Cusimano v. Toronto (City), 2012 ONSC 2629
CITATION: Cusimano v. Toronto (City), 2012 ONSC 2629
DIVISIONAL COURT FILE NO.: 260/11 & 259/11
DATE: 20120413
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
JENNINGS, DAMBROT and SPROAT JJ.
B E T W E E N :
AGUSTINE G. CUSIMANO
Applicant (Respondent)
– and –
CITY OF TORONTO and MARIA AUGIMERI
Respondents (Appellants in Appeal)
--and –
GLORIA SACCON and CITY OF MISSISSAUGA
Interveners
AND BETWEEN:
MICHAEL SULLIVAN
Applicant (Respondent)
-- and –
CITY OF TORONTO and STEPHANIE PAYNE
Respondents (Appellants)
-- and –
CITY OF MISSISSAUGA
Intervener
Counsel:
Dianne Dimmer, Susan Ungar and Tim Carre, for the Appellant City of Toronto
Julian D. Heller and Laby Yaqeen, for the Appellant Augimeri
Lorne Honickman, Rory Barnable and Meredith Rady, for the Respondent
Caroline Jones and Jodi Martin, for the Intervenor Saccon
Andrea Wilson-Peebles and Marcia Taggart, for the Intervenor City of Missauga
Dianne Dimmer, Susan Ungar and Tim Carre, for the Appellant City of Toronto
Julian D. Heller and Zaby Yaqeen, for the Appellant Payne
George Rust-D’Eye, for the Respondent
Andrea Wilson-Peebles and Marcia Taggart, for the Intervenor City of Mississauga
DECISION ON COSTS
SPROAT J.:
Introduction
[1] Our reasons for allowing the appeal in this matter are set out in Cusimano v. Toronto (City), 2011 ONSC 7271. In these reasons we utilize the same abbreviations.
[2] In brief, Cusimano, a defeated candidate for City Council, challenged the election of Augimeri. Sullivan, a defeated candidate for the Toronto District School Board, challenged the election of Payne.
[3] The Application Judge allowed the applications and ordered by-elections. The Application Judge awarded costs payable by the City as follows:
(a) to Cusimano - $65,000;
(b) to Sullivan - $40,000; and
(c) to Payne - $20,000.
[4] Augimeri was not a party before the Application Judge. She brought a motion and was added as a party by order of Lederman J. dated August 17, 2011.
[5] On appeal we concluded that the irregularities complained of did not affect the result of the election and that the election was conducted in accordance with the principles of the M.E.A. As such, the elections were valid having regard to s. 83(6) of the M.E.A.
Positions of the Parties
[6] The City of Toronto seeks $5,000 in costs from Cusimano and $2500 in costs from Sullivan.
[7] The position of Cusimano is that there should be no costs of the motion before Lederman J., no costs in the Divisional Court and that he should retain the costs awarded to him by the Application Judge payable by the City.
[8] Sullivan submits that there should be no costs in the Divisional Court, and that he should retain the costs awarded to him by the Application Judge payable by the City.
[9] Payne submits, pursuant to her cross-appeal, that we should increase the $20,000 awarded to her by the Application Judge. In addition, she seeks costs of the appeal of approximately $38,000 on a substantial indemnity basis and $26,000 on a partial indemnity basis.
[10] Augimeri seeks costs of her motion to be added as a party of approximately $26,500 on a partial indemnity basis, and $39,500 on a substantial indemnity basis. Augimeri claims approximately $76,500 in costs of the appeal on a partial indemnity basis, and approximately $110,500 on a substantial indemnity basis, related to the appeal.
[11] Payne and Augimeri submit that the City should be responsible for their costs with the City entitled to pursue Sullivan and Cusimano for all or a portion of the costs award.
Governing Principles – The Law
[12] The M.E.A. simply provides that persons may commence an application in court. As such, s. 131(1) of the Courts of Justice Act (“C.J.A.”) applies which states as follows:
Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.
[13] Rule 57.01(1) of the Rules of Civil Procedure is, therefore, applicable. Rule 57.01, and the caselaw which has considered it, reflect that the successful party is generally entitled to costs. We do recognize, however, that Rule 57.01(2) provides that:
The fact that a party is successful in a proceeding or a step in a proceeding does not prevent the court from awarding costs against the party in a proper case.
[14] A predecessor of the M.E.A. provided for a presumption that the costs of a candidate in a recount case would be paid by the municipality. The M.E.A. no longer contains this presumption. Had the legislature intended, in enacting the M.E.A., to oblige the City to indemnify litigants in all types of election litigation for costs it would have stated this expressly.
