




CITATION: Lawson v. Viersen, 2012 ONCA 25



DATE: 20120116



DOCKET: C52688



COURT OF APPEAL FOR ONTARIO



Sharpe, Armstrong and Rouleau JJ.A.



BETWEEN



Martha Lawson



Plaintiff (Respondent)



and



Maria Viersen and John
          Viersen



Defendants (Appellants)



AND BETWEEN



Martha
          Lawson and James Lawson



Plaintiffs (Respondents)



and



Scott
          Robert Hart



Defendant (Respondent)



Jeffrey M. K. Garrett, for the appellants



Mason Greenaway, for the respondents, Martha Lawson and James
          Lawson



Gordon L. Robson, for the respondent, Scott Robert Hart



Heard: September 6, 2011



On appeal from the order of Justice
          C. Anne Tucker of the Superior Court of Justice, dated June 17, 2010, with
          reasons dated December 29, 2009 and April 27, 2010, with the April 27, 2010 reasons
          reported at 2010 ONSC 2465.



Rouleau J.A.:



[1]

This is an appeal of the costs ordered in the trial of the consolidated action
    of two claims involving successive motor vehicle accidents.  The appeal concerns
    the costs consequences of a plaintiffs failure to accept an offer to settle
    and of a co-defendants failure to accept an offer to contribute as well as a
    courts discretion in awarding and apportioning costs. More specifically, it involves
    the interpretation of s. 1 of the
Negligence Act
, R.S.O. 1990, c. N.1, the
    interplay between that section and rule 49.11 of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194, and the interpretation and application of
    rules 49.12 and 49.13.

[2]

Rule 49.11 provides that where two or more defendants are alleged to be
    jointly and severally liable and rights of contribution or indemnity
may
exist between the defendants, they must make a joint offer to settle to attract
    the costs consequences of rule 49.10(2).  Rule 49.12 concerns offers to
    contribute in cases involving multiple defendants and rule 49.13 gives a trial
    judge residuary discretion to consider offers to settle that do not meet the specific
    requirements of rules 49.10 and 49.11.

FACTS

Background

[3]

The respondent, Martha Lawson, was involved in
    two motor vehicle accidents that occurred approximately seven months apart.  The
    first accident, on August 16, 1997, involved the appellants, Maria
Viersen
    and John Viersen (collectively, the Viersens).  The second, on March 21,
    1998, was with the respondent, Scott Robert Hart.

Pleadings

[4]

On March 13, 2000, Ms. Lawson and her eldest
    son, James Lawson, (collectively, the Lawsons) commenced an action against Mr.
    Hart for injuries suffered by Ms. Lawson in the second motor vehicle accident
    and for damages claimed by James Lawson pursuant to the
Family Law Act
,
    R.S.O. 1990, c. F.3.  On April 10, 2001, Ms. Lawson commenced an action against
    the Viersens for injuries she suffered in the first motor vehicle accident. 
    Neither statement of claim made specific reference to the other motor vehicle
    accident.  Both claims, however, claimed damages in respect of injuries to the
    same areas of Ms. Lawsons body.

[5]

The position of Ms. Lawson, as well as her
    medical experts, was that both the first and second accidents contributed to
    the same damages and injuries she suffered.  For instance, it was alleged that
    both accidents contributed to, among others, a mild traumatic brain injury,
    cognitive deficits, a major depressive episode, general anxiety disorder, and chronic
    pain syndrome as well as to Ms. Lawsons income loss both before and after the trial.

[6]

Ms. Lawsons allegation that the first and
    second accidents contributed to overlapping injuries was also canvassed during
    the pre-trial conference before Riley J. on January 16, 2009.  The pre-trial
    conference resulted in a consent endorsement that both actions be tried
    together as a single consolidated action.

Offers to Settle

[7]

The following offers to settle were made:

(a)       Mr.
    Hart offered to settle by making a payment of $300,000 to the Lawsons, net of
    any advance payments and the statutory deductible under the
Insurance Act
,
    R.S.O. 1990, c. I.8, plus costs on a partial indemnity basis to be agreed upon
    or assessed (the Hart offer);

(b)       The
    Lawsons offered to settle the consolidated action for $1,250,000, plus costs to
    be agreed upon or assessed; and

(c)       The
    Viersens offered to settle or contribute by making a $100,000 payment to Ms.
    Lawson, plus costs as agreed upon or assessed (the Viersens offer or  the
    Viersens offer to contribute).

[8]

Each offer remained open for acceptance until the beginning of trial.  However,
    none of the offers was accepted.

Trial and Result

[9]

The trial commenced on March 23, 2009 and lasted
    approximately six weeks.  The jury found that the injuries suffered by Ms. Lawson
    in the two motor vehicle accidents were separate and distinct.  Therefore, the
    jury made separate damages assessments respecting each accident.

