Case Name:

Ishoy v. Abreu

Between
Cynthia Ishoy, plaintiff, and
Francisco Abreu, defendant

[2005] O.J. No. 5702
Newmarket Court File No. 64271/02

Ontario Superior Court of Justice
J.R. MacKinnon J.

Heard: December 7, 2005.
Judgment: December 16, 2005.
(18 paras.)

Civil procedure - Costs - Assessment or fixing of costs - Counsel fees - Party and party or partial indemnity - Partial indemnity costs were fixed in favour of the plaintiff in the amount of $145,000 together with another $1,000 for the costs hearing itself, considering the experience of counsel, the rates charged and the hours spent - Although the result obtained was less than the plaintiff's expectations, the legal services delivered and court trial advocacy on her behalf was above average in quality - The time spent by counsel was not demonstrated to be manifestly unreasonable.

Statutes, Regulations and Rules Cited:

Courts of Justice Act, s.131

Ontario Rules of Civil Procedure, Rule 57.01(1)

Counsel:

J.P. Brown and R. Morzaria, for the plaintiff

P.B. Pachai, for the defendant

REASONS FOR DECISION ON COSTS

1. J.R. MacKINNON J.:- The jury verdict was received October 25, 2005. Plaintiff's counsel have now delivered a Bill of Costs. I received written submissions from both sides as well as oral submissions from both by telephone conference call.



2. Liability and damages were both in dispute. The jury found the defendant to be fully liable. The plaintiff advanced claims exceeding $1,000,000 but the jury assessed all heads of damages cumulatively at $160,000. There were no rule 49 offers by either side which had direct cost consequences. Two days of discoveries were eventually followed by a trial which extended over eight days.



3. The liability issues were not complex, unlike the factual and legal issues relating to damages. The plaintiff is a celebrated Canadian Olympian who has represented Canada with distinction in her sport of dressage both before and after the 2001 motor vehicle accident in question. One significant part of the evidence called on her behalf dealt with the difference between her stated diminished ongoing ability to train horses and her continued ongoing ability to compete at an elite level in international dressage competitions.



4. Medical evidence called on Mrs. Ishoy's behalf dealt with thoracic outlet syndrome, chronic pain, tendonosis and pre-existing degenerative disc disease involving both Athey and thin skull issues. In addition to her general damages claim, her lawyers advanced claims for past and future loss of earning capacity. These were based not on her actual loss of income, but on a capacity quantification provided by her forensic accountant. Both pre- and post-accident Mrs. Ishoy's family business generated detailed financial and accounting records. The claims in relation to those records gave rise to factual issues relating to income splitting, extraordinary expenses for horse training, possible future sales of championship horses, and the allocation of contributions of Mrs. Ishoy and her husband to their family business.



5. This was a reasonably complex damages trial, although not overly lengthy or exceptionally complex. Plaintiff's counsel presented their case in a focused, well-organized fashion. Their trial preparation resulted in well-prepared and focused witnesses. To assist in reduction of trial time and eliminate the necessity of proving business records, they prepared both dressage and liability photographic briefs and business records briefs. They prepared statements of law on the loss of earning capacity, causation, and other issues which were of significant assistance to the court and minimized the length of the trial. The charts, aerial photographs, medical illustrations and demonstrative evidence both assisted the jury in understanding the medical and liability issues and as well significantly reduced the time of trial. This advance preparation of submissions which were likely to arise during the course of the trial avoided trial delay. Far from constituting over-lawyering, it was effective advocacy preparation.



6. Until six days prior to the commencement of the trial the only rule 49 offer made by the defendant was for dismissal of the plaintiff's claim without costs. The only rule 49 offer made by the plaintiff was for $475,000 plus interest and costs.



7. The defendant maintained its position throughout that Mrs. Ishoy's case did not meet the Ontario statutory threshold. The plaintiff was accordingly required to prepare a statement of law and oral submissions on that issue in anticipation of the announced defence motion. Plaintiff's counsel had no other choice since a failure to meet the threshold would have resulted in Mrs. Ishoy being statutorily denied her non-pecuniary damages. The defendant only withdrew the threshold argument as a live issue after the jury had been fully charged.



8. Counsel for the defendant served an expert accounting report denying entirely the plaintiff's claim for loss of her past and future earning capacity. Only after counsel for the plaintiff closed her case did the defence formally announce that it would not call its expert. Plaintiff's counsel had no choice but to prepare in advance for the cross-examination which never occurred.



9. In fixing costs, a judge is not assessing costs as if he or she were performing the function of an assessment officer. The object of fixing costs is to avoid the delay and added costs of a full assessment. The court determines what the services devoted to the proceedings are worth. The incurring of costs and time spent by counsel in litigation is essentially the exercise of judgment. The prudence, foresight and imagination of their judgment must be considered at the time the disbursement was incurred or the work done. It is inappropriate to apply a test of hindsight to determine whether a service or charge was for an extra not reasonably necessary to advance their client's position. The time to view the decision to commit services to the issue is before the trial.



