Hurley's Trucking Ltd. Plaintiff And: Gavin Lefrense v. Michelle Lefrense, 2018 NLSC 83

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Hurley's Trucking Ltd. v. Lefrense , 2018 NLSC 83 Date : April 18, 2018 Docket : 201501G4884 Between: Hurley's Trucking Ltd. Plaintiff And: Gavin Lefrense AND Michelle Lefrense DefendantS Before: Justice Gillian D. Butler Place of Hearing: St. John’s, Newfoundland and Labrador Date(

s) of Hearing: April 11, 2018

Summary: Costs award suspended by virtue of Rule 20A.08(3) and replaced with award under Rule 20A.08(1)(

b) and (4) entitling the Plaintiff to double party and party costs after April 21, 2016.

Appearances: Joseph F. Boulos Appearing on behalf of the Plaintiff Stephen P. Orr Appearing on behalf of the Defendants Authorities Cited: CASES CONSIDERED: Mega Roofing & Waterproofing Ltd. v. N.D. Dobbin Ltd. (NL SC), 1996, 143 Nfld. &P.E.I.R. 14, 448 A.P.R. 14 (Nfld. S.C. (T.D.)); Finn v. St. John’s (City), 2007 NLCA 46; Steele v. Rendell, 2017 NLCA 36; NiagaraStructural Steel (St. Catharines) Ltd. v. W.D. Laflamme Ltd. (ON CA), 1987, 19 O.A.C. 142, 3 A.C.W.S. (3d) 226(Ont. S.C. (C.A.)); Shakur v. Mitchell Plastics, 2012 ONSC 1780; Lore v. Tortola 2008, 165 A.C.W.S. (3d) 237, [2008] O.J. No. 769(Ont. Sup. Ct.

J.); Toronto Dominion Bank v. Thind, 2010 ONSC 6974; Evoke Solutions Inc. v. Chive Inc., 2017 ONSC 1684; Pyatt v.Roessle, 2017 ONSC 3878; Stronge v. London Life Insurance Company 1993, 39 A.C.W.S. (3d) 33, 4 W.D.C.P. (2d) 192 (Ont. Ct. J.(G.D.)); Winter v. Newfoundland & Labrador Health Care Ass., 2005 NLCA 66 RULES CONSIDERED: Rules of the Supreme court, 1986, S.N.L. 1986, c. 42, Sch. D TEXTS CONSIDERED: Mark M.

Orkin, The Law of Costs, 2nd ed. (Aurora, Canada Law Book, 1987) (loose-leaf updated December2004) REASONS FOR JUDGMENT Butler, J.: INTRODUCTION [1] At the conclusion of the trial of this matter on March 2, 2018, my judgment was reserved and subsequently filed on March26, 2018. Having found the Plaintiff to be the primarily successful party, I held that it was entitled to its costs to be taxed on Column 3.

On March 29, 2018, counsel for the Plaintiff filed an Interlocutory Application requesting an order pursuant to Rule 20A.08(3)suspending my costs award pending further consideration and determination of the issue of costs. facts [2] By Statement of Claim filed September 21, 2015, the Plaintiff sought payment of the amount of $6,045.50 and pre and post-judgment interest at the rate of 2% per month or 24% per annum on the amount of $6,045.50 from May 30, 2012 (in accordance with theterms of the Plaintiff’s invoice) and costs. [3] It is established that the Plaintiff’s solicitors forwarded to the Defendants’ solicitors on April 21, 2016, an offer to settleunder Rule 20A, the terms of which were that the Plaintiff/Defendant by Counterclaim, offered to settle its claim, inclusive of pre-judgment interest, for the sum of $6,045.50 and costs to be taxed.

The offer was not accepted and the matter proceeded to trial onFebruary 28 and for a half-day each on March 1 and 2, 2018. [4] The relevant provisions of Rule 20A.08 state: 20A.08.

(1) Unless ordered otherwise, when (

a) an offer to settle was made by a plaintiff (

i) at least 7 days before commencement of the trial or hearing of the proceeding, and

(ii) was not revoked or accepted prior to commencement of the trial or hearing, and (

b) where that plaintiff obtains a judgment as favourable or more favourable than the terms of the offer to settle, that plaintiff shall be entitled to party and party costs plus taxed disbursements to the date of service of the offer to settle and thereafter to double party and party costs plus taxed disbursements.

