What discretionary powers can be exercised by the Court when deciding the apportionment of costs after a trial?
The 2020 decision of Hummel v. Jantzi, focused on the apportionment of costs as between the defendants. The facts are as follows:
Wesley Hummel was seriously injured in a single car motor vehicle accident. Philip Jantzi was the driver of the motor vehicle owned by his father. His ability to operate the motor vehicle was impaired by alcohol. He had consumed that alcohol at the All Star Tap & Grill.
In the reasons for judgment, after a 39 day trial, Taylor, J., found as follows:
a) Philip Jantzi to be negligent in the operation of the motor vehicle in which Wesley Hummel was a passenger;
b) The All Star Tap & Grill to be negligent for over serving alcohol to Wesley Hummel and Philip Jantzi;
c) Philip Jantzi to be 80% at fault and the All Star Tap & Grill to be 20% at fault;
d) Wesley Hummel to be 25% contributorily negligent; and
e) Wesley Hummel and members of his family to be entitled to damages of approximately $12 million.
Offers to settle were made, an advance payment was made by the Jantzi defendants, but no settlement could be reached.
Both sets of the Defendants took the position that the other should pay the lion’s share of costs, based on the non acceptance of offers and where the focus on liability, during the trial, lay.
Taylor J stated that Section 131(1) of the Courts of Justice Act provides that the costs of a proceeding are in the discretion of the court. Rule 57.01 of the Rules of Civil Procedure sets out the factors to be considered when exercising the discretion to award costs. Not all of the factors listed in Rule 57.01 are relevant to the present case but those that could be considered are:
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding;
(g) a party’s denial of or refusal to admit anything that should have been admitted; and
(i) any other matter relevant to the question of costs.
Taylor J stated:
I accept that more than two years before the commencement of the trial, the Jantzi defendants offered to pay their policy limits in return for a full and final release and then eventually made an advance payment in the amount of the policy limits without being given a release. However, it is clear that the plaintiffs did not forgo their entitlement to seek damages in excess of $1 million from the Jantzi defendants. The Jantzi defendants did not make a formal admission of liability for the motor vehicle accident nor did they admit the plaintiffs’ damages. The Jantzi defendants vigorously contested, and were successful, on the issue of contributory negligence.
It was held that apportionment of liability for an accident is not the same as the responsibility to pay a judgment or costs. Rochon v. MacDonald, [2014] O.J. No.362
The Jantzi defendants had a policy with limits of $1 million while the All Star Tap & Grill had a policy with limits of $2 million. It was held that both insurers had the right to attempt to protect their respective policy limits.
Taylor J stated,
…considering the unique factors of this case and the respective policy limits of the defendants, it is fair and equitable to require the defendants to contribute to the plaintiffs’ costs in proportion to their respective policy limits.
The Jantzi defendants were ordered to pay one third of the plaintiffs’ costs of this action and All Star Tap & Grill, to pay two thirds of the plaintiffs’ costs.
It is an interesting decision, because the apportionment of costs, was not in keeping with the apportionment of liability and the basis for that decision is Rochon v. MacDonald. The Court is in essence, relying on Rule 57.01(i) and that the Court is required to consider any other matter relevant to the question of costs.
I can understand this type of decision being rendered when one party is not insured but this decision really is troubling because it is not meant to punish, but simply focused on the policy limits. Without question, this decision will be appealed and rightfully so, because nowhere in the decision, was one defendant found to be obstructive or responsible for the delay in this action, settlement or the length of the trial. Because one party has greater insurance limits, this results in a greater payment on costs?
It just does not appear to be fair and just.