Horne v. QEII Health Sciences Centre, 2016 NSSC 266

SUPREME COURT OF Nova Scotia Citation: Horne v. QEII Health Sciences Centre , 2016 NSSC 266 Date: 2016-09-20 Docket: Hfx. No. 274540 Registry: Halifax Dr. Gabrielle Horne v. QEII Health Sciences Centre, Capital District Health Authority, Dr. Blair O’Neill, John Malcolm, and the Department of Medicine QEII DECISION ON: PREJUDGMENT INTEREST, COSTS AND DISBURSEMENTS Judge: The Honourable Justice Allan P.

Boudreau Heard: Oral Decision: Written Decision: September 20, 2016 in Halifax, Nova Scotia September 20, 2016 in Halifax, Nova Scotia October 5, 2016 Counsel: Michael Wright and Danielle Stampley for the plaintiff Peter Rogers, QC and Ian Dunbar for defendants: CDHA; Dr. Blair O’Neill; and John Malcolm Clarence Beckett, QC and Michael Scott for the defendant: Department of Medicine QEII INTRUDUCTION: [ 1 ] This is the Court’s decision on the question of prejudgment interest, costs and disbursements in Dr. Horne v. Capital Health, et al. [ 2 ] This case was decided by a civil jury on June 17, 2016. Dr.

Horne had claimed damages from Capital District Health Authority (Capital Health) for wrongful variation of her hospital privileges in October of 2002. Her privileges were ultimately restored in 2006 by the Capital Health Board of Directors in an unusually lengthy by-laws process.

[ 3 ] Dr. Horne commenced this law suit in November of 2006, claiming damages against Capital Health for loss of reputation and loss of her research career, and several other causes of action. She also pleaded wrongful under-remuneration by the Department of Medicine (QEII) Practice Plan. However, Dr. Horne had also named Dr. Blair O’Neill, the then Chief of the Department of Cardiology, and Mr. John Malcolm, the CEO of Capital Health, and the Department of Medicine, as party defendants. [ 4 ] Dr.

Horne’s pleadings claimed damages for what amounted to restoration of her research career, but in her own space and on her own terms. This had the potential to amount to some ten million dollars according to the initial pleadings. As I decided in my decision on the applicable law, such a damage award would require a significant re-writing of the Law of Damages. [ 5 ] Moreover, the parties, Dr. Horne and Capital Health, could not agree on the law which applied to these proceedings. Dr.

Horne was alleging three alternative bases of liability on the part of Capital Health; one was breach of contract; one was unlawful interference with her economic relations with intent to injure; one was in ordinary negligence; and one was an allegation of bad faith or malice in the variation of her hospital privileges. [ 6 ] The Defendant, Capital Health, contended that only bad faith or malice could form the basis for liability in the circumstances of this case. [ 7 ] Needless to say, Dr.

Horne’s position in advancing rather questionable causes of action and heads of damages caused all the parties to address all of those issues at considerable expense. [ 8 ] Capital Health ultimately prevailed as to the applicable law and the allowable heads of damages. [ 9 ] Dr. Horne had initially sued Dr. Blair O’Neill and Mr. John Malcolm personally; however, Capital Health had conceded all along during this trial that the actions of those two individuals were those of Capital Health and there does not appear to have been a legal reason to continue with them as personal defendants.

They were ultimately removed as defendants in my ruling on the Non-Suit Motions and in my ruling on the applicable law prior to the jury instructions. [ 10 ] There does not appear to have been a clear position on the part of Dr. Horne as to what damages she was claiming against the Department of Medicine. However, it is not difficult to conclude from her Answer to the Demand for Particulars that the claim against the Department of Medicine could only be, and have been, for alleged under-remuneration pursuant to the Practice Plan.

The Department of Medicine originally, and all along, took the position that first of all, not being any sort of “body corporate” it could not sue or be sued. However, I ruled otherwise on the claim for under-remuneration under the Practice Plan, which Plan was in effect controlled by the Department of Medicine. [ 11 ] While “joint and several liability” on the part of all the defendants was bandied about by counsel for Dr.

Horne, it should have been quite clear that the Department of Medicine could only be liable for under-remuneration under its Practice Plan based on the Answer to the Demand for Particulars and the evidence to be presented by the plaintiff. [ 12 ] As pointed out by the defendants, particularly Capital Health, there were several attempts by Dr. Horne to introduce opinion reports of bodies outside of the Capital Health by-laws process without having attempted to comply with the governing expert opinion rules.

Also, the contents of some expert reports were successfully objected to by the defendants. [ 13 ] All this to say that there is ample evidence for finger pointing by the various parties; but in the final analysis there is nothing which persuades me to award costs to any party on anything but Tariff ‘A’ as provided by the Civil Procedure Rules . I will commence by applying the basic scale to the amount involved and work from that base.

That is the most appropriate way to do justice to the parties in the unique circumstances of this case. [ 14 ] First, in establishing costs to the plaintiff from Capital Health, I have set the amount involved under Tariff ‘A’. The best indication of that amount is the $167,460.90 legal fees paid by Dr. Horne during the by-laws process and awarded by the jury; plus the $1,400,000.00 in general damages awarded to Dr. Horne for loss of reputation and loss of research career. That totals, $1,567,460.90.

