Preston et al. v. Chow et al., (2008) 230 Man.R.(2d) 27 (QB)

• Judge: Greenberg, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: May 26, 2008
• Jurisdiction: Manitoba
• Citations: (2008), 230 Man.R.(2d) 27 (QB);2008 MBQB 154

Preston v. Chow (2008), 230 Man.R.(2d) 27 (QB)

MLB headnote and full text

Temp. Cite: [2008] Man.R.(2d) TBEd. JN.012

Christina Preston and Cheryl Mott, as the litigation guardian for Calla Elizabeth Preston (plaintiffs) v. Chi-Ieng Chow, The Misericordia General Hospital, Elsie D'Eshambeault, Villa Rosa Inc. and Frances Gaudinez (defendants)

(CI 95-01-94122)

Christina Preston (plaintiff) v. Elsie D'Eshambeault and Villa Rosa Inc. (defendants)

(CI 99-01-15497)

(2008 MBQB 154)

Indexed As: Preston et al. v. Chow et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Greenberg, J.

May 26, 2008.

Summary:

Shortly after birth, a child developed herpes encephalitis and as a result suffered permanent neurological damage leaving her with the mental age of a toddler. Her mother had a herpes infection which she alleged was transmitted to the child during the delivery. The mother and child (the plaintiffs) sued the doctor who cared for the mother during her pregnancy and the home for single mothers where the mother was residing at the time of the child's birth and one of its employees, a nurse.

The Manitoba Court of Queen's Bench, in a decision reported at 224 Man.R.(2d) 39, allowed the action against the doctor and assessed damages accordingly. The court dismissed the claim against the home and the employee. Costs were in issue.

The Manitoba Court of Queen's Bench, in the decision reported below, dealt with costs accordingly.

Practice - Topic 4185

Discovery - Examination - Costs - General - Calla, a successful plaintiff in a malpractice suit against a doctor, was awarded damages in excess of $4,000,000 - The plaintiff submitted a bill of costs totalling $240,325.60, including a claim for the Tariff amount ($700 per half day) for six days of discovery - The doctor argued that the plaintiff was not entitled to be reimbursed for the first two half-days of discovery, because she was represented by other counsel during that time and it was unclear whether she had paid or owed fees to her previous lawyer - The Manitoba Court of Queen's Bench held that regardless of whether the plaintiff owed money to her first lawyer, the doctor's argument missed the point of a costs order - The court stated that costs are not awarded to the lawyer; they are awarded to the litigant - In seeking party and party costs in accordance with the Tariff, a litigant who was represented by counsel was not required to prove what her lawyer had charged her for his services - See paragraphs 7 and 8.

Practice - Topic 7060.1

Costs - Party and party costs - Counsel fees - At hearing of trial or appeal - [See second and third Practice - Topic 7066 ].

Practice - Topic 7062

Costs - Party and party costs - Counsel fees - Entitlement - [See Practice - Topic 4185 ].

Practice - Topic 7066

Costs - Party and party costs - Counsel fees - Written argument - Calla, a successful plaintiff in a malpractice suit against a doctor, was awarded damages in excess of $4,000,000 - The plaintiff submitted a bill of costs totalling $240,325.60, including a claim for $96,000 for preparation of written argument - The argument was 267 pages plus a reply of 39 pages and took over 500 hours to prepare - The doctor argued that the fee claimed for the written argument was excessive, suggesting that an appropriate amount would be between $9,500 and $15,800 - The Manitoba Court of Queen's Bench held that although the argument was well crafted and thorough, it was lengthier than required - However, keeping in mind that the purpose of party and party costs was not to provide full indemnification, $96,000 was not reasonable - The court, considering the complexity and length of the trial (six weeks spread out over six months), held that $35,000 was a reasonable award for preparation of the written argument - See paragraphs 16 to 20.

Practice - Topic 7066

Costs - Party and party costs - Counsel fees - Written argument - Christina, a successful plaintiff in a malpractice suit against a doctor, was awarded damages of $268,000 - The plaintiff claimed $107,000 in costs, which included $35,700 for trial attendance, the same amount for trial preparation and $25,000 for written argument - The doctor argued that Christina should not be entitled to any costs because the damages awarded to her were really an "in trust" award made to her daughter (also a plaintiff) and, therefore, would be covered by the award of costs to the daughter - The Manitoba Court of Queen's Bench rejected this argument, holding that it was because of the doctor filing a counterclaim against Christina that she had to retain separate counsel - Had the doctor not filed a counterclaim against Christina, her "in trust" claim would have been pursued by the daughter's counsel and would not have resulted in additional costs - However, the court agreed with the doctor that the amount awarded for trial preparation should reflect the fact that the vast majority of the evidence for both plaintiffs was put before the court by the daughter's counsel - Christina's counsel had a limited role in leading evidence and cross-examining witnesses - The court therefore awarded $5,000 for trial preparation - The court also agreed that $25,000 for written argument was excessive and awarded $3,500 - The court reduced the costs for trial attendance and preparation by 20% because part of those expenses were directed to a claim against a nurse that was unsuccessful - See paragraphs 37 to 44.