[15] Further, s. 84(7) of the M.E.A. provides that if a successful candidate disclaims any right to the office, the candidate is relieved of liability for any costs award. This clearly contemplates that there may be costs awards as between challengers and elected officials.
[16] While a secondary consideration, in considering the propriety and fairness of requiring the City to pay costs, we note that candidates are able to raise money through public fundraising and to extend their campaigns to cover campaign expenses. The M.E.A., s. 67(2), provides that the costs of controverted election litigation are campaign expenses. As such, candidates considering litigation can factor into their assessment whether campaign donations may be available to defray expenses.
[17] Augimeri and Payne (both represented by the same counsel) submit that:
Generally the relevant cases have awarded costs to the candidates, payable by the municipality, on either a substantial or partial indemnity basis.
[18] In support of this proposition they cite:
- Janigan v. Harris, 1989 CarswellOnt 2342;
- Harris v. Corporation of the City of Ottawa et al, 1994 CarswellOnt 641;
- Silva v. O’Donohue, 1995 CarswellOnt 1045;
- Di Biase v. Vaughan (City), 2007 CarswellOnt 5876; and
- Goldie v. Brock (Township), 2011 CarswellOnt 9885.
[19] Their facta state:
- While the City has been found to have acted properly and diligently by the panel, the public interest protection of candidates, and particularly winning candidates, requires that the government in question essentially underwrites the costs of litigation in support of the democratic process.
[20] Augimeri and Payne in essence submit that we should read in to the M.E.A. a presumption that the City is obliged to pay the costs of both successful and unsuccessful litigants.
[21] The caselaw cited certainly does not go that far. Janigan, Harris and Silva were all recount cases decided under the predecessor legislation which provided that, “unless a Court orders otherwise, the costs, including the costs of a candidate, of a recount [...] shall be borne by a municipality...”.
[22] In Silva, the Court of Appeal upheld the award of costs in the court below but held that a further appeal to the Court of Appeal was not an appeal under the M.E.A. so that the M.E.A. provision then in force obliging the municipality to bear costs was not applicable. As such, the Court of Appeal held that the parties “are on their own” and did not order any additional costs against the City.
[23] In Di Biase, costs were awarded against the municipality but there the municipality had acted improperly. Howden J. was quite scathing in his criticism of the conduct of the City Clerk who made an “ill informed” decision to rent computerized voting machines which were programmed in such a way that they missed counting 1,656 ballots in an election where the Mayor won by 90 votes. The Clerk then improperly refused to allow the mayoral candidates to review the ballots in issue. Howden J. ordered the losing and at fault municipality to pay the costs of both mayoral candidates.
[24] Goldie was also a recount case. It was decided after the M.E.A. was amended and so there was no presumption that the municipality would bear the costs of the litigants. The applicant was a ratepayer who sought a manual recount of ballots. The respondents were the municipality, the mayor elect and the self-represented unsuccessful mayoral candidate who lost by 13 votes. Lauwers J. rejected the request for a manual recount and ordered a partial recount involving scanning 76 ballots in a Vote Tabulator Machine.
[25] In Goldie, the applicant was not a candidate and was clearly a public interest litigant who was partially successful. It does not appear that the municipality contested the claims for costs. In awarding costs, Lauwers J. stated:
In Di Biase v. Vaughan (City), (2007) 39 M.P.L.R. (4th) 112, [2007] O.J. No. 3516 Howden J. made the following statements on the cost principles which I adopt:
- As counsel for Ms. Jackson submits, a review of the cases involving electoral issues discloses that the court has sought to at least partially indemnity candidates for their legal expenses. In some cases it has been on a substantial or full indemnity basis. As I have found regarding the applicant, the City reasonably would have expected such an Order.
[26] Cusimano and Sullivan submit that they should retain the costs award against the City made by the Application Judge and that there be no costs of the appeal on the basis that these proceedings are public interest litigation, citing:
- Mahar v. Rogers Cablesystems Ltd. (1995), 1995 7129 (ON SC), 25 O.R. (3d) 690 (Ont. Gen. Div);
- Friends of the Greenspace Alliance v. Ottawa (City), 2011 ONSC 472, 80 M.P.L.R. (4th) 176 (Div. Ct); and
- Re Centenary Hospital Association (1989), 69 O.R. (2d) 447, 60 D.L.R. (4th) 768 (ON SC).
