PLAINTIFF

‑AND-

THE CORPORATION OF THE TOWNSHIP OF EVANTUREL

DEFENDANTS

DECISION WITH RESPECT TO BILL OF COSTS

In a Decision dated February of 2003 with respect to the above-mentioned matter the Ontario Drainage Referee dismissed the Application and Ordered that written submissions with respect to the issue of legal costs be filed. The Referee having read the submissions duly filed together with the authorities referred to, is of the opinion that the Bill of Costs filed on a “partial indemnity” basis (a copy of which is attached hereto) is proper.

The Respondent is further awarded an additional two hours for the preparation of the written submissions with respect to costs. Accordingly an additional $600.00 will be added.

The Respondent in its written submissions requested that costs be ordered on a substantial indemnity basis. The amount of the Bill of Costs as submitted on a substantial indemnity basis amounted to the sum of $17,045.78. The substance of the Respondent’s submissions were as follows:

In the Referee’s decision in the matter the Respondent was successful on all grounds.
Notwithstanding the fact that the Divisional Court had returned the matter to the Court of the Drainage Referee to determine on the narrow ground the right to be heard with respect to new evidence relating to a claim for repair and the interpretation of section 15 and 32 of the Drainage Act it became apparent at the Hearing that sufficiency of outlet was the issue addressed.
The issue addressed by the Applicants was sufficiency of outlet, the same issue that had been essential to previous hearings and no significant new evidence was presented.
The Applicants’ proposed interpretation of Section 15 and 32 of the Drainage Act was unsubstantiated in law and thus it would be unfair for the upstream owners to bear a portion of the very significant legal costs, so that the costs ought be awarded on a substantial indemnity basis.

STATUTE AND CASE LAW

(5) Section 108 of the Drainage Act clearly authorizes the Drainage Referee to award costs and further the Courts of Justice Act Section 131 provides that a Court and inherently the Drainage Referee has authority to award or refuse costs on a partial or substantial indemnity basis.

(6) Mr. Ellies’ pointed out that the recent case of Digiorgio v. Matchett (2002, 21 c.p.c. 321 granted costs for senior counsel at $300.00 per hour on a partial indemnity basis and $400.00 per hour on a substantial indemnity basis.)

SUBMISSIONS OF THE APPLICANT AS TO COSTS

The Applicant requested that costs be awarded in the fixed amount of $2,000.00 subject to an appeal. The Applicant submitted the following grounds:

The matter had been returned to the Drainage Referee by the Divisional Court for the purpose of hearing any new evidence relating to any new claim.
The Applicant believed that it had reasonable ground particularly in the evidence of an expert witness, Mr. DeVries.
It was further submitted that the Applicant was justified in bringing the Application to protect his property from further land loss and to protect the Blanche River from further pollution.

STATUTE AND CASE LAW

d) The Applicant acknowledged that the Drainage Referee had authority pursuant to Section 108 of the Drainage Act to award costs, but noted that Section 109 of the Drainage Act granted the Drainage Referee broad discretion. Section 109 of the Drainage Act reads as follows:

“The costs of any proceedings before the referee are in the

discretion of the referee.”

e) Mr. Good argued that the Drainage Referee should exercise his discretion as the Applicant specifically obtained the permission of the Divisional Court for the matter to be returned to the Drainage Referee.

f) Mr. Good further argued that the award of costs in this situation should not be treated as a deterrent to a party contemplating litigation when such landowners particularly farmers are only protecting their interests. He quoted the case of Television Real Estate Limited v. Rogers Cable T.V. Limited 1997 CanLII 1960 (ON CA), 34 O.R. (3d) 29.

‘While the conventional rule that costs follow the event may be a deterrent

to a party contemplating litigation, the usual award of costs is not intended

to be punitive. The Court should not send a message that litigation is beyond

the reach of a party that fails to make its case.’

g) The Applicant submitted that the financial consequences of the presentation of its case had been onerous and that such costs were more easily defrayed by the Respondent Corporation. In support of this statement he referred to the case of Abello v. Scott No. 98 (Rural Municipality) [1988] S.J. No. 188 Q.B. No. 422 of 1977 J.C.R.

h) The Applicant further submitted that in previous cases where the Drainage Referee had granted costs to a successful party, the costs had fallen well below what had been requested by the Respondent. The Applicant sited a series of cases decided by the Drainage Referee in support of its submissions.

i) The Applicant further submitted that the issue of costs is not about amounts allowable under a grid, but about awarding what is fair. Mr. Goode sited in support the Ontario Court of Appeal case decision in Zesta Engineering Ltd. v. Cloutier 2002 CanLII 25577 (ON CA), [2002] O.J. No. 4495.

j) The Applicant concluded by admitting that the costs in the amount of $2,000.00 would be appropriate in the circumstances of this case.

CONCLUSIONS OF FACT AND LAW

The Drainage Referee agrees with the submissions of both parties that the Drainage Referee has authority to assess costs as set out in Section 108 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.”

and that the Drainage Referee has a broad discretion as set out in Section 109 of the Drainage Act

“The costs of any proceedings before the referee are in the

discretion of the referee.”

The Drainage Referee is further guided by Section 131(1) of the Courts of Justice Act which reads 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 of the costs shall be paid.”

Rules 57.01 and 57.03 now require the Court to fix costs in accordance with the cost grid established by Part 1 of Tariff A, except in exceptional cases. The editorial comment following Section 131 of the Courts of Justice Act states:

“Inevitably, there will be a more general approach to costs, guided by

the grid, returning to some extent to the process of some 35 to 40 years

ago when the weight and “feel” of the file and issues indicated the

appropriate assessment.”

Rule 57.01 subsection (1) sets out the facts to be considered by the Court in exercising its discretion:

the amount claimed and the amount recovered in the proceeding;
the apportionment of liability;
the complexity of the proceeding;
the importance of the issues;
the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding;
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 a 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.

The factors considered by the Referee were as follows:

i) the amount claimed in accordance with one of the engineering proposals involved many hundreds of thousands of dollars.

ii) the matter was complex and followed an appeal to the Divisional Court of Ontario.

iii) the issues were important involving the interpretation of the Drainage Act with respect to “sufficient outlet.”

iv) the Respondent was successful with respect to all issues. The matter involved a three-day trial and the Parties were represented by very experienced and senior counsel.

v) the hourly rates submitted by the Respondent are in the circumstances reasonable at $300.00 per hour for a partial indemnity basis and at $400.00 per hour for a substantial indemnity basis considering the experience of the Respondent’s counsel namely 41 years.

The Drainage Referee however, is of the opinion that costs should not be awarded on the substantial indemnity basis for two reasons:

The matter was referred back to the Drainage Referee by the Divisional Court, and thus it can be assumed that it was reasonable under all the circumstances for the Applicant to pursue this proceeding.
In drainage matters it is recognized that the level of costs generally are restrained by the consideration that landowners are frequently reluctant participants in the process of establishing municipal drains and ought not be discouraged in exercising their legitamite rights of appeal provided for the purpose of protecting their legal interests..

Accordingly, I am of the opinion that the Bill of Costs submitted by the Respondent on a partial indemnity basis is in all the circumstances reasonable except with respect to the hourly rate designated for travel. The Respondent’s counsel had to travel some distance daily to attend the trial and the Applicant ought to receive some relief in that regard.

DATED: September 16th, 2003

Delbert A. O’Brien, Q.C. JURIS D.

Ontario Drainage Referee

McLean et al v. Evanturel (Township), 2003 ONDR 3

Case Summary

PLAINTIFF

DEFENDANTS