[10]

The jury found the Viersens 100 per cent
    responsible for the first motor vehicle accident and awarded $20,000 for
    general damages (resulting in an award of $5,000 net of the statutory
    deductible), plus prejudgment interest.  The jury did not award damages for
    past or future income loss.

[11]

The jury found that Mr. Hart was 75 per cent
    responsible for the second motor vehicle accident and awarded $100,000 in
    general damages (resulting in an award of $85,000 net of the statutory
    deductible), $321,000 in past income loss and $192,000 in future income loss. 
    The jury also awarded James Lawson damages of $12,000 pursuant to the
Family
    Law Act
.  Each award carried prejudgment interest.

[12]

Following the jurys award, the court found
    that, after taking into account the statutory deductibles,
[1]
Ms. Lawsons
    contributory negligence with respect to the second motor vehicle accident and
    the prejudgment interest, the total net amount awarded against the Viersens was
    $7,926.71 and the total net amount awarded against Mr. Hart was $344,260.37,
    for a total net damage award of $352,187.08.
[2]

[13]

The Lawsons sought costs of $519,378.92.  The
    Viersens argued that they should not pay costs but rather were entitled to
    recover their costs on the basis of rule 49.10(2).  They argued that their
    offer of $100,000 far exceeded the judgment of $5,000 obtained by Ms. Lawson
    with respect to the first accident.  In the Viersens view, their offer could
    be considered as a standalone offer and did not have to encompass the claim
    being made in the action against Mr. Hart as contemplated by rule 49.11.  The
    Viersens submitted that the accidents were separate, there was no issue between
    them and Mr. Hart and they did not attempt to shift the responsibility on Mr.
    Hart in making their case.

[14]

The trial judge rejected the Viersens
    position.  She confirmed that both defendants made offers but that the offers
    had not been made jointly in accordance with rule 49.11.  Although the Viersens
    offer exceeded the jury verdict, the trial judge found that the Hart offer was
    less than the award made against Mr. Hart.  Because the defendants were alleged
    to be jointly and severally liable for Ms. Lawsons injuries, only a joint
    offer to settle constituted an offer that complied with rule 49.11.  As a
    result, the trial judge declined to apply the costs consequences of rule
    49.10(2) with respect to the Viersens offer and found that the Lawsons were
    entitled to their costs in the consolidated action.

[15]

The trial judge accepted Mr. Hart and the Viersens
    submission that there was duplication in the work due to the number of new
    lawyers involved on behalf of the Lawsons in the consolidated action.  Accordingly,
    the trial judge reduced the amount of fees claimed by approximately 10 per cent. 
    She then awarded the Lawsons a total of $482,278.09 in fees and disbursements.

[16]

The Viersens submitted that the liability to pay
    the costs should be divided as between Mr. Hart and the Viersens on the same basis
    as the proportion of damages awarded against each of them.  In the Viersens
    view, since the Lawsons recovered $344,260.37 from Mr. Hart and Ms. Lawson only
    recovered $5,000 from the Viersens, virtually all of the costs should be paid
    by Mr. Hart.  The trial judge, however, rejected their submission.  She noted
    that it was a joint trial and that the time spent defending each action was
    similar.  She then exercised her discretion and apportioned costs of 35 per
    cent against the Viersens and 65 per cent against Mr. Hart.

[17]

The Viersens also sought to recover their costs
    from Mr. Hart pursuant to rule 49.12 on the basis that Mr. Hart ought to have
    accepted their offer to contribute $100,000 towards settlement of the
    consolidated action.  The trial judge rejected this submission finding that in
    the face of a $1 million joint claim it would not [have been] logical to
    accept the Viersens offer to contribute and, although the award against the
    Viersens was substantially lower than the offer, making an award of costs based
    on hindsight in the result was not appropriate in this case.

[18]

The Viersens appealed the costs order with leave
    of this court.

ISSUES

[19]

The issues raised on appeal are as follows:

(1)

Did the trial judge err in declining to apply
    the costs consequences of rule 49.10 against Ms. Lawson considering the
    Viersens offer to settle?

(2)

Pursuant to rule 49.13, should the Viersens and
    Hart offers have been taken into account in making the costs order?

(3)

Did the trial judge err in giving little or no
    weight to the Viersens offer to contribute made pursuant to rule 49.12?

(4)

Did the trial judge err in her apportionment of
    the costs awarded to the Lawsons?

PURPOSE OF RULE 49

[20]

The purpose of Rule 49 is to encourage parties to make reasonable
    offers to settle or to contribute by imposing costs consequences on those who
    do not reasonably assess the actual value of the case in advance of trial: see
    e.g.
Niagara Structural Steel (St. Catherines) Ltd. v. W.D. LaFlamme Ltd.
(1987), 58 O.R. (2d) 773 (C.A.);
Rooney (Litigation Guardian of) v. Graham
(2001), 53 O.R. (3d) 685 (C.A.).
This
    objective includes providing an incentive to plaintiffs and defendants to make
    settlement offers which represent some reasonable element of compromise: see
Walker
    Estate v. York-Finch General Hospital
(1999), 43 O.R. (3d) 461 (C.A.),
    affd without reference to this issue 2001 SCC 23, [2001] 1 S.C.R. 647 .


