COURT OF APPEAL FOR ONTARIO

CITATION: Bondy-Rafael v. Potrebic, 2019 ONCA 1026

DATE: 20191231

DOCKET: C66487

Lauwers, van Rensburg and Roberts JJ.A.

BETWEEN

Krystal Lynn Bondy-Rafael, Tanner Curtis Eyraud,
a minor by his Litigation Guardian, Leeann Rafael, Spencer Ouellette,
a minor by his Litigation Guardian, LeeAnn Rafael and
LeeAnn Rafael

Plaintiffs (Respondents)

and

Soka Potrebic, Dane Potrebic
,
The
    Estate of Luigi Pipolo, by his Estate Trustee, Enza Mary Pipolo, Enza Mary
    Pipolo, Anthony Lino Pipolo, Anthony Pipolo Incorporated
and the Corporation
    of the City of Windsor

Defendants (
Appellants
/
Respondents
)

Sheldon A. Gilbert, Q.C., for the appellants

Brian A. Foster and Anne C.
    Davenport, for the respondents, The Estate of Luigi Pipolo, by his Estate Trustee,
    Enza Mary Pipolo, Enza Mary Pipolo, Anthony Lino Pipolo, and Anthony Pipolo
    Incorporated

Alan L. Rachlin, for the
    respondents, Krystal Lynn Bondy-Rafael, Tanner Curtis Eyraud, a minor by his
    Litigation Guardian, LeeAnn Rafael, Spencer Ouellette, a minor by his
    Litigation Guardian, LeeAnn Rafael, and LeeAnn Rafael

Heard: August 28, 2019

On appeal from the order of Justice Justice J. Paul R.
    Howard of the Superior Court of Justice, dated August 31, 2018.

Roberts
    J.A.:

A.

Overview

[1]

This appeal turns on the correct analytical approach to be followed in
    the fixing of costs when an action is settled before its adjudication on the
    merits.

[2]

On May 4, 2004, the then infant plaintiffs, Krystal Lynn Bondy-Rafael
    and Tanner Curtis Eyraud, were catastrophically injured when struck by the SUV
    driven by Soka Potrebic while they were waiting for their mother to pick them
    up from the Pipolos plaza. There was no issue that these plaintiffs damages
    exceeded by several millions of dollars the Potrebics and the Pipolos respective
    third party liability policy limits.

[3]

The Potrebics appeal from the order of the motion judge that required
    them to pay all the plaintiffs partial indemnity costs in the amount of
    $927,934.08, without any contribution from the Pipolo respondents (the
    Pipolos), but net of an agreed upon contribution by the City of Windsor. While
    they also take issue with the quantum of the costs award, the main thrust of
    their appeal challenges the motion judges apportionment of liability for
    damages as the basis for apportioning costs following a settlement.

[4]

The background to the settlement is as follows. The plaintiffs reached a
    settlement with the City of Windsor in 2014. After more than ten years of
    litigation, the remaining parties agreed to settle the action in June 2017,
    about three months before the four-month trial of the action was scheduled to
    commence. The plaintiffs settled their claims as against the Potrebics for $1 million
    plus accrued interest
[1]
,
    and as against the Pipolos for $1 million, plus costs to be determined by the
    court and allocated between the Potrebics and the Pipolos. The settlement and
    the fees and disbursements payable to plaintiffs counsel were approved by the
    motion judge, who had also been assigned to hear the trial.

[5]

The motion judge later heard argument on the issue of costs payable to
    the plaintiffs by the Potrebics and the Pipolos. The plaintiffs disbursements
    were conceded, although their apportionment was not. The Potrebics and the
    Pipolos each argued that the other should be primarily responsible for the
    payment of the plaintiffs costs.

[6]

The motion judge assessed the Potrebics and the Pipolos respective
    liability based on his view of the merits of the action and concluded that the
    Potrebics were entirely responsible for the plaintiffs damages. As a result, he
    found the Potrebics solely responsible to pay the plaintiffs partial indemnity
    costs.

[7]

For the reasons that follow, I would allow the appeal and re-allocate
    liability for the plaintiffs costs equally between the Potrebics and the
    Pipolos consistent with their respective settlement contributions. In the
    circumstances of this case, the motion judge erred in his approach to fixing
    the plaintiffs costs following the settlement by apportioning costs based on
    his assessment of what would have been the respective liability of the parties
    for damages at trial.

B.

Issues

[8]

The Potrebics raise two issues:

(i)

The motion judge erred in his apportionment of costs as between the
    Potrebics and the Pipolos.

(ii)

The motion judge erred in the amount of costs awarded to the plaintiffs.

[9]

Before addressing these issues, I set out the background facts.

C.

Background facts

(1)

The accident and the injuries

[10]

For the purposes of this appeal, a brief summary of the relevant
    background and unchallenged facts suffices.

[11]

On May 4, 2004, Ms. Bondy-Rafael, who was then 17 years old, worked
    part-time at the nursery school that her then 2-year-old brother, Mr. Eyraud,
    attended. The nursery school was located two doors south of the Pipolos plaza.
    At the end of the nursery school day, Ms. Bondy-Rafael took her brother to get
    a snack at a convenience store located in the plaza. They sat outside the
    convenience store while they waited for their mother, LeeAnn Rafael, to pick
    them up. Other than a shallow curb, there were no barriers between the plazas
    parking lot and the area where Ms. Bondy-Rafael and Mr. Eyraud were seated.

[12]

Without warning, Dane Potrebics SUV, driven by Ms. Potrebic, left the
    parking lot, drove over the curb, and hit Ms. Bondy-Rafael and her brother.
    They were both catastrophically injured. Neither of them will ever be able to
    live independently or to support themselves financially.

(2)

The action and settlement

[13]

In 2006, the plaintiffs, by their litigation guardian, Ms. Rafael, sued
    the Potrebics, the Pipolos, and the City of Windsor. They pleaded that Ms.
    Bondy-Rafael and Mr. Eyraud were catastrophically injured by the accident.
    Plaintiffs counsel estimated the plaintiffs damages to be
:
    $18.8 million for Mr. Eyraud; $5.6 million for Ms. Bondy-Rafael; $300,000 for Ms.
    Rafaels
Family Law Act
, R.S.O. 1990, c. F.3 (
FLA
) claims;
    and $225,000 for Spencer Ouellettes
FLA
claims.

[14]

The plaintiffs sought damages against the Potrebics on the ground that
    Ms. Potrebic was negligent in her operation of the motor vehicle that struck
    and catastrophically injured Ms. Bondy-Rafael and Mr. Eyraud. Their claim
    against the Pipolos alleged negligence on the basis that they failed to install
    barriers in the parking lot that would have prevented the vehicle from jumping
    the curb and hitting Ms. Bondy-Rafael and Mr. Eyraud. The plaintiffs claimed
    damages against the City of Windsor on the ground that it had jurisdiction over
    the area where the Pipolos plaza was located and was responsible for
    promulgating and enforcing bylaws and standards affecting the plaza, which were
    deficient and failed to protect the plaintiffs.

