Court File and Parties

CITATION: El-Hennawy v. The Law Society of Upper Canada, 2014 ONSC 1640

COURT FILE NO.: 59/13

DATE: 20140411

SUPERIOR COURT OF JUSTICE – ONTARIO

Divisional Court

RE: Tarek El-Hennawy et al., Applicants

AND:

The Law Society of Upper Canada, Respondent

BEFORE: Then, Himel and Sachs JJ.

COUNSEL: Victor L. Freidin, Q.C., for the Applicants

M. Jill Dougherty, for the Respondent

Endorsement re: costs

[1] On January 28, 2014, this court dismissed the applicants’ application for judicial review and gave the parties the opportunity to make written submissions as to costs. We have now received and reviewed those submissions.

[2] The respondent, as the successful party, is requesting its partial indemnity costs fixed in the amount of $25,000.00. The applicants “do not dispute the time spent or the rates charged in calculating the Law Society’s Bill of Costs” (applicants’ Costs Submissions). They also do not dispute that costs normally follow the event. They argue that this is a case where the court should depart from the normal rule that costs follow the event and order no costs.

[3] The first submission the applicants make to support their argument for no costs is the huge financial loss that the applicants have already experienced as a result of Mr. Mazzucco’s conduct. Not only did he misappropriate their money, but they incurred substantial legal fees in making their Compensation Fund claim, costs for which they will never be reimbursed and costs that they argue were necessary to meet arguments put forward by the respondent that were ultimately not successful. As part of this submission, the applicants point out that, to the extent that they were successful before the Compensation Fund, the costs they were awarded were limited by the guidelines established for the award of costs before that committee. They argue that it would be unfair and inequitable for the applicants to have their costs limited by the Law Society’s guidelines and for the Law Society not to be subject to similar limitations when it comes to its costs on the judicial review application.

[4] In our view, none of these arguments justify an order of no costs. The applicants chose to apply for a judicial review of the Compensation Fund Committee’s decision. In doing so, they took the risk that if they were unsuccessful, they may have to pay costs, which would be fixed in accordance with the Rules of Civil Procedure, not in accordance with the costs guidelines that apply to the Compensation Fund costs awards.

[5] The second argument the applicants advance for an order of no costs is that this case is analogous to public interest litigation where the courts have found that no costs should be awarded. In particular, according to the applicants, the issue of whether Convocation had jurisdiction to establish guidelines to structure the Compensation Fund Committee’s exercise of discretion in making grants from the Compensation Fund was a novel legal point that it was in the public interest to raise and clarify. We disagree. There is lots of existing case law to justify the Law Society’s use of guidelines as long as those guidelines are not binding on the committee in question. In other words, this issue, while important, was not novel. Neither can it be said that the application before us concerned a matter of public interest.

[6] Finally, the applicants submit that an award of costs against them would run contrary to the purpose of the Compensation Fund, which is to protect the public in its dealings with members of the Law Society. According to the applicants, it is in the public interest that the fund be administered to provide access to justice, and awarding costs in this case would do the opposite. They also argue that ordinary members of the public would have difficulty understanding this court’s role on judicial review; in particular, its use of the reasonableness as opposed to the correctness standard of review. In their submission, if an award of costs were made against them, the public’s perception of the Compensation Fund process and the Law Society, generally, would be adversely affected.

[7] Again, this submission of the applicants ignores the reality that the applicants chose to pursue this application for judicial review and did so knowing the principles of costs that would apply, one of which is that costs follow the event. This principle is designed to promote, not impede, access to justice. Without it, unnecessary and expensive litigation could be pursued without risk to the party pursuing the litigation and at huge cost to the party subject to the litigation. With respect to the applicable standard of review, this standard reflects the respect of the courts for legislation that has been enacted to set up specialized tribunals with the responsibility for making decisions in certain areas. In a democracy, that legislation embodies, not obstructs, the will of the majority of the population.

[8] For these reasons, we find that, contrary to the submission of the applicants, the ordinary rule of costs should apply and the respondent, as the successful party, is entitled to its costs. Since the applicants take no issue with the quantum sought, which we agree is reasonable, we fix the costs payable at $25,000.00, inclusive of disbursements and HST, payable by the applicants to the respondent forthwith.

THEN J.

HIMEL J.

H. SACHS J.

Date: April 11, 2014