COURT FILE NO.: 411/03
DATE: 20050303
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Toronto Community Housing Corporation Landlord, Respondent
- and -
Winsome Greaves Tenant, Appellant
HEARD: Submissions in writing, January, 2005
BEFORE: Lane, Pitt and Molloy JJ.
COUNSEL: Kerry K. Gearin for the Appellant Jim Kandaji for the Respondent
E N D O R S E M E N T A S T O C O S T S
[1] On December 14, 2004, we released reasons allowing the Tenant’s appeal from an order of the Ontario Rental Housing Tribunal terminating her tenancy and ordering that she be evicted, subject to a stay to permit her four children to complete their school year. We have now received submissions as to the costs of the appeal.
[2] The matter arose from an altercation between two tenants. The landlord made a snap decision to move one tenant to another housing complex and to seek to terminate the appellant’s tenancy. Evidently, the landlord considered the appellant as blameworthy, although it is conceded that it did no investigation of the circumstances of the altercation, even though it was a case of the credibility of conflicting stories.
[3] Counsel for the appellant submitted a request for costs totalling $26,862.04 made up as follows:
Before the ORHT: $ 7,447.20
For the Appeal: $16,169.84 for fees plus $3,245 for disbursements.
[4] The landlord operates a subsidized housing complex and the appellant is a subsidized tenant, being a single mother on social assistance with four minor children. Counsel submits that the landlord acted in draconian fashion, employing the ultimate weapon of eviction without investigating the matter or waiting for the court proceedings to determine who was at fault. Charges were outstanding against both tenants. There was conflicting evidence and the landlord arbitrarily determined to attempt to evict this tenant while treating the other participant very differently. Compounding this unfairness was the refusal of the landlord to consent to adjourn the eviction proceedings until the court had heard the charges. Counsel submits that in the circumstances, the tenant should obtain full indemnity for her costs at both the Tribunal and the appeal hearings.
[5] In addition, counsel submits that public policy calls for full indemnity to the tenant in circumstances such as these, in order to drive home to landlords, including publicly funded landlords, the need to act fairly, investigate the facts and act in good faith in dealing with tenants, particularly tenants whose poverty ensures that their housing choices are very limited. These are matters that ought to inform the Tribunal’s application of section 84 of the Tenant Protection Act (TPA) in every case.
[6] Counsel for the landlord submits that there should be no costs awarded by us in respect of the proceeding before the Tribunal. The Tribunal ordered none in favour of the successful landlord and we should refrain from making an order. The landlord acted in good faith and there was no mention of costs for the Tribunal hearing at the appeal hearing. Further, Rule 24.5 of the rules of the ORHT sets a limit of $500 for any costs that might be awarded.
[7] As to the costs of the appeal, the landlord submits that there should be none because, in defending the appeal, it acted in good faith based on a Tribunal order that “did not contain any errors of law on the face of the record”; there was in fact a good chance of successfully holding the Tribunal order; and the decision on appeal resulted in an important clarification for the Tribunal of the extent of its obligations under section 84. In the alternative, the costs should be partial indemnity costs for a half-day, say $1,000.
Costs at the Tribunal
[8] Section 190(2) of the TPA provides that the Tribunal may order a party to an application to pay the costs of another party. Section 190(3) provides that the Tribunal may also order that its costs be paid, by a party or a paid agent or counsel to a party. Section 190(4) provides that the amount of an order for costs is to be determined in accordance with the Rules. Rule 24 deals with costs and is accompanied by an extensive commentary. So far as relevant, it is set out below, with the commentary in italics:
24.3 Representation fees shall not exceed $75 per hour for the services of a lawyer or paid agent.
This Rule sets the maximum amount which may be allowed if a Member decides it is appropriate to order one party to pay another party’s "costs". The Guideline suggests this is appropriate only where a party has been responsible for unreasonable conduct and also suggests situations in which a party is not entitled to costs even if there has been unreasonable conduct by another party.