There was some discussion of whether prejudgment interest should be added to that amount to calculate costs under Tariff ‘A’. I decline to do so because the recent authorities from this court indicate that prejudgment interest is not a proper amount to add to the amount involved. As we noted in our discussions, when a party is not successful, does one try to estimate what, if they had been successful, would have been the prejudgment interest? For example, as in this case with regard to the Department of Medicine, do we add a fictitious amount of prejudgment interest to calculate the amount involved?

I decline to add interest to the amount involved. Therefore,

with regard to Capital Health, the amount involved is $1,567,460.90. That amount multiplied by 0.65% equals costs of $101,884.95. [ 15 ] The question then remains, should that award be increased under Scale 3 by 25%? As I have alluded to earlier, the trial was somewhat unnecessarily complicated by the various causes of action and the heads of damages claimed. It was, nevertheless, a complex proceeding involving important issues for the parties and the providers of health care facilities. As I mentioned earlier, because of my findings I will not depart from applying Tariff ‘A’ for setting the amount involved.

However, because of the complexity of the pertinent issues, and I stress the pertinent issues, and the legitimate length of the trial, I will award 25% under Scale 3 pursuant to Rule 77. Therefore, 25% of the amount I just mentioned is $25,471.24. To those two amounts I will add the 33 days of trial at $2,000 per day for a total $66,000. Therefore, the total costs awarded of $193,356.19. [ 16 ] With regard to prejudgment interest on the legal fees of $167,460.90, I award 4.25%, which is $7,117.09 per year, for a total of seven years.

I decline to award interest for the entire period because of the unexplained delay for a period of five years when this action was not being prosecuted by the Plaintiff. The total of that interest is $49,819.62. [ 17 ] With regard to interest on the $1,400,000.00, I see no reason to depart from the past and present position of our court to award 2.5% on those non-pecuniary damages for a total of $35,000.00 per year. I note that, similar to the legal fees issue, it was in 2004 that Dr. Horne’s career waned and for all intents and purposes was at an end.

I also apply the same reasoning for unexplained delay for the period I mentioned earlier and award the amount of $35,000.00 for a period of seven years for a total of $245,000.00. That makes a total prejudgment interest award of $294,819.62. [ 18 ] With regard to the disbursements claimed, there seems to be a slight difference between what was in the text of the Plaintiff’s brief and the attached tabs, but everyone seemed to be working from the amount claimed in the brief which was $86,388.44.

In accordance with the case law in this province, I deduct from that the amount of $792.62 for Quicklaw services which has been categorized by our Court as ordinary firm overhead. [ 19 ] With regard to photocopying, there was an amount of $5,333.00 at 25 cents per copy. I reduce that amount to 12.5 cents per copy for a reduction of $2,666.50. [ 20 ] The main contentious issue with the disbursements claimed is the claim for travel costs for counsel outside of the Province. Those costs were in excess of $35,000.00. As pointed out by the defendants, if the case had been prosecuted during the period when Mr.

Pizzo was counsel, it is quite probable that out of Province counsel would not have been necessary. Counsel for the defendants also argued that only minor efforts to retain other local Nova Scotia counsel were made. In my view, it is difficult to precisely assess blame on that issue. I assign 50% of the blame to the Plaintiff and I reduce the travel costs by one half. Therefore, I reduce travel costs by $17,952.90 for a total reduction of disbursements in the amount of $21,412.02. Deducting that from the $86,388.44 equals net disbursements of $64,976.42.

Therefore, adding the total costs and the total interest and the total disbursements allowed, according to my calculations, is $553,152.23 plus applicable HST. I hope counsel can agree on what is the applicable HST because I do not have sufficient information before me to arrive at a precise figure for the HST. I have questioned whether there should be HST on travel expenses being reimbursed but that depends on the accounting system which was being used. That is my ruling on costs, interest and disbursements flowing from Capital Health to Dr.

Horne. [ 21 ] With regard to the Department of Medicine, those are costs payable by Dr. Horne to the Department of Medicine. I set the amount involved at $1,000,000.00. That is roughly or almost precisely the halfway point in the range of amounts indicated in Dr. Horne’s brief which I accept as being what was claimed before the jury. Therefore, I award costs on $1,000,000.00 at 0.65% for costs of $65,000.00.

I am not persuaded that the basic scale amount should be increased, in spite of the $100,000.00 Rule 10 offer made by the Department of Medicine in March of 2016; nor that there should be an increase in costs pursuant to Rule 77. The case against the Department of Medicine, and the one which it had to answer, was never very complicated. If the Department of Medicine had any concerns or doubts about this, including its legal entity status, it could have had those concerns or issues clarified by the court years in advance of the trial.

Indeed, as it turned out, the Department of Medicine called one witness only to successfully defend the claim against it. As I stated several times during these proceedings, the trial issue had, in my opinion, always been about bad faith or malice alleged against Capital Health. Therefore, I award costs of $65,000.00, being the basic scale on $1,000,000.00 ; plus 33 days of trial at $2,000.00, or $66,000.00. Therefore, I award costs to the Department of Medicine, payable by Dr. Horne, in the total amount of $131,000.00 plus disbursements and applicable HST.

I understand disbursements have been agreed to between Dr. Horne and the Department of Medicine. [ 22 ] Mr. Wright will prepare the order and have it consented as to form by counsel for all the parties.

Boudreau, J. (Allan)