McKeough v. Miller, 2010 NSSC 172

IN THE SUPREME COURT OF NOVA SCOTIA Citation: McKeough v. Miller, 2010 NSSC 172 Date: 20100427 Docket: Pic. No. 261422 Registry: Pictou Between: Francis Bernard McKeough Plaintiff v. Doreen Miller Defendant v. Daniel Bowie Third Party DECISION - COSTS Judge: The Honourable Justice N.M. Scaravelli Heard: (Trial) - October 23, 26, 27, 28, 29, 2009, Pictou, Nova Scotia Final Written (Re: Costs) April 20, 2010 Submissions: Counsel: Ray O’Blenis , Esq., for the plaintiff Christa M. Brothers, and Karen N. Bennett-Clayton for the defendant Clarence Beckett, Q.C., and Ellen R. Sampson for the Third Party

By the Court : [ 1 ] This decision relates to the issue of costs. [ 2 ] The plaintiff brought action against the defendant for recovery of damages for injuries sustained arising from a motor vehicle/pedestrian accident that occurred on February 26 th , 2004 in Antigonish County. The defendant claimed against the third party. The Court issued a written decision dated December 17 th , 2009 following the trial over a five-day period. Liability was determined to be 80/20 percent in favour of the plaintiff.

There was no negligence on behalf of the third party that caused or contributed to the accident. [ 3 ] The plaintiff and defendant have been unable to agree on costs and have provided written submissions. The parties disagree on the amount involved for the purpose of taxation costs. Disbursements are also an issue. The plaintiff seeks an increase in tariff costs. The defendants seeks a reduction in costs as a result of obtaining a favourable judgment. [ 4 ] The relevant provisions of the Civil Procedure Rules provide: General discretion (party and party costs) 77.02

(1) A presiding judge may, at any time, make any order about costs as the judge is satisfied will do justice between the parties.

(2) Nothing in these Rules limits the general discretion of a judge to make any order about costs, except costs that are awarded after acceptance of a formal offer to settle under Rule 10.05, of Rule 10 - Settlement Assessment of costs under tariff at end of proceeding 77.06

(1) Party and party costs of a proceeding must, unless a judge orders otherwise, be fixed by the judge in accordance with tariffs of costs and fees determined under the Costs and Fees Act , a copy of which is reproduced at the end of this Rule 77. [ 5 ] The tariffs provide: In these Tariffs unless otherwise prescribed, the (amount involved) shall be: (

a) where the main issue is a monetary claim which is allowed in whole or in part, an amount determined having regard to (

i) the amount allowed, (ii) the complexity of the proceeding, and (iii) the importance of the issues; [ 6 ] Rule 77.07(1) and Rule 77.07(2):

Increasing or decreasing tariff amount 77.07(1) A judge who fixes costs may add an amount to, or subtract an amount from, tariff costs.

(2) The following are examples of factors that may be relevant on a request that tariff costs be increased or decreased after the trial of an action, or hearing of an application: (

a) the amount claimed in relation to the amount recovered; (

b) a written offer of settlement, whether made formally under Rule 10 - Settlement or otherwise, that is not accepted; (

c) an offer of contribution; (

d) a payment into court; (

e) conduct of a party affecting the speed or expense of the proceeding; (

f) a step in the proceeding that is taken improperly, abusively, through excessive caution, by neglect or mistake, or unnecessarily; (

g) a step in the proceeding a party was required to take because the other party unreasonably withheld consent; (

h) a failure to admit something that should have been admitted; [ 7 ] Rule 10.09(1): Determining costs if formal offer not accepted 10.09(1) A party obtains a “favourable judgment” when each of the following have occurred: (

a) the party delivers a formal offer to settle an action, or a counterclaim, crossclaim, or third party claim, at least one week before a trial; (

b) the offer is not withdrawn or accepted;

(

c) a judgment is given providing the other party with a result no better than that party would have received by accepting the offer. 10.09(3) A judge may award costs in one of the following amounts to a party who defends a proceeding, does not fully succeed, and obtains a favourable judgment: (

a) the amount that the tariffs would provide had the party been successful, if the offer is made less than twenty-five days after pleadings close; (

b) seventy-five percent of that amount, if the offer is made more than twenty-five days after pleadings close and before setting down; (

c) sixty percent of that amount, if the offer is made after setting down and before the finish date; (

d) nothing, if the offer is made after the finish date. [ 8 ] Ultimately, an award of costs is discretionary. [ 9 ] Prior to deductions, the total award amounted to $216,577.00 as follows: General Damages $ 85,000.00 Pre-judgment interest $ 12,197.00 Past Loss Income $ 29,000.00 Future Loss Income $ 62,160.00 Loss of valuable services $ 28,220.00 Total $216,577.00 [ 10 ] From the above, I ordered the deduction of the sum of $50,000.00 (out of a total of $75,000.00 paid) as

