The Ontario Court of Appeal Concludes that A Party’s Resources Is Not a Factor in Weighing its Decision to Not Settle a Case When it Comes to Costs

By Grant W. Black May 10, 2021

In the matter of Przyk v. Hamilton Retirement Group Ltd. (The Court at Rushdale), 2021 ONCA 267, the Plaintiff brought a claim against the retirement home she resided in “Rushdale” for injuries sustained from a slip and fall incident she had while on Rushdale’s property. The quantum of damages was agreed upon and trial commenced on the subject of liability alone before a judge and jury.

At trial the jury found no liability on the part of Rushdale and the action was dismissed. Being the successful party of the action Rushdale asked for an award of partial indemnity costs against the Plaintiff Ms. Przyk.

Cost awards are often complex and take in to account many factors, such as Offers to Settle as defined under Rule 49 of the Ontario Rules of Civil Procedure and other intervening factors. Cost award can often times be so complex that it can see the winning party pay costs to the losing party.

However Trial Judge Justice Whitten, in deciding against awarding costs to Rushdale cited two unique reasons out of the three he gave for this decision against Rushdale’s cost claim.

As Rushdale had been insured for slip and fall claims on their property they had been represented by their insurance company during the course of the action. Their insurance company happened to be Aviva Canada. Justice Whitten stated that one reason for denying the cost award was  the “David and Goliath situation” of Aviva being one of the largest insurance company’s in Ontario and thus had significant resources to fund their side of the action. Another one being that Aviva had not offered to settle at any point during the claim and that Justice Whitten felt this was an example of the “hardball” nature Aviva takes when defending claims.

Rushdale appealed this decision on cost awards to the Ontario Court of Appeal.

Although the Court of Appeal upheld the decision to not award costs they were critical of Justice Whitten’s reasons for denying costs in the first place. Writing for a unanimous panel including Justices Tulloch and Sossin Justice Zarnett said:

“In my view, the trial judge’s costs ruling reflects certain errors in principle. The fact that Rushdale was insured and defended by Aviva, a large insurer, was not a reason to deny an award of costs. Neither the existence of insurance in favour of a successful party at trial, nor the fact that the successful party was better resourced than their opponent, is a justification for denying costs where the resource advantage has not been used to engage in abusive tactics or other misconduct during the litigation. The refusal of a party to offer a financial settlement before trial is also not a reason to deny that party costs where the refusal is proven reasonable by the verdict. Nor ought the trial judge to have sought to correct a general attitude of Aviva toward settlement in other cases by his costs award in this case.”[1]

The Court of Appeal reasoned that the amount of resources a party has at its disposal is not the relevant consideration; it is how those resources were utilized and if utilized for vexatious or ill conduct during trial which should be the point of consideration.

Further commenting on Justice Whiiten’s opinion on what he called Aviva’s “hardball” tactics, the Court of Appeal stated that no party in any litigation has an obligation to settle the claim simply because it has been sued. Each and every party has the right to have the matter decided upon by the court through the method of trial. Regardless of a parties conduct in prior matters, it is the matter at hand and the conduct of its own history by the parties which should be the subject in discussion when regarding costs.

The take away from this decision by the Court of Appeal essentially can be marked as that each claim in tort is unique to the one before it with its own set of issues to be dealt with and viewed by the parties. No party has an obligation to accept settlement and are free to approach a file in the matter that it see fit despite the other sides opinions. Lawyers on both sides should remember that no claim is ever perfect, and should avoid rash judgements of the other party’s position based on preconceived notions and views of how a party has conducted itself in past matters. This decision shows that the courts will not tolerate “mud-slinging” of a party’s reputation as a method of proving one’s position.

Grant Black is a lawyer at the firm and author of this blog. If you have a question about this decision or a similar file, please contact Grant at 416-777-7384.

 

[1] Przyk v. Hamilton Retirement Group Ltd. (The Court at Rushdale), 2021 ONCA 267 para 7.

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