“Meta-costs” submissions?

Posted on December 17, 2014 by Stephen Cavanagh

I noticed recently that Justice Frederick L. Myers gave a decision in which he betrayed some unhappiness about so often having to adjudicate issues of costs. He made it clear that counsel should be able to settle costs and that if they cannot, at least in proceedings before him, there will probably be consequences.

In Gillespie v. 1766998 Ontario Inc., 2014 ONSC 6952 (CanLII), he said this:

I note that in all but rare cases the costs outcome, if not obvious, is well within experienced counsels’ ability to predict. While predictions may differ, the order of magnitude of the differences makes settlement readily available. Costs submissions should not be viewed as either a low cost way to take a shot at a ridiculous outcome or as a way to defer to a judge a difficult conversation with one’s client. Counsel should be able to settle costs. If costs do not settle, counsel should be prepared to make submissions on the costs of the costs submission process. I will in that process look at the offers to settle costs made prior to the filing deadlines set above and assess whether anyone’s conduct caused unnecessary or wasteful proceedings. [Emphasis added]

It would not be surprising if making submissions about the costs of making costs submissions (perhaps “meta-costs submissions”?) becomes more common.

Justice Myers put his “meta-costs” principle into practice in 1465152 Ontario Limited v. Amexon Development Inc., 2014 ONSC 4384 (CanLII) where he chastised counsel for trying to get costs on a substantial or full indemnity basis, with no good reason for doing so. He penalized the successful party by ordering it to pay the costs of the costs submissions:

Here, for the cost of a mere two pages, the applicant sought to increase its costs by approximately $22,000 without any real basis to do so. Page limits are imposed to highlight that costs matters are usually so routine that written argument is generally unnecessary and inefficient. The page limits are designed to encourage settlement not to create a low entry fee gamble. Therefore, there should be a downside to prevent parties from taking a low-cost shot at doing better. Absent reasonable grounds, such submissions just waste the time and resources of counsel opposite and the Court. I award costs of the costs process to the respondent landlord in the amount of $1,500 thereby reducing the costs payable by it to $28,331.49.

One other interesting thing about the Gillespie decision. As he did in in Picicci v. 1485528 Ontario Inc., 2014 ONSC 6496 (CanLII), Justice Myers ordered that the costs submissions be made electronically:

All submissions are to be made by pdf searchable attachments to emails to my Assistant. No case law should be enclosed. References to case law, if necessary, should be by hyperlinks to CanLII or an alternative resource embedded in the written submissions. If counsel need assistance with making pdf searchable attachments, reference should be had to the Guide to E-Delivery at http://www.ontariocourts.ca/scj/practice/practice-directions/edelivery-scj/.

As I said in my post about that case, I actually was not aware that there is now a protocol for electronic submissions that applies across the province and became effective on July 1, 2014. It can be accessed at the link above.

Now that Justice David Brown is on the Court of Appeal, I think we can expect an acceleration in the process of reducing paper in the courts.

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Partial indemnity costs: determined objectively or subjectively?

Posted on December 17, 2014 by Stephen Cavanagh

In TMS Lighting Ltd. v. KJS Transport Inc., Mr. Justice David Price made some comments about fixing partial indemnity costs that, I think, are noteworthy. He held unequivocally that the correct approach, at least in the first instance, is an objective one: the “Information for the Profession” table that was issued by the Costs Subcommittee of the Civil Rules Committee back in July, 2005 and not some percentage of the lawyer’s actual hourly rate, as some courts have said. He went so far as to say that the actual rate is “irrelevant” to the issue of costs, except in that it sets an upper limit:

[T]he starting point in arriving at an appropriate hourly rate when fixing costs is the “Information for the Profession” table, not the actual hourly rate charged. The actual rate charged is irrelevant, except as a limiting factor, in preventing the costs awarded from exceeding the actual fees charged. The Costs Subcommittee’s rates apply to all lawyers and all cases, so everyone of the same level of experience starts at the same place.

The court adjusts the hourly rate, or the resulting fees, to reflect unique features of the case, including the complexity of the proceeding, the importance of the issues, and the other factors set out in Rule 57.01(1). If an excessive amount of time was spent, or too many lawyers worked on the file, the court reduces the resulting amount of fees accordingly. As long as the resulting amount does not exceed the amount actually charged to the client, the actual fee that the client agreed to pay is irrelevant.