[21]

Costs consequences are result oriented.  Pursuant to rule 49.10,
    the terms of the offer are measured not against the claim advanced but rather
    against the judgment obtained in order to determine whether such offer is as
    favourable as, more favourable than or less favourable than the judgment.

[22]

For the purpose of comparing the offer with the judgment, the
    court considers not the judgment awarded by the jury, but the amount finally
    awarded by the trial judge plus prejudgment interest: see
Pilon v. Janveaux
(2006), 211 O.A.C. 19 (C.A).  This is the amount contained in the formal
    judgment that finally disposed of the action. However, statutory deductibles,
    mandated by s. 267.5(7) of the
Insurance Act
, are treated differently. 
    In
Rider v. Dydyk
, 2007 ONCA 687, 87 O.R. (3d) 507, leave to appeal to
    S.C.C. refused, [2007] S.C.C.A. No. 594, this court noted that the deductions
    from a plaintiffs assessed damages in a motor vehicle negligence case are not
    to be taken into account in determining whether the defendant is presumptively
    entitled to costs.  As a result, pursuant to s. 267.5(9) of the
Insurance Act
,
    the court determines a partys entitlement to costs without regard to the
    effect of the statutory deductions under s. 267.5(7)(3) of the
Insurance Act
on the amount of damages awarded for non-pecuniary loss and considers this
    amount against all of the terms of the offer.
[3]

[23]

With these general principles and policy objectives in mind, I
    turn now to the specific issues raised by this appeal.

DISCUSSION

(1)

Did the trial judge err in declining to apply the costs consequences of
    rule 49.10 against Ms. Lawson considering the Viersens offer to settle?

[24]

The parties agree that the Viersens offer complied with the requirements
    of rule 49.10 in that the judgment obtained by Ms. Lawson with respect to the
    Viersens liability was less favourable than the terms of the offer.  The
    issue, however, is whether in the circumstances of this case, rule 49.11
    operates such that the presumptive costs consequences of rule 49.10 do not
    apply in favour of the Viersens.

Rule 49.11: Multiple Defendants

[25]

Rule 49.11 provides that, where multiple defendants are alleged to be
    jointly or jointly and severally liable to the plaintiff in respect of a claim
    and rights of contribution or indemnity
may
exist between the
    defendants, the costs consequences prescribed by rule 49.10 do not apply to an
    offer to settle (emphasis added) unless, pursuant to rule 49.11(b):

(i)
    the offer is an offer to settle the plaintiffs claim against all the
    defendants and to pay the costs of any defendant who does not join in making
    the offer, or

(ii) the offer
    is made by all the defendants and is an offer to settle the claim against all
    the defendants, and, by the terms of the offer, they are made jointly and
    severally liable to the plaintiff for the whole amount of the offer.

[26]

In the present case, Ms. Lawson argues that the claim she advanced
    included claims for damages she suffered as a result of the combined effect of
    both motor vehicle accidents.    Therefore, she argues that the damages are
    indivisible and could not be attributed to one tortfeasor or the other.  In
    other words, both accidents contributed to the injuries she suffered, such as
    her major depressive episode.  Because of her claim that it was impossible to
    determine which defendant caused the damages and that each defendant materially
    contributed to her injuries, Ms. Lawson was of the view that the defendants
    should be jointly and severally liable for the entirety of her damages.  The
    defendants would then have rights of contribution and indemnity between them.

[27]

The fact that the jury found against Ms. Lawson on the issue of joint
    and several liability was, in Ms. Lawsons submission, of no moment because, to
    comply with rule 49.11, she need only advance a claim that
may
result in
    rights of contribution or indemnity.

[28]

The Viersens argue that where, as in the circumstances of this case,
    there are two separate and distinct actions arising from two torts separated in
    time, there is no possibility of joint and several liability and consequently,
    no rights of contribution or indemnity exist.  In their view, rule 49.11 should
    have no application.

Determining Joint and Several
    Liability and Rights of Contribution and Indemnity

[29]

Section 1 of the
Negligence Act
provides for a right of
    contribution and indemnity between concurrent tortfeasors.  Specifically, s. 1
    provides that:

Where damages have
    been caused or contributed to by the fault or neglect of two or more persons,
    the court shall determine the degree in which each of such persons is at fault
    or negligent, and, where two or more persons are found at fault or negligent,
    they are jointly and severally liable to the person suffering loss or damage
    for such fault or negligence, but as between themselves, in the absence of any
    contract express or implied, each is liable to make contribution and indemnify
    each other in the degree in which they are respectively found to be at fault or
    negligent.

