COURT FILE NO.: 369/05
DATE: 20051129
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Christina Elizabeth Holt Applicant
-and-
Stephan Anderson Respondent
HEARD: October 19, 2005; written submissions as to costs November 17, 21, 2005.
BEFORE: Lane J.
COUNSEL: Darrell S. Waisberg, for the Appellant
Melanie Sager, for the Respondents
Shelley D. McIntyre for the Children’s Lawyer.
E N D O R S E M E N T A S T O C O S T S
[1] On October 21, 2005, I released reasons dismissing the appellant’s motion for leave to appeal a temporary order granting the father the role of custodial parent on a three month trial basis. The respondent seeks costs of $4,000 on a partial indemnity basis.
[2] The order was made on August 30, 2005 and was reviewable at a case conference to be held in December 2005, and if a change was sought, a motion would be heard in January 2006. In the light of these short time periods, the respondent questions the necessity of bringing a motion for leave to appeal. There is some force to this submission for, if leave were granted, the appeal would likely be heard after the review in the court below. On the whole, the bringing of the motion seems of questionable utility. The respondent’s Bill of Costs at counsel’s usual rate ($250/hr) comes to $5125 plus GST and disbursements of $647 (including GST) for a total of $6131.10. Counsel submits that a fair figure in these circumstances is $4000.
[3] Counsel for the applicant submits that, as the respondent is legally aided, the costs should be based on the sums actually payable by Legal Aid. This submission is based upon the principle of indemnity, which has recently been added to Rule 57 as one of the matters to be considered by the court in assessing costs. If due regard is given to this principle, the fees must be limited to the amount applicable under Legal Aid, which in this case would be $92.34 per hour and $23 for clerks.
[4] The Legal Aid Services Act, 1998, S.O. 1998, c. 26 provides a statutory scheme for the provision of legal aid services in Ontario. Section 46 of the Act provides:
(1) The costs awarded in any order made in favour of an individual who has received legal aid services are recoverable in the same manner and to the same extent as though awarded to an individual who has not received legal aid services.
[5] In Ramcharitar v Ramcharitar (2002), 2002 53246 (ON SC), 62 O.R. (3rd) 107, Wein J. of this court wrote:
[7] It has been held that a legally aided client stands before the court in exactly the same position as any other litigant. The amount of costs to be awarded in favour of a party who has received Legal Aid is not to be affected by the fact that the person is legally aided.
[8] The phrase "recoverable in the same manner and to the same extent" in s. 46 of the Act, has been held to obviate the indemnity principle in cases where a party receiving costs is legally aided:
….section [46] is intended to obviate the indemnity principle in respect of costs awarded to the legally aided person: Fothergill v. Fothergill 1973 434 (ON SC), [1973] 1 O.R. 708 (H.C.J.)
[9] In Cropper v. Cropper, [1974] O.J. No. 477 (Quicklaw) (C.A.), the Court of Appeal held that it was irrelevant to consideration of the costs to be awarded in a child custody matter whether a party was legally aided. The court held that the fact that one party had a Legal Aid certificate ought not even to be brought to the attention of the court.
[10] In O'Sullivan v. Lindley, [2000] O.J. No. 3965 (Quicklaw) (S.C.J.), the court held that the assessment of costs should be made without regard to the litigant's receipt of Legal Aid.
[11] Even more recently in Foran v. Foran, [2001] O.J. No. 430 (Quicklaw) (S.C.J.), it was held in a family law matter that the fact that the parties were both legally aided should not be considered in the assessment of costs.
[12] Finally, in Ragin v. Ven-Cor Vending Distributors Ltd., [2001] O.J. No. 3763 (Quicklaw) (S.C.J.), the court followed the previous authorities and held that in making a costs order the court cannot consider the existence of a Legal Aid certificate.
[13] All of these cases relied on by counsel for Legal Aid were decided prior to the year 2002 amendments to Rule 57 of the Rules of Civil Procedure. Rule 57 provides guidance to the court in determining the amount of costs of a proceeding where the court decides to fix costs. The amendment which came into force on January 1, 2002 incorporated a new "costs grid" and required that a court hearing a matter fix the costs of the proceeding, except in an exceptional case.