(2.2) If a plaintiff or defendant is awarded costs after judgment under a column of the Scale of Costs pursuant to rule 55.04, the judge shall not change the column if it is later determined that paragraphs (1), (2) or (2.1) apply.

(3) If after a trial or hearing (

a) an offer to settle had been made and not revoked or accepted prior to commencement of the trial or hearing; and (

b) an application for a determination as to costs based on the application of Rule 20A is made by a party within 15 days following the filing or delivery of the decision or order the decision of a judge with respect to costs shall be suspended pending determination of the application in clause (b).

(4) A determination as to costs resulting from an application pursuant to paragraph (3) shall, to the extent determined by the judge, replace and be deemed to have replaced a determination made by the judge as to costs in the original decision or order. [ 5 ] Following trial, I determined that the Plaintiff had established entitlement to the sum of $5,535.00 plus HST of $719.55 for a total of $6,244.55 but denied the Plaintiff’s entitlement to interest at 2% per month pursuant to the invoices. I accept however that pre- judgment interest under the Judgment Interest Act , R.S.N.L. 1990 c.

J-2, would entitle the Plaintiff to judgment interest on the amount awarded, annually since April 2013 which the Plaintiff calculates at $564.73. [ 6 ] I accept therefore that the effect of my judgment was that the Defendants were required to pay the Plaintiff the sum of $6,809.28, calculated as $5,535.00 plus $719.55 plus $564.73.

Against this amount the Defendants had paid only $500.00. [ 7 ] Rule 20A.08 requires that I compare the proposal to settle that was made in 2016 for $6,045.50 plus costs against the ultimate judgment given of $6,809.28 plus costs to determine whether the Plaintiff has obtained a judgment as favourable or more favourable than the terms of the offer to settle. [ 8 ] I accept that this has been established and that the effect of Rule 20A.08(3) is that the costs award which I made in my written decision is suspended. [ 9 ] The effect of Rule 20A.08(1) is that the Plaintiff is entitled to party and party costs plus taxed disbursements to the date of service of the offer to settle in April 2016 and thereafter to double party and party costs plus taxed disbursements and Plaintiff’s counsel asks that I substitute my suspended costs award for a costs award consistent therewith. [ 10 ] However, counsel for the Defendants relies on Rule 20A.10 which confirms that the court, in exercising its discretion as to costs, may take into account any offer to settle made in writing, the date the offer to settle was served, the terms thereof and any “other relevant matters”. analysis [ 11 ] As to what might constitute “other relevant matters” for consideration in this case, I would summarize the Defendants’ position as follows:

1. That the Plaintiff was entitled to commence and should have commenced its claim in the Small Claims Division of Provincial Courtand that its decision to commence and litigate in the Supreme Court was to trigger cost consequences; 2. That the conduct of the Plaintiff in pursuing this matter against the Defendants in this court was oppressive; and 3.

That on access to justice principles, a costs award that would see double party and party costs on Column 3 following April 21,2016 would result in a disproportionate award of costs and would create undue financial hardship for the Defendants. [12] Perhaps the most often cited decision on Rule 20A.08 is that of my colleague, Orsborn, J., in Mega Roofing & WaterproofingLtd. v. N.D. Dobbin Ltd. (NL SC), 1996, 143 Nfld. & P.E.I.R. 14, 448 A.P.R. 14 (Nfld. S.C. (T.D.)).

In that case,Orsborn, J. found the context of Rule 20A to be one of encouraging expeditious resolution to civil litigation and that, “The intention ofthe rule will be served only if, in the case of a defendant's failure to accept an offer and the plaintiff's greater recovery at trial, the costconsequences visited on the defendant by the trial judge are both severe and predictable.” (at paragraph 23). [13] The word “severe” utilized by Orsborn, J. was criticized by our Court of Appeal in Finn v. St.

John’s (City), 2007 NLCA 46 butapart from that, the trial Judge’s explanation of the law was found to be correct (see Steele v. Rendell, 2017 NLCA 36). [14] In the recent Steele decision, our Court of Appeal upheld the double party and party costs award of the trial Judge on the basisthat he/she had explained why the discretion should rarely be exercised. I quote paragraph 35 of the trial decision in Steele, cited by theCourt of Appeal at paragraph 30: ... [P]redictability as to the cost consequences from the failure to accept an offer of settlement is a cornerstone to the Rule.

