CITATION: Bouji v. Heritage Education Funds Inc., 2015 ONSC 3451
DIVISIONAL COURT FILE NO.: 600/14
COURT FILE NO. 04-CV-281392CM2 DATE: 20150528
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
B E T W E E N :
ISSAM BOUJI
Plaintiff
(Respondent Party)
– and –
HERITAGE EDUCATION FUNDS INC.
Defendant
(Moving Party)
Robert Ackerman
for the Plaintiff (Responding Party)
Adam D. H. Chisholm
for the Defendant (Moving Party)
HEARD at Toronto: April 28, 2015
THEN J.:
[1] On April 29, 2014, the Master dismissed the action of the plaintiff (Bouji) for delay some ten years after being filed. The defendant (Heritage Education Funds) seeks leave to appeal the order of the Master referring the costs for assessment. For reasons that follow the application for leave to appeal is dismissed.
[2] Section 57.01(3) outlines the basis upon which the court is permitted to fix costs as follows:
(3) Fixing costs: Tariffs – When the court awards costs, it shall fix them in accordance with subrule (1) and the Tariffs. O. Reg. 284/01, s. 15(1).
[3] Section 57.01(3.1) specifies that in an “exceptional case” the court is permitted to refer costs for assessment under Rule 58 as follows:
(3.1) Assessment in Exceptional Cases – Despite subrule (3), in an exceptional case the court may refer costs for assessment under Rule 58. O Reg. 284/01, s. 15(1).
[4] In the instant case, the Master exercised her discretion to refer costs for assessment by means of a short endorsement:
I recognize that generally a Master who manages an action has greater familiarity with the action's procedural history, than a judicial officer who does not. While I was managing this action the counterclaim, my involvement was not extensive and until recently it did not involve a substantive review of the issues raised.
I have considered the submissions of counsel, the procedural history of the proceedings and the nature and extent of my involvement to date.
Given the fact that the counterclaim was discontinued and some work was done after the March 15/10 deadline set by Mr. Justice Aston and given the limits of my involvement, I agree with Mr. Ackerman when he says that the cost of the action ought to be referred to an Assessment Officer for determination. An Assessment Officer is better positioned and able to conduct the detailed review of dockets that is here required save as they relate to the motion heard by me.
Cost of the action, save costs of the motion and which I will decide, are referred to assessment -- without reservation and directions (except as to interest of payment) the court will do nothing to fetter the Assessment Officer's discretions as to quantum, the costs assessed are to be paid to Heritage Foundation Funds Inc., forthwith after assessment.
[5] Section 133(b) of the Courts of Justice Act specifies that leave to appeal must be obtained as to costs in the following circumstances:
- Leave to appeal required -- No appeal lies without leave of the court to which the appeal is to be taken,
(b) where the appeal is only as to costs that are in the discretion of the court that made the order for costs.
[6] I adopt the test for the granting of leave to appeal costs outlined by Swinton J. in Anhil Enterprises v. Select Inc., [2006] O.J. No. 1443 at para. 2:
2 A party seeking leave to appeal a costs order pursuant to s. 133 of the Courts of Justice Act must show that there are strong grounds upon which an appellate court could find that the judge erred in exercising his or her discretion (Yakabuski v. Yakabuski Estate, [1988] O.J. No. 2870 (Div. Ct..) at para. 8).
[7] In addition, the authorities are clear that leave to appeal a costs order will only be granted sparingly when and only when there are strong grounds upon which an appellate court could find that the judge erred in principle or was plainly wrong in exercising his or her discretion, to which considerable deference must be accorded. (See McNaughton Automotive Ltd. v. Co-operators General Insurance Co. (2008), 2008 ONCA 597, 95 O.R. 365 (Ont. C.A.)
position of the parties
[8] Heritage submits that based on Boucher v. Public Accountants Council (Ontario) (2002), 118 A.C.W.S. 622 at para. 45 there is a presumption that costs are to be fixed by the court unless the court is satisfied that it is dealing with an exceptional case. Heritage submits that by failing to advert to, or indeed, to find an “exceptional case”, there is strong reason to infer that the Master committed an error in principle by exercising her discretion injudiciously or based on a wrong principle.
[9] Moreover, the factors which she did refer to do not either individually or cumulatively constitute an “exceptional case”. Those factors are:
(i) that a counterclaim was discontinued;
(ii) that work was performed by Heritage after a breach by Bouji of a court order; and
(iii) that an assessment officer is better positioned and able to “conduct the detailed review of dockets” do not of themselves either legally or factually constitute exceptional circumstances especially in the absence of some explanation of why these factors either individually or cumulatively constitute an exceptional case.
[10] Finally, Heritage submits that the Master has failed to address why “it is likely that the assessment process would be more suited to effect procedural and substantive justice than the fixing process by the court” (Delrina Corporation v. Triolet Systems Inc. (2002) 117 ACWS 3d (31) at para. 14). In this context, Heritage submits that given the Master was provided with dockets, costs submissions, an “invoice list” summarizing all invoices paid for by Heritage for its costs of the action as well as the Bill of Costs, the Master was readily able to fix costs rather than ordering a costly docket by docket assessment of costs which would result in further delay particularly in circumstances where Bouji was not prepared to divulge his own costs.
