DORILLA CUSSON

APPELLANT

‑AND-

THE CORPORATION OF THE TOWNSHIP OF CHAMPLAIN

RESPONDENT

DECISION RE: COSTS

This matter was heard by the Ontario Drainage Referee on the 24^th day of September 2002 in the Superior Court House at L'Orignal, Ontario. The only issue to be determined by the Referee was the legal costs of the proceedings, both Counsel having urged the Referee to fix the costs in the circumstances.

The parties first appeared before the Referee on the 17'hday of January, 2002 at L'Orignal at which time a Procedural Order was granted. The parties appeared a second time before the Referee on the 25' day of April 2002 at which time a further adjournment was requested by the Appellant and after submissions had been made a date for trial of this matter was set to proceed on the 13' and 14'b days of June, 2002. On the 13' of June 2002 the trial of the matter proceeded concluding at mid day on the 14'h. The decision of the Referee filed on the 30`h day of July 2002 found for the Appellant, setting aside the Municipal By‑Law, the subject of the dispute.

SUBMISSIONS OF YVES M. PERRIER, COUNSEL FOR THE APPELLANT

Mr. Perrier filed with the Referee the Bill of Costs he had submitted to his client together with receipts relating to disbursements which totalled $15,740.00 for legal fees and $1,685.10 for disbursements. In addition, Mr. Perrier filed a detailed lawyer's hourly docket relating to the file.

Mr. Perrier first dealt with the jurisdiction of the Referee to decide the issue of legal costs. He referred to Section 108, Section 109 and Section 110 of the Drainage Act.

Costs shall be assessed by the referee, or he or she may direct the assessment thereof by the local registrar of the Ontario Court (General Division) with whom the papers are filed or by an assessment officer.
The costs of any proceedings before the referee are in the discretion of the referee.
In the absence of other provisions, the tariff of costs in any application or proceeding under this Act shall be that of the court that would have jurisdiction to try a civil action involving a similar amount of money or type of proceeding.

He further referred to Section 131 (1) of the Courts of Justice Act:

“Costs – subject to the provisions of an Act or the rules of the court, the cost of and incident 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 costs shall be paid”

Mr. Perrier then referred to Rule 57.01 of the Rules of Civil Procedure dealing with costs of proceedings between party and party. Section 57.01 (1) reads as follows:

57.01 (1) Factors in discretion ‑ In exercising its discretion under section (3) of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing:

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party's denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding; or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different solicitor; and

(i) any other matter relevant to the question of costs.

57.01 (2) Costs against successful party – 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.

57.01 (3) Fixing costs: tariffs – When the court awards costs, it shall fix them in accordance with subrule (1) and the Tariffs.

57.01 (3.1) Assessment in Exceptional Cases – Despite subrule (3) in an exceptional case the court may refer cost for assessment under Rule 58.

Mr. Perrier advised that the proper tariff to be applied in circumstances of this case was the Superior Court grid noting that the appeal was based on an application to set aside a municipal by‑law.

Mr. Perrier pointed out that he had twenty years' experience in practising law since he was called to the Bar and the hourly rate recommended for the Profession, based on that level of experience was up to $350.00 per hour. He indicated that he had charged his client $180.00 per hour which he believed to be appropriate in the circumstances, recognizing the principle of partial indemnity. Mr. Perrier advised that he was satisfied that partial indemnity in his opinion was proper in this case and for that proposition relied on the case of McBride Metal Fabricating Corp. v. H & W. Sales Company Inc. Court of Appeal for Ontario, April 26 2002. In that Decision the Court held

" Zuber J. was however not justified in awarding costs on a solicitor and client scale on the facts of this case. The judicial discretion under Rule 49.13 is not so broad as to permit a fundamental change to the law that is governing the award of solicitor and client costs. It is only in rare and exceptional cases that costs are awarded on a solicitor and client scale."

Mr. Perrier proceeded to highlight certain principles set forth in Rule 57.01 as they applied to this particular case. He first argued that it is normal for costs to follow the event, e.g. the result of the proceeding. In particular he referred to the complexity of the proceeding, advising that the Drainage Act was not a standard area of general practice and therefore required considerable research. Efforts to "shorten the proceeding" were made in this matter by both Counsel as demonstrated by the agreed upon Statement of Facts. He further pointed out that discoveries were useful and transcripts were used at the Trial.

