, which amounted to a net zero award for damages once the statutory deductible and collateral deduction provisions of the Insurance Act were applied.
In her Costs Endorsement, Justice Tzimas made it clear that the law of costs is well settled and that the result of a proceeding is a consideration in the making of a costs award, but not the only consideration in determining the quantum of costs. Following Rule 57.01 of the Rules of Civil Procedure (and application of section 131(1) of the Courts of Justice Act) and the Court’s analysis in Neary v. Aviva Insurance Company of Canada (2024 ONSC 2510), Justice Tzimas noted that “costs rules are designed to foster the indemnification of the successful party, the encouragement of settlements, and the discouraging of inappropriate behaviour by litigants.” Plaintiff’s counsel proposed a significant reduction in the costs and disbursements sought by defence counsel, relying on four arguments: first, the Plaintiff’s impecuniosity; second, the purported “scorched earth approach” adopted by the Defendant, which allegedly prevented the Plaintiff from a graceful exit from the litigation before trial; third, the Plaintiff’s gross success; and fourth, the mixed success in relation to in-trial motions.
The claim was not complex. As for the Plaintiff’s financial position, Justice Tzimas noted that she was on social assistance, making the enforcement of the costs award unlikely. Despite this, Justice Tzimas took the opportunity to remind litigants that they are accountable for the risks of pursuing litigation, especially where there were “obvious weaknesses” with the Plaintiff’s case. As for the claim of impecuniosity, Justice Tzimas found that to reduce costs for such a claim would run the risk of “condoning a ‘nothing to lose’ approach”, which would simply not be fair and reasonable. Justice Tzimas also dismissed the Plaintiff’s “scorched earth” argument, as there was no evidentiary basis to support this argument. In fact, Her Honour found that the Defendant did not present a nominal offer to settle, but rather an offer that was fairly close to the jury’s award for general damages. As such, it was difficult to accept both the “scorched earth” argument as well as the Plaintiff’s claim that she would otherwise have made a graceful exit because, in fact, a monetary offer had been made and it had not been accepted. Lastly, Plaintiff’s counsel failed to maintain a Rule 49 offer up to the commencement of trial, which would have limited the Plaintiff’s costs exposure. Justice Tzimas noted this was a critical oversight by counsel.
With respect to the experts of the parties, Justice Tzimas noted that the trial was unnecessarily complicated, and lengthened, by both parties seeking to lead evidence by witnesses whose impartiality was questionable. The defence withdrew their experts before the completion of the first voir dire, and the Plaintiff chose to spend over two days trying to qualify Dr. Basile, without success. This all added four additional days to the trial. Lastly, Justice Tzimas commented on the disorganization of Plaintiff ‘s counsel, which also led to an unnecessarily lengthened examination in chief of the family doctor. After accounting for such details, Justice Tzimas ordered a total of $185,000 in costs payable to Defendant, reduced from the $269,264.87 costs and disbursements that had been sought by the Defendant.
It is important to mention that Justice Tzimas also addressed the “high and disproportionate” fees claimed by defence counsel. It was noted that if the defence assesses a claim as unmeritorious, then it would be difficult to understand disbursements over $100,000.00. Additionally, Justice Tzimas commented on the lack of sufficient particulars to defence counsel’s Bill of Costs, and she also noted the increased fees docketed for a “straight forward motor vehicle accident claim”.
Takeaway
The costs of litigation can be high, and very real for the litigants. It is imperative that counsel have a well guided litigation strategy, and to ensure that a Rule 49 Offer is open for acceptance up to the first day of trial. This would likely assist that party in the event of any adverse costs award that may result. Relying on an argument of impecuniosity, or willingness to “gracefully exit” the litigation would not be well accepted where the evidence contradicts such arguments , or would condone unnecessary delay or a “nothing to lose” approach. Also, it is imperative that counsel detail their dockets with respect to the time allotted to files, as same is required when seeking a costs award, especially costs and disbursements in excess of $100,000 for an uncomplicated and unmeritorious claim. As this case demonstrates, the court’s overarching objective with respect to a costs award is to arrive at a figure that is “fair and reasonable in the circumstances”.
Tiziana Serpa is the author of this blog and a lawyer at the firm. If you have a question about this decision or a similar file, please contact Tiziana at 416-777-5209.