[27] In Maher, Friends of the Greenspace and Re Centenary the analysis related to whether the status of public interest litigant will relieve an unsuccessful litigant from liability to pay costs. The cases do not go so far as to support an award of costs to an unsuccessful public interest litigant.
[28] Sullivan cites B.(R.) v. Children’s Aid Society of Metropolitan Toronto (1992), 1992 2831 (ON CA), 10 O.R. (3d) 321 (C.A.) at para. 30, for the proposition that costs can be awarded against a successful party even if there is no misconduct by the successful party. This was however an extraordinary case involving the constitutionality of Child Welfare Act provisions that were used to grant wardship of a child to the Children’s Aid Society (“C.A.S.”) to allow the child to have a blood transfusion contrary to the religious convictions of the parents.
[29] A majority of the Court of Appeal upheld a costs order against the Attorney General in favour of the parents. The majority noted that the case had been initiated by the C.A.S. and the parents were, therefore, responding to state action. Further, the issue litigated was of national and international significance. Houlden J.A. dissented as to costs on the basis that it would create a dangerous precedent to award costs against the Attorney General in such a case.
[30] As stated by Howden J. in De Biase v. Vaughan (City), [2007] O.J. No. 3516 (S.C.J.):
- [...] It is well known that candidates raise money for their campaigns, that they have a strong personal interest in running, and that they stand to gain personal benefit. That said, I recognize that they also, of course, undertake a public duty for community benefit. Re Chapman et al. (1986), 53 O.R. (3d) 189 (Dist. Ct.), Janigan v. Harris, supra.
[31] We distill the following from the cases just discussed:
(a) there is no presumption that the City is obliged to pay the costs of all litigants;
(b) the combined effect of the C.J.A., the M.E.A. and Rule 57 is that losing litigants generally pay costs to winning litigants;
(c) the court has a discretion to relieve a public interest litigant from an obligation to pay costs;
(d) it is only in truly extraordinary cases, such as B(R.) that a successful party would be required to pay costs to an unsuccessful public interest litigant; and
(e) the court may, in appropriate circumstances, require a successful municipality to pay costs to another successful party.
Analysis and Conclusion - Entitlement to Costs
The Application
[32] On the evidence it was clear that Augimeri and Payne had received the most votes, cast by qualified electors, on election day. Mr. Rust D’Eye fairly conceded this and the evidence made that clear. This was not a case brought to ensure that the democratic will prevailed. While there may have been a public interest aspect to the litigation initiated by Cusimano and Sullivan there was also a significant personal interest.
[33] At its highest, Cusimano and Sullivan were endeavouring to hold election officials to strict compliance with the technical requirements of the M.E.A. No one would take issue with the fact that the stricter the compliance by election officials the better. A court proceeding is, however, not the only way to pursue that laudable objective in a free and democratic society. Cusimano and Sullivan could have, for example, brought perceived failings in the training and diligence of election officials to the attention of the City Clerk, the Mayor and members of Council, the media and the public.
[34] The argument is made that unless unsuccessful litigants like Sullivan and Cusimano receive funding for their costs, all but the extremely wealthy will be deterred from bringing applications which are at minimum arguable and should be heard. We do not agree. An arguable, interesting case is likely to attract able counsel who will take the case on other than on a straight hourly basis. Further, a meritorious and/or altruistic case is likely to attract support through campaign donations.
[35] We, therefore, conclude that there is no basis upon which we should maintain the costs award against the City made by the Application Judge in favour of Cusimano and Sullivan.
[36] As discussed below in greater detail we agree that Payne is entitled to costs of the application. Payne claimed her total costs inclusive of fees disbursements and HST were $36,000. She submitted that substantial indemnity fees would be $32,000 and partial indemnity fees be $28,000. That would make partial indemnity costs 77% of full indemnity costs which is high. The Application Judge awarded $20,000 after considering various arguments to moderate the costs award. We see no error in principle that would justify increasing that award.
The Appeal
[37] Payne and Augimeri were elected to office. Through no fault of their own the litigation ensued and their entitlement to hold office was at stake. Compared to all other individuals elected to office on the same day, they were simply in the wrong place at the wrong time and so embroiled in litigation.
[38] There is also a significant public interest aspect to the roles they played. As appears from Augimeri’s affidavit filed before Lederman J., the decision of the Application Judge was released April 21, 2011. By letter dated May 13, 2011 the City Clerk advised that the City would not appeal. On May 19, 2011 the City announced that it had decided to appeal:
In response to events this week which made it clear that the decision would be appealed to the Divisional Court by other parties, and in order to ensure appropriate representation...