Practice - Topic 7066

Costs - Party and party costs - Counsel fees - Written argument - A child, who was exposed to herpes during a vaginal birth, developed herpes encephalitis which resulted in neurological damage leaving her permanently with the mental age of a toddler - The mother and child (the plaintiffs) successfully sued the doctor who cared for the mother during her pregnancy - The plaintiffs' claim against a nurse and the home for single mothers where the mother was residing was unsuccessful - The successful defendants claimed costs of $66,500 for trial attendance, an equal amount for trial preparation and $70,000 for the preparation of written argument - The Manitoba Court of Queen's Bench awarded $35,000 for trial preparation, noting that the primary litigants were the child and the doctor - However, the court awarded the full amount claimed for counsel fees where it was not unreasonable to have two counsel present throughout the trial - Also the court awarded $17,000 for written argument (116 pages addressing only the liability issue) - See paragraphs 49 to 54.

Practice - Topic 7069

Costs - Party and party costs - Counsel fees - Apportionment - Calla, a successful plaintiff in a malpractice suit against a doctor, was awarded damages in excess of $4,000,000 - The plaintiff submitted a bill of costs totalling $240,325.60 - The doctor argued that there should be a reduction in the total amount awarded to take into account that part of the trial was directed to the plaintiff's claims against a nurse at a home for single mothers where she was living when the child was born - The claim against the nurse was dismissed - The Manitoba Court of Queen's Bench agreed that there should be a reduction in the amount awarded for trial preparation, trial attendance and written argument to reflect the fact that some of that time was devoted to the claim against other defendants - The court reduced the amount awarded under these heads by 20%, noting that the vast majority of the trial would have proceeded in the same fashion even if the nurse had not been sued - See paragraphs 21 to 23.

Practice - Topic 7069

Costs - Party and party costs - Counsel fees - Apportionment - [See second Practice - Topic 7066] .

Practice - Topic 7080

Costs - Party and party costs - Witness fees and costs of preparation for trial or appeal - General - Calla, a successful plaintiff in a malpractice suit against a doctor, was awarded damages in excess of $4,000,000 - The plaintiff submitted a bill of costs totalling $240,325.60, including a claim for $66,500 for trial preparation, an amount equal to the amount claimed for counsel fee at trial - The doctor claimed that the amount claimed for trial preparation was excessive - The doctor argued that s. 3(2)(k) of the Tariff should be interpreted as prescribing a fee of $1,000 for each three days of trial, and since the trial lasted 28.5 days, the award for trial preparation should be $9,500 - Section 3(2)(k) of the Tariff provided that "(k) preparation for trial of an action or application (including preparation, set down. ... subject to discretion of trial judge to increase the costs in any class where trial exceeds three days ): CLASSES II, III and IV: $1,000" - The Manitoba Court of Queen's Bench stated that it was a distortion of the wording of s. 3(2)(k) to suggest that it provided for a fee of $1,000 for every three days of trial - Rather, the provision gave the judge unfettered discretion in determining the proper amount where the trial exceeded three days - There was no indication in s. 3(2)(k) that the $1,000 fee for trials of three days or less should form the basis for the exercise of the discretion for longer trials - See paragraphs 9 to 13.

Practice - Topic 7082

Costs - Party and party costs - Witness fees and costs of preparation for trial or appeal - Preparation for trial - [See second and third Practice - Topic 7066 and Practice - Topic 7080 ].

Practice - Topic 7082

Costs - Party and party costs - Witness fees and costs of preparation for trial or appeal - Preparation for trial - Calla, a successful plaintiff in a malpractice suit against a doctor, was awarded damages in excess of $4,000,000 - The plaintiff submitted a bill of costs totalling $240,325.60, including a claim for $66,500 for trial preparation, an amount equal to the amount claimed for counsel fee at trial - The doctor argued that the amount claimed for trial preparation was excessive - The Manitoba Court of Queen's Bench rejected the doctor's argument - The trial in this case was a lengthy one involving complex issues - There were numerous expert witnesses, entailing lengthy preparation - Moreover, the length and complexity of the trial was exacerbated by the fact that the doctor made no concessions, either in the area of liability or in the area of damages - Virtually every aspect of the case was strongly contested - The court stated that, in its view, it was reasonable to suggest that a trial of this nature would require at least a day of preparation for each day of trial - Therefore, using the tariff amount for trial attendance was a reasonable way to assess an amount for trial preparation - The amount of time required for preparation was confirmed by time records filed by plaintiff's counsel which showed that between the last pre-trial conference and the start of the trial a total of 286 hours was spent on trial preparation - The court therefore awarded $66,500 for trial preparation - See paragraphs 9 to 15.