Although it may be difficult to estimate, the intention is to allow the representation fees only for the portion of the hearing that was caused by the unreasonable conduct. For example, if the Member warned the respondent’s representative that an issue she raised did not seem relevant to the application, and yet they continued to pursue the issue for an hour, the Member could order the respondent to pay the applicant $75 as costs.
24.4 If the Member decides to allow costs related to the representative’s preparation time, fees may be allowed not exceeding $75 per hour for the time spent.
The Guideline suggests that preparation fees are only to be allowed in the most serious cases of unreasonable conduct. For example, if the applicant raises a totally irrelevant issue in their application, the respondent’s representative may be allowed a preparation fee of up to $75 per hour for reviewing the Act, Guidelines and any past significant decisions related to that issue.
24.5 Expenses of the Tribunal which a party or representative may be ordered to pay shall not exceed $75 per hour for the hearing or $500 in total in respect of the proceedings as a whole.
This Rule is somewhat different than Rule 24.3 which deals with representation fees as "party costs". It recognizes unreasonable conduct in any stage of the proceedings will be relevant in considering the Tribunal’s costs, whereas the issue of ordering a party’s costs is limited to unreasonable conduct at the hearing.
There are two limits on the amount ordered. First, if the unreasonable conduct affects only part of the hearing, the order shall not exceed $75 per hour. (However, there may be an order for Tribunal costs even where the unreasonable conduct did not affect the hearing.) Second, the amount allowed in total for the proceedings cannot exceed $500, including any amount ordered for the hearing.
[9] The submissions of the landlord treat the $500 limit in Rule 24.5 as applying to orders for payment of the costs of a party, but the Rule clearly applies only to the costs of the Tribunal itself. The only limit in the Rules on the amount of a costs order payable by one party to another is $75 per hour. The guidelines are not part of the Rule and do not bind members nor can they bind us, particularly in the light of section 196(5) of the TPA which provides that on an appeal from the ORHT:
(5) The Divisional Court may also make any other order in relation to the matter that it considers proper and may make any order with respect to costs that it considers proper.
[10] Having said that, we observe that section 196(5) does not exempt us from considering with respect the views of the Tribunal as expressed in its guidelines and also the normal considerations that inform any decision as to the costs of a proceeding before us.
[11] When appellate courts reverse decisions made below, it is the practice to consider whether any costs order made below ought to survive the reversal of the substantive order. Normally the two fall together. In the present case, the Tribunal made no order in favour of the successful landlord. Had the tenant prevailed at the Tribunal, as she has prevailed before us, on the basis of the landlord’s unfair and hasty rush to judgment against only one participant without inquiry or patience to await the outcome of the charges; it would have been a case for costs on the Tribunal’s guideline standard of unreasonable conduct.
[12] Accordingly, we are of the view that it is appropriate to award the tenant costs of the hearing before the Tribunal. We will turn to the amount later.
Costs of the Appeal
[13] The tenant appellant has been successful and we see no reason why she should not have her costs for that reason. In addition, the considerations of unfair and unreasonable conduct by the landlord from the beginning also inform the costs issue on the appeal. On September 25, 2003, shortly after the appeal was launched, the charges against the appellant ended in her favour. It was not reasonable in the circumstances for the landlord to pursue the eviction in this court, particularly bearing in mind the difficult personal circumstances of the tenant appellant.
Quantum
[14] The figures submitted by counsel for the appellant are very high for the type of hearing involved. Even reducing the hourly rate claimed ($145/hr) to the allowable $75 per hour, the claimed fee for the Tribunal hearing would be $3600. The hours (48) are unusually high and at least one item (preparation for appearance on a 2 days for every day in court basis) appears to be an estimate and not a docket. Applying the principles of Zesta Engineering[^1] an award of $7,000 plus disbursements far exceeds the reasonable expectation of a party to such a hearing as to what he might have to pay if he loses. There is, however, a further factor discussed below.
