The Ontario Court of Appeal reiterated its disapproval of distributive cost orders but upheld a trial judge’s decision to disallow the successful plaintiff the costs of an expert where the expert’s evidence is of marginal value to the case.

Fuller v. Aphria Inc., 2020 ONCA 465

Facts and Issues

At trial, the judge awarded the successful Plaintiff partial indemnity costs of $74,408.  In making that decision the trial judge disallowed the Plaintiff’s disbursement for one of the Plaintiff’s experts regarding damages ($16,950), finding that the expert’s work had been a “mathematical exercise” as opposed to an expert opinion.

The Plaintiff appealed, arguing that “the expert’s evidence contained information that was useful in the assessment of damages, even though the application judge did not accept the ultimate conclusion” and that the refusal to award costs for that disbursement amounted to “an exercise of distributive costs” (whereby a court determines costs “by success on each issue rather than by reference to overall success in the litigation)

HELD: For the Defendants; appeal dismissed. 

1. The Court reiterated its disapproval of the practice of “distributive costs”, but rejected the Plaintiff’s argument that the trial judge employed it in this case

[5]   We disagree with the appellants that the disallowance of an element of a successful party’s costs on the basis contended for in this case would amount to a distributive costs order. The latter involves an issue by issue review of the result of litigation, with the costs being determined by success on each issue rather than by reference to overall success in the litigation: Armak Chemicals Ltd. v. Canadian National Railway Co., 1991 CarswellOnt 440 (C.A.), at paras. 13, 19-20; Wesbell Networks Inc. v. Bell Canada, 2015 ONCA 33, at para. 21.

[6]   There is no suggestion here that the appellants should not receive costs because of a lack of success on any issue. The appellants were ultimately successful on the issues of liability and damages (although not in the quantum they sought). The question here is different. It is whether the appellants should be reimbursed for a specific disbursement, that is, whether the disbursement goes beyond what should be properly recoverable by a successful party in a partial indemnity costs award.

2. The Court held that in determining whether or not to award a successful litigant costs for an expert disbursement, it should consider how useful the expert’s evidence was to that litigant’s case:

[7]   In determining whether and to what extent disbursements to an expert  should be allowed, the court considers, among other things, whether the expert made a contribution to the case and whether the evidence was of marginal value or crucial to the case: Hamfler v. 1682787 Ontario Inc., 2011 ONSC 3331, at para. 17; R & G Draper Farms (Keswick) Ltd. v. Nature's Finest Produce Ltd., 2016 ONCA 626, 133 O.R. (3d) 395, at para. 20. We agree with the respondents that the disbursement to the expert should not be recoverable in this case. It is difficult to see any value contributed by the evidence of the expert. The evidence essentially consisted of the multiplication of publicly available share prices by the number of options the appellants held, and the subtraction, from the resulting total, of the exercise price. We agree with the description of that exercise as a mathematical one, not opinion evidence. To the extent the mathematics produced amounts based on the share prices at which the appellants claimed they would have disposed of the shares, they were premised on an assumption that was not proven to the satisfaction of the application judge and were thus not useful. To the extent the expert’s evidence contained other calculations based on share prices on different dates, or raw material from which still other calculations could be done, again, that raw material was simply publicly available share price data and the calculations were simply mathematics; expert evidence was not required.