Practice - Topic 7118

Costs - Party and party costs - Special orders - Interest on costs - A child, who was exposed to herpes during a vaginal birth, developed herpes encephalitis which resulted in neurological damage leaving her permanently with the mental age of a toddler - The mother and child (the plaintiffs) successfully sued the doctor who cared for the mother during her pregnancy - The plaintiffs' claim against a nurse and a home for single mothers was dismissed - The plaintiffs argued that interest on their award of costs should run from the date of judgment (December 20, 2007), rather than from the date when the costs issues were determined by the court (May 26, 2008) - The Manitoba Court of Queen's Bench noted that it had made no determination in its original judgment as to who was entitled to costs, but rather left the matter of costs to be spoken to if the parties could not agree - As a result, costs did not form part of the original judgment and interest on them should start to run from May 26, 2008 - See paragraphs 62 to 65.

Practice - Topic 7155

Costs - Party and party costs - Liability for party and party costs - Bullock order or Sanderson order - Where success divided - A child, who was exposed to herpes during a vaginal birth, developed herpes encephalitis which resulted in neurological damage leaving her permanently with the mental age of a toddler - The mother and child (the plaintiffs) successfully sued the doctor who cared for the mother during her pregnancy - The plaintiffs' claim against a nurse and a home for single mothers was dismissed - The plaintiffs claimed that the costs of the successful defendants (i.e., the nurse and the home) should be borne by their co-defendant, the doctor, under either a Bullock or a Sanderson order - The Manitoba Court of Queen's Bench held that it was reasonable for the plaintiffs to have joined the nurse and the home and to have kept them in the action until judgment - Thus a Bullock/Sanderson order would be fair in this case - The court held that the doctor was responsible for the costs owing to the nurse and the home as well as the costs owing to both plaintiffs - The court noted that none of the parties took a position as to which form of order, Bullock or Sanderson, was more appropriate; therefore, the court ordered the doctor to pay the costs directly (i.e., a Sanderson order) - See paragraphs 57 to 61.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - Calla, a successful plaintiff in a malpractice suit against a doctor was awarded damages in excess of $4,000,000 - She was unsuccessful in her claim against another defendant - The plaintiff submitted a bill of costs totalling $240,325.60 - Prior to the trial, the plaintiff's counsel had served both defendants with an offer to settle the case for $3,600,000, inclusive of damages, costs and disbursements - Since the award at trial was more favourable than the offer to settle, the plaintiff sought double costs under Queen's Bench Rule 49.10(1) from the date of the offer onwards - The doctor argued that the plaintiff was not entitled to double costs for trial preparation or written argument because that would result in an award of costs that would exceed her actual solicitor and client costs - The Manitoba Court of Queen's Bench held that, in fact, an award of double costs would not exceed the plaintiff's solicitor and client costs - Her legal fees were based on a contingency arrangement which would result in legal fees well in excess of a double costs order - The court stated that, in any event, while reasonable party and party costs would not generally exceed solicitor and client costs, the purpose of doubling costs where there had been a rejected offer to settle was not to compensate the successful party but to penalize the unsuccessful party - The court held that double costs were appropriate in this case resulting in an award of $250,000 - See paragraphs 24 to 30.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - Christina, a successful plaintiff in a malpractice suit against a doctor, was awarded damages of $268,000 - She was unsuccessful in a claim against another defendant - The plaintiff submitted a bill of costs totalling $107,000 - Prior to the trial, the plaintiff's counsel served both defendants with an offer to settle the case for $250,000, inclusive of damages, costs and disbursements - Since the award at trial was more favourable than the offer to settle, the plaintiff sought double costs under Queen's Bench Rule 49.10(1) from the date of the offer onwards - The Manitoba Court of Queen's Bench held that while it was necessary for Christina to have counsel separate from her daughter (co-plaintiff), the case against the doctor was put in primarily by the daughter's counsel - For that reason, the court did not believe that it would be appropriate to double the amounts awarded for trial preparation, trial attendance or written argument - Nevertheless, the fact that an offer to settle was made and rejected should be taken into account in some way, considering the objective of Rule 49 and the fact that the need for separate counsel for Christina was due to the doctor's unsuccessful counterclaim - As a result, the court increased the award for trial attendance by 50% - The award of costs was therefore $63,500 plus disbursements - See paragraphs 45 to 48.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - A child, who was exposed to herpes during a vaginal birth, developed herpes encephalitis which resulted in neurological damage leaving her permanently with the mental age of a toddler - The mother and child (the plaintiffs) successfully sued the doctor who cared for the mother during her pregnancy - The plaintiffs' claim against a nurse and a home for single mothers where the mother was residing was unsuccessful - The successful defendants (i.e., the nurse and the home) sought double costs because they had made an offer prior to trial that was not accepted (an offer to settle for $250,000 all-inclusive) - The Manitoba Court of Queen's Bench held that in light of amount of damages ultimately awarded and because it was reasonable for the nurse and the home to be named as defendants, it was not appropriate to penalize the plaintiffs for not accepting the offer - See paragraphs 53 to 54.