10. In hindsight, it is clear that the plaintiff should have reduced her offer to settle. In hindsight it is clear that the defendant should have increased his offer to settle. The trial results support the contention that both parties' offers to settle were unreasonable. However, the plaintiff was entitled to pursue the case she wished and was not required to settle it. The jury verdict indicates that her counsel were mistaken in their assessment of the quantum of her damages but they did nothing to delay or lengthen the trial, harass the defendant or otherwise abuse the process of the court.



11. This trial lasted eight days but could have lasted a great deal longer had plaintiff's counsel not focused their efforts as they did. The trial conduct of plaintiff's counsel was entirely appropriate throughout. Mr. Brown was lead counsel and has twelve years of experience. His closing address to the jury was dramatic, focused and effective. His partial indemnity rate claimed at $275 is entirely appropriate. Mr. Morzaria has less than three years experience and was junior counsel at trial. His claimed rate of $175 is high for his experience. A more appropriate rate would be $150.



12. Both Messrs. Brown and Morzaria attended at the pretrial conference hearing. No reason was advanced which persuaded me why one counsel that day would not have sufficed. A party may indulge herself or himself to the extent of being represented at trial by two counsel, but if that occurs the client ought not in every case to expect the other side to underwrite that decision by paying two full counsel fees. That said, I find that Mr. Morzaria participated effectively at trial and that his involvement, both in preparation for and at trial, minimized the legal work which would otherwise have had to be done by more senior, higher priced counsel in his firm. Because the plaintiff had two trial counsel, the trial was shortened. Two counsel fees are appropriate in this case. I do, however, have difficulty with counsel's preparation time claimed at approximately $47,000 as compared to trial time claimed at approximately $43,000. Only in exceptional cases should preparation time exceed or approximate counsel fee at trial. This was not such a case.



13. The defendant submits that some of the disbursements incurred by the plaintiff were excessive or unreasonable. I have considered the wisdom of O'Brien J. in Roberts v. Morana 37 O.R. (3d) 342 where he adopted the view of Blair J. in 131843 Canada Inc. v. Double "R" (Toronto) Ltd. (1992), 11 C.P.C. (3d) 190, that providing witness charges bear some reasonable relationship to prevailing market rates, judges should not attempt to act as arbiters of what amounts are appropriate. I agree. I have considered the submissions of both counsel and accept the submissions of Mr. Brown that his firm reasonably incurred the disbursements set out in his client's Bill of Costs. I have considered all the disbursement accounts submitted and am not persuaded that there should be any reduction or elimination of any of them. I am not persuaded that the amounts claimed by witnesses Schraymer or Spadoni are excessive. Fees were paid to some witnesses who did not ultimately attend at trial. These were at-trial advocacy decisions designed to minimize the length of the trial. Plaintiff's counsel has no obligation in law to seek return of conduct money paid to persons who in these circumstances were not ultimately required to attend at trial. I am not satisfied that the amounts paid to Drs. Zamora or Khumbara or Mr. Nafekh are excessive or unreasonable. I am not persuaded that any photocopy or other disbursement claims are excessive or unreasonable. I accept the submissions of plaintiff's counsel that the time spent by their experts was required for the experts to prepare detailed schedules, to prepare for their testimony, and to actually attend and testify. Mr. Nafekh's second account was in connection with services performed as a result of issues raised by the defendant's expert who was not ultimately called as a defence witness.



14. I have considered all the discretionary factors set out in rule 57.01(1), the experience of counsel, the rates charged, and the hours spent. I have also considered the principle of indemnity and the amount of costs that the unsuccessful party could reasonably expect to pay in relation to this proceeding. The mileage claim for plaintiff's counsel to attend trial at Newmarket is appropriate as reasonably necessary to the conduct of the proceedings.



15. I am asked to fix the plaintiff's costs on a partial indemnity basis and have approached the matter in that fashion. Substantial indemnity is not applicable.



16. In coming to the conclusion that I have, I have attempted to be fair to both parties. I repeat that in fixing costs I am not meticulously assessing them as if I was performing the function of an assessment officer. I have, however, conducted a critical examination of the work performed by plaintiff's counsel.



17. While the result obtained was less than the plaintiff's expectations, the legal services delivered and in court trial advocacy on her behalf was above average in quality. I have a wide latitude under section 131 of the Courts of Justice Act and do not consider it to be my role to second-guess the time spent by counsel unless that time is manifestly unreasonable in the sense that the total time spent or disbursements incurred were clearly excessive or that the matter was the subject of an unwarranted number of legal personnel. None of these exceptions are demonstrated in this case.



18. I fix partial indemnity costs in the sum of $145,000 inclusive of fee, disbursements and GST, together with an additional $1,000 all inclusive for the costs hearing itself.

J.R. MacKINNON J.

QL UPDATE: 20060125
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