Mr. Perrier further advised that the Appellant had been totally successful with respect to the outcome and the issue had been very significant for Ms. Cusson who had attended at all proceedings, having appealed to the Court of Revision and the Drainage Tribunal as well as the Referee.

With respect to the “complexity of the proceedings” Mr. Perrier stated that the Drainage Act was draconian legislation, providing for measures of expropriation, imposed taxation upon the resisting party, and even eventual potential of loss of property through tax sale for non compliance.

With respect to "any other matter relevant to the question of costs" Counsel for the Appellant stated that the municipality was a financially capable Respondent and that the imposition of costs would not result in any personal hardship.

Mr. Perrier concluded by stating that he ought to be paid for the total amount of the invoice, which in all the circumstances was reasonable, that it represented only partial indemnity and he ought to be permitted a premium reflecting the success achieved. Mr. Perrier referred the Court to a Decision of Chadwick J. between 656203 Ontario Inc. Foley, Yantha, Applicants and Soloway, Wright, Respondent dated February of 1999. In that case Justice Chadwick stated:

"On the facts of this case should the solicitor be entitled to an additional fee over and above their time and hourly rate billings? Does the Court have jurisdiction to assess a premium in the absence of a written agreement between a solicitor and his client? I my view the answer to both these questions is yes. The parties agree that the Court would assess the fees in accordance with the Solicitors Act and the Rules of Practice. In assessing what is a proper fee under the circumstances, one cannot separate the fees billed into categories but must look at the total amount of the accounts rendered and the services provided".

SUBMISSIONS OF ROBERT E. TOLHURST, COUNSEL FOR THE RESPONDENT

In reviewing the Bill of Costs, Counsel for the Respondent noted that there was not an adequate breakdown of costs with respect to the component parts of the proceedings which he outlined as follows:

(a) the first part of the proceeding related to preliminary matters and the filing of the appeal;

(b) the Procedural Order of January;

(d) the motion to adjourn in April which was consented to with conditions;

(e) the hearing of the matter which lasted 1½ days.

Mr. Tolhurst advised that he did not find the 30 hours expended before the Procedural Order to be unreasonable considering the fact that drainage issues were not common place in practice. However, he argued that in his opinion the substantive matters of the appeal were not complex.

Mr. Tolhurst agreed that the Court had the jurisdiction and discretion to fix the legal costs in the matter and he urged that they be fixed by the Referee. However, Mr. Tolhurst drew attention to the provisions of Section 110 of the Drainage Act previously referred to. He advised that in his opinion, because a requisition drain was limited to the expenditure of $7,500.00 that the matter would normally fall within the jurisdiction of Small Claims Court. He advised that if such was the case the appropriate award would be 15 % of the $7,500.00.

Mr. Tolhurst noted that there was an error with respect to disbursements in the Bill of Costs which would reduce the costs of a transcript from $404.50 to $330.00. (Mr. Perrier acknowledged the error).

Mr. Tolhurst agreed, in the circumstances, that the hourly fee of $180.00 charged by Mr.

Perrier was fair and reasonable reflecting partial indemnity. He submitted that the Decision of Chadwick J. referred to was not relevant and did not apply because it was a Decision dealing on a solicitor and client basis and not between parties.

Mr. Tolhurst submitted that the total costs of $5,000.00 plus disbursements would be reasonable and adequate in the circumstances. He based his decision on the cost grid which provided for a maximum daily limit of $2,100.00. In the subject case he suggested that the hearing involved 1½ days but might have been compressed in the circumstances into one full day of hearing. He noted that discovery took approximately 1/2 day and the Procedural Motion and the Hearing with respect to the adjournment each involved less than 1/2 day. He added that if costs were awarded on the Small Claims Court scale at the maximum level of $10,000.00 costs would amount to approximately $1500.00.

Mr. Tolhurst submitted that because there were no available precedents with respect to the requisition drain issue before the Referee that the Municipality was justified in seeking a legal determination of the matter. As a consequence, he argued, that the Municipality should not be required to pay costs. He submitted that Orkin on Costs, page 251 (d), provided authority for the proposition that no costs need be awarded in circumstances where the parties are unable to be guided by legal authorities.

Mr. Tolhurst further made the submission to the Referee that in the circumstances the Court might consider awarding costs personally against the Drainage Engineer in view of the findings made in the July Decision of the Referee. Counsel for the Respondent added that in the circumstances he was of the opinion that the Referee had jurisdiction to award costs personally against the Drainage Engineer.