[30]

The question raised by this appeal is whether, in order to come within
    that section, the damages in issue need to be caused or contributed to by
    multiple tortfeasors acting together or at the same time.  In other words, does
    s. 1 apply to create joint and several liability if (1) two torts are unrelated
    and separated in time, as they are in the present case; and (2) the damage
    suffered by the plaintiff as a result of both torts is indivisible and
    therefore cannot be divided as between the two tortfeasors.

[31]

Tortfeasors whose torts are separate in time but concur in the sense
    that they run together to produce the same damage are described by Glanville L.
    Williams,
Joint Torts and Contributory Negligence
: A Study of Concurrent Fault in Great Britain,
    Ireland and the Common-Law Dominions
(London: Stevens and Sons,
    1951), at p. 1, as concurrent tortfeasors.  These concurrent tortfeasors are
    distinguished from nonconcurrent tortfeasors where separate acts produce
    different damage to the plaintiff.  This was explained in the Ontario Law
    Reform Commission,
Report on Contribution Among Wrongdoers and Contributory
    Negligence
(Toronto: Ontario Ministry of the Attorney General, 1988), at p.
    8-9, as follows:

First, each of
    two or more concurrent wrongdoers ... is liable in
solidum
for the whole
    of the loss suffered by [the plaintiff].  However, in the case of
    non-concurrent, several tortfeasors, whose acts have produced different damage,
    each tortfeasor is liable ... only for the damage he has caused. ...  Secondly,
    because concurrent tortfeasors are responsible for the same damage,
    satisfaction by one discharges them all.  Accordingly ... there may be rights
    of contribution between such wrongdoers. [Footnotes omitted.]

[32]

The issue of joint and several liability was dealt with by this court in
Alderson v. Callaghan
(1998), 40 O.R. (3d) 136 (C.A.).  In
Alderson
,
    the plaintiff sued her common law spouse as result of injuries she sustained in
    a motor vehicle accident while a passenger in an automobile driven by her
    common law spouse.  The defence took the position that the extensive brain
    damage she suffered was not due to that accident but rather to a series of
    post-accident assaults inflicted on her by her common law spouse, a further
    assault committed by a stranger and her pre-existing conditions.  Relying on
Athey
    v. Leonati
,

[1996] 3 S.C.R. 458, this court held that, where damages
    caused by consecutive tortfeasors are indivisible, in that it is impossible to
    determine which tortfeasor caused which damages, the material contribution test
    applies.  In those circumstances, any tortfeasor whose actions materially
    contributed to those damages is liable for all of the damages and, pursuant to
    s. 1 of the
Negligence Act
, each tortfeasor has a right of contribution
    and indemnity from the other tortfeasors who caused the damages.

[33]

Subsequent case law, such as
Blackwater v. Plint
, 2005 SCC 58,
    [2005] 3 S.C.R. 3 and
Resurfice Corp. v. Hanke
, 2007 SCC 7, [2007] 1
    S.C.R. 333, has made it clear that the material contribution test is the
    exception.  It applies only if causation cannot be determined using the but
    for test.  Further, even if untangling different sources of damage and loss may
    be difficult, it is nonetheless the obligation of the trial judge or the jury
    to do so.

[34]

In
Martin v. Listowel Memorial Hospital
(2000), 51 O.R. (3d) 384
    (C.A.), leave to appeal to S.C.C. refused,
[1993] 3 S.C.R. vii,
this court described the purpose of s. 1 of the
Negligence Act
at
    para. 34 as facilitating full recovery of the loss for the plaintiff, while at
    the same time providing a mechanism for each of those who contributed to the
    loss to share the financial responsibility in the proportions of their
    respective degrees of fault.  At para. 35, this court went on to state that,
    as between the defendants, they are each entitled to contribution and
    indemnity to the extent of any overpayment to the plaintiff of their own
    proportionate share.  Any defendant who successfully claimed over against a
    third party is also entitled to contribution from that third party to the
    extent of that partys fault.

[35]

In summary, the
Negligence Act
makes concurrent tortfeasors, that
    is persons whose conduct causes a single loss to another, jointly and severally
    liable.  It also provides for the right of concurrent tortfeasors to claim
    contribution and indemnity from another tortfeasor provided the tortfeasor from
    whom he or she seeks contribution is, or could be if sued, liable to the
    plaintiff.  The statute is not concerned with the acts of several tortfeasors
    whose actions produce different damage to the same person.  In those
    circumstances, several tortfeasors are liable only for the damage they
    respectively caused.

Did Subsequent Decisions of this Court Change the
    Law?