[11] Bouji concedes that while the Master did not specifically address the issue of “exceptional case”, nevertheless, the Master did not commit an error in principle by exercising her discretion to refer costs for assessment because this is an “exceptional case” and accordingly the motion or leave to appeal should be dismissed.
[12] Bouji relies specifically on para. 52 of Boucher, supra, where Epstein J. (as she then was) stated the following:
[52] While I earlier suggested that a review of the authorities was not particularly helpful in defining "exceptional", it does assist in understanding the test to be applied. The jurisprudence makes it clear that the determination of whether a case is "exceptional" or not is fact specific and will depend on the circumstances of each individual case. Only if the assessment process will be more suited to effect procedural and substantive justice should the Court refer the matter for assessment. There must be some element to the case that is out of the ordinary or unusual that would warrant deviating from the presumption that costs are to be fixed. Neither complex litigation nor significant amounts in legal fees will be enough for a case to be exceptional. The judge should be able to fix costs with a reasonable review of the work completed without having to scrutinize each and every docket. If that type of scrutinizing analysis is required, then perhaps, the matter would fall within the exception and be referred to assessment: BNY Financial corp.-Canada v. National Automotive Warehousing Inc., [1999] O.J. No.1273 (Commercial List, Gen. Div.) (BNY Financial).
[13] Bouji submits that this is an exceptional case for essentially four reasons:
a) the dockets are not detailed and proper documentation has not been provided with the bill of costs;
b) no information has been provided as to how the dockets filed relate to the items in the bill of costs;
c) the dockets filed contain instances where a lawyer docketed in excess of 24 hours per day;
d) this case went on for many years and involved a counterclaim by Heritage which it chose not to pursue and which has been discontinued without costs by operation of Rule 24.03. However the bill of costs and dockets of Heritage do not segregate the costs of the action from the costs of prosecuting the counterclaim.
[14] Finally, Bouji submits that proceeding with the assessment is more cost effective than the pursuit of an appeal which may eventually result in validating the order made by the Master.
analysis
[15] In my view, the brief reasons of the Master are problematic as she made no specific finding that this was an exceptional case nor did she explain why the factors which she referred to either individually or cumulatively constituted an exceptional case which would rebut the presumption that the Master fix the costs rather than referring the matter for assessment. Notwithstanding these deficiencies in the Master’s reasons I have concluded that leave to appeal should not be granted.
[16] The Master did not specifically refer to Rule 57.01(3.1) requiring her to find an exceptional case before referring the matter of costs for assessment. While it would have been preferable for the Master to specifically find an exceptional case I cannot accept that an experienced Master after being referred to the relevant Rule, as the record indicates, would nevertheless decline to exercise her discretion in accordance with the Rule. I am not prepared to accept that the Master committed an error in principle for that reason alone.
[17] As I am prepared to assume the Master applied the “exceptional case” test, it nevertheless remains to determine whether there are strong reasons to conclude that she was plainly wrong in exercising her discretion to which this court must award a considerable measure of deference.
[18] In her reasons, the Master referred to several factors purporting to justify her ordering of an assessment but did not explain why those factors either individually or cumulatively constituted an exceptional case in the circumstances. Given this deficiency in the reasons, but in order to accord appropriate deference to those reasons, it is left to this court to examine those factors in order to determine whether the Master exercised her discretion judiciously.
[19] In Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board) the Supreme Court, albeit in a different context, cited two excerpts from an article by Professor Dyzenhaus touching on the deference to be awarded to the reasons of a lower court or tribunal as follows at paras. (11 and 12):
.... We agree with David Dyzenhaus where he states that the concept of "deference as respect" requires of the courts "not submission but a respectful attention to the reasons offered or which could be offered in support of [page714] a decision" .... [Emphasis added; citations omitted; paras. 47-48.]
"Reasonable" means here that the reasons do in fact or in principle support the conclusion reached. That is, even if the reasons in fact given do not seem wholly adequate to support the decision, the court must first seek to supplement them before it seeks to subvert them. For if it is right that among the reasons for deference are the appointment of the tribunal and not the court as the front line adjudicator, the tribunal's proximity to the dispute, its expertise, etc, then it is also the case that its decision should be presumed to be correct even if its reasons are in some respects defective. [Emphasis added.]
[20] In order to determine whether the Master was plainly wrong in exercising her discretion in ordering an assessment this court may refer both to the record and the submissions of counsel to determine if the Master erred in exercising her discretion to implicitly find this was an exceptional case having failed to do so explicitly.