[39] Payne and Augimeri, therefore, also deserve at least partial credit for the fact that the City appealed and the integrity of the election was upheld. Conducting a by-election would have been very expensive. The City of Mississauga’s evidence indicated it budgeted $445,000 to conduct one by-election.
[40] Someone must pay costs of the appeal to Payne and Augimeri. The City or the unsuccessful litigants.
[41] While we found no fault or neglect in the conduct of the City it remains that the City was responsible for running the election and it was the mistakes made by City election officials that resulted in the large number of unsigned VLCRFs.
[42] Payne and Augimeri have a limited ability to spread their legal costs over donors who may contribute to their campaigns. The legal costs in issue by any standard exceed what would otherwise be their total campaign budgets.
[43] In contrast, any expense incurred by the City is automatically spread across all taxpayers. Further, the legal costs in issue are a minuscule percentage of the total cost of the election to the City. There is a benefit to all taxpayers in having any matters which seriously cast doubt on the integrity of the election aired and decided.
[44] The cases cited and the costs claimed in this case reflect that election litigation is expensive. We have already determined that Sullivan and Cusimano must bear their own costs. The further question is whether they should also be liable to pay costs to the City, Augimeri and Payne.
[45] Sullivan states that he earned $44,000 in 2010 in light of having taken a 5 month leave of absence to run for a school board trustee position which pays $26,000 per annum. His wife is currently a student.
[46] Cusimano asserts that he does not have the financial resources to pay a costs award. His actual resources are not detailed or documented.
[47] Sullivan and Cusimano had an arguable case to present as evidenced by the fact that it found favour with the Application Judge. To require them to bear their own costs and in addition to pay costs would effectively put election litigation beyond all but the richest candidates.
[48] In these circumstances, we conclude that the blameless and successful parties Payne and Augimeri should be entitled to have their reasonable costs of the appeal paid by the City.
[49] We now turn to Augimeri’s motion to be added as a party. Cusimano offered to settle the motion but on terms that included that Augimeri would not be permitted to claim costs against Augimeri and that she not be permitted to file any evidence. Augimeri clearly bettered this offer as Lederman J. granted her party status and a limited right to file evidence.
[50] We see no public interest aspect to Cusimano’s opposition to the motion. This was driven by personal or political motives. Cusimano must pay costs of the motion to Augimeri.
[51] Our previous reasoning supports the conclusion that Augimeri should not be left to pursue Cusimano and run the risk he is judgment proof. It is more appropriate that the City run that risk. The City and Cusimano are, therefore, jointly and severally responsible to pay the costs of the motion to Augimeri. The City is, however, entitled to be indemnified by Cusimano for any costs of the motion paid to Augimeri.
Quantum of Costs
[52] The City was successful, however, for the reasons discussed we are requiring the City to bear certain costs. There was, however, no misconduct or other extraordinary circumstances which would warrant awarding costs on a substantial indemnity basis. We agree with the Application Judge that the election litigation caselaw favours partial indemnity costs. As such we proceed on the basis that partial indemnity costs are appropriate.
[53] The City of Toronto has deep pockets (albeit taxpayer funded) and an in-house legal department. It only makes sense that individual litigants aligned in interest with a major corporation like the City, would let the major corporation take the lead and participate only, and to the extent, necessary. This common sense, fiscally prudent, approach is reflected in Rule 57.01(0.b) which allows the court to consider whether it is appropriate to award costs, or more than one set of costs, where a party in defending a proceeding has “separated unnecessarily from another party in the same interest or defended by a different lawyer”.
[54] The flip side of this coin is Rule 57.01(0.b) which provides that the court may consider the costs that an unsuccessful party would reasonably expect to pay. Specifically, in our view, the City would reasonably have expected that Augimeri and Payne would play a limited role given the leading role played by the City. For example, retaining counsel to review materials and suggest arguments to the City. If the City was unprepared to advance certain arguments it would be reasonable to expect them endorse the City position and attend the appeal to advance further arguments.
[55] Augimeri claims costs of the appeal of $76,500 on a partial indemnity basis. Augimeri, however, devoted considerable time and effort to pursuing issues which we found to be unwarranted or without merit. We ruled that we would not entertain her challenge to the constitutionality of provisions of the M.E.A. on the grounds that the record was “woefully inadequate” and that in adding her as a party Lederman J. had stated that his order was not “to unduly [widen] the focus scope or nature of the appeal”.
