Court File and Parties

CITATION: Hunsberger et al. v. Hitchens, 2016 ONSC 6310

COURT FILE NO.: DC-16-0051-00

DATE: 2016-10-07

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: NEIL HUNSBERGER and ANITA HINSCHBERGER, Plaintiffs

AND: Clare Hitchens, Defendant

AND: MASGRAS PROFESSIONAL CORPORATION, Plaintiffs’ former Solicitors

BEFORE: J. Trimble J.

COUNSEL: Georgiana Masgras, for the Plaintiffs’ former Solicitors/Appellant Peter Danson, for the Defendants/Respondent No one appearing for the self-represented Plaintiffs.

HEARD at Brampton: In writing

ENDORSEMENT

Introduction:

[1] The Plaintiffs’ former solicitors seek leave to appeal from the $800 cost award made against them, personally, by Barnes, J. on April 14, 2016.

[2] This action arises from a motor vehicle accident. The Defendants brought a motion for summary judgment, seeking an order dismissing the action as the Plaintiff, having no motor vehicle insurance, was barred from bringing the action. The motion was originally returnable on January 21, 2016, but adjourned, apparently at the request of the Plaintiffs, on consent of the Defendant, to February 26, 2016.

[3] In the meantime, the Appellants, the Plaintiffs’ former solicitors, brought a motion on February 20, 2016, returnable February 23, to remove themselves from the record. That order was granted on February 23, 2016 by Andre, J., and provided:

4 THIS COURT FURTHER ORDERS that, pursuant to subrule 15.05, Masgras Professional Corporation shall act and remain the lawyers of record for the Plaintiffs, Mr. Neil Hunsberger and Ms. Anita Hinschberger, until the end of the fifth business day after the Order removing Masgras Professional Corporation as lawyers of Record for the Plaintiffs, Mr. Neil Hunsberger, have been entered, served on Mr. Neil Hunsberger and Ms. Anita Hinschberger, and the Defendant and filed with proof of service.

[4] On February 26, 2016, the parties appeared before Emery, J. From the transcript it is clear that Plaintiffs’ counsel advised that the now former Plaintiffs’ solicitors had not yet served the Plaintiffs with Andre, J.’s order. The Defendant’s summary judgment motion was adjourned on consent to April 14, 2016. The Defendant’s solicitor put the Plaintiffs’ solicitor on notice, on the record, that he was seeking instructions to obtain costs of the February 26, 2016 attendance from her, personally. He received those instructions and notified the Plaintiffs’ former solicitor the next day. Emery, J. reserved costs of February 26 to April 14.

[5] On February 29, 2016, the Plaintiffs’ former solicitor served Andre, J.’s order on the Plaintiffs.

[6] Nothing occurred until a week before the April 14 motion when the Plaintiffs’ former lawyers attempted to adjourn that portion of the motion concerning the claim for costs of February 26 from her, personally. She claimed a conflict with an Advocate’s Society program. The Defendants refused to adjourn. Ultimately the Plaintiffs’ former counsel said “I intend to come (or appoint someone to come) to deal with the issue of costs against me.”

[7] On April 14, no one from the Plaintiffs’ former solicitors appeared before Barnes, J. With respect to the costs of February 26, Barnes, J. held:

Defendant seeks costs against Plaintiffs’ former counsel personally because she failed to notify the plaintiffs personally about the summary judgment matter of February 26, 2016 which resulted in an adjournment. Counsel for the Defendant notified Ms. Sirbu of today’s motion and date was set in accordance with her schedule. Neither Ms. Sirbu nor the Plaintiffs appeared. Costs set against Ms. Sirbu, personally, in the amount of $800.00 and the Plaintiffs in the amounts of $3,200.00 … Costs payable forthwith.

POSITIONS OF THE PARTIES:

[8] The Plaintiffs’ former solicitor says that leave to appeal should be granted because Barnes, J. did not explain why he chose not to apply the “extreme caution” test as required before awarding costs against the lawyer, personally. The Defendants say that Barnes J. did not err.

Test for Leave to Appeal FROM A COSTS ORDER

[9] Section 133(b) of the Courts of Justice Act provides that “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.”

[10] The test for leave to appeal from an order of costs was succinctly stated by the Court of Appeal in McNaughton Automotive Limited v. Co-operators General Insurance Company, [2008] ONCA, 597. At paras. 23-25 the court stated:

23 Appeals in which the sole issue of costs lie only with leave of the court: see Courts of Justice Act, R.S.O. 1990, c.C-43, s.133(b).

24 In Brad-Jay Investments Ltd. v. Szijjarto, 2006 42636 (ON CA), [2006] O.J. No. 5078 at para. 21 (C.A.), this court said:

Leave to appeal a costs order will not be granted save in obvious cases where the party seeking leave convinces the court that there are “strong grounds upon which the appellate court could find that the judge erred in exercising his discretion.”