Thispredictability enables the party faced with an Offer to Settle to objectively assess the economics of proceeding further.

In the words ofOrsborn, J.: "predictable and severe cost consequences serve to focus the mind on a realistic assessment of the offer" (at paragraph 27).The predictability of the cost consequences means that in all but the most unusual circumstances the Court should adhere to the costs setforth in the Rule, which in this case is double party and party costs. [15] While the cases I have reviewed suggest that the discretion that I have (not to award double party and party costs after April 21,2016) is narrow, they are not particularly helpful in determining what “unusual” or “other relevant circumstances” would justify adeparture from the Rule. [16] In Mega Roofing, Orsborn, J. had cited Niagara Structural Steel (St.

Catharines) Ltd. v. W.D. Laflamme Ltd. (ON CA), 1987, 19 O.A.C. 142, 3 A.C.W.S. (3d) 226 (Ont.

S.C. (C.A.)), in support of the principle that costs consequences of the Rulesshould be imposed unless “the interests of justice require a departure” but did not make any suggestions with respect to circumstancesthat would warrant the departure. [17] Turning now to the three grounds raised by counsel for the Defendants, unlike other jurisdictions, I was not referred to anyprovision of our Rules of Court that provide that where a Plaintiff recovers an amount that is within the monetary limit of the SmallClaims Division of the Provincial Court, the Court may order that such a Plaintiff not recover any costs. (To opposite effect in theProvince of Ontario, see Shakur v.

Mitchell Plastics, 2012 ONSC 1780 and Lore v. Tortola 2008, 165 A.C.W.S. (3d) 237, [2008] O.J.No. 769 (Ont. Sup. Ct. J.) and Toronto Dominion Bank v. Thind, 2010 ONSC 6974). [18] In these circumstances, I find these Ontario decisions distinguishable. [19] As to alleged improper conduct by the Plaintiff, I acknowledge that I have the discretion to consider the conduct of a party notmerely during the course of the litigation but also prior to and leading up to or contributing to it. However, I have not been referred toany conduct of the Plaintiff which I would consider could possibly fall within this category.

I was not referred to any miscarriage in theprocedure (other than the Plaintiff’s suggestion that to commence the action in Supreme Court Trial Division was improper) nor anyoppressive or vexatious mode of conducting the proceedings (see Mark M.

Orkin, The Law of Costs, 2nd ed. (Aurora, Canada Law Book,1987) (loose-leaf updated December 2004)). [20] Turning finally to the issue of access to justice, Defendants’ counsel suggests that the costs award that I have suspended wouldhave a value of approximately $7-8,000.00 and that the effect of double party and party costs after April 21, 2016 could cause the costsaward to amount to $14,000.00 or $15,000.00.

I agree that such a costs award would, on its face, be disproportionate to the amount ofthe judgement itself. [21] In this regard I accept that there is judicial precedent from other jurisdictions relieving defendants from the presumptive doublecosts award. [22] In Evoke Solutions Inc. v. Chive Inc., 2017 ONSC 1684, the damage award was approximately $40,000.00 and the costsclaimed were $80,000.00.

The court partially relieved the defendant from the presumptive double costs award and reduced the costs to atotal of $50,000.00 stating as follows: 31 Access to justice is a real impediment to both plaintiffs and defendants for claims of amounts that fall under the simplifiedprocedure regime. In this case, the defendant chose to refuse what turned out to be two reasonable offers.

While the defendant wasentitled to choose to take this matter to trial, it courted the risk and consequences of an adverse result at trial. 32 The plaintiff is presumptively entitled to its costs in accordance with Rule 49.10, given that the judgment was more favourablethan its offers to settle. However, it is my view that the award of costs should be proportionate to the amounts in dispute, particularly inlight of the fact that this action proceeded under Rule 76 and given the application of Rule 1.04(1.1). I agree with the views expressed byJustice Wilson in Trafalgar Industries of Canada Ltd. v.