[15]

In 2007, the Potrebics counsel advised the plaintiffs that their third
    party liability policy limits were capped at $1 million, inclusive of interest,
    plus costs. The Potrebics offered to pay their policy limits to settle the
    action, provided that the plaintiffs agreed to limit their liability to the $1
    million policy limit. In September 2007, the Potrebicss insurer paid $1
    million into an interest-bearing trust account. When the investment matured on September
    12, 2017, its total value was $1,117,544.77 inclusive of interest.

[16]

The plaintiffs did not accept the Potrebics offer at that time because
    of the obligation to limit the Potrebics liability. Over the next ten years, they
    pursued the Pipolos to contribute to the settlement. To that end, they secured
    three experts reports supporting their allegation of negligence against the
    Pipolos. The Pipolos obtained their own experts report that disputed the
    opinions of the plaintiffs experts and expressed the view that the Pipolos
    were not negligent. The Pipolos third party liability policy limits were fixed
    at $2 million, including interest.

[17]

In 2010, the plaintiffs settled their statutory accident benefits claims
    with their own insurer for a total of $3,007,903.97 without litigation.

[18]

On June 20, 2014, the court approved the settlement of the plaintiffs
    claim against the City of Windsor in the amount of $400,000, plus $100,000
    towards the plaintiffs legal fees, inclusive of HST, and $50,000 for
    disbursements, inclusive of HST, based on a Mary Carter Agreement.

[19]

The trial of the action was estimated to take four months and scheduled
    to commence on September 5, 2017. In June 2017, the remaining parties achieved
    a settlement, subject to court approval. All issues were settled, except for
    the amount of costs to be paid to the plaintiffs and the apportionment of costs
    as between the Potrebics and the Pipolos. The minutes of settlement provided
    that the costs would be determined by a judge of the Superior Court of Justice.

[20]

On November 24, 2017, the motion judge approved the settlement. The
    judgment provided that the defendants shall pay to the plaintiffs their costs
    in an amount and allocated amongst the defendants in accordance with a further
    order to be made by a judge of this Court and that they were collectively
    entitled to a credit against the plaintiffs costs in the amounts paid by the
    City of Windsor - $100,000 for fees and $50,000 for disbursements, including
    HST.

[21]

The motion judge also approved the fees payable by the plaintiffs to
    their counsel pursuant to their contingency fee agreement, under which the
    plaintiffs agreed to pay their counsel 30 percent of any amount awarded in
    settlement or after trial. The motion judge fixed counsel fees for the tort action
    and the statutory accident benefits claims in the amount of $1,222,996.68,
    inclusive of HST.

(3)

Fixing of costs

[22]

The parties later appeared before the motion judge on a motion to have
    the plaintiffs costs fixed. They filed the settlement brief prepared by plaintiffs
    counsel for the approval of the settlement, including the contingency fee
    agreement, a brief of counsels dockets, the voluminous medical reports and
    clinical records in relation to the injuries suffered by Ms. Bondy-Rafael and
    Mr. Eyraud, as well as the four experts reports submitted by the parties
    concerning the configuration of the Pipolos plaza. There was a conflict
    between the plaintiffs and the Pipolos experts.

(a)

The positions of the parties

[23]

The plaintiffs three experts opined that the Pipolos plaza was
    negligently configured in that it lacked any barriers, such as bollards, in
    front of the parking lot that they stated would have prevented the accident.
    The Pipolos sole expert disagreed and was of the view that the plaza was
    configured in accordance with relevant standards. No cross-examinations of any
    of the experts occurred and there was no oral evidence called at the hearing of
    the costs motion.

[24]

The Potrebics position was that the Pipolos should bear most of the
    plaintiffs costs. They submitted that the Pipolos delay in admitting
    liability increased the plaintiffs costs. They pointed to their 2007 offer to pay
    their policy limits and submitted that the Pipolos should pay a significantly
    greater percentage of the costs award. Finally, they stated that the costs of
    particular motions for which costs had been fixed should be excluded from the
    plaintiffs costs, as well as costs of a motion for summary judgment brought by
    the Pipolos, in which the Potrebics did not participate, and which was under
    reserve at the time of the settlement.

[25]

The Pipolos submitted that the motion judge should apportion costs
    between them and the Potrebics based on their respective liability for the
    plaintiffs damages. They argued that the Potrebics were entirely responsible
    for the plaintiffs injuries and that the plaintiffs theory of the Pipolos
    liability was dubious. They relied on their own experts report to exonerate
    them from any negligence in the configuration of their plaza. They submitted
    that, as a result, they should pay no costs.

(b)

The decision under appeal

[26]

The motion judge organized his reasons around three principal issues on
    the fixing of costs: the scale of the plaintiffs costs; the amount of the
    plaintiffs costs; and the apportionment of the responsibility to pay the
    plaintiffs costs as between the Potrebics and the Pipolos.

[27]

With respect to the first two issues, the motion judge rejected the
    plaintiffs request that their costs be fixed on a full indemnity scale and
    ordered that they be awarded on a partial indemnity basis. He then fixed the
    plaintiffs partial indemnity costs for the tort action, net of the City of Windsors
    settlement contribution, in the amount of $800,000 for fees, including HST, and
    $127,934.08 for disbursements (the amount of the disbursements was conceded and
    is not challenged on appeal).

[28]

In establishing the quantum of costs, the motion judge took into
    consideration the factors listed at r. 57.01(1) of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194. In particular, he considered the amount
    of the plaintiffs recovery in terms of the settlement of the tort action
    combined with the settlement of the statutory accident benefits claim.

[29]

On the apportionment of the costs between the Potrebics and the Pipolos,
    the motion judge adopted the Pipolos suggested analysis. The motion judge
    followed the approach applied by the trial judge sitting without a jury in
Mortimer
    v. Cameron
(1994), 17 O.R. (3d) 1 (C.A.), leave to appeal refused, [1994]
    S.C.C.A. No. 150, and apportioned the Potrebics and the Pipolos liability for
    costs in accordance with his view of what would have been the apportionment of
    liability for the plaintiffs damages after a trial. In taking this view, the
    motion judge relied on the opinion of plaintiffs counsel submitted for the
    purposes of the settlement approval motion that there was a significantly less
    than 50/50 chance of any recovery against the Pipolos if the matter went to
    trial. He also relied on the expert report provided by the Pipolos to conclude
    that the Pipolos were not negligent in the configuration of their plaza and
    should not bear any responsibility for the plaintiffs costs.

[30]

The motion judge held that the Potrebics were solely responsible for the
    payment of costs to the plaintiffs.

[31]

I now turn to address the issues of apportionment and quantum.

D.

Analysis

(1)

Apportionment of liability and of costs

[32]

I begin by considering the motion judges approach. In assessing the
    respective liability of the Potrebics and the Pipolos for the plaintiffs damages,
    the motion judge noted that the evidence is quite clear that the negligence of
    the Potrebic defendants caused the injuries in question. The liability of the
    Potrebic defendants is not in question.