25 This court has also said that leave to appeal a costs order, standing alone, is granted only sparingly. See: Inter-Trust Mortgage Investment Corp. v. Robinson, 1999 CarswellOnt 1733 at para. 12 (C.A.).

[11] As to the grounds upon which an appellate court should set aside a costs order, Arbour J. said in Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, 2004 S.C.C. 9, [2004] 1 S.C.R. 303 at para. 27:

A court should set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong (Duong v. NN Life Insurance Co. of Canada, 2001 24151 (ON CA), 2001 24151 (ON C.A.), (2001), 141 O.A.C. 307 at para. 14).

[12] In Feinstein v. Freedman, 2014 ONCA 205, the Court of Appeal said that leave to appeal from a costs order should only be granted sparingly, and only in the presence of strong grounds to believe the judge erred. The Court repeated that the test is whether there are strong reasons to believe that the Judge exercised his discretion on the wrong principles or was plainly wrong (see also Brad-Jay Investments Ltd. v. Szijjarto, 2006 42636 (ON CA), [2006] O.J. No. 5078 at para. 21 (C.A.), Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303; Adrian v. Napa Valley Plaza Inc., 2011 ONSC 2168 and Black v Black, 2016 ONSC 1984).

[13] I am also mindful that the judge at first instance is due a high degree of deference. A costs award is a discretionary order and that the judge of first instance is in the best position to determine the entitlement, scale and quantum of any such award. In Gottareo Properties (Dome Inc.) v. City of Toronto, 1998 6184 (ON CA), 1998, 6184 (ONCA), the Court of Appeal discussed the issue of deference due to a motions judge at para. 48:

Deference is desirable for several reasons: to limit the number and length of appeals, to promote the autonomy and integrity of the trial or motion court proceedings on which substantial resources have been expended, to preserve the confidence of litigants in those proceedings, to recognize the competence of the trial judge or motion judge, and to reduce needless duplication of judicial effort with no corresponding improvement in the quality of justice.

[14] Where costs are sought against a solicitor personally, the test that must be met has two parts. First, the lawyer must have cause unnecessary costs. The conduct that causes the unnecessary costs must amount to a clear dereliction of the lawyer’s duty to the Court. Second, the Court may exercise its discretion in sparingly, with extreme caution, and only in the clearest cases (see Galganov v. The Corporation of the Township of Russell, 2012 ONCA 410, at para 14 to 16).

DISPOSITION:

[15] The Motion for Leave to Appeal part of Barnes, J.’s April 14, 2016 costs order is dismissed.

ANALYSIS:

[16] I decline to grant leave. It does not appear that the learned motions judge was referred to the test in Galganov. However, I cannot say, based on his reasons, that notwithstanding that he was not referred to Galganov, that “there are strong reasons to believe that the Judge exercised his discretion on the wrong principles or was plainly wrong.” In his reasons, he implicitly addressed the two step analysis in Galganov.

[17] In refusing leave, I am mindful of the deference due to the learned motions judge and the high test that rests on the applicant for leave to appeal.

[18] The facts support an award of costs against the Plaintiffs’ former solicitors for the attendance at the February 26 hearing. The Plaintiffs’ former solicitors were still solicitors of record, not having served Andre, J.’s Order on the Plaintiffs. When they obtained the order on the 23rd, they knew of the February 26 date. Had they notified the Defendants and the Plaintiffs of Andre, J.’s order, they could have avoided the February 26 attendance.

[19] Once a solicitor removes himself from the record, he has an obligation to notify the client and the other parties to the action of the changed status, lest the now unrepresented party’s rights be affected by any step in the action. The failure to notify the Plaintiffs of Andre, J.’s order immediately on receiving it is a dereliction of a lawyer’s duty to his client and the Court. The first prong of the Galganov test is met.

[20] Do the facts warrant the learned motions Judge’s award of costs against the Plaintiffs’ former solicitors recognizing that it is to be exercised sparingly and in clear circumstances?

[21] Yes. The Plaintiffs’ former solicitors had a conflict which ought to have been clear when she agreed to the adjournment to April 14. On April 7, when the Defendant refused to adjourn the costs issue from April 14, the Plaintiffs’ former solicitor ought to have filed something to provide a factual basis for her position (even if for the adjournment or to contest Mr. Recht’s Affidavit of April 7 attesting to the email and phone exchanges re the adjournment) and have someone attend in her stead, as she indicated she would. She did not do so. The conflict she claimed was with respect to an Advocate’s Society program, not another court attendance, and not something which takes precedence to a court attendance.

COSTS:

[22] The Defendants are presumptively entitled to their costs of this application. I will entertain submissions as to who should pay whom costs, and in what amounts, in writing. The Defendants are due by October 21 and the Plaintiffs’ former solicitor’s by October 31. Submissions are not to exceed two pages, excluding bills of costs.

Jamie K. Trimble, J.

Date: October 7, 2016