[21] I begin by referring to the observation of Epstein J. in Boucher, supra, at para. 53:
[53] There are a number of things that I believe may contribute to a finding of an "exceptional" case. I suggest as examples - if there are complex questions surrounding the issue of costs; there has been litigation ongoing for many years or there have been numerous pre-trial motions or aspects to the litigation that the trial judge is not familiar with; very complex litigation involving numerous parties; or the dockets are not detailed and proper documentation is not provided with the bill of costs. These alone are probably not enough, but together or in conjunction with other aspects of a case may lead the case to be referred to assessment. Again, the most important thing to keep in mind is that assessments are to be rare as the purpose of the whole scheme is efficiency and to save the parties involved any additional expense. If the court is capable of fixing costs in a manner that effects procedural and substantive justice, it must do so.
[22] In her reasons the Master referred to the discontinuance of the counterclaim and work done by Heritage after Bouji breached a court order. In his submissions Bouji contended that the counterclaim was discontinued without costs by application of Rule 24.03 and that the dockets do not segregate the costs of the action from the counterclaim.
[23] Heritage submits that the references to the counterclaim in the dockets are relatively few and that given that the Master case managed the counterclaim, discounting the costs of the counterclaim from the costs of the action could be a relatively simple task.
[24] The Master’s reasons refer to the Assessment Officer as better placed to assess costs. First, Bouji submitted before the Master that the dockets contained egregious instances of excessive billing where lawyers docketed in excess of 24 hours per day. In this court the matter was clarified as the practice is that billings for a lawyer for an entire month are posted on a single day. While the Master did not refer to this factor specifically, because the matter was not clarified before her the submission that the billings were excessive may have unfortunately improperly influenced the Master’s decision to refer the matter for assessment.
[25] Secondly, Bouji argues that the dockets are not detailed and proper documentation has not been provided with the bill of costs. Again, this submission is not specifically referred to by the Master. The principal objection is that either the dates (either day or month but not the year) or some of the content has been redacted on the basis of privilege asserted by Heritage. On the basis of documentation received from Heritage including the invoice list, the Bill of Costs and the dockets and the submissions of counsel it would appear that the Master was not lacking in documentation to fix costs. Moreover, the Master did not raise any discrepancies in the documentation which she could not resolve. In my view this factor does not raise an exceptional case.
[26] Thirdly, Bouji submits that there is a lack of congruence between the claim in the Bill of Costs for trial preparation but that the dockets do not indicate time spent for such preparation and that accordingly the scrutiny required can only be performed by an assessment officer. More specifically, 41.2 hours are claimed by one of the defendants’ lawyers on trial preparation after Mr. Bouji’s breach of a court order. Bouji argues that no work should have been done as it was open to Heritage to move for dismissal for delay, a motion which eventually succeeded.
[27] Heritage argues that in circumstances where Bouji was trying to set the matter down for trial, success on a motion for dismissal was not assured, and accordingly, it was not unreasonable to continue to prepare for trial by inter alia attempting to enforce a myriad of undertakings with which Bouji had not complied. Heritage submits it was readily available to the Master to discount the time spent for trial preparation after the breach of court order which she considered to be unreasonable without requiring a docket by docket assessment.
[28] Finally Bougi submits while assessment will no doubt add more costs the costs associated with both this motion and any subsequent appeal are commensurate. Heritage submits an assessment will be both costly and inconvenient as the dockets a number of counsel over a period of nine years will need to be examined in circumstances Bouji has declined to reveal his own costs.
[29] The presumption is that the Master must assess costs unless the Master finds there to be an exceptional case justifying a referral for assessment. It is in the public interest to affirm the proposition that assessments should be a rare occurrence in order to promote efficiency and costs savings to litigants by requiring the court to fix costs if it is capable of doing so.
[30] In my view it would have been vastly preferable for the Master to have made a specific finding that this was an exceptional case and clearly articulated the reasons for that finding.
[31] However, having supplemented the reasons of the Master with the reference to the record and the submissions of counsel, I find this to be a borderline case. While I may have exercised my discretion differently I am not persuaded that there exist strong reasons to find that the Master exercised her discretion injudiciously in circumstances where this court must accord deference to the Master based on her experience and expertise notwithstanding the deficiencies in the reasons.
[32] Accordingly, the application for leave to appeal costs is dismissed.
[33] Both parties have submitted costs outlines including fees, disbursements and HST on both a partial and substantial indemnity basis. Bouji, the successful party, claims $11,513.47 and $16,118.23 whereas Heritage claims $4,982.44 and $6,930.56 respectively.
[34] In my view having regard to the factors set out in subrule 57.01(1) it is fair and reasonable to award costs to the successful party in the amount of $5,000 all inclusive payable forthwith.
THEN J.
RELEASED: May 28, 2015
CITATION: Bouji v. Heritage Education Funds Inc., 2015 ONSC 3451
DIVISIONAL COURT FILE NO.: 600/14
COURT FILE NO. 04-CV-281392CM2 DATE: 20150528
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N :
ISSAM BOUJI
Plaintiff
(Respondent Party)
– and –
HERITAGE EDUCATION FUNDS INC.
Plaintiff by Counterclaim
REASONS FOR JUDGMENT
THEN J.
RELEASED: May 28, 2015