In making this finding, Justice Price followed a Divisional Court decision in which Heather Williams of our office acted as counsel,  Geographic Resources Integrated Data Solutions Ltd. v. Peterson, 2013 ONSC 1041 (CanLII). (This line of cases stemmed from the Mantella case that was discussed in my previous post.)

It has always been my view that Rule 57.01 wrestles somewhat schizophrenically (and unsuccessfully) with two possible philosophies to the process of determining hourly rates for purposes of fixing partial indemnity costs. One is subjective and the other is objective.

Under the subjective approach, the starting point would be the actual rate charged by the lawyer to his or her client. Typically, some percentage of that rate, usually 60-66%,  is allowed as a partial indemnity rate. In the Moore v. Getahun case (which has attracted lots of attention for other reasons), Justice Janet Wilson used this approach. The following excerpt from her reasons is a good outline of how it usually works:

[20] Courts have held that partial indemnity costs, as a rough estimate, are 60% of full indemnity costs. See: Hanis v. University of Western Ontario, 2006 CanLII 23155 (ON SC), 53 C.C.E.L. (3d) 86, 42 C.C.L.I. (4th) 65 at para. 46; Allianz Global Risks US Insurance Co. v. Canada, 2014 ONSC 1552 (CanLII), 2014 CarswellOnt 3377 at para. 3; Lewis v. Cantertrot Investments Ltd., 2010 ONSC 5679 (CanLII), 1 C.P.C. (7th) 428 at para. 66. In one case a proportion of 55% has also been suggested: see Boyd v. Taj Mahal Stables Inc., 2009 CarswellOnt 3613 at para. 12). In my view, as the hourly rates proposed by the plaintiff in my view are very reasonable, the 55% figure suggested by the defendant’s counsel is too low. Furthermore, under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, using a different percentage rate is within the court’s discretion.

[21] I am of the view that a partial indemnity costs award amounting to approximately 60% of the plaintiff’s full indemnity costs, as determined by the court, is reasonable in this case, and in accordance with the case law.

Not a mention of the “Information for the Profession” table.

Under what I am calling the “subjective” approach, if two lawyers of approximately the same experience render services that are identical in every other respect, they will receive significantly different treatment with respect to partial indemnity costs if one has a much higher hourly rate than the other.

The “objective” approach, used by Justice Price, ignores the actual hourly rate charged by the lawyer and focuses on the partial indemnity rate established by the “Information for the Profession” (sometimes adjusted for inflation). The result is that the clients of lawyers who, because of expensive overhead or other reasons, are charging their clients a high hourly rate, will receive as costs a much smaller proportion of their actual legal expenditure than will lawyers with lower rates.

The reason that I have characterized Rule 57.01 as “schizophrenic” is that it attempts to use both approaches. Subrule 57.01(1) sets out a list of factors that the court “may consider”. The very first one is subjective: “the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer”.

The next one is objective: “the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed”.

How are these to be reconciled? How can a court, in any principled way base a costs finding on both the actual hourly rate of the lawyer and what is objectively reasonable? I would have thought that either the objective or the subjective factor would have to be viewed as the starting point, perhaps to be mitigated by the other one. And certainly, Justice Price seems to be saying that the objective factor (the “Information for the Profession”) is the key element. He might have gone too far in saying that actual hourly rates charged are “irrelevant”, but I say that only because R. 57.01(1)(a) expressly allows a court to take actual rates into account in the exercise of its discretion in awarding costs.

Still, it is probably fair to say that Justice Price’s decision is in step with a growing cynicism on the part of the bench with high hourly rates (see the Court of Appeal’s very pointed comments recently in Bank of Nova Scotia v. Diemer, 2014 ONCA 851 (CanLII), under the heading, “The Rise and Dominance of the Billable Hour”).

My impression is that the tide is moving in the direction of the “objective” approach.

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Costs: Mantella followed again

Posted on November 19, 2014 by Stephen Cavanagh

I admit that this case may only be of interest to those of us acting for insurers and at discounted hourly rates. But in Sigma Capital Management Group Inc. v. KPMG LLP & Benzer Ltd. v. KPMG LLP, 2014 ONSC 6486 (CanLII), Justice Charles Hackland became the latest judge to apply the principle enunciated in Mantella v. Mantella. There, it was held that counsel retained by LawPRO at a discounted hourly rate was entitled to recover partial indemnity costs at his full hourly rate. The rationale was that there was no reason for the unsuccessful party to obtain the benefit of the negotiated rate.