[15] The costs claimed for the appeal are also very high at $16,000 plus G.S.T. and disbursements, unspecified, of $3,245. The hourly rate has climbed to $200 per/hr., but of course, the $75 rate does not apply. At $200, the rate is near the top of the appropriate range for Ms. Gearin, a 2000 call. The maximum rates are reserved for the most experienced person doing the maximum case[^2] and the claimed rate is too high for this case. The hours are also rather high for preparation and some staff work might better be classed as overhead. Still, it is clear that a lot of work went into the case. The respondent’s submission that a total of $1,000 ought to be awarded for one-half day in court overlooks that preparation time is an essential part of a Bill on an appeal.
[16] The present case is an extraordinary, and, one hopes, unusual case. The tenant is impoverished and dependant upon subsidized housing to house her family. She has nowhere else to go. This utterly vulnerable woman became involved in an altercation as to which there are two versions of events. Without investigation or the patience to await the verdict of the court as to fault, the landlord seeks her eviction, (to live where?) and immediately houses the other combatant in accommodation in another complex. Once that move has happened, there is no conceivable danger to the other combatant, even assuming the tenant is indeed the villain. Why then the rush to evict the tenant? This landlord has not acted reasonably and has brought upon itself the consequences of hasty action. Fortunately for the tenant, her counsel came forward and acted for her, with great success in the end.
[17] Certainly a figure such as $16,000 is well beyond what most persons would think would be the penalty to be paid for losing an appeal of an ORHT order. However, since legislation does not permit agents to appear in Divisional Court and it is difficult to obtain Legal Aid certificates for this type of thing, it is important that costs, where they are justified, go some distance towards enabling tenants to engage lawyers to assert their rights and so discourage landlords from trampling on them. It is an access to justice issue. We are not prepared to award the full sum claimed, but in all the circumstances described above, we think it necessary to award a sum which will encourage other lawyers to take on such cases.
[18] The need to encourage counsel of experience to take on cases where plaintiffs are impecunious and payment will be, at best delayed, and may not be forthcoming at all if the case is lost, has been the basis for a premium on costs in a number of cases. One such case was Bakhtiari,[^3] where the solicitor carried not only the expenses of the case, but also an allowance for the personal expenses of the plaintiff, for eight years with a risk of non-payment and was awarded a premium over the costs for so doing, in a situation where the plaintiff would otherwise have been unable to access justice. The Court of Appeal found no basis for interfering with the premium awarded and the Supreme Court refused leave.
[19] Although the facts of the present case are quite different from those in Bakhtiari and the other cases footnoted, the principle remains the same: access to justice ought not to be denied on the basis of impecuniosity and counsel prepared to act despite the risk of non-payment ought to be appropriately rewarded. This is all the more appropriate where, as here, the landlord was aware of the extreme vulnerability of the tenant throughout.
[20] Combining the principle in Bakhtiari with that in Zesta, we conclude that a fair and reasonable award of costs in these circumstances is $2,000 for the Tribunal hearing, $6,000 for the appeal and a premium of $3,000. We also award the appeal disbursements of $3,245 as claimed (and not questioned).
Lane J.
Pitt J.
Molloy J.
DATE:
[^1]: Zesta Engineering v. Cloutier (2002) 2002 45084 (ON CA), 164 O.A.C. 234 (C.A.)
[^2]: Moon v. Sher, 2004 39005 (ON CA), [2004] O.J. No. 4651, paragraph 31, (C.A.)
[^3]: Banihashem-Bakhtiari v. Axes Investments (2004), 2003 32527 (ON SC), 66 O.R. (3d) 284 (S.C.J.); 2004 36112 (ON CA), 69 O.R. (3d) 671 (C.A.); leave to appeal refused [2004] S.C.C.A. No. 145; See also Lurtz v. Duchesne, 2005 5080 (ON CA), [2005] O.J. No. 354 (C.A.) paragraph 35; Dybongo-Rimando Estate v. Lee [2003] O.J. No. 534, paragraph 33.