Garisto v. Wang is one of relatively few cases in which a trial judges has imposed the costs penalties contained in Rule 76 of the Rules of Civil Procedure.
The plaintiff had originally sought damages of $800,000 in this car accident case. By the time of trial (which lasted 7 or 8 days), the plaintiff’s demands had reduced to $100,000 plus. At trial, the jury found for the plaintiff on liability but awarded only $20,000 in damages. After the statutory deductible was applied, the award dropped to $5,000.
The Insurance Act provides, in s. 267.5(9), that “In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the determination of a party’s entitlement to costs shall be made without regard to the effect of paragraph 3 of subsection (7) on the amount of damages, if any, awarded for non-pecuniary loss.” So, for the purpose of considering the plaintiff’s entitlement to costs, Mr. Justice Peter H. Howden was required to treat the damages as having been $20,000. (The situation is different, incidentally, when it comes to evaluating offers to settle. There, the Insurance Act deductibles are taken into account. This is discussed in one of our posts from 2004.)
In this case, the plaintiff’s solicitor was seeking $52,470.50 in fees on a partial indemnity basis plus disbursements of $27,769.44, or $80,239 total. He had a contingency fee arrangement with the plaintiff, for payment of 20% of any amount recovered, plus any costs payable by the opposing party.
Justice Howden considered Rule 76.13(3) of the Rules of Civil Procedure. Rule 76 deals with the “simplified procedure” for cases where the claim is for $50,000 or less. Subrule 76.13(3) deals with the costs consequences of suing in ordinary procedure, where the amount awarded at trial turns out to be less than $50,000. That subrule provides, in effect, that if a plaintiff sues under ordinary procedure and receives less than $50,000 at trial, he or she shall receive no costs, unless the court is satisfied that it was nevertheless reasonable for the plaintiff to have sued under ordinary procedure.
As we have written in a post earlier this year, Ontario courts seem reluctant to deny costs under Rule 76.13(3). However, Justice Howden bucked that trend and ordered that the plaintiff in this case receive no costs. There was no question that the jury’s award of $20,000 was well below the simplified rules threshold of $50,000. (If the deductible had been taken into account, the actual recovery–$5,000–would have been less than the limit of Small Claims Court’s jurisdiction.)
His Honour went on to find that it was not reasonable, in this case, for the plaintiff to have sued under ordinary procedure. This was in part because the plaintiff had “significant pre-accident conditions similar to or the same as his complaints in this case” and also due to the absence of any convincing evidence to substantiate a loss of income claim. (Justice Howden also mentioned the plaintiff’s “flat demeanour” and the fact that one of the plaintiff’s own witnesses suggested that the plaintiff had understated his ability to play golf.)