November 29, 2018 by David Gambrill
A bitter cost dispute between two auto insurers over an abandoned court action has led to a rebuke from a judge, who ordered Wawanesa to pay Dominion its legal fees.
In doing so, Ontario Superior Court Justice Darla A. Wilson slashed Dominion’s fees, which were calculated at 107.6 hours’ worth of work for a lawyer with eight years of experience.
Still ongoing, the main tort action in the dispute arises from an auto collision involving an unidentified driver. Claudia Villani alleged an unidentified driver of a Nissan vehicle struck her car in October 2011. She made a claim against her own auto insurer, Wawanesa, because the other driver was not known.
The numbered company owning the car that hit Villani, later found to be insured by Dominion, had earlier filed a statement of defence saying that it did not own the Nissan. Wawanesa’s abandoned motion essentially argued that Dominion was prevented from denying coverage because its insured had already filed a statement of defence in the matter.
Wawanesa told the court it had abandoned its application – which was based on determining simple, uncontested facts – because it found Dominion’s position to be “unreasonable,” and therefore moving forward would have escalated costs.
Dominion’s counsel calculated the actual time expended at Wawanesa’s withdrawn application to be $28,329, plus disbursements of $552.52. On a partial indemnity basis (which is usually less than 50% of a lawyer’s full fee), Dominion totaled its legal fees at $18,697. In written submissions before the court, Dominion’s counsel did not indicate whether fees were being claimed on a partial or substantial indemnity scale.
Either way, Wilson slashed Dominion’s fees down to $10,000.
“In my view, the time claimed is excessive — more than 100 hours of time for an application that did not proceed is not reasonable, particularly from a counsel whose practice is based on insurance law,” Wilson wrote for the court. “This application does not contain a novel point, nor does it arise from a complex fact situation. I am of the view that fees of $10,000 plus HST plus disbursements of $552.52 is fair and reasonable and is a sum that the unsuccessful applicant [Wawanesa] could well have expected [to pay] when it decided to abandon the application.”
Wawanesa argued it should not have to pay Dominion’s costs for the abandoned application, in part because they were “exorbitant.” It also blamed Dominion’s “unreasonable” position for making withdrawal of the application its only viable option.
However, Wilson found that Wawanesa could not blame Dominion for its own decision not to proceed with the application. “Work was done by Dominion to respond to the application which was not proceeded with,” she wrote. “In my view, those are costs thrown away, which ought to be paid by Wawanesa.”
That said, the judge took both insurers to task for the amount of time they spent on a simple costs motion involving an abandoned legal action.
“I specifically endorsed that costs submissions were to be brief,” Wilson wrote. “Notwithstanding my direction, I received lengthy materials from Dominion, including portions of the cross-examination of the representative of Wawanesa, the Response to the Request to Admit served by Dominion, and copies of emails.
“From the applicant [Wawanesa], I received similar materials as well as case law.
“I then received reply costs submissions from Dominion with further submissions and a tabbed brief of no less than 11 cases.
“That is not what I anticipated when I agreed to deal with the issue of costs at the chambers appointment. However, neither counsel provided me with a copy of the application giving rise to the costs submissions, for reasons which escape me.”