[33]

With respect to the Pipolos, however, the motion judge concluded that
    there was little, if any, evidence before [him] on this hearing (or the record
    as a whole) to establish liability on the part of the Plaza defendants on the
    basis of [a very novel argument, that is, that the Plaza defendants should have
    installed bollards at the Lauzon Plaza] and that [i]n the absence of evidence
    before the court establishing that the Plaza [Pipolo] defendants were negligent
    in a manner that contributed to the injuries sustained to the plaintiffs, it is
    inappropriate to apportion to them any responsibility for the payment of costs
    of this matter.

[34]

The motion judge accepted the plaintiffs submission, supported by the
    Pipolos, that the jurisprudence overwhelmingly supports the proposition that
    costs should be apportioned amongst defendants in the same proportion as their
    respective liability for damages. He cited the
Mortimer

case,
Wright
    v. Wal-Mart Canada et al.
, 2010 ONSC 2936, and
Gorman v. Falardeau
,
    2004 CanLII 14959 (Ont. S.C.), in support of that proposition.

[35]

The Potrebics submit that the motion judge erred in undertaking an
    assessment of the respective liability of the Potrebics and the Pipolos for the
    plaintiffs damages in order to apportion costs.

[36]

I agree. The motion judge erred in principle by purporting to rely on
    the apportionment of liability as a general principle that must invariably be
    applied in fixing costs following a settlement of the issue of liability for
    damages, both as a matter of principle, and as a matter of procedure.

(a)

The motion judge erred in principle

[37]

The jurisprudence relied upon by the motion judge does not support the
    determination of the apportionment of liability for damages at a costs hearing.
Mortimer
does not stand for the general proposition that the apportionment
    of costs must always replicate the apportionment of liability for damages. In
Mortimer
,
    the question was whether the apportionment of costs between defendants should
    follow the apportionment of liability made
following a trial
. This court
    determined that the apportionment of costs should follow the apportionment of
    liability
in that particular case
but did not state, as a general rule,
    that it should be followed in all cases.

[38]

Wright
and
Gorman
also do not support the motion
    judges position. In both

cases, costs were apportioned between
    defendants
following a trial
on the merits. Moreover, in
Wright
,
    the court held that it would not be just in the circumstances to reduce the
    plaintiffs entitlement to costs by her five percent contribution to liability,
    meaning that costs were not strictly apportioned according to each parties
    respective liability for damages: see para. 30.

[39]

Indeed, the jurisprudence indicates that costs are not always
    apportioned in accordance with the co-defendants respective liability with
    respect to damages. In
Burns v. Hedge

(2001), 146 O.A.C. 333
    (C.A.), this court held that the motion judge who determined the relative and
    different obligations of three insurers funding the settlement of the
    plaintiffs action, on the basis of the statutory minimum under the
Insurance
    Act
and the limits under the respective insurance policies, should have
    apportioned costs equally among them.

[40]

More recently, in
Gendron v. Thompson Fuels
, 2018 ONSC 2079, 18
    C.E.L.R. (4th) 178, at para. 38, the motion judge refused to apportion the
    plaintiffs costs on the same percentage basis as liability, observing that the
    apportionment of costs calls for a more nuanced analysis. This court upheld
    his decision: 2019 ONCA 293, 56 C.C.L.T. (4th) 33, at para. 123, leave to
    appeal refused, [2019] S.C.C.A. No. 228.

(b)

The motion judge erred procedurally

[41]

The motion judge erred in fixing costs following the settlement of the
    action by carrying out an apportionment of the liability between the Potrebics
    and the Pipolos for the plaintiffs damages, without a proper record and a
    trial on the merits.

[42]

Permitting the adjudication of the parties respective liability for
    damages following settlement would run contrary to the purpose of settlements
    and trial fairness. By their settlement, parties agree to resolve the issue of
    the parties respective potential liability for the plaintiffs damages without
    a trial. It would therefore be inappropriate for the court to embark on a full
    examination and adjudication of the merits of the parties substantive claims
    and defences for the sole purpose of determining the question of costs:
Waterloo
    North Condominium Corporation No. 161 v. Redmond
, 2017 ONSC 1304, at para.
    34.

[43]

Still apposite after more than a century is the following passage from
McLellan
    v. Powassan Lumber Co.
(1914), 26 O.W.R. 323 (Ont. H.C.), at p. 324:

Costs are in truth incident to a determination of the rights of
    the parties and ought not to be made themselves the subject matter of the
    litigation. When the merits for any reason cannot be determined, there ought
    not to be a pretended investigation of the merits for the purpose of awarding
    costs.

[44]

There are several practical reasons for this prohibition. A full paper
    proceeding based upon the affidavit evidence filed by the parties for the
    purposes of settlement will rarely allow a court to make a proper adjudication
    of the merits of an action. The requirement of oral evidence and
    cross-examination to resolve any controversies would transform a costs motion
    into the trial process that the parties expressly sought to avoid by their
    settlement. This inevitable result would undermine the principles of
    expediency, certainty and finality that promote settlement and the smooth
    operation of the administration of justice that encourages and depends on
    settlement.

[45]

Returning to the present case, the parties agreed to resolve the issue
    of liability for the plaintiffs damages by their settlement. The issue of the
    parties respective liability for the plaintiffs damages was therefore not
    before the motion judge on the costs motion. Moreover, the untested evidentiary
    record before the motion judge was inadequate, deficient and controversial for
    the purpose of determining liability for damages. At trial, the opinion of
    plaintiffs counsel as to the merits of the plaintiffs action would have been
    inadmissible evidence and the competing experts opinions would necessarily
    have been subject to cross‑examination and submissions by counsel.

[46]

Accordingly, I would set aside the motion judges apportionment of costs
    and his order that the Potrebics are solely liable for the plaintiffs costs.

[47]

In the circumstances of this case, the appropriate and fair
    apportionment of costs is that the Potrebics and the Pipolos contribute equally
    to and be held jointly and severally liable for the plaintiffs costs. This is
    consistent with the fact that the Potrebics and the Pipolos contributed equally
    to the settlement. It was not unreasonable for the plaintiffs to pursue their
    claim against the Pipolos, which ultimately resulted in their contribution toward
    the settlement, but required extensive steps in the litigation. I would reject
    the Potrebics argument that the Pipolos should be responsible for a
    significantly greater percentage of the costs because of the extensive
    litigation costs incurred after their 2007 settlement proposal. Although the
    Potrebics offered their policy limits at an early stage, their proposal was
    contingent on the plaintiffs agreeing to limit their recovery to the $1
    million policy limit. They did not pay the funds into court. Just as it was
    reasonable to continue the litigation against the Potrebics, it was also
    reasonable for the plaintiffs to pursue other avenues of recovery which, as the
    motion judge found, ultimately benefitted the Potrebics. I see nothing in the
    conduct of either side that would warrant diverging from the proportionate
    arrangement regarding damages that the parties accepted in the settlement.

[48]

Consequently, the Potrebics should contribute 50 percent and the Pipolos
    50 percent of the plaintiffs costs.