Sigma Capital was also a LawPRO case. Two third party claims by the defendant KPMG were dismissed on the basis that the law firm had owed no duty to it.

On the issue of costs, Justice Hackland said the following:

Special considerations can apply to discounted fee situations such as LawPRO employs as do an increasing number of institutional clients who litigate in our courts. The partial indemnity guideline of 60% of fees actually charged can result in unduly modest costs recovery to parties whose counsel are subject to discounted fee arrangements and an unwarranted benefit to unsuccessful litigants against whom costs awards are made.

He then endorsed the decision of Justice Corbett in Mantella, rejecting KPMG’s argument that the retainer between counsel and the client is irrelevant in fixing costs. He did, however, reduce the fees recoverable by the successful LawPRO defendant, from a claimed  $63,524.00 to $50,000.

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E-delivery of documents to Superior Court

Posted on November 19, 2014 by Stephen Cavanagh

I happened to see, in Picicci v. 1485528 Ontario Inc., 2014 ONSC 6496 (CanLII), that Justice F.L. Myers ordered that documents be provided to him electronically:

All documents to be delivered to me in this matter should be sent to the court as attachments to emails or on memory keys/sticks. The documents should be in searchable pdf format. Reference to case law, if any, should be by hyperlinks to CanLII or another online source if necessary. If counsel need assistance with format, resort may be had to http://www.ontariocourts.ca/scj/practice/practice-directions/edelivery-scj/

I have not seen such an order made before, but we will probably see it with increasing frequency.

I also had not been aware that there is now a general protocol for e-delivery in the Superior Court. The link to the guide, where the protocol is set out, appears in the quotation above.

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Costs: Nothing for Research

Posted on November 19, 2014 by Stephen Cavanagh

In Huber v. Way, 2014 ONSC 6535 (CanLII), Mr Justice Patrick J. Flynn was dealing with costs of a simplified procedure case in which, to his dismay, the trial had lasted eight days. He had given judgment to the plaintiff for $134,994.40 and had found the defendant to be neither credible or reliable.

Although Justice Flynn said that he had been tempted to order full indemnity costs against the defendant, he reminded himself that “costs must still be reasonable”.

The first item that he disallowed was fees or disbursements relating to “legal research”: “[I]t is safe to say that lawyers are presumed to know the law and I would eliminate all time and expenses identified as ‘legal research’.”

The fees of the winning plaintiff’s counsel were cut back again, this time because he was from Toronto and the trial had taken place in Kitchener:

[20] When Boucher says “reasonable” as in “fair and reasonable” and within the “reasonable expectations of the losing party”, that definition of reasonableness must include a consideration of the legal marketplace where the proceedings were conducted.

[21] Mr. Wortzman is from Toronto. This case was conducted in Kitchener. There is a world of difference in those 100 kilometres as to what the market will bear.

[22] Mr. Wortzman’s actual hourly rate is set out as $650 before September 1, 2013 and $700 thereafter. He is 20 years to the bar. Those are rates which local counsel of similar experience could never demand.

[23] While Mr. Huber was certainly entitled to choose his own counsel for this case, it must be said that there are fine lawyers in Waterloo Region capable of conducting this Plaintiff’s case and able to do it for much less than Mr. Wortzman, while obtaining the same or similar results.

(In 2009, I posted about a decision of Mr. Justice McNamara, now our Regional Senior Justice, that was to similar effect. It was later followed by Justice Heidi Polowin in Young v. RBC Dominion Securities, 2009 CanLII 7181 (ON SC).)

 

 

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C.A. Says No Need to Plead Discoverability Until Limitation Issue Raised In Defence

Posted on October 7, 2014 by Stephen Cavanagh

In Collins v. Cortez, released today, the Court of Appeal departed from some lower court decisions that had held that a plaintiff intending to rely on the discoverability principle to postpone the commencement of a limitation period must plead in the statement of claim the facts that invoke discoverability. The court below had granted summary judgment in a motor vehicle case, largely on the basis that the plaintiff had failed to plead, in her statement of claim, any facts that would allow her to rely upon the principle of discoverability. The Court of Appeal reversed that decision, saying that “this was a summary judgment motion, the resolution of which depended on a consideration of the evidence adduced by the parties, and not their pleadings.”