[36]

The Viersens argue that
ONeil v. Van Horne
(2002), 59 O.R. (3d)
    384 (C.A.) and
Misko v. John Doe
, 2007 ONCA 660,
87
    O.R. (3d) 517
have limited the application of s. 1 of the
Negligence
    Act
to cases where the tortfeasors are concurrent in time, that is, the
    torts occurred at the same time.

[37]

I disagree.  In
ONeil
, it was alleged that the defendant had
    sexually assaulted the plaintiff when she was three years old and he was 12. 
    The defendant sought to add three third parties: the plaintiffs parents who
    allegedly abused her during childhood and a former boyfriend who had allegedly
    sexually assaulted her some 16 years after the events at issue in the action. 
    This court dismissed the appeal from the decision of the motion judge refusing
    to add the third parties.  The court did so on the basis that, although the
    stream of damages caused by the defendant may have come into confluence with
    other streams flowing from other tortious or non-tortious acts each tortfeasor
    was nonetheless answerable for its individual conduct but not for the conduct
    of others (at para. 10).  At para. 14, the court also noted that although it
    may be difficult to separate out the consequences, if any, of the defendants
    conduct from all the influences upon the plaintiff over the intervening years
    ... that is her task as a plaintiff.  In other words, the court concluded that
    this was not a case where two or more tortfeasors had caused single indivisible
    damage.  Rather, each tortfeasor may have aggravated the injury suffered by the
    plaintiff.

[38]

It should also be noted that in
ONeil
, the plaintiff only sought
    damages for which the defendant was solely to blame.  There was no indication
    that the plaintiff was seeking damages from the defendant as a contributor to
    her injuries along with other tortious or non-tortious causes.  As this court
    noted, at para. 14, because the tortfeasors [were] each distinct, the
    plaintiff could not have attempted to seek contribution for any damages she
    suffered as a result of the proposed third parties wrongdoing.

[39]

In
Misko
, the plaintiff was involved in two motor vehicle
    accidents 11 months apart.  He settled with the defendant in the first accident
    and gave him a standard form of release that included the usual term that he
    would not make any claim or take any proceeding against a person who might
    claim contribution or indemnity from that defendant.  The driver responsible
    for the second accident was unidentified so the plaintiff sued his own insurer,
    Liberty Mutual, since his policy included unidentified motorist coverage.

[40]

When Liberty Mutual became aware of the earlier accident, it brought a
    motion for leave to issue a third party claim against the tortfeasor in the
    first accident.  The leave to issue the third party claim was initially granted
    by Heeney J. but later struck.  In striking the third party claim, Desotti J.,
    relying on
ONeil
and
Listowel
, held that tortfeasors who are not
    concurrent tortfeasors (that he defined as existing or happening at the same
    time), cannot third party one another:
Misko v. Doe
(2006), 82 O.R.
    (3d) 535 (S.C.), at para. 47.  The Viersens rely on this statement as
    demonstrating that concurrent tortfeasors encompass only tortfeasors who were
    acting at the same time.

[41]

The Viersens argue that because this court dismissed the appeal, it
    effectively adopted Desotti Js interpretation of concurrent tortfeasors.  I
    disagree.  Although this court quoted, at para. 9, Desotti J.s comment that
    if defendants are not concurrent tortfeasors (existing or happening at the
    same time) then they cannot third party one another, this was not part of the
    courts reasoning and the court did not rely on that statement in dismissing
    the appeal.

[42]

In
Sale v. OGradys Restaurant
, 2011 ONSC 2837, Strathy J., in a
    thoughtful analysis, carefully reviewed the
Misko
decision and was of
    the view that this court was simply quoting Desotti J. without confirming the
    correctness of his statement.  As Strathy J. explained, the basis of this
    courts conclusion that the third party claim should be struck was that Liberty
    Mutual could never be at risk of having to compensate the plaintiff for the
    damages sustained in the first accident.  This was because the plaintiff had
    limited his claim against Liberty Mutual to the portion of damages for which
    Liberty Mutual would ultimately be responsible.  As set out by this court at
    paras. 17-18:

Assuming that,
    as alleged by Liberty Mutual, there is a single indivisible injury, this simply
    means that, applying
Athey v. Leonati
, both tortfeasors are fully liable
    for the injury.  The court, however, must still apportion responsibility
    between the tortfeasors.  Liberty Mutual will be responsible in the pending
    trial only to the extent that the unidentified driver caused or contributed to
    the damages claimed. ... Applying s. 1 [of the
Negligence Act
] to the
    circumstances of this case, at the trial between Misko and Liberty Mutual, the
    court will determine both the amount of damages suffered by Misko and the
    degree of responsibility attributable to the second accident.  In view of the
    plaintiffs position that this is all he seeks from Liberty Mutual (and that he
    does not rely on the full compensation principle in
Athey
), judgment
    will go against Liberty Mutual only for the damages for which the second
    tortfeasor is responsible.  If the damages are indivisible as is alleged by
    Liberty Mutual, this task may not be an easy one, but the court will have to
    make the determination.  [Footnotes omitted.]