[56] Further we ruled that the extensive affidavit evidence filed by Augimeri canvassing eligible voters after the fact, was inadmissible. Augimeri suggests that this canvass was reasonable and prompted by an observation by the Application Judge. In fact, the Application Judge stated at para. 59 that it “may have been possible for the City” to have contacted voters after the fact to verify entitlement to vote and then sign the VLCRFs but that this was “not something that the applicants could have done”. If anything, this should have indicated that such a canvass should not be undertaken by her.
[57] Mr. Heller submits that the research and drafting of the constitutional challenge was done by a lawyer called to the Bar in 2011 and that, as such, on a partial indemnity basis any reduction related to this challenge should not exceed $3,480 (23.2 hours x $150). This, however, assumes that no time was spent by the junior lawyer and more senior counsel in preparing for the appeal.
[58] Items one and two of the Augimeri costs outline relate generally to receiving instructions, reviewing documents, legal research, preparing affidavit material and preparation of factum, and do not include research and drafting of the constitutional challenge. On a partial indemnity basis the time totals approximately $36,477.
[59] Nine pages of the Augimeri factum was devoted to the voter canvass issue. If anything, the work in assembling that material would be time intensive.
[60] On a conservative basis we would reduce the partial indemnity costs claimed by $10,000 on account of the constitutional challenge and $15,000 on account of the voter canvass issue. The remaining costs claimed amount to $51,500.
[61] What remains of the Augimeri factum and argument is to a significant extent a duplication and repetition of the arguments advanced by the City.
[62] Payne seeks approximately $31,000 in partial indemnity costs of the appeal.
[63] Payne is in a somewhat different position. She advanced arguments based upon the Education Act which were not relevant to, and so not advanced by, the City. Having said that, the Education Act provisions were clearly peripheral and secondary. In allowing the appeal we did not refer to or rely upon any of the Education Act arguments advanced by Payne.
[64] We then step back to consider what the City would reasonably have expected to pay Payne and Augimeri for costs.
[65] We conclude, considering the points just made, and all the Rule 57 factors, that costs should be awarded to Payne in the amount of $25,000 and Augimeri in the amount of $40,000.
[66] As to Augimeri’s motion to be added, she claims $26,500 on a partial indemnity basis and $39,500 on a substantial indemnity basis. In our view, Cusimano’s opposition to the motion was very unreasonable and costs should be awarded on a basis somewhat higher than partial indemnity. We, therefore, award Augimeri’s costs of the motion fixed at $32,500.
[67] The City seeks $5,000 in costs from Cusimano and $2500 from Sullivan. These are certainly nominal amounts given the time and effort by the City. These litigants have, however, incurred significant non-recoverable costs. Costs have been increased through no fault of their own by the fact of an appeal. The successful appeal has relieved the City of the substantial costs of a by-election. In these circumstances we decline to award costs to the City.
Conclusion
[68] The City shall, therefore, pay costs as follows:
(a) to Payne, of the application, in the amount of $20,000 as awarded by the Application Judge;
(b) to Payne, of the appeal, in the amount of $25,000; and
(c) to Augimeri, of the appeal, in the amount of $40,000.
[69] Cusimano shall be liable to pay costs of the motion to Augimeri in the amount of $32,500. The City shall be jointly and severally liable for such costs. Cusimano shall indemnify the City for the amount it pays to Augimeri in relation to the motion.
[70] There shall be no costs awarded to Sullivan and Cusimano, or payable by them, in relation to the application and the appeal.
SPROAT J.
JENNINGS J.
DAMBROT J.
RELEASED: April 13, 2012
CITATION: Cusimano v. Toronto (City), 2012 ONSC 2629
DIVISIONAL COURT FILE NO.: 260/11 & 259/11
DATE: 20120413
AGUSTINE G. CUSIMANO
Applicant (Respondent)
– and –
CITY OF TORONTO and MARIA AUGIMERI
Respondents (Appellants in Appeal)
--and –
GLORIA SACCON and CITY OF MISSISSAUGA
Interveners
AND BETWEEN:
MICHAEL SULLIVAN
Applicant(Respondent)
-- and –
CITY OF TORONTO and STEPHANIE PAYNE
Respondents (Appellants)
-- and –
CITY OF MISSISSAUGA
Intervener
DECISION ON COSTS
THE COURT
RELEASED: April 13, 2012