Appellant says costs are disproportionate to net damages award of $16,160.50
In a vehicular accident case, the Ontario Court of Appeal disagreed that the $300,000 cost award was disproportionate to the $16,160.50 net damages award, considering a cost reduction due to the injured party’s hiring of two senior lawyers.
In Barry v. Anantharajah, 2025 ONCA 603, the respondent was walking over a pedestrian street crossing on Dec. 9, 2014, when the motor vehicle the appellant was driving struck her.
In 2016, the respondent brought an injury claim seeking more than $1,000,000 in damages, comprising $300,000 in general damages, $700,000 in special damages, healthcare expenses, future housekeeping, and home maintenance expenses.
In October 2018, the appellant, via her insurance company, offered to settle for a dismissal without costs. She kept this offer open until two days before the action’s scheduled trial date.
In December 2023, the respondent offered to settle for $500,000 in damages plus costs and disbursements.
The appellant repeated her offer of a dismissal sans costs. She alternatively offered to admit liability if the respondent would limit her claim to the insurer’s $1 million policy limit. She acknowledged that any partial or full settlement would require court approval.
In January 2024, the three-week trial covering liability and damages proceeded before a judge and a jury.
The appellant conceded liability. However, she alleged that the respondent was 25 percent contributorily negligent and had impairments that were either pre-existing, minor, or resolved by the time of trial.
The jury awarded the respondent $16,160.50 in damages, consisting of $24,166 in general damages and $26,000 in special damages for past income loss, with a deduction due to the respondent being 15 percent contributorily negligent.
The respondent asked for $404,809 in partial indemnity costs and disbursements. The trial judge awarded her $300,000, comprising $164,148.33 in fees, $21,339.29 in harmonized sales tax, and $114,512.38 in disbursements. The appellant appealed this cost order.
The Court of Appeal for Ontario dismissed the appeal and ordered the appellant to pay the respondent $15,000 in appeal costs, including disbursements and applicable tax.
First, the appeal court ruled that the trial judge did not err in finding the respondent more successful than the appellant and did not assess this success solely based on whether the award exceeded the appellant’s settlement offer.
The appeal court added that the judge did not go against the principle that a party would assume the associated risks if they opted for a “hardball” settlement approach.
“Put differently, a defendant is not required to make any settlement offers, but if that is the posture adopted, it must live with the consequences of that posture if its decision does not prove to have been a reasonable one,” wrote Justice Sarah E. Pepall for the appeal court.
The appeal court pointed out that the judge listed the factors to weigh under r. 57.01(1), addressed the parties’ success at trial, and ultimately deemed the respondent more successful than the appellant. The appeal court noted that the jury refused to award the respondent nothing for past income loss, as the appellant requested.
Next, the appeal court applied the principle of proportionality and affirmed the judge’s discretionary cost award.
The appeal court noted that the judge addressed the proportionality principle, the case’s complexity, the need for extensive expert evidence, the respondent’s net award, the appellant’s reasonable expectations, and the parties’ offers. The appeal court did not consider the appellant’s alternative offer materially different from other defence offers.
The appeal court noted that the judge reduced the quantum of costs by $100,000 based on proportionality, including a $40,000 reduction due to the respondent’s choice to hire two senior lawyers.