(2)

Amount of the plaintiffs costs

[49]

The Potrebics submit that the motion judge erred in awarding the
    plaintiffs $800,000 in fees on a partial indemnity basis. The Pipolos support
    and adopt the Potrebics submissions. They raise five arguments based on: proportionality,
    the amount recovered, the reasonable expectations of the parties, the inclusion
    of the costs of the interlocutory motion, and the costs of the summary judgment
    motion brought by the Pipolos. I address each in turn.

(i)

Proportionality

[50]

First, the Potrebics argue that the amount awarded was grossly
    disproportionate based on the amounts assessed between the plaintiffs and their
    counsel and the recovery in the tort action alone. The motion judge determined
    that the plaintiffs gross contingency fee payable to their counsel was
    $1,222,996.68, inclusive of HST. This amount included costs in relation to the
    tort action and the statutory accident benefits claim. With respect to the tort
    recovery, he assessed a 30 percent contingency fee of $853,447.68, inclusive of
    HST, based on the total amount of the settlement, including the amounts paid by
    the City of Windsor. He concluded that the plaintiffs were entitled to partial
    indemnity costs which he fixed at $800,000, inclusive of HST ($900,000 less the
    $100,000 contribution made by the City of Windsor) and net disbursements of
    $127,934.08 ($177,934.08 less the $50,000 contribution by the City of Windsor).

[51]

The Potrebics submit that, as a result, the motion judge fixed the
    partial indemnity fees of the plaintiffs at an amount that effectively exceeded
    the full indemnity fees awarded to their counsel for the tort recovery.
    Moreover, when the net costs related solely to the tort action in the amount of
    $927,934.08 are compared to the net recovery of $2,117,544.77 from the tort
    action (excluding the City of Windsors settlement contribution), the former
    represents approximately 44 percent of the latter. They argue that this is
    grossly disproportionate.

[52]

I am not persuaded by these submissions.

[53]

These submissions fail to recognize that the overarching consideration
    in fixing party and party costs is to arrive at an amount that is fair and
    reasonable for the losing party to pay in the particular proceeding, rather
    than an amount fixed by the actual costs incurred by the successful litigant:
Boucher
    v. Public Accountants Council for the Province of Ontario
(2004), 71 O.R.
    (3d) 291 (C.A.), at para. 26.

[54]

The amount of fees that clients pay to their solicitors, while relevant,
    is not determinative of the reasonableness of the partial indemnity costs that
    a losing party is required to pay.

[55]

The factors to be considered when assessing solicitor fees, including
    the reasonableness of a contingency fee, are not completely identical to those
    listed at r. 57.01(1) of the
Rules of Civil Procedure
. Most notably,
    while the risk assumed by the solicitor, including the risk of non payment, and
    the ability of the client to pay are relevant in assessing solicitor fees or
    the reasonableness of a contingency fee, these factors are not listed at r. 57.01(1):
    see
Cohen v. Kealy
(1985), 10 O.A.C. 344 (C.A.), at para. 11;
Raphael
    Partners v. Lam
(2002), 61 O.R. (3d) 417 (C.A.), at para. 50.

[56]

Moreover, ss. 20 and 20.1 of the
Solicitors Act
, R.S.O. 1990,
    c. S.15, state
that a contingency fee agreement should
    not impact a costs award
. Specifically, s. 20(1) provides that a
    contingency fee agreement does not affect the amount, or any right or remedy
    for the recovery, of any costs recoverable from the client by any other person.
    Section 20.1(1) specifies that [i]n calculating the amount of costs for the
    purposes of making an award of costs, a court shall not reduce the amount of
    costs only because the clients solicitor is being compensated in accordance
    with a contingency fee agreement.

[57]

Further, partial indemnity fees are not defined in terms of an exact
    percentage of full indemnity fees under the
Rules of Civil Procedure
.
    While representing a portion of full indemnity costs, that portion has never
    been defined with mathematical precision but generally amounts to a figure in
    the range of more than 50 percent but less than 100 percent. This is as it
    should be given the myriad factors that the court must consider in the exercise
    of its discretion in fixing costs.

[58]

Here, the motion judge properly took into account all of the factors
    under rule 57.01(1) and other relevant considerations to arrive at the
    $800,000 figure, including grappling with the value of the plaintiffs claim,
    to which I return below. His decision is entitled to a high degree of deference
    on appeal. I see no error in principle in the motion judges decision as to the
    quantum of costs and this decision is not plainly wrong:
Hamilton v. Open
    Window Bakery Ltd.
,
2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

(ii)

Amount recovered

[59]

The second submission builds on the first. It is submitted that the
    motion judge erred in concluding that his assessment of partial indemnity costs
    in the tort action should be based not only on the recovery made in the tort
    action, but also on the sum of $3,007,903.97 recovered by the plaintiffs from
    their own insurer in relation to their respective statutory accident benefits
    claims. They reiterate that the motion judge should have restricted his
    analysis to the net amount recovered in the tort action and that the costs awarded
    were therefore grossly disproportionate to the settlement achieved.

[60]

In my view, this submission depends on too narrow a reading of the
    motion judges reasons. The motion judge was clearly responding to the
    Potrebics submission at the costs motion that the amount recovered as opposed
    to the amount claimed is the governing factor in fixing the plaintiffs
    costs. He grappled with the large discrepancy between the undisputed value of
    the plaintiffs claims and the restricted policy limits available for
    settlement. The motion judge properly determined that the amount recovered by
    the plaintiffs was only one of many factors that he was required to consider
    and that a more nuanced approach was necessary in order to properly apply the
    principle of proportionality in the circumstances of this case to arrive at an
    amount that is fair and reasonable for the unsuccessful party to pay in the
    particular proceeding.

[61]

In determining a fair and reasonable amount of costs, the motion judge
    considered the total amount recovered to be $5,525,448.74, being $2,517,544.77
    recovered on the tort claim (including the City of Windsors contribution) and
    $3,007,903.97 recovered on the statutory accident benefits claims. He found
    that the plaintiffs success on their statutory accident benefits claims
    represented a direct benefit to the defendants. He concluded that even full
    indemnity costs of $1,222,996.68 represented 22.13 percent of that which was
    recovered and that this was not disproportionate.

[62]

The motion judges reliance on
Moodie v. Greenaway Estate
,
    [1997] O.J. No. 6525 (Gen. Div.), at para. 4, affd 122 O.A.C. 90 (C.A.), seems
    misplaced. He adverted to it for the proposition that by reason of the releases
    available to a tortfeasor under the
Insurance Act
, R.S.O. 1990, c.
    I.8, only in compelling circumstances should the unsuccessful tortfeasor escape
    responsibility to indemnify a plaintiff for the costs of pursuing statutory
    accident benefits claims. Unlike the defendant in
Moodie
, the Potrebics
    and the Pipolos are not entitled under s. 256(3) of the
Insurance Act
[2]
to have the amount
    of the plaintiffs statutory accident benefits settlement taken into account to
    reduce the settlement amounts payable in the tort action.