[43]

In
Misko
, the court was presented with a very specific
    situation.  The plaintiff had conceded that he was not relying on the full
    compensation principle in
Athey
and did not seek compensation for the
    damages he sustained in the first accident since he had already reached a
    settlement in that regard.  As such, any judgment against Liberty Mutual, if
    liable to the plaintiff, would go against it only for the degree of its
    responsibility for the plaintiffs injuries.  In order to make it absolutely
    clear that the plaintiff was only claiming damages for the injuries for which
    the driver in the second accident was responsible, this court stated that the
    statement of claim should be amended in that regard.

[44]

In my view,
ONeil
and
Misko
did not narrow the concept of
    concurrent tortfeasors and, in the present case, the trial judge was correct to
    conclude that, because the defendants in the consolidated action were alleged
    to be jointly and severally liable to Ms. Lawson for indivisible injuries,
    rights of contribution or indemnity
may
exist between them.  As a
    result, the Viersens offer did not engage the costs consequences of rule 49.10
    as the offer did not comply with rule 49.11 respecting a joint offer from
    multiple defendants.  The
ONeil
and
Misko
decisions did,
    however, indicate that a plaintiff can accept an offer to settle from a
    concurrent tortfeasor and, by limiting the claim against the other concurrent
    tortfeasor in the manner set out in
Misko
, proceed against that other
    tortfeasor without giving rise to a possible third party claim.  As I will
    explain further in these reasons, this option was available to Ms. Lawson.

(2)

Pursuant to rule 49.13, should the Viersens and Hart offers have been
    taken into account in making the costs order?

[45]

This case presented the trial judge with a very particular and somewhat
    unusual set of circumstances.  Although neither the Viersens nor the Hart offer
    complied with rule 49.11, the total amount they offered in settlement exceeded
    the Lawsons recovery at trial.
[4]
It was, therefore, important for the trial judge to consider the impact of rule
    49.13.

[46]

Rule 49.13 provides that [d]espite rules 49.03, 49.10 and 49.11, the
    court, in exercising its discretion with respect to costs, may take into
    account any offer to settle made in writing, the date the offer was made and
    the terms of the offer.  This rule allows a judge to consider offers even
    though the offers do not comply with rules 49.10 or 49.11.  Rule 49.13 is not
    concerned with technical compliance with the requirements of rules 49.10 or
    49.11.  It calls on the judge to take a more holistic approach.

[47]

The trial judge made no specific reference to this rule in her brief
    reasons on costs.  Instead, the trial judge simply concluded that because the
    offers of Mr. Hart and the Viersens did not comply with rule 49.11, they should
    not recover costs and the Lawsons should recover their costs against both the Viersens
    and Mr. Hart.  The only adjustment made was a 10 per cent reduction in the fees
    being claimed in order to adjust for duplication in the work carried out by the
    Lawsons lawyers.  The trial judge concluded that, because the offers made by
    the defendants did not comply with rule 49.11, she [could not] consider them
    together, nor [could she] find that they [could] successfully stand on their
    own.  Although the Viersens offer exceeded the award made against them, the
    trial judge considered that:

[T]he [p]laintiff
    was being put in a position to make an impossible if not negligent choice of
    accepting one offer.  Only a joint offer would have allowed the [p]laintiff to
    be reasonably in a position to accept such offer without compromising [her]
    ability to recover against either of the other defendants.  Although the jury
    did not find a global assessment to be correct, [it] could have done so.  If
    Ms. Lawson had settled with the Viersens and the jury found that the Viersens
    were the parties that were mainly responsible for the injuries, her ability to
    recover would have been compromised.

[48]

In my view, the trial judge erred in the way she approached the issue of
    costs as between the Viersens and the Lawsons.  Although she correctly
    concluded that the failure to comply with rule 49.11 meant that she could not
    consider the Viersens offer alone or together with the Hart offer for purposes
    of rule 49.10(2), she was not prevented from considering the offers when
    exercising her discretion pursuant to rule 49.13.

[49]

In the circumstances of this case, it is significant that the combined
    Viersens and Hart offers exceeded the Lawsons recovery.  The reason that the
    combined total exceeded the Lawsons recovery was because of the Viersens
    offer.  When the Viersens offer is viewed in context rather than in isolation,
    it is therefore apparent that the offer was a genuine and generous offer to
    settle and, particularly when taken together with the Hart offer, complied with
    the spirit of rule 49.10.  In these circumstances, the Viersens offer is the type
    of offer that, as contemplated by rule 49.13, ought to be given considerable
    weight in arriving at a costs award.