Practice - Topic 7249.1

Costs - Party and party costs - Offers to settle - Where multiple parties - Calla, a successful plaintiff in a malpractice suit against a doctor, was awarded damages in excess of $4,000,000 - A claim by the plaintiff against a nurse was dismissed - The plaintiff submitted a bill of costs totaling $240,325.60 - Prior to the trial, the plaintiff's counsel served both defendants with an offer to settle the case for $3,600,000, inclusive of damages, costs and disbursements - Since the award at trial was more favourable than the offer to settle, the plaintiff sought double costs under Queen's Bench Rule 49.10(1) from the date of the offer onwards - The doctor argued that the plaintiff was not entitled to double costs because the offer was made to both defendants and the doctor was not in a position to accept it without the cooperation of the co-defendant - The Manitoba Court of Queen's Bench noted that rule 49.11 specifically provided that where there were multiple defendants, the costs consequences of rejecting an offer to settle applied if the offer was made to all defendants, as it was here - Here, not only did the doctor not respond to the offer to settle, she contested every aspect of the case and pursued a claim, which in the court's view, had absolutely no merit - See paragraphs 24 to 30.

Cases Noticed:

Bachalo v. Robson et al., [1997] Man.R.(2d) Uned. 77 (Q.B.), revd. (1998), 129 Man.R.(2d) 1; 180 W.A.C. 1 (C.A.), refd to. [para. 12].

Morrison Petroleums Ltd. v. Phoenix Canada Oil Co. et al. (1998), 236 A.R. 95; 1998 ABQB 624, refd to. [para. 18].

Wesfoods Ltd. v. VS Services Ltd. et al. (1997), 124 Man.R.(2d) 154 (Q.B.), refd to. [para. 19].

Howael Ventures (1984) Inc. v. Andersen (Arthur) & Co., [1997] 3 W.W.R. 256; 116 Man.R.(2d) 255 (Q.B.), refd to. [para. 19].

Shillingford v. Dalbridge Group Inc. et al., [2000] 5 W.W.R. 103; 268 A.R. 324; 76 Alta. L.R.(3d) 361; 42 C.P.C.(4th) 214; 2000 CarswellAlta 48; 2000 ABQB 28, refd to. [para. 28].

Knock v. Dumontier et al. (2006), 208 Man.R.(2d) 121; 383 W.A.C. 121; 2006 MBCA 99, refd to. [para. 59].

Andree v. Pierce (1986), 41 Man.R.(2d) 262 (Q.B.), refd to. [para. 64].

Statutes Noticed:

Court of Queen's Bench Act, S.M. 1988-89, c. 4; C.C.S.M., c. C-280, sect. 84(1) [para. 63].

Rules of Court (Man.), Queen's Bench Rules, rule 49.10(1) [para. 24]; rule 49.11 [para. 25]; Tariff A, sect. 3(2)(k) [para. 11].

Authors and Works Noticed:

Orkin, Mark M., The Law of Costs (2nd Ed.) (2007 Looseleaf Supp.), pp. 2-179, 2-180 [para. 46].

Counsel:

Harvey I. Pollock, Q.C., Martin Pollock and Steven R. Hyman, for the plaintiff, Calla Preston;

John S. Michaels, for the plaintiff, Christina Preston;

Helga D. Van Iderstine and Gregory M. Fleetwood, for the defendant, Chi-Ieng Chow;

Kevin T. Williams, for the defendants, Elsie D'Eshambeault and Villa Rosa Inc.

This matter was heard before Greenberg, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following decision on May 26, 2008.