[63]

While the motion judges reference to
Moodie
is not exactly
    clear, his determination that the Potrebics and the Pipolos received a benefit
    from the statutory accident benefits claims settlement is reasonable in that it
    facilitated the plaintiffs agreement to the settlement in the tort action
    within the Potrebics and the Pipolos policy limits.

[64]

The fixing of costs is not a bookkeeping exercise. The fact that the net
    costs award represents about 44 percent of the net recovery of $2,117,544.77
    recovered on the tort claim is not the determining factor in the consideration
    of the principle of proportionality. While the consideration of proportionality
    is necessary to the soundness of any costs award and to ensure the health of
    the justice system, the overarching consideration is that the order for costs
    must be fair and reasonable. Making that assessment is more of an art than an
    exact science. See
Marcus v. Cochrane
, 2014 ONCA 207, 317 O.A.C. 251,
    at paras. 15-16. In consequence, an overemphasis on proportionality to the
    detriment of the other equally relevant factors ignores the principles of
    indemnity and access to justice, especially in proceedings where the
    legitimate claims of clearly wronged plaintiffs are being pursued:
Gardiner
    v. MacDonald,
2016 ONSC 2770, at para. 65, affd 2016 ONCA 968, 63
    C.C.L.I. (5th) 212.

[65]

As already noted, the motion judge quite properly did not limit his
    analysis to the one factor urged by the Potrebics. The motion judges
    determination that the fixed fees were reasonable was open to him. I see no basis
    to intervene.

(iii)

Reasonable expectations of the parties

[66]

Third, it is submitted that the motion judge failed to consider, as
    reflecting the reasonable expectations of the parties, the example of $250,000
    in costs on a $2 million settlement set out in the plaintiffs contingency fee
    agreement.

[67]

This submission is without merit.

[68]

I refer again to the provisions of ss. 20 and 20.1 of the
Solicitors
    Act
that a contingency fee agreement should not impact a costs award. As
    the motion judge noted, reasonably in my view, the example of a possible cost
    recovery used by the plaintiffs solicitors in the contingency fee agreement
    does not serve to establish the amount of costs that a court would determine is
    fair and reasonable in all the circumstances. That determination is subject to
    the many different factors considered by the motion judge.

(iv)

Inclusion of the costs of the interlocutory motions

[69]

Fourth, the Pipolos and the Potrebics argue that the motion judge erred
    in including in the costs award amounts for interlocutory motions for which
    costs had been fixed by other court orders at a net sum payable to the
    plaintiffs.

[70]

I would not accept this submission. In my view, this court is
    effectively being asked to undertake a line by line review of the motion
    judges fixing of costs, which is not our task. As I have already observed, and
    the Potrebics acknowledged at para. 53 of their factum, the fixing of costs
    does not begin or end with the calculation of hours and rates:

see
Boucher
,
    at para. 26.

[71]

The motion judge was aware of these arguments and the previous costs
    awards. There is no indication in his reasons that he failed to consider them,
    along with the other submissions presented by the parties. His reasons do not
    indicate that he awarded the plaintiffs costs covered by previous court
    orders.

[72]

Again, the motion judges task was not a bookkeeping exercise, but,
    rather, as he instructed himself, to fix costs in an amount that would be fair
    and reasonable, having regard to the factors set out in r. 57.01(1) and in all
    the relevant circumstances of this case. I see no error in his fixing of costs
    that would warrant appellate intervention.

(v)

Costs of the summary judgment motion brought by the Pipolos

[73]

Finally, the Potrebics submit that the motion judge erred by including
    in the plaintiffs costs award their costs related to the Pipolos motion for
    summary judgment.

[74]

I would not accept this submission because there is no evidentiary basis
    for it.

[75]

In February 2017, the Pipolos brought a motion for summary judgment
    before the motion judge for an order that would have restricted their potential
    liability in the action to the proceeds of their $2 million insurance policy.

[76]

Unlike the previous costs orders for other interlocutory motions, there
    was no prior disposition of the costs of the Pipolos motion for summary judgment
    which was under reserve at the time of the settlement. The Potrebics submit
    that they should not be responsible for the costs associated with the summary
    judgment motion.

[77]

Since he heard the motion for summary judgment, the motion judge was
    well aware that the motion was under reserve at the time of the settlement.
    There is no indication in the motion judges reasons that he awarded the costs
    of that motion to the plaintiffs.

[78]

As a result, there is no basis to make any reduction to the plaintiffs
    costs.

E.

Disposition

[79]

For these reasons, I would allow the appeal in part and substitute for
    the costs order of the motion judge the following order:

(i)

THIS COURT ORDERS that the plaintiffs costs on a partial indemnity
    basis are fixed in the amount of $800,000 on account of fees (inclusive of
    HST), together with $127,934.08 for disbursements, for a total of $927,934.08,
    payable within 30 days of the date hereof.

(ii)

THIS COURT ORDERS that the plaintiffs costs in the amount of
    $927,934.08 be paid equally by the Potrebics and the Pipolos in the following
    percentages: the Potrebics shall pay 50 percent and the Pipolos shall pay 50
    percent. The Potrebics and the Pipolos are jointly and severally liable for the
    total amount of the plaintiffs costs.

(iii)

THIS ORDER BEARS INTEREST at the rate of 3 percent per year commencing
    30 days from August 31, 2018
.

[80]

I would otherwise dismiss the appeal.

[81]

In my view, the plaintiffs and the Potrebics enjoyed substantial success
    and should be entitled to their partial indemnity costs of the appeal,
    including the costs of the motion for leave to appeal, in the amount of $20,000
    for the plaintiffs and $30,000 for the Potrebics, inclusive of disbursements
    and applicable taxes. I would order that the Pipolos pay the appeal costs of
    the plaintiffs and the Potrebics.

Released: December 31, 2019 (L.R.)

L.B.
    Roberts J.A.

I
    agree. P. Lauwers J.A.

I
    agree. K. van Rensburg J.A.

[1]
The judgment provides for payment by the Potrebics in the amount of $64,172.74
    and periodic payments of $1,053,372.03 as set out in Schedule A to the
    judgment, for a total of $1,117,544.77.

[2]
256 (3) Where the person commences an action, the court shall adjudicate
    upon the matter first without reference to the payment but in giving judgment
    the payment shall be taken into account and the person shall only be entitled
    to judgment for the net amount, if any.


COURT OF APPEAL FOR ONTARIO

CITATION: Cable Assembly Systems Ltd. v. Barnes, 2019 ONCA
    1013

DATE: 20191223

DOCKET: C66641

Roberts, Zarnett and Jamal JJ.A.

BETWEEN

Cable
    Assembly Systems Ltd. and Brian Manese

Plaintiffs (Respondents)

and

Ben Barnes and The Corporation of the
    City of Brantford

Defendants (Appellants)

David A. Potts, for the appellants

Peter A. Downard and Dennis M. Touesnard, for the
    respondents

Heard: December 17, 2019

On appeal from the judgment
    of Justice R. John Harper of the Superior Court of Justice, dated January 29,
    2019, with reasons reported at 2019 ONSC 97.