[50]

Further, the trial judge appears to have discounted the fact the Viersens
    offer far exceeded the amount of the award made against them.  Although the
    allegation of joint and several liability meant that pursuant to rule 49.11 the
    presumption of costs consequences in rule 49.10 did not apply, it would not, as
    the trial judge found, have been impossible or negligent for Ms. Lawson to
    have accepted the Viersens offer.  The claim of joint and several liability
    that made the Viersens offer non-compliant with rule 49.11 was not made out at
    trial.  In light of the jurys award, the Viersens offer can, therefore, only
    be seen as having been very reasonable.  Contrary to the view expressed by the
    trial judge, it would have been no more impossible or negligent for Ms. Lawson
    to have accepted the Viersens offer, than for any plaintiff to accept an offer
    to settle for an amount substantially less than the amount claimed.  Given the
    outcome at trial, an accurate assessment of Ms. Lawsons claim was that there
    was no joint and several liability.  As a result, accepting the Viersens offer
    would not have prejudiced the claim against Mr. Hart and, therefore, would have
    been the correct decision.

[51]

Additionally, as the cases of
ONeil
and
Misko
show, even if
    there is a possibility of joint and several liability, a plaintiff can settle
    with one defendant and continue his or her action against a co-defendant
    provided that the plaintiff agrees to limit his or her recovery from the
    co-defendant to the damages caused by that defendant.

[52]

In my view, the trial judge erred in failing to consider or in giving
    inadequate weight to the fact that the combined offers exceeded the Lawsons
    recovery at trial, the fact that the Viersens offer substantially exceeded the damages
    awarded against them and the fact that, given the outcome of the trial, Ms. Lawson
    could have accepted the Viersens offer without compromising her right to
    recover against Mr. Hart.  These were significant factors that weighed heavily
    in favour of limiting the award of costs against the Viersens to the costs
    incurred before the date of their offer and militated in favour of allowing the
    Viersens to recover some of their costs.  As a result, the award of costs
    against the Viersens cannot stand.

[53]

The Viersens should only be responsible for the Lawsons costs up to the
    date the Viersens offer was served.  Using the allocation made by the trial
    judge, I would order costs against the Viersens equal to 35 per cent of the
    Lawsons costs incurred to the date of the Viersens offer less a reduction of
    10 per cent in the amount claimed for fees to account for duplication in the
    work.  I would also allow the Viersens to recover their partial indemnity costs
    from the date of their offer.  For the reasons that follow, however, I would
    make these payable by Mr. Hart.

(3)

Did the trial judge err in giving little or no weight to the Viersens
    offer to contribute made pursuant to rule 49.12?

[54]

The Viersens offer to settle for $100,000 was also an offer to
    contribute to Mr. Hart pursuant to rule 49.12(1).  Rule 49.12(2) provides that [t]he
    court may take an offer to contribute into account in determining whether
    another defendant should be ordered, (a) to pay the costs of the defendant who
    made the offer; or (b) to indemnify the defendant who made the offer for any
    costs that defendant is liable to pay to the plaintiff or to do both.  Pursuant
    to rule 49.12(3), rule 49.13 also applies to an offer to contribute made in
    accordance with rule 49.12(1) as if it were an offer to settle.

[55]

According to rule 49.12(2), costs consequences pertaining to an offer to
    contribute are discretionary, not presumptive as is the case with rule 49.10. 
    More specifically, rule 49.12(2) provides that the court
may
consider an
    offer to contribute in making an award of costs.

[56]

Although the Viersens acknowledge that rule 49.12(2) is permissive, they
    argue that the trial judges reasons for declining to give effect to the offer
    would leave that rule devoid of any meaning and would also go against the
    policy objectives of that rule.  Similar to rule 49.10, the purpose of rule 49.12
    is to encourage parties to make reasonable offers to contribute to
    co-defendants by providing that, if the results after trial show that the offer
    should have been accepted, it will weigh in favour of awarding the party having
    tendered the offer a more favourable costs order than otherwise would have been
    the case.  As a general rule, the reasonableness of an offer to contribute is
    measured against the judgment.

[57]

The trial judge rejected the Viersens submission that Mr. Hart should
    have accepted the offer to contribute stating that: in the face of a $1
    million joint claim it would not be logical to accept [the] Viersens offer
    to contribute.  In light of the decision of the jury, [the Viersens] argument
    has some validity but to make the costs rest upon hindsight in the result in
    this case is not appropriate I find.

[58]

In my view, the trial judge erred by refusing to consider the
    reasonableness of the Viersens offer to contribute in light of the result
    obtained.  Nothing in the record or her reasons explain why the offer should be
    viewed as anything but a good faith effort by the Viersens to extricate
    themselves from what would be a lengthy trial by offering to contribute
    significantly more than the award of damages ultimately awarded against them at
    trial.  The trial judges analysis failed to properly consider both the purpose
    and mechanism of offers to contribute under rule 49.12 as encouraging
    reasonable offers to contribute by exposing a co-defendant to possible costs
    consequences.

