In a recent “David vs. Goliath” decision, Justice Zarnett of the Court of Appeal upheld a Superior Court motion judge’s decision to decline awarding costs to the Defendant for the successful defence of a slip and fall claim.
The Plaintiff brought an action against the retirement home where she resided for negligence and breach of the Occupiers’ Liability Act, R.S.O. 1990, c. O.2 with respect to a slip and fall accident. The jury found no liability on the part of the retirement home, and the action was dismissed.
The Defendant, as the successful party to the action, asked for an award of partial indemnity costs against the Plaintiff. The trial judge denied the request for three reasons:
- The action, which required expert evidence, illustrated the need for the law of negligence to adapt to the growing area of elder care;
- The Defendant was insured and defended by an insurer that holds a large share of the Ontario insurance market, making the case a “David and Goliath” situation; and
- The Defendant’s insurer never offered settlement to the Plaintiff other than a no costs dismissal of her claim.
- The trial judge considered this to be an example of the insurer’s arrogant, “hardball” approach to litigation.
The Defendant obtained leave to appeal the costs ruling.
The Appeal – Key Takeaways
Justice Zarnett cited the case of Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, stating that an appellate court is to take a deferential approach when reviewing the discretionary award of costs by a trial court. A costs award will only be set aside on appeal if the trial judge has made an error in principle or if the costs award is plainly wrong.
Justice Zarnett stated that the trial judge’s costs ruling reflected multiple errors in principle, including:
- The fact that the Defendant was insured and defended by a large insurance company is not reason to deny an award of costs;
- The fact that the successful party had better resources than their opponent is not a justification to deny an award of costs where the resource advantage was not used to engage in abusive tactics or other misconduct during the litigation;
- The refusal of the insurance company to offer settlement to the Plaintiff is not a reason to deny that party costs where the refusal is proven reasonable by the verdict; and
- The trial judge should not have sought to deny the party costs to correct their general attitude towards settlement in the future.
With respect to the trial judge stating that this action illustrated the need for the law of negligence to adapt to the growing area of elder care, Justice Zarnett referenced rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. Rule 57.01 contemplates the court considering the nature, importance, and complexity of issues in exercising its costs discretion. A novel issue that involves the public interest can support a no costs order as an exception to the general approach that a successful party will receive their costs.
Justice Zarnett concluded that the trial judge was well-positioned to determine whether the case raised an important and novel issue. His decision to accept that it did, and to rely on that factor to make a no costs award, is entitled to deference. It is not tainted by any error in principle and does not result in a costs award that is plainly wrong.
Notwithstanding certain errors in principle, Justice Zarnett stated that the trial judge’s costs award had an independent basis to support it that was free of error. As a result, Justice Zarnett upheld the decision and dismissed the appeal.