[14] Counsel for the defendants argues that the issue of costs has been significantly altered by these amendments, such that the prior decisions relied on by Legal Aid Ontario are of limited value. In Basdeo v. University Health Network, [2002] O.J. No. 597 (S.C.J.), it was said:
The issue of costs has been significantly altered. A new cost grid has been adopted which among other things makes major changes to the hourly rates which are recoverable where costs are fixed. Past awards of costs in terms of quantum are of limited, if any, relevance.
Per Nordheimer J.
[15] Of greater relevance is the decision, also by Justice Nordheimer, in Lawyers' Professional Indemnity Co. v. Geto Investments Ltd., [2002] O.J. No. 921 (S.C.J.). This case considers the issue of the assessment of costs applicable in cases where salaried solicitors have been retained, or where there are contingency fee arrangements, or where costs are awarded to self-represented litigants. The court noted that while costs recovery is available in all of these situations:
… none of these authorities, or the reasons underlying them, stand for the proposition that a party can recover costs in excess of that which is in fact being charged for those services by its lawyer. Indeed the contrary is true. [page 111]
[6] Later, Wein J. referred to the approval of the LPIC case by the Court of Appeal in Wasserman, Arseneault Ltd. v. Sone (October 4, 2002), but observed that nothing in the LPIC case dealt with section 46(1) of the Legal Aid Services Act, supra.
[7] In Ramcharitar, counsel submitted that that the Ontario Legal Aid Plan is in an identical situation to the Lawyers' Professional Indemnity Company (LPIC) or C.M.P.A. or counsel acting for insurance companies, in terms of indemnity. A Legal Aid certificate simply provides a specific contract of insurance for fees. The defendants argued that the Fothergill decision, which holds that the indemnity principle is obviated by s. 46 of the Legal Aid Services Act has been misinterpreted and/or extended too far by subsequent courts, allowing Legal Aid to make a "tremendous profit" on cases where it recovers costs.
[8] However, Wein J. noted that the cases continued to follow the Fothergill precedent and referred to Turczinski v. Dupont Heating (S.C.J. June 28, 2002) where MacFarland J held that section 46(1) was a complete answer to the indemnity argument. She also referred to Nairn v. Lukowski 2002 78091 (ON SC), [2002] O.J. No. 2680 (S.C.J) where the court relied on Cropper, Fothergill and Foran as supporting the view that it was irrelevant that the party receiving the costs was legally aided.
[9] In the present case, counsel referred me to Riss v. Greenhough (No. 3), 2003 2224 (ON SC), [2003] O.J. No 1574 (S.C.J.) where the court applied the principle of indemnity to a legal assistance plan operated by the Canadian Auto Workers Union. But that case does not affect the different situation of the Legal Aid Plan which has the statutory direction of section 46(1). Nor do I agree that the cases applying rates higher than the Legal Aid rate were wrongly decided.
[10] I agree with Wein J. that the amendments to Rule 57 have not altered the previous interpretation of s. 46(1) of the Legal Aid Act. While indemnification remains the guiding principle, the statute requires that in the particular case of Legal Aid, the court is to assess costs without regard to the fact that the recipient is legally aided. Therefore, I will assess the Bill before me as if the respondent was not legally aided.
[11] The applicant submits that the research conducted by counsel for the respondent should not be allowed, relying on Giguere v. Giguere, 2004 5004 (ON SC), [2004] O.J. No. 444. However, the research time disallowed in that case was research on an issue on which the party receiving the costs was not successful. The case does not indicate that research is generally not recoverable on an assessment on a partial indemnity basis and if it did, I would disagree.
[12] The item re work performed by the law clerk for “Preparation of Factum and Book of Authorities” is objected to as mere copying and hence as secretarial overhead. I do not agree that looking up citations and copying the cases necessary for the book of authorities is necessarily secretarial, although I am sure that many secretaries are quite able to do it. But such work is also within the law clerk’s area and I allow it, but not at $120 per hour.
[13] Counsel for the applicant also submits that the applicant’s modest income should be taken into account. I am never opposed to inserting an element of mercy in an appropriate case, although to some extent that is offset here by the lack of necessity in bringing the motion at all when the review before the motion judge was so near.
[14] All things considered and bearing in mind Boucher v. Public Accountant’s Council (2004), 72 O.R. (3rd) 291 (C.A.), I have concluded that a fair and reasonable amount for the applicant to bear is $2,500.
Lane J.
DATE: November 29, 2005