(The latter statement seems to go a bit far, since it is the pleadings that define the scope of what evidence may be adduced.)

The Court added that “[i]n the normal course, if a limitations defence is raised, as here, in a statement of defence, and the plaintiff relies on the discoverability principle, the material facts relevant to discoverability should be pleaded in reply” and that unless and until a limitation issue is raised in a statement of defence, there is no need for the plaintiff to address it.

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Contractual Risk Transfer: A Review of Recent Authorities on Additional Insured Endorsements, Covenants to Insure and Subrogation Bars

Posted on September 30, 2014 by Stephen Cavanagh

NOTE: The decision of Justice Morgan in Sanofi Pasteur Limited v. UPS SCS, Inc. et al., 2014 ONSC 2695 (CanLII), discussed in this post, was upheld in the Court of Appeal: 2015 ONCA 88 (CanLII).

Also, the decision of Justice Metivier in Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2014 ONSC 5148 (CanLII) was reversed by the Court of Appeal on April 4, 2016.

I had an “additional insured” problem come up on a file lately. (Well, to be honest, they come up all the time.) Anyway, I took a look at the recent authorities and realized that it had been a while since I’d written on this (or really, any) subject. So, to try to make up for my delinquency, I’m posting this somewhat lengthy discussion of recent cases dealing with additional insureds and the related subjects of covenants to insure and subrogation bars, in the hope that this one post will count for four or five of the usual length.

Diligent readers who wade through this post will find a nugget of what I think is an important development in the law of apportionment of fault, tucked away in one of the decisions dealing with covenants to insure. Although really, this is simply another aspect of the larger topic of contractual risk transfer.

PART I.               Additional insureds

Great Atlantic & Pacific Co. of Canada Ltd. v. Economical Mutual Insurance Co., 2013 ONSC 7200 (CanLII)

This was a decision of Madam Justice Patricia Hennessy. A & P sought reimbursement from Economical Mutual Insurance for its expenses in having successfully defended a slip and fall action brought against it by some customers.

Economical was the insurer of a floor maintenance company (“CBSG”) with which A & P had contracted. CBSG had agreed to have A & P included as an additional insured in its liability insurance policies. And that was done in the CGL policy that had been issued to it by Economical.

According to Justice Hennessy’s reasons, “[t]he Certificate at issue describes A & P as an additional insured pursuant to the Policy, ‘but only insofar as their [sic] legal liability arises vicariously out of the negligent operations of the named insured.’ CBSG was the named insured.”

I have observed in previous posts (see “Recent ‘additional insured’ decisions continue confusing Ontario jurisprudence”) that in many Ontario cases dealing with “additional insured” issues, there appears to be no recognition of the fact that it is not the certificate, but the additional insured endorsement that creates the coverage. As an American commentator said, in a passage reproduced more fully in my earlier post, “A certificate of insurance is a form confirming the existence of the named insured’s coverage. It is merely proof that the named insured has insurance. It is not, by its terms, a contract of insurance.”

However, in this case, although reference was made to the Certificate of Insurance, Justice Hennessy also referred to the wording of the actual Additional Insured Endorsement. Her reasons in fact make clear the danger of relying on the certificate: the wording of the certificate and the endorsement was different. The former purported to restrict coverage to legal liability to A & P that arose “vicariously out of the negligent operations of [the named insured]”. The endorsement did not refer to vicarious liability nor to the “negligent” operations of the named insured, only to its “operations”.

Rather bizarrely, in this case, Economical Mutual itself tried to rely on the certificate, rather than the endorsement, as the basis for its denial of coverage. The reasons do not indicate whether the insurer tried to argue that the certificate should prevail over the endorsement but if that argument was advanced, it did not succeed.

Justice Hennessy found that “the Policy is determinative”. (Of course, in this case, that was the result that the additional insured, A & P, desired. What would have happened if the wording of the certificate and the endorsement had been reversed, such that the broader coverage appeared in the certificate? I would think that A & P could then have made a strong argument that Economical would be bound to provide the coverage that it would have falsely represented, in the certificate, to have been extended. A certificate of insurance should not be permitted to narrow the grant of coverage in the endorsement itself, but principles of estoppel might permit the coverage to be broadened by the certificate.)

