November 10, 2016
In complex litigation, the plaintiff often names numerous defendants before a clear understanding of the relative liabilities of those defendants has been determined. It is only throughout the course of the action that certain defendants are revealed to be more at fault than others. In certain instances, it is determined that some defendants had no liability whatsoever and in the ordinary course, such defendant(s) are entitled to claim their costs from the plaintiff after trial.
The above scenario may lead to an injustice where the plaintiff cannot really be faulted for naming a defendant initially, however, the plaintiff must nonetheless pay costs to that party. As a way of ameliorating this unfairness and when appropriate, the parties can ask the court to award a Sanderson Order or a Bullock Order, which Orders can be utilized to protect a successful plaintiff from an adverse cost award.
In effect, a Sanderson or Bullock Order permits a successful defendant to claim its costs from the unsuccessful defendant, as opposed to obtaining costs from the plaintiff. Both a Sanderson Order and a Bullock Order lead to the same result, but the mechanics of each are different. With a Bullock Order, the unsuccessful defendant reimburses the plaintiff for the successful defendant’s costs. Accordingly, the Bullock Order provides compensation to the plaintiff, provided the unsuccessful defendant has an ability to pay.
On the other hand, a Sanderson Order provides more comfort for the plaintiff. Specifically, a Sanderson Order requires the unsuccessful defendant to pay the successful defendant directly. Generally the courts will order a Sanderson Order unless there is some reason to believe the unsuccessful defendant would not be able to pay.
In Moore, (Litigation Guardian of V. Wienecke), 2008 ONCA 162, the Court of Appeal for Ontario articulated the test for awarding Sanderson and Bullock Orders. There is a two-step process, namely:
- The threshold question is whether it was reasonable for the plaintiff to join the defendants in one action. If the answer to that threshold question is yes, then;
- The court must exercise its discretion to determine whether a Sanderson or Bullock Order would be just and fair in the circumstances.
MacPherson J.A., writing for a unanimous panel, identified four factors that are relevant to the court’s decision as to whether a Bullock or Sanderson Order should be awarded:
- Whether the defendants tried to shift responsibility between each other, in contrast to concentrating on meeting the plaintiff’s case (Justice MacPherson described this as the foremost consideration);
- Whether the unsuccessful defendant caused the successful defendant to be added to the action;
- Whether there was a joint cause of action against both defendants or a separate cause of action; and
- Whether there is an issue with respect to the plaintiff’s ability to pay costs.
It should be noted these factors are not to be applied mechanically in every case. Further, counsel should be mindful that the overarching determination is discretionary and that Bullock or Sanderson Orders are the exception to the general principle of having the plaintiff pay costs to the successful defendant.