REASONS FOR DECISION

[1]

The appellants appeal from the judgment that they pay the respondents
    general damages for defamation in the amount of $75,000 and punitive damages in
    the amount of $75,000.

[2]

The appellants raise numerous grounds of appeal
[1]
.
    The appellants challenge the trial judges findings of defamation, malice and
    abuse of public office and position and take issue with the award of punitive
    damages.

[3]

To provide a proper framework for the analysis of these issues, it is
    necessary to set out a brief factual background, including a summary of the
    trial judges reasons.

[4]

This action arises out of derogatory statements about the respondents
    that Ben Barnes, in his capacity as Manager of Network Services for the City of
    Brantford, made during a meeting on September 30, 2014, to Chris Earl, the
    sales representative of Belden CDT Inc. Mr. Barnes made all City decisions on
    the award of contracts for cabling services with a value of up to $25,000.
    Contracts of higher value were subject to a mandatory tender process.

[5]

Belden manufactured and supplied cable used in installation work
    required by the City of Brantford. The respondent, Cable Assembly Systems Ltd.
    (CAS), of which Brian Manese is the principal, is a Certified Systems Vendor
    (CSV) of Belden cable. From the mid 1990s to 2013, CAS performed all the
    cable installation work for the City of Brantford.

[6]

From 2011 to 2013, Mr. Barnes caused the City to continue to engage CAS.
    Issues arose between Mr. Barnes and Mr. Manese. Mr. Manese objected to the
    Citys use of other cable installers without providing specifications for the
    projects or stipulating required standards of cables. Mr. Barnes criticized the
    quality of CAS work. Mr. Manese escalated the dispute, meeting with Mr.
    Barnes superior, Helen English, and then her superior, Darryl Lee. Still
    frustrated by what he perceived as an unsatisfactory response from the City, Mr.
    Manese raised his concerns about Mr. Barnes with a City councillor.

[7]

Aware of Mr. Maneses complaints about him, Mr. Barnes met on September
    30, 2014, with Mr. Earl and complained about CAS workmanship, describing it as
    poor. He showed Mr. Earl photographs of CAS work, without disclosing that the
    issues depicted in the photographs had been resolved well over a year earlier.
    He urged Belden to certify as a CSV a contractor Mr. Barnes was using, Ramkey,
    incorrectly stating that CAS was the only Belden CSV in the City of Brantford.
    Mr. Barnes also stated that Brantford Hydro would not use CAS, although
    CAS had never performed or sought to perform any work for Brantford Hydro. He
    also intimated that there was an issue with his predecessor and Mr. Manese and
    the number of invoices, and that he was happy to say that he had reduced that
    number.

[8]

In their statement of defence, the appellants denied the latter two
    statements, but admitted that Mr. Barnes had uttered the other statements and
    claimed they were true or made with an honest belief in their truth and as fair
    comment, and published on an occasion of qualified privilege.

[9]

The trial judge rejected the appellants defences. He found that Mr.
    Barnes had made all the statements attributed to him, that they were defamatory
    of the respondents and that he acted in a malicious manner in response to Mr.
    Maneses complaints, by attempting to malign the reputation of CAS and Mr.
    Manese with Belden. The trial judge also concluded that Mr. Barnes abused his
    position as a public officer by making the defamatory statements and by
    refusing for improper or ulterior motives to hire the services of CAS after
    October 2014.

[10]

Finding
    that CAS reputation was placed in serious jeopardy by Mr. Barnes statements,
    which could have had a serious negative impact on CAS business, the trial
    judge determined that the damage to CAS reputation merited damages in the
    amount of $75,000. He did not award any damages for the tort of abuse of public
    office; however, the trial judge concluded that Mr. Barnes malicious actions
    and abuse of his position warranted an award of punitive damages in the amount
    of $75,000.

[11]

We
    are not persuaded that there is any basis for appellate intervention with
    respect to the trial judges findings of defamation, malice and abuse of
    position. The trial judges findings are amply supported by the record and the
    appellants admissions in their statement of defence. He properly cited to and
    applied the governing principles to determine the issues of defamation, malice
    and abuse of position.

[12]

The
    trial judges determination that Mr. Barnes, in his capacity as a public
    officer of the City of Brantford, acted maliciously in that he made
    representations that were purposely false and misleading with the intention to
    damage the reputation of CAS (para. 36), was firmly grounded in the evidence
    that the trial judge was entitled to accept. So was the trial judges finding
    at para. 67 of his reasons:

Barnes comments in the meeting Earl were not germane or
    reasonably appropriate to the occasion of the September 30, 2014 meeting. I
    also find that Barnes had an ulterior motive. He was responding to the many
    complainants Manese had made about him to his superiors. As a result, he acted
    in a malicious manner by attempting to malign the reputation of CAS Ltd. and
    Manese. Give this finding the Defendants cannot rely on a defence of qualified
    privilege.

[13]

The
    trial judges findings foreclosed any defence of honestly held belief, fair
    comment or qualified privilege. The trial judges findings also supported his
    award of general damages.

[14]

We
    do not reach the same conclusion, however, with respect to the trial judges
    award of punitive damages. In our view, the trial judge erred in making this
    award.

[15]

The
    entirety of the trial judges rationale for his award of punitive damages
    appears at para. 76 of his reasons as follows: Given my finding that the
    actions of Barnes were malicious, and an abuse of his position, the Plaintiffs
    are entitled to punitive damages in the amount of $75,000. The trial judge
    sets out no basis for the Citys liability for punitive damages.

[16]

Punitive damages, unlike compensatory damages, are not at large.
    As a result, an appellate court has a much broader scope for review on an
    appeal from an award of punitive damages. As Cory J. stated in
Hill v.
    Church of Scientology of Toronto
, [1995] 2 S.C.R. 1130, at para. 197,
[t]
he
    appellate review should be based upon the court's estimation as to whether the
    punitive damages serve a rational purpose.

[17]

It
    is well established that punitive damages are exceptional for malicious
,
oppressive and high-handed
    misconduct that offends the court's sense of decency": per Binnie J. in
Whiten
    v. Pilot Insurance Co.
, 2002 SCC 18, at para. 36. They are only to be
    awarded where compensatory damages are inadequate to accomplish the objectives
    of retribution, deterrence, and condemnation:
Pate Estate v.
    Galway-Cavendish (Township)
, 2013 ONCA 669, at para. 211;
Filice v.
    Complex Services Inc.
, 2018 ONCA 625, at para. 57.

[18]

When considering whether to award punitive damages and in
    quantifying those damages where such an award is justified, trial judges must
    consider the punitive components of the compensation otherwise awarded and
    determine whether they adequately serve to achieve the objectives of retribution,
    deterrence and condemnation.
Failure
    to do so is an error in principle. See:
Pate
, at para. 214;
Filice
, at paras. 59-61.

[19]

In
    this case, the trial judge did not engage in any analysis of why the
    compensatory award that he decided on was inadequate to achieve the objectives
    of retribution, deterrence and condemnation. In failing to do so, he committed
    an error in principle.