Mr. Tolhurst concluded his submissions by pointing out that the old "practice" with respect to Party and Party costs amounted to 2/3rds of normal solicitor and client costs. Party and Party costs did not allow for extensive preparation and research.

FINDINGS

The Referee finds that as a matter of law in the circumstances of this case, the Superior Court tariff is applicable. The Appeal in this case related to the setting aside of a by‑law, such matter was beyond the jurisdiction of the Small Claims Court.

I further find that the Referee has unfettered discretion in awarding costs, the amount awarded in costs and with respect to the issue of fixing costs. That authority is clearly set out in Section 109 of the Drainage Act.

In applying the general principles with respect to proceedings between Party and Party costs, as set out in Section 57.01 of the Rules of Civil Procedure, I find that

a. The Appellant was completely successful in having the by‑law set aside.

b. The proceeding had a moderate degree of complexity considering the fact that general practioners in an area such as L'Orignal would have limited experience with respect to the Drainage Act.

c. The "importance of the issues" in this matter as is the case in most proceedings pursuant to the Drainage Act are significance because they involve substantial property rights considerations.

d. The conduct of both parties in this proceeding, I find to have been constructive and positive.

I find in the circumstances that the Bill of Costs submitted by Counsel for the Applicant, both with respect to the hourly rate charged therein and the number of hours expended to be in all the circumstances, reasonable.

I further find that in the circumstances of this case it would be inappropriate for me to award costs, even if I have the jurisdiction to do so, personally against the Drainage Engineer, who though advised of the proceedings by Counsel for the Respondent has not appeared before me and made submissions. It is, however, open to the Municipality to take whatever action it deems appropriate to recover costs in the circumstance of this case. I believe that decision should remain with the Municipality.

In making my final determination with respect to the issue of costs, I am influenced by two major considerations. The first matter which is present in every drainage proceeding is the role of the Municipality as the chosen agent by the legislation to administer the Drainage Act as it applies to Municipal Drains. Thus pursuant to its responsibilities under the Drainage Act the Municipality is often an impartial and reluctant litigant. Accordingly, it is viewed in nearly all cases as doing its duty objectively and without favour to any party and thus ought not to be unduly penalized in an award of costs.

Secondly, in this matter I agree with Counsel for the Respondent that the issue for determination was without legal precedent and therefore the subject of differing opinions. In such circumstances, the Municipality could be said to be justified in requiring a legal interpretation by the Drainage Referee.

ORDER:

I THEREFORE ORDER THAT the Respondent Municipality of the Township of Champlain pay costs to the Applicant, Dorilla Cusson, fixed in the sum of Ten Thousand Dollars ($10,000.00) plus disbursements in the amount of One Thousand Six Hundred and Ten Dollars and Sixty Cents ($1,610.60), such costs to be paid within a period of thirty (30) days.

DATED: November 29 2002

Delbert A. O’Brien, Q.C. Juris D.

Ontario Drainage Referee

Cusson v. Champlain, 2002 ONDR 3

Case Summary

DORILLA CUSSON

APPELLANT

THE CORPORATION OF THE TOWNSHIP OF CHAMPLAIN

RESPONDENT

DECISION RE: COSTS

SUBMISSIONS OF YVES M. PERRIER, COUNSEL FOR THE APPELLANT

SUBMISSIONS OF ROBERT E. TOLHURST, COUNSEL FOR THE RESPONDENT

In reviewing the Bill of Costs, Counsel for the Respondent noted that there was not an adequate breakdown of costs with respect to the component parts of the proceedings which he outlined as follows:

FINDINGS

Cusson v. Champlain, 2002 ONDR 3

Case Summary

DORILLA CUSSON

APPELLANT

THE CORPORATION OF THE TOWNSHIP OF CHAMPLAIN

RESPONDENT

DECISION RE: COSTS

SUBMISSIONS OF YVES M. PERRIER, COUNSEL FOR THE APPELLANT

SUBMISSIONS OF ROBERT E. TOLHURST, COUNSEL FOR THE RESPONDENT

In reviewing the Bill of Costs, Counsel for the Respondent noted that there was not an adequate breakdown of costs with respect to the component parts of the proceedings which he outlined as follows:

FINDINGS