Economical argued that “the Statement of Claim makes allegations directly against A & P for its negligence as an occupier and that there is no claim that A & P’s liability stems from the acts of CBSG”. As a result, it reasoned, A & P’s liability did not arise from the operations of CBSG and no coverage was afforded.

Justice Hennessy rejected the insurer’s submission. She analyzed the allegations that had been made in the statement of claim and found that they triggered a duty to defend:

[49] The respondent argues that the claim against A & P is with respect to their duties as an occupier.  That may have been a question put to the jury. But it does not diminish the substance and true nature of the factual basis of this claim. It is a simple slip and fall alleged to have occurred as a result of the negligent janitorial operations. A & P had contracted out the janitorial operations and the contractor, CBSG, had added A & P as an insurer with respect to commercial general liability arising out of these operations.

[50]           The authorities do not require an analysis of the legal foundation which may give rise to damages, i.e. occupier liability or vicarious liability arising from the negligence of the individual operator.  The focus of the assessment must be the facts alleged in the Statement of Claim.  The coverage provisions should be construed broadly (Halifax Insurance at para. 34).

[51]           I do not have any trouble finding that the plaintiff is alleging damages as a result of unsafe conditions left by the floor cleaning operator. The true substance of this claim, giving a fair reading to the entire pleadings, is that the plaintiff alleges that she slipped and fell on the floor in close proximity in time and place to the floor cleaner who was operating floor cleaning equipment and who left the floors in a slippery and hazardous condition. The allegations against A & P claim a breach of their obligation to ensure that the floors are safe and that the floor cleaners do not cause unsafe conditions.

Unfortunately, Her Honour’s reasons do not provide guidance as to how to interpret the phrase, “arising out of the operations of the Named Insured”. So, on that issue, the decision would have to be viewed as very much limited to its facts. Continue reading →

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Compound interest: must entitlement be proved or disproved?

Posted on May 20, 2014 by Stephen Cavanagh

In a 2011 post, I commented on a decision of Justice Newbould, Enbridge Gas. v. Michael Marinaccio et al, 2011 ONSC 4962 (CanLII), in which the court suggested that where a plaintiff is a commercial business, compound interest ought to be the rule rather than the exception.

Since that time, the Court of Appeal, in 2012, upheld the decision here and, in particular, agreed with the following passage from the reasons of Justice Newbould:

Courts of equity have always exercised the power to award compound interest whenever a wrongdoer deprives a company of money which it uses in its business. On general principles it should be presumed that had the business not been deprived of the money, it would have made the most beneficial use of it available to it. Alternatively, it should be presumed that the wrongdoer made the most beneficial use of it. [Emphasis added, internal citations omitted.]

I am somewhat surprised that the Enbridge case has not received more attention during the ensuing two years. It was referred to in a British Columbia case, Bronson v. Hewitt, 2013 BCCA 367 (CanLII), decided last year but does not seem to have been mentioned in any Ontario case, at least on the issue of compound interest.

However, there was a decision released last month that considered the issue again. The case was decided by Justice James McNamara (soon to be Regional Senior Justice McNamara). Unfortunately, it does not appear that Enbridge was cited to His Honour, as it was not mentioned in the reasons. Justice McNamara’s ruling indicates that before compound interest will be awarded, it is up to the plaintiff to establish a basis for such an award.

The case is Colautti Construction Ltd. v. Ashcroft Homes Inc. et al., 2014 ONSC 2715 (CanLII). The plaintiff, having recovered judgment of $495,111.38, sought prejudgment and postjudgment interest at a rate of 10 percent per annum, compounded. (The frequency of the requested compounding was not specified in the reasons.)

The rate of prejudgment interest that would have been payable under s. 128 of the Courts of Justice Act was 4.8 percent, so the plaintiff’s argument included not only compounding but also varying the applicable rate. A rate of ten percent was allegedly chosen because it reflected the plaintiff’s cost of borrowing.