Section B Weekly Benefits. At trial the plaintiff did not provide evidence regarding the breakdown of the $75,000.00 maximum

Section B Benefits paid. As a result, I attributed $25,000.00 to Medical Benefits and $50,000.00 to Weekly Benefits. [ 11 ] Another issue at trial was whether past and future CPP Disability Benefits payable to the plaintiff were deductable from the loss of income claim. The issue was undecided in Nova Scotia following amendments to the Insurance Act . This Court determined that such payments were to be deducted. The actuary report provided calculations for deduction of CPP Disability Benefits in determining past loss of income but did not make similar projections for loss of future income.

As a result, I ordered deduction of future disability benefits based on the indexing provisions of the CPP. It appears the parties have now agreed upon the sum of $46,520.00 as future CPP Benefits.

[ 12 ] The plaintiff submits the Future CPP Benefit amount together with the $50,000.00

Section B Weekly Benefits (i.e. $96,524.00) reduces the future loss award of $62,160.00 to zero resulting in an award of $154,417.00. Deducting 20 percent contributory negligence from this amount leaves a balance of $123,534.00 as the “amount involved” subject to any discretionary increase by the Court. According to the plaintiff, the excess payments made in the amount of $34,364.00 ($96,524.00 - $62,160.00) should not be deducted from the award. It appears the plaintiff relies upon my statement in the decision “I apportion the sum of $50,000.00 attributable to future weekly benefits”.

As indicated there was no evidence before the Court that enabled a calculation of net loss of future income. No fault benefits under

Section B should be deducted from a damage award. In this case, I agree with the defendant that after deducting Weekly Benefits from Future Loss of Income, the remaining

Section B Benefits should be applied first to the Past Loss of Income award with the balance applied to the General Damage award. Fulton v. East Coast Oilfield Services Ltd., [1991], NSJ 461 (CA) . [ 13 ] As a result the net award is calculated as follows. Total Amount Awarded $216,577.00 Less:

Section B Weekly Benefits $ 50,000.00 Future CPP Benefits $ 46,524.00 ($ 96,524.00) $120,053.00 [ 14 ] A deduction of 20 percent contributory negligence leaves a balance of $96,000.00 which I determined to be the amount involved. [ 15 ] In my view, there is no reason to deviate from the basic Tariff A Costs under Scale II. This would total $12,250.00 based on $96,000.00 as the amount involved. [ 16 ] I do not intend to add to or subtract from Tariff Costs as requested by the parties. The trial commenced on October 23 rd , 2009.

On October 14 th , 2009, the defendant made a formal offer to settle the plaintiff’s claim in the amount of $150,000.00 inclusive of costs and disbursements. The plaintiff submits disbursements in the amount of $15,000.00 for various expert reports, expert testimony, discovery evidence, filing charges as well as $1,000.00 photocopying charges. The defendant objects to the disbursement claim of $15,000.00 where the plaintiff failed to provide documentation supporting any of the charges.

Moreover, if disbursements of $15,000.00 were acceptable the net award plus costs and disbursements would fall short of the defendant’s settlement offer. [ 17 ] Even where a defendant obtains a favourable judgment, a reduction in costs is discretionary. The intent of the adjustment of costs rules is to encourage settlement. Reductions are usually granted under normal circumstances. In this case, the defendant’s offer to settle was made more than 7 days before trial but after the Finish Date.

The deductibility of CPP Benefits from Loss of Income following amendments to the Insurance Act , although not a complex issue, was an undecided issue in this Court at time of trial. Moreover, there was no information available to the parties that would enable calculation of the amount of future CPP Benefits. [ 18 ] I determine the actual trial time to be 4 ½ days. The trial costs are $2,000.00 per day totalling $9,000.00. [ 19 ] As a result, I award costs to the plaintiff in the amount of $21,250.00 plus disbursements to be taxed in the event the parties are unable to agree. J.