[20]

In
    our view, the $75,000 compensatory award of general damages for defamation was
    adequate to achieve the objectives of retribution, deterrence and condemnation
    in the circumstances of this case. These circumstances involved utterances made
    during one meeting to an interlocutor sympathetic to the respondents which had
    no actual effect on their reputation or business interests. Aggravating
    circumstances that served to increase the award of general damages included the
    trial judges findings that Mr. Barnes acted maliciously and abused his
    position of public authority.

[21]

While Mr. Barnes conduct was not justified, the appellants will
    pay for his improper actions through the generous award of compensatory
    damages. As Binnie J. also said in
Whiten
at para. 123, Compensatory
    damages also punish. In many cases they will be all the punishment required.
    In our view, that is the case here. We therefore set aside the trial judges
    punitive damages award.

Disposition

[22]

As
    a result, we allow the appeal in part and set aside the award of punitive
    damages.

[23]

The
    appeal is otherwise dismissed.

[24]

In
    our view, success on this appeal was mixed. We make no order as to costs.

L.B. Roberts
    J.A.

B. Zarnett J.A.

M. Jamal J.A.

[1]
The appellants abandoned at the hearing of the appeal two new issues that the
    action should have been dismissed under s. 137.1 (Anti-Slapp provisions) of the
Courts of Justice Act

and in
    accordance with the principles articulated by the English Court of Appeal in
Jameel (Yousef) v. Dow Jones & Co. Inc.
,
    [2005] Q.B. 946 where the extent of the publication is small and the costs out
    of proportion to any harm.


COURT OF APPEAL FOR ONTARIO

CITATION: Campbell (Re), 2019 ONCA 973

DATE: 20191211

DOCKET: C66819

Lauwers, van Rensburg and Hourigan JJ.A.

IN THE MATTER OF: Angela Campbell

AN APPEAL UNDER PART XX.1 OF THE
CODE

Meaghan McMahon, for the appellant

Amy Alyea, for the respondent, the Attorney General of
    Ontario

Marie-Pierre T. Pilon, for the respondent, the
    Person-in-Charge for the Royal Ottawa Mental Health Centre

Heard: November 8, 2019

On appeal from the disposition of the Ontario Review Board,
    dated November 15, 2018, with reasons dated December 10, 2018.

REASONS FOR DECISION

[1]

The appellant, Angela Campbell, appeals the disposition
    of the Ontario Review Board, dated November 15, 2018. Ms. Campbell says that,
    in concluding that she continues to pose a significant threat to the safety of
    the public, and thus refusing an absolute discharge, the Board reached an
    unreasonable decision, and made improper use of two unproven allegations
    against her.

[2]

Ms. Campbell was found not criminally responsible
    on account of mental disorder (NCR) in June 2004 as a result of an offence on
    March 3, 2004. She was 20 years old at the time. The index offence involved the
    theft of a motor vehicle and assault on police officers that occurred after she
    was taken into custody. Ms. Campbell had a history of mental illness,
    having been first diagnosed with schizoaffective disorder, alcohol abuse
    disorder and conduct disorder at age 18.

[3]

After her NCR verdict, Ms. Campbell was
    initially detained at the Brockville Psychiatric Hospital. There were a number
    of unsuccessful attempts to place her in the community in 2006 and 2007. In
    2014, after ten years in Brockville, she was transferred to the Royal Ottawa
    Hospital (the Hospital). In November 2017, Ms. Campbell was discharged
    with conditions to a group home in Ottawa. After an incident at the group home,
    she was readmitted to the Hospital in February 2018.

[4]

The Board convened in March 2018 for a
    restriction of liberties hearing. On that occasion, Ms. Campbells treating
    psychiatrist, Dr. Joel Watts, raised the issue of whether she continued to
    represent a significant threat to the safety of the public. The Board
    determined that it did not have enough information to hold an early hearing on
    the issue of significant threat and adjourned the matter to August 24, 2018.

[5]

Following the March 2018 hearing, Ms. Campbell was
    discharged back to the group home. On May 29, 2018, she had a verbal
    altercation with a co-resident of the home who reported that Ms. Campbell had
    threatened to kill him, and he felt unsafe (the May 29 incident). She was
    also reported to have been verbally and physically aggressive with staff and
    other co-residents.

[6]

At the hearing on August 24, 2018, Dr. Watts
    again expressed the opinion that Ms. Campbell, although not complying with the
    conditions of her disposition (she was using substances and was no longer
    taking her mood stabilizer and one of her two anti-psychotic drugs), did not
    show evidence of behaviour that meets the threshold of significant threat. Dr.
    Watts had not confirmed whether Ms. Campbell would continue her injectable
    anti-psychotic medication if she received an absolute discharge. The Crown had
    filed the 2014 and 2015 Hospital reports and sought to call other evidence. The
    hearing was adjourned to November 13, 2018.

[7]

On October 23, 2018, Ms. Campbell was dropped
    off at the group home by police who did not explain why. After showing bizarre
    and disruptive behaviour, Ms. Campbell was persuaded by a staff member to
    attend the Hospital where she was admitted. In the interim, it was determined
    that Ms. Campbell had been charged with assault after she allegedly kicked and
    spat on a fellow passenger on an OC Transpo bus on October 23rd (the OC
    Transpo incident).

[8]

At the November 13, 2018 hearing (which was both
    an annual review and a restriction of liberties hearing), Dr. Watts advised
    that the Hospitals position had changed. He and the treatment team now took
    the position that Ms. Campbell was a significant threat to the safety of the
    public and that she should be maintained on her current disposition order
    (which required her detention at the Secure Forensic Unit of the Hospital, with
    privileges up to and including to live within the community in accommodation
    approved by the person-in-charge).

[9]

The Board concluded that Ms. Campbell continued to
    represent a significant threat to the safety of the public. The Board also
    concluded that Ms. Campbells return to the Hospital was necessary, appropriate
    and justified. The Board confirmed the continuation of her current disposition
    as the least onerous and least restrictive in the circumstances.

[10]

At the November 2018 hearing, the Board had
    additional evidence with respect to the May 29 incident. It had summonsed Emily
    Armstrong, an employee of the group home to give evidence at the hearing, and
    had notes from the group home. With respect to the OC Transpo incident, the
    Board had the Crown brief, the police summary, and a victim statement.

[11]

The Board also had evidence about Ms. Campbells
    behaviour after the August 2018 hearing, including the events precipitating her
    readmission to the Hospital and her conduct while in the Hospital, both before
    and after her readmission. This information was detailed in an updated Hospital
    report and set out in the evidence of Dr. Watts. Ms. Campbell did not testify
    at the hearing, although she interjected comments at various times.

[12]

In concluding that Ms. Campbell continued to
    represent a significant threat to the safety of the public, the Board noted
    that until this particular hearing, the panel had struggled with trying to
    assess the degree of risk that Ms. Campbell presented. This was due to the lack
    of detailed descriptions in the Hospital reports and in
viva voce
evidence of the physical and verbal aggression attributed to her over the years
    in the Hospital. It was difficult to ascertain from the Hospital records
    whether Ms. Campbells conduct went beyond what was only trivial or annoying or
    whether there was a risk of serious physical or psychological harm.