Continue reading →

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Lawyers Can’t Review Experts’ Draft Reports and Suggest Revisions

Posted on January 16, 2014 by Stephen Cavanagh

UPDATE, June 4, 2014: I learned yesterday, at a meeting of the Civil Rules Committee, that the appeal of this decision is to be heard by the Court of Appeal during the week of September 22, 2014. I understand that the appeal of Westerhof v. Gee will also be heard that week.

In Moore v. Getahun, a medical malpractice action, Madam Justice Janet Wilson commented extensively on a number of aspects of expert testimony.

Draft reports and “corrections” by counsel

It emerged at trial that one of the defence experts had submitted a draft of his report to the law firm representing the defendant physician “for comments”. A ninety minute telephone conversation ensued between counsel and the expert, during which the lawyer suggested changes to the draft report. The expert implemented the “corrections” in the final version of the report, which was served on counsel for the plaintiff.

Justice Wilson took a rather dim view of this practice (which, in my experience, is very widespread). She said:

I conclude that counsel’s prior practice of reviewing draft reports should stop. Discussions or meetings between counsel and an expert to review and shape a draft expert report are no longer acceptable.

If after submitting the final expert report, counsel believes that there is need for clarification or amplification, any input whatsoever from counsel should be in writing and should be disclosed to opposing counsel.

She added, later in her reasons, that “[t]here should be full disclosure in writing of any changes to an expert’s final report as a result of counsel’s corrections, suggestions, or clarifications, to ensure transparency in the process and to ensure that the expert witness is neutral.”

In my own experience (yes, I have engaged in the now-forbidden practice of reviewing draft reports of experts and suggesting changes), there can be several reasons for revising the report. The most common one (for me, at least) has been that the expert expresses opinions that go beyond the bounds of the expertise for which he or she is likely to be qualified at trial.

Another common problem that I have seen is that the expert makes factual assumptions that either are not in the evidence or whose source is unclear.

I have had the occasional experience of receiving a draft report that contained so many grammatical and spelling mistakes that I feared that the expert’s authority would be compromised if the court were to see his (it was always a “he” where this happened) report in its original form. In those cases, I edited the reports solely for form.

Obviously though, the involvement of a lawyer can result in more substantive changes being made to the report. An expert could be asked to remove a comment that is critical of the lawyer’s client, if the comment was considered to be extraneous to the expert’s opinion. Or a criticism could be re-worded in a gentler form. (I am not saying that I ever engaged in either of these practices.)

If Justice Wilson’s comments represent the practice going forward, there will probably be far fewer draft reports floating around. As it is, it is very common for counsel to discuss the expert’s opinion with him or her before deciding whether or not to obtain a report at all. And that practice will likely continue. Unless an expert’s written report contains an obvious error though, there will probably be far fewer “corrections” to written reports made by counsel in future.

Expert’s report as evidence

An issue that very commonly arises at a trial that involves the testimony of expert witness is: what use can the court make of the expert’s written report?

The usual practice (again, in my experience) is that the trial judge is given a copy of the report to refer to but that the report itself is not marked as an exhibit. The evidence of the expert is made up entirely of what he or she says in oral testimony.

Continue reading →

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Divisional Court Clarifies Expert Witness Rule

Posted on July 9, 2013 by Stephen Cavanagh

January 15, 2014. I understand that leave to appeal this decision has been granted.

In Westerhof v. Gee (Estate), 2013 ONSC 2093 (CanLII), the Divisional Court (Matlow, Aston & Lederer JJ.) has addressed an area of the law that has been in some disarray over the last few years: the application of rule 53.03, which deals with expert evidence. Some cases have held that the rule, which sets out the requirements for delivery of experts’ reports, does not apply to certain categories of expert witnesses. However, in the wake of the Westerhof decision, there will now be few situations in which the rule does not apply.

The case involved a personal injury claim resulting from a motor vehicle accident. The action proceeded to trial before a jury. It was ultimately dismissed by the trial judge on the basis that the plaintiff’s injuries had not met the Insurance Act threshold.

The plaintiff appealed, in part on the ground that the trial judge had erred in various evidentiary rulings that had had the effect of limiting the expert evidence that was heard by the jury. This brought into question the extent to which rule 53.03 had to be complied with.

The Divisional Court unanimously dismissed the appeal. In so doing, it rejected the proposition, which had been accepted in McNeill v. Filthaut, 2011 ONSC 2165 (CanLII), that rule 53.03 does not apply to certain categories of expert witnesses.

