COURT FILE NO.: Div. Ct. 632/02
Div. Ct. 50/03
DATE: 20040510
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Alex Kouleles, Applicant; Respondent in motion;
-and-
A. Diamond in trust, et al. Respondents, moving party;
AND RE: Diamond & Co., et al. Plaintiffs, moving party;
-and-
Christina Maria Nigro, et al. Defendants, Respondents in motion;
HEARD: December 2, 2003; Costs submissions January 27, February 11, March 22, 2004.
BEFORE: Lane, Then and Meehan, JJ.
COUNSEL: Joseph Markin, for the Moving Parties;
George Argiris, for the Respondents.
E N D O R S E M E N T A S T O C O S T S
[1] On December 4, 2003, we released reasons dismissing the appellants’ motions, one in each proceeding, to set aside the orders of Lang J., sitting as a single judge of the Divisional Court, whereby she refused to set aside orders of Swinton J. who had refused the present appellants leave to appeal from the orders of Rouleau J. and Paisley J. In effect, the entire effort was to circumvent the refusal of leave to appeal despite the fact that no appeal lies from such an order. There was no merit in the either of the proceedings before us and Mr. Argiris was not called upon.
[2] The court directed that the parties make their submissions as to costs in writing, those of Mr. Argiris within thirty days and those of Mr. Markin within a further twenty days. As it happened, Mr. Argiris delivered his submissions 24 days late. Mr. Markin submitted that this delay should be fatal to the claim for costs. This submission does not sit well with the court when it is made in submissions which were themselves filed 24 days late. In any event, Mr. Argiris has explained his delay satisfactorily and we are not disposed to penalize his client for the delay.
[3] The respondents seek substantial indemnity costs. They do so on numerous grounds, including the absence of any merit in the motions; the failure of Mr. Markin to communicate or respond to communications; the client Diamond’s ‘gross misconduct’; Mr. Markin’s ‘bitter and unfounded’ accusations against Mr. Argiris; an attempt by Mr. Diamond to mislead a panel of this court on November 21, 2003; delays deliberately or unfairly caused by the moving parties; the disparity between the ample financial resource of Mr. Diamond versus the limited resources of the respondents; the social utility of using costs to encourage counsel to take cases at financial risk to themselves, in order to ensure that justice is provided for financially disadvantaged litigants; and the complete success of the respondents before us.
[4] Mr. Markin makes several submissions in reply. He says that there is no evidence properly before this court to support the allegations outlined above. Mr. Argiris has made allegations in his submissions, without putting in evidence. He further submits that the same allegations were made in earlier appearances and resulted in costs orders, which should not be duplicated. Finally, he submits that the costs orders made against Mr. Diamond previously were extremely high and therefore any further costs should be nominal. Significantly, Mr. Markin makes no effort to deny the truth of the allegations made in Mr. Argiris’ material. On the contrary, the position is that these allegations have already resulted in costs orders against his client.
[5] The record does support Mr. Markin’s position to a limited extent. Paisley J. commented in his endorsement of October 17, 2002 in the Kouleles action about Mr. Diamond’s ‘refusal to co-operate’ and Swinton J.’s March 3, 2003 endorsement awarded substantial indemnity costs against Mr. Diamond, referring to his behaviour. Thus, it would appear that those judges dealt with any such problem that was before them in their costs orders. It would be inappropriate to re-visit those incidents with further costs.
[6] However, counsel for the respondents submits that the two orders just discussed demonstrate a pattern of conduct requiring deterrence. He then points to two incidents occurring in relation to this present proceeding that show a continuation of the pattern. At tab 25 of the Respondents’ Costs Brief appear several letters,[^1] which were necessary to obtain a simple approval of the order of Lang J. of June 3, 2003. A similar pattern is revealed by the correspondence[^2] in which Mr. Argiris tries to get the order of this court made on October 23, 2003 approved, and also to obtain proof of the payment into court, which the order required as a condition precedent to a hearing on November 21, 2003.
