An Ontario court has ordered a plaintiff to pay costs after his challenge to an insurer's litigation privilege claims largely failed.
The Ontario Superior Court of Justice, in a ruling from Justice MacNeil, decided costs on three motions in a first-party insurance dispute between the plaintiff and Royal and SunAlliance Insurance Company, where he sought $4,750,000 in damages.
Two of the three motions came from the plaintiff. In December 2017, he sought a further affidavit of documents along with answers to outstanding undertakings and refusals, though he abandoned that motion before it reached a hearing. In May 2019, he challenged the insurer's claim of litigation privilege over documents sought during discovery - a motion the insurer won outright, successfully defending its asserted privilege date and upholding privilege for 25 of 33 inspected documents. The insurer brought the third motion in November 2019, seeking fulfilment of the plaintiff's outstanding undertakings and refusals; the court found success on that one divided.
The insurer's costs outline claimed $47,225.58 in fees and $3,891.33 in disbursements. Justice MacNeil first stripped out the time claimed for the third motion, narrowing the fees to $41,113.75, then removed a further $8,258.76 tied to general file handling rather than the motions themselves. He trimmed the total again to account for duplicative work between a senior and junior lawyer on the privilege motion.
He awarded the insurer $2,000 for the December 2017 motion and $15,000 for the privilege motion, while ordering each side to bear its own costs on the third. In total, the plaintiff must pay $20,891.33 within 30 days.
Justice MacNeil rejected the plaintiff's request to reserve the costs question to the trial judge, finding the insurer was "the predominantly successful party" and its success was not so nominal as to warrant deferral. He also noted the motions took more than seven years to resolve, and the action itself may not reach trial soon.
The insurer had twice tried to settle the costs question beforehand - first offering a without-costs withdrawal of all motions, then $20,000 in costs after the privilege ruling. The plaintiff turned down both offers, arguing the insurer's claimed costs were excessive for relatively simple motions and that no party had clearly prevailed.
The plaintiff cited two precedents where courts deferred costs to trial judges amid divided success. Justice MacNeil distinguished both, finding no similar ambiguity here given the insurer's clear success on the privilege motion.
The insurer's disbursements were found reasonable and payable in full.