[13]

The Board turned to the information about the
    May 29 incident that was recorded by the group home residential worker, Ms.
    Armstrong. The notes set out details of threats that Ms. Campbell made to Ms.
    Armstrong and two co-residents, and that one co-resident called the police. Ms.
    Armstrong testified that Ms. Campbell said nothing had happened. Although Ms.
    Armstrong had not heard the threats to the other residents, she had spoken to
    them and was aware that one co-resident feared for his safety. She acknowledged
    that Ms. Campbell was not physical towards her, but had made a kicking motion
    to warn her not to come too close.

[14]

The Board noted that Ms. Campbells reported
    conduct in threatening to kill a co-resident could have resulted in criminal
    charges, but because of her disposition, it was likely the case that the police
    had left it to Ms. Campbells hospital worker to determine what steps should be
    taken. The Board concluded that the circumstances involving a threat to a
    fellow resident and his fear for his safety provided evidence of the threat of
    serious psychological harm by Ms. Campbell.

[15]

The Board also considered the OC Transpo
    incident and relied on the Crown brief. The Board noted that, on her
    readmission to the Hospital on October 24th, Ms. Campbell reported that she had
    accidentally hit a Chinese girl with her foot and had been arrested. The
    evidence in the Crown brief was largely unchallenged. After acknowledging that
    the charges were still before the court (they have since been resolved with Ms.
    Campbell entering into a peace bond), the Board concluded on a balance of
    probabilities that the assaultive event on the OC Transpo bus occurred. It took
    this into consideration in determining that Ms. Campbells conduct met the
    significant threat threshold. Further, the Board noted that the OC Transpo
    incident should be viewed in the context of certain bizarre text messages Ms.
    Campbell sent around October 22, 2018, the conduct precipitating and following her
    readmission to the Hospital, and Dr. Watts opinion that there had been an
    escalation of Ms. Campbells manic behaviour consistent with hypomania
    associated with schizoaffective disorder.

[16]

On appeal, counsel argues that the Boards
    determination that Ms. Campbell continues to pose a significant threat is
    unreasonable and that, in arriving at its conclusion on significant threat, the
    Board improperly relied on unproven allegations with respect to the May 29
    incident and the OC Transpo incident. In particular, Ms. Campbell submits that
    the Board ought not to have given the weight that it did to the May 29 incident
    or the OC Transpo incident because the information it had was hearsay. Ms.
    Campbell had denied the OC Transpo incident and the charges had not been
    resolved.

[17]

We disagree.

[18]

The Board identified and applied the correct
    test for whether Ms. Campbell continued to pose a significant threat: there
    must be a real risk of physical or psychological harm from conduct that is
    criminal in nature and must go beyond what is only trivial or annoying: See
Winko
    v. British Columbia (Forensic Psychiatric Institute)
, [1999] 2 S.C.R. 625, at
para. 57
.

[19]

The Board acknowledged that there had been doubt
    on this question before, and it ensured that it had all of the necessary
    information to be able to make a fully informed decision on this important
    question. Contrary to the appellants submission, the Board was entitled to
    consider the two incidents that resulted in the police being called,
    notwithstanding that both incidents involved hearsay evidence.

[20]

It is settled law that the Board is entitled to
    receive hearsay evidence, in part because its proceedings are more
    inquisitorial than adversarial:
Re Conway
, 2016 ONCA 918, 135 W.C.B.
    (2d) 147, at para. 31. Information from a police occurrence report is a form of
    hearsay evidence and may be received and considered by the Board. Indeed,
    [i]nformation about prior behaviour that led to police involvement can be
    useful in assessing whether an accused poses a significant threat to the safety
    of the public and in determining the appropriate disposition:
Re Ranieri
,
    2015 ONCA 444, 336 O.A.C. 88, at para. 17.

[21]

Of course, some hearsay evidence will require
    greater scrutiny before the Board can accept it:
Re Conway
, at para.
    31. It is for the Board to evaluate the hearsay evidence while being aware of
    the dangers inherent in evidence of this type:
Re Ranieri
, at para.
    16. The Board must evaluate the evidence having regard to such matters as its
    source and context, and any contradictory information, including any account or
    explanation provided by the accused:
Re Ranieri
, at para. 17.

[22]

Contrary to the submissions made on Ms.
    Campbells behalf, the Board did not accept the May 29 incident and OC Transpo incident
    without the proper level of scrutiny. With respect to the threat to kill a
    co-resident, the co-resident had called the police. There was a note that the
    group home employee and police officer, together with the group home owner, determined
    that Ms. Campbell, while a threat, should stay at the group home for the night.
    This was a better alternative than taking her to a shelter because she had a
    history of substance abuse and that environment might lead her to use again.
    While Ms. Armstrong had not witnessed the threats, she testified that the
    co-resident felt unsafe, remained uncomfortable, and was persuaded by staff to
    tolerate Ms. Campbells presence in the home that night. Moreover, Ms.
    Armstrong had witnessed similar threats in the past.

[23]

As for the OC Transpo incident which led to an
    assault charge, the Board noted that Ms. Campbells explanation was that she
    had hit the victim accidentally. The Board concluded on a balance of
    probabilities that the assaultive event on the OC Transpo bus had occurred. Although
    Ms. Campbell had not been convicted of an offence, and the charges had not been
    resolved at the time of the hearing, it was appropriate for the Board to
    consider the evidence that was available to it concerning the OC Transpo
    incident. The issue for the Board was not to determine whether she was guilty
    of an offence, but to consider her conduct on that occasion as part of its
    evaluation of whether she continued to pose a significant threat to public
    safety: see
Re Ranieri
,

at paras. 16-18.

[24]

Moreover, as noted above, the Board did not rely
    on the OC Transpo incident in isolation. The Board considered this in the
    context of Ms. Campbells bizarre text messages around October 22, 2018, her
    presentation at the group home preceding this event, and her behaviour after
    she was readmitted to the Hospitalthreatening to spit at staff, kick a staff
    member, and strike an orderly with a baseball bat. On one occasion, she
    required four-point restraints.

[25]

We see no error here. The Board was required to
    consider all the evidence that was available to make an informed determination about
    whether Ms. Campbell continued to pose a significant threat of harm to the safety
    of the public. The Board approached its task carefully, as is demonstrated by
    the repeated adjournments to obtain more information. It considered the two
    reports that were based on hearsay and concluded reasonably that the incidents
    had occurred. When these incidents were considered in the context of Ms.
    Campbells history and recent behaviour, it was reasonable for the Board to
    accept Dr. Watts opinion and to find that Ms. Campbell continued to pose a
    significant risk.

[26]

The appeal is therefore dismissed.

P.
    Lauwers J.A.

K.
    van Rensburg J.A.

C.W.
    Hourigan J.A.