[7] Mr. Argiris submitted, as an additional basis for substantial indemnity costs, that he had been the victim of gross misconduct by Mr. Diamond who had written ‘repugnant’ letters to his client, to the court and to Mr. Argiris himself. One of the parties in the Nigro case, Christina Nigro, passed away and her daughter Debbie Sapounas is the Trustee of her estate. In this capacity, Ms. Sapounas is Mr. Argiris’ client. On June 19, 2003, two days after Ms. Sapounas was appointed as Estate Trustee, Mr. Diamond wrote a bullying and abusive letter to her, clearly designed to shake her confidence in Mr. Argiris. In the course of this diatribe, Mr. Diamond called Mr. Argiris “this pig of a lawyer you have retained” and twice more referred to him as a pig and to his work as garbage. He also made numerous defamatory statements about Mr. Argiris’ conduct in respect of another client and stated that Mr. Argiris would suck the life out of the estate through high fees.
[8] There is also a letter of the same date, sent to the court reporter and to the court administration, ordering a transcript of the hearing when Ms. Sapounas was appointed, but additionally and gratuitously defaming Mr. Argiris as having made fraudulent submissions to the court to obtain that appointment. Finally, there is a letter of November 19, 2003, sent only to Mr. Argiris, claiming that he lied to and manipulated this court on October 21, 2003.
[9] These letters show a pattern of conduct by Mr. Diamond in connection with the matters ultimately heard by this panel, which is utterly unacceptable, bullying and abusive.
[10] It was submitted that Mr. Markin was a participant in this conduct since he served Mr. Argiris on November 27, 2003, with an affidavit by Mr. Diamond that is said to have repeated much of the abuse. However, Mr. Markin did not file the affidavit; and the affidavit of Mr. Hughes responding to Mr. Diamond’s suggestion that Mr. Argiris misled the court, was withdrawn at the opening of the hearing before us in order to avoid another adjournment. Neither document was before us and so we do not rely upon either of them in dealing with the costs.
[11] Mr. Argiris complains that Mr. Diamond’s refusal to have Ferrier J. on the November 21st panel of this court, due to that judge having acted for Mr. Argiris in a matter when in practice, was unnecessary and done solely for delay. That may or may not be the case, but it is not obviously so, and we do not consider that incident as any basis for substantial indemnity costs.
[12] Counsel for the respondents submitted that Mr. Diamond was a rich man who was using his wealth to try to beat down the opposition by repeated and prolonged court proceedings. There is no actual evidence that he is rich, but there is ample evidence that he is employing the technique of bringing every possible proceeding when decisions go against him, which, when coupled with an evident reluctance to pay costs orders in a timely way, is an unacceptable combination. In addition, the pattern of lack of co-operation by Mr. Markin appears to have continued.
[13] Considering all of the foregoing, the conduct discussed has certainly delayed and lengthened the proceedings, and Mr. Diamond’s bullying and defamatory approach adds insult to injury. This conduct deserves sanction. In addition, there was no merit in the motions, as should have been apparent. There will therefore be an award of substantial indemnity costs against the moving parties.
[14] The Bills as filed are:
Kouleles: Fees @ $325/hr. for 66 hours = 21,674.25
G.S.T. 1,517.20
Disbursements 918.14
$24,109.59
Nigro: Fees @ $325/hr for 58.9 hours = $19,142.50
G.S.T. 1,339.98
Disbursements 860.89
21,343.37
[15] Counsel for the moving parties did not raise any issue as to the hourly rate or number of hours set out in the Bills of Costs. It is not necessary to review them, but the court should still look at the Zesta Engineering[^3] question: Does the court consider that these costs of some $45,000 are a fair and reasonable amount that should be paid by the unsuccessful parties?
[16] Under ordinary circumstances, the answer for a day-long appearance in this court would almost certainly be that the total is much too high. In the particular circumstances here, as outlined above, the court is of the view that justice will be done by an award of $35,000 plus G.S.T. on that sum, plus disbursements.
Lane J.
Then J
Meehan J.
DATE: May , 2004
[^1]: June 4, June 9 and August 5, 2003. [^2]: October 24, November 19, November 20, (12:24 pm) and November 20 (5:55 pm) 2003. [^3]: Zesta Engineering Ltd. v. Cloutier 2002 25577 (ON CA), [2002] O.J. No. 4495; (2002) 21 C.C.E.L. (3rd) 161 (C.A.)