Pharmax Ltd. (2003), (ON SC), 64 O.R. (3d) 288 (Ont.S.C.J.), at paras. 11-12:

When fixing costs in a simplified trial, one must bear in mind the objectives of the Simplified Procedures. In Impex v. Nasr Foods Inc ., [1999] O.J. No. 3360 (Quicklaw) (S.C.J.) at para. 9 , Lamek J. confirmed that one of the objectives of the simplified procedures was "to curb the crippling cost of litigating small claims". In McLean v. 721244 Ontario Ltd. (c.o.b. Paint Shoppe Services) , [2000] O.J. No. 3507 (Quicklaw) (S.C.J.) , Hill J. observed at para. 2 that "an action conducted under the Simplified Procedure is meant to be cost effective.

As a general rule, this straightforward and streamlined process is not intended to be as expensive as trial by ordinary procedure." I agree with these views expressed. It is clear that cost effectiveness is a key component to cases proceeding under the Simplified Procedures. . . . [ 23 ] From these passages it is apparent that the Evoke decision addressed a hearing under the simplified procedures Rule and that this was relied on primarily as the basis for the exercise of discretion. [ 24 ] In Pyatt v.

Roessle , 2017 ONSC 3878 , the Ontario court did rely on the harshness of the costs award and the chilling effect that it may have on potential litigants to soften the effect of the Rule. I cite paragraph 16: 16 Access to justice, for it to have any real meaning for the average person, must encompass, not only the ability of a litigant to walk through the doors of a court room, but also to exit through those same doors as near to financially intact as when they entered as is possible.

So often, we speak of access to justice from a front-end perspective only: can a person with a legitimate claim, defence or complaint be heard in a timely, affordable and efficient manner? Yet, should the end result of the process prove to be ultimately ruinous for a person bringing a legitimate if unsuccessful claim through the system, the ideal of access to justice is undermined. Civil jury trials are often lengthy. They have become increasingly expensive.

They are always unpredictable; so much so that the potentially nightmarish costs consequences for a Plaintiff of modest means proceeding through to the end of an unsuccessful jury trial has spawned the entirely new industry of costs insurance. While this is a development to be welcomed, for it cannot help but embolden and girder persons with legitimate claims, it also comes at a cost. [ 25 ] Ontario courts have also exercised their discretion under their Rule 49.10 in cases where the presumptive costs award would cause hardship. See for example, Stronge v.

London Life Insurance Company 1993, 39 A.C.W.S. (3d) 33, 4 W.D.C.P. (2d) 192 (Ont. Ct. J. (G.D.)). [ 26 ] In order to rely upon either the “harshness” of the costs award, “economic hardship” for the Defendants, or that the consequences would be “ultimately ruinous”, the Court requires evidence on which it can make a conclusion of fact. [ 27 ] As our Court of Appeal held in Winter v. Newfoundland & Labrador Health Care Ass. , 2005 NLCA 66 , at paragraph 23 , judicial discretion must be exercised on fixed principles and must be based upon materials proven to exist.

It is not enough that they should be imagined or suspected or without proof believed by the trial Judge to exist. [ 28 ] A similar conclusion is stated in Orkin’s The Law of Costs , at

section 205.2 wherein the author expresses the view that the discretion of the Court to deprive a successful litigant of his or her costs is a discretion which must be exercised judicially and upon proper material connected with the case or having relation to the subject matter of the action. [ 29 ] I have not been presented with any reliable material on which I could rely to make the conclusion necessary to exercise my discretion judicially in this respect and I cannot assume that it exists. conclusion [ 30 ] The result of the foregoing is that the costs award granted in my March 26, 2018 Order (and which was suspended pursuant to the effect of Rule 20A.08(3)) is now replaced by the following costs award: “The Plaintiff/Defendant by Counterclaim shall be entitled to its party and party costs from the commencement date of the within proceeding, September 21, 2015 to April 21, 2016, taxed on Column 3 plus taxed disbursements and to double party and party costs from April 22, 2016 to March 26, 2018 also taxed on Column 3, plus taxed disbursements.” [ 31 ] The Plaintiff is also entitled to its costs to be taxed on the Application filed under Rule 20A.08, also on Column 3, but not as double party and party costs. _____________________________ Gillian D.

Butler Justice