[59]

In my view, the Viersens offer to contribute should have weighed heavily
    in favour of ordering that Mr. Hart pay the Viersens costs as contemplated by
    rule 49.12(2)(a).  As a result, I would order Mr. Hart to pay the Viersens their
    partial indemnity costs incurred from the date of their offer to contribute.

(4)

Did the trial judge err in her apportionment of the costs awarded
    to the Lawsons?

[60]

The Viersens argue that the trial judge erred in not apportioning the
    Lawsons costs on a pro-rata basis in accordance with the proportionate amount
    of damages awarded against the Viersens and Mr. Hart and in failing to take
    into account the relative success of the Lawsons.

[61]

The force of these submissions is substantially reduced in light of the
    changes I would make to the award of costs.  In any event, the apportionment of
    costs is a discretionary order and I see no basis to interfere with the trial
    judges order in that respect.

CONCLUSION

[62]

In conclusion, I would allow the appeal and vary the costs order to
    provide that the Viersens are to pay 35 per cent of the Lawsons costs incurred,
    but only up to the date of the Viersens offer, less a 10 per cent adjustment to
    the fees component to account for duplication in the work.  I would also order
    that Mr. Hart pay the Viersens partial indemnity costs incurred from the date
    of the Viersens offer to contribute in the agreed upon amount of $149,071.  I
    would also award the Viersens their costs of the appeal fixed at $33,000
    inclusive of disbursements and applicable taxes.  Mr. Hart is to pay $16,500 of
    the costs and the Lawsons are to pay the balance of $16,500.

Paul Rouleau J.A.

I agree Robert J.
    Sharpe J.A.

I agree R.P. Armstrong
    J.A.

RELEASED:






[1]
The applicable statutory deductibles under s. 267.5(7)(3) of the
Insurance
    Act
are as follows: (1) $15,000 in the case of damages for non-pecuniary
    loss other than damages for non-pecuniary loss under s. 61(2)(e) of the
Family
    Law Act
and (2) $7,500 in the case of damages for non-pecuniary loss under s.
    61(2)(e) of the
Family Law Act
.  Pursuant to s. 267.5(7)(4) of the
Insurance
    Act
, the award for damages is reduced by the statutory deductibles before
    the damages are apportioned for contributory negligence.  Therefore, in this
    case, the total amount of statutory deductibles under s. 267.5(7)(3) of the
Insurance
    Act
is $37,500. Other deductions considered in the determination of the net
    damage award relate to the calculation of net income loss.



[2]
Counsel for the respondents Lawsons provided a detailed calculation of the
    damage award and arrived at a slightly lower figure.  Nothing turns on this
    difference.  Counsel confirmed that, after reconciliation of the total damages
    awarded by the jury and the statutory deductibles under s. 267.5(7)(3) the
Insurance
    Act
, the deductions related to income loss, the deduction for contributory
    negligence, the deduction for Mr. Harts advance payment of $10,000, and the
    addition of pre-judgment interest, the net damage award against the Viersens
    was $7,167.50 and the net damage award against Mr. Hart was $344,268.37, for a
    total net damage award of $351,435.87.



[3]
The effect of the statutory deductible in the case of the damage award against
    the Viersens is $15,000. In the case of the damage award against Mr. Hart, the
    effect of the statutory deductibles is 75 per cent of the total amount of the
    statutory deductibles of $15,000 and $7,500, considering that Mr. Harts
    negligence was assessed by the jury at 75 per cent and Ms. Lawsons
    contributory negligence was assessed at 25 per cent.  For this reason, the
    effect of the statutory deductibles on the damage award against Mr. Hart is
    $16,875.  Therefore, the combined effect of the statutory deductibles on the
    total damage award is $31,875.



[4]
According to the trial judge, the total net damage award with prejudgment
    interest was $352,187.08 (as noted earlier, the reconciliation provided by
    counsel for the respondents Lawsons uses the slightly lower figure of
    $351,435.87 for the total net damage award, however, this is of no consequence
    for the calculations that follow).  While the offers were made net of the
    statutory deductible, even if the total amount of $31,875 with regard to the
    effect of the statutory deductibles under s. 267.5(7)(3) of the
Insurance
    Act
(see note 3, above) is added back to the net damage award of
    $352,187.08 in accordance with this courts decision in
Rider
, the
    combined Viersens and Hart offers of $400,000 still exceeded the total net
    damage award plus the effect of the statutory deductibles, which amounts equal
    $384,062.08.  Finally, counsel for the respondents Lawsons advised that Mr.
    Hart made a $10,000 advance payment.  It is unclear as to whether this payment
    was made before or after the Viersens and Hart offers, however, even if the
    $10,000 advance payment is added to the above amount, the combined Viersens and
    Hart offers nonetheless exceeded this amount.