The rule reads as follows (with the emphasis taken from the reasons of the Divisional Court):

Experts’ Reports

53.03(1) A party who intends to call an expert witness at trial shall, not less than 90 days before the pre-trial conference required under Rule 50, serve on every other party to the action a report, signed by the expert, containing the information listed in subrule (2.1). O. Reg. 438/08, s. 48.

(2) A party who intends to call an expert witness at trial to respond to the expert witness of another party shall, not less than 60 days before the pre-trial conference, serve on every other party to the action a report, signed by the expert, containing the information listed in subrule (2.1). O. Reg. 438/08, s. 48.

(2.1) A report provided for the purposes of subrule (1) or (2) shall contain the following information:

1. The expert’s name, address and area of expertise.

2. The expert’s qualifications and employment and educational experiences in his or her area of expertise.

3. The instructions provided to the expert in relation to the proceeding.

4. The nature of the opinion being sought and each issue in the proceeding to which the opinion relates.

5. The expert’s opinion respecting each issue and, where there is a range of opinions given, a summary of the range and the reasons for the expert’s own opinion within that range.

6. The expert’s reasons for his or her opinion, including

i. a description of the factual assumptions on which the opinion is based,

ii. a description of any research conducted by the expert that led him or her to form the opinion, and

iii. a list of every document, if any, relied on by the expert in forming the opinion.

7. An acknowledgement of expert’s duty (Form 53) signed by the expert. O. Reg. 438/08, s. 48.

The trial judge had had to rule on the admissibility of several types of testimony which counsel for the plaintiff had sought to adduce. These included a lay witness who was tendered as a supposed fact witness (to whom rule 53.03 would not apply), expert witnesses who had not complied with rule 53.03 but who were able to testify as fact witnesses and treating physicians.

There were also some witnesses who, the trial judge found, were entitled to provide expert opinion evidence in one field (such as neurology) but not another (psychiatry).

The appellant argued that, in making his rulings, the trial judge had failed to distinguish appropriately between experts retained for purposes of the litigation and those who were testifying because they had treated the plaintiff.

The court looked at some of the cases that have considered rule 53.03 since its enactment. In each of McNeil, supra, Slaght v. Phillips (18 May 2010, unreported, Court File No. 109/07) and Kusnierz v. Economical Mutual Insurance Company 2010 ONSC 5749 (CanLII), trial judges drew a distinction between experts retained for purposes of the litigation, to whom rule 53.03 certainly applies, and experts who are engaged, in some manner, in treatment and to whose evidence the rule either does not apply or applies more loosely. In McNeil, in particular, the court had considered rule 53.03 together with rule 4.1.01. which reads as follows (again, with the Divisional Court’s emphasis):

It is the duty of every expert engaged by or on behalf of a party to provide evidence in relation to a proceeding under these rules,

(a) to provide opinion evidence that is fair, objective and non-partisan;

(b) to provide opinion evidence that is related only to matters that are within the expert’s area of expertise; and

(c) to provide such additional assistance as the court may reasonably require to determine a matter in issue.

The court in McNeil concluded that rules 4.1.01 and 53.03 must be read together as part of a comprehensive “…framework for the duty of an expert called as witness at a trial” and that the opening words of rule 4.1.01 also apply to rule 53.03. As a result, it was held in McNeill that only experts retained by or on behalf of a party must comply with rule 53.03.

Similar approaches were taken in Slaght and Kusnierz.

The Divisional Court rejected this approach. In its view, the error in those cases was in looking at who the witnesses are instead of what the tendered evidence was:

The important distinction is not in the role or involvement of the witness, but in the type of evidence sought to be admitted. If it is opinion evidence, compliance with rule 53.03 is required; if it is factual evidence, it is not.

Based on this distinction, it is not difficult to see that, where the expert has not been, qualified to give the opinions to be tendered or where the report relied on to advance the opinion does not comply with rule 53.03, it is correct for the trial judge to refuse to admit the evidence.

The court considered, with apparent approval, the decision of Justice J. Patrick Moore in Beasley v. Barrand, 2010 ONSC 2095. In that case, Justice Moore had held that compliance with rule 53.03 was required before a witness could provide expert opinion evidence to the court.

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