Court File and Parties

COURT FILE NO.: 18-CV-574948 DATE: 20181015 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Costs of the s.140 application; Next Case Management Conference

COUNSEL: Gary M. Caplan for the Plaintiffs Nadire Atas self-represented

HEARD: October 15, 2018

BEFORE: D.L. Corbett J.

Endorsement

[1] In this endorsement I address the costs of the s.140 application which was decided in my judgment of January 3, 2018 and give directions for the case management conference scheduled for October 19, 2018.

[2] As a preliminary matter, Ms Atas continues to write improper communications despite having been ordered to stop. Most recently, Ms Atas has written to criticize this court’s decisions, further alleging bias, and to say that she will not attend the case management conference on October 19, 2018.

[3] Ms Atas is ordered to attend the case management conference on October 19, 2018. At this conference, she shall be required to explain her repeated defiance of this court’s orders respecting improper communications.

Materials Considered to Decide Costs

[4] I have considered the lengthy proceedings that culminated in this court’s judgment in Peoples Trust v. Atas, 2018 ONSC 58. In that judgment I directed as follows (at para. 357(12)):

The applicants shall provide written costs submissions by January 31, 2018. These shall include bills of costs, any pertinent offers to settle, and written submissions of no longer than fifteen pages. The respondents shall provide written responding submissions by March 30, 2018. These may include a bill of costs, any pertinent offers to settle, and written submissions of no longer than fifteen pages. There are no restrictions on the number of authorities that may be included by either side. There shall be no reply or oral costs submissions unless I hereafter direct otherwise.

[5] The applicants were represented by three sets of counsel. Mr Caplan, on behalf of his clients, submitted a bill of costs of $67,550.09 (partial indemnity), $81,878.90 (substantial indemnity) and $102,348.62 (full indemnity). Ms Wallis, on behalf of Peoples Trust, submitted a bill of costs of $134,649.99 (partial indemnity), $162,363.22 (substantial indemnity) and $210,953.57 (full indemnity), plus a claim for $12,844.82 for the recusal motion. Mr Gulia, on behalf of the Chahals, submitted a bill of costs of $30,584.24 (partial indemnity), $37,162.20 (substantial indemnity) and $46,452.76 (full indemnity).

[6] These claims for costs aggregate as follows (including the $12,844.82 sought by Peoples Trust for the recusal motion):

a. Partial indemnity: $245,629.14 b. Substantial indemnity: $294,249.14 c. Full indemnity $372,599.77

[7] The applicants filed joint submissions of six pages in length in support of their claims for costs, together with a brief of authorities, all by January 31, 2018, as directed in the judgment.

[8] Ms Atas filed a bill of costs and submissions dated March 30, 2018, as directed in paragraph 357(12) of the judgment. In her bill of costs, Ms Atas calculated her costs at $189,716. This claim was not supported by docket details or copies of accounts from her lawyers. However, it does provide some information from which this court can assess Ms Atas’ reasonable expectations about the costs she might be required to pay if she was unsuccessful. As will be explained in more detail below, the document received from Ms Atas on March 30, 2018 entitled “Submissions” is not comprised of costs submissions. It does not address the amounts claimed by the applicants, the hours spent or hourly rates applied, the scale of costs, the question of whether costs should include the costs of case-managing the s.140 process, or the issue of whether applicants should receive three sets of costs for three sets of lawyers.

[9] During the case management conference on June 26, 2018, this court advised that it would release its costs decision “shortly”. When I came to write the decision, I discovered that there did not appear to be responding costs submissions from Ms Atas respecting the central questions to be decided on the question of costs. I asked Ms Atas about this at the next case management conference, on September 14, 2018. She advised that she had delivered responding costs submissions. I asked her to provide me with a copy of whatever she had previously submitted in respect to costs and directed her not to prepare any fresh or additional costs submissions: I would decide the costs issues on the basis of what had been provided by the parties pursuant to the judgment of January 3, 2018, but I wanted to be sure that I had everything that had, in fact, been filed.

[10] To put this direction in context, there has been active case management since the end of January 2018, and extensive additional materials have been provided. Some materials have been provided in formats and manners that do not comply with the Rules of Civil Procedure, and I felt there was some risk that Ms Atas had filed submissions that had not come to my attention or which I had failed to locate within the several boxes of materials that have accumulated over the course of 2018.

[11] Ms Atas responded to my direction of September 14, 2018 (memorialized in my endorsement of September 28, 2014) by delivering fresh costs submissions dated September 18, 2018, entitled “Nadire Atas submissions to Applicants’ Bill of Costs of the Applicants, The Chahals, Peoples Trust Company and Lawpro”. These submissions were delivered in direct contravention of my order at the case management conference of September 14, 2018.

[12] In these improper costs submissions, Ms Atas stated that she “had already filed… responses dated January 31, 2018, March 30, 2018, April 30, 2018, Affidavit sworn May 17, 2018 and Affidavit sworn June 1, 2018.” She did not include any of these prior submissions, as I directed her to do on September 14, 2018. Subsequently, Ms Atas provided me with copies of the documents dated January 31, 2018 and March 30, 2018.

[13] I now address, briefly, the materials identified by Ms Atas relating to costs:

a. January 31, 2018: the submissions filed by Ms Atas on January 31, 2018 are in respect to her claims for costs for particular costs of steps taken in predicate proceedings. These submissions are irrelevant to the applicants’ claims for costs in the s.140 application, and will be addressed in a separate endorsement. b. March 30, 2018: the materials filed on this day by Ms Atas were the bill of costs and submissions referenced above. I address the merits of these submissions below. c. April 30, May 17 and June 1, 2018: despite my second request that she do so, Ms Atas did not provide me with a copy of the submissions that she claims were filed on April 30, 2018 or affidavits from May 17, 2018 and June 1, 2018 that she says are costs submissions. I have identified materials filed by Ms Atas bearing these dates, and none of them are costs submissions. Ms Atas is a very experienced litigant at this stage. She understands that the court considers the record that has been filed in respect to the issue before the court; the court does not review everything that has been filed in respect to any matter under case management to consider if there is something in all of the materials that might bear on the question before the court.

I proceed on the basis of the materials referenced above, being the judgment itself, and the materials filed by Ms Atas dated January 31, 2018 and March 30, 2018 and the improper submissions sent September 18, 2018. I have not considered any other materials filed by Ms Atas on the issue of costs, because they are not styled costs submissions, were not filed in accordance with the schedule for filing costs submissions, and were not provided in response to my direction for materials on September 14, 2018.

[14] In respect to Ms Atas’ improper costs submissions delivered on September 18, 2018:

(a) Ms Atas argues that orders made by this court after the s.140 judgment are relevant to the issue of costs. She then fails to refer to any of these orders that she says are relevant to costs of the s.140 application. (b) Ms Atas argues that this court “predetermined” that it would make the s.140 order, and thus the applicants should not receive costs of the application. As I understand it, Ms Atas argues that the applicants should not have spent money on the application since they were going to win it anyway. This submission is baseless and without merit. It is also contemptuous of the court and is therefore improper. Ms Atas has been told that it is not proper for her to criticize and challenge this court’s decisions to this court. The place for her to air her disagreements with this court’s judgment is in the Court of Appeal. Constantly assailing this court’s judgment, to this court, is contemptuous – all the more so for Ms Atas having been told that this is improper and having been directed to stop. (c) Ms Atas argues that this court “delayed” release of the s.140 judgment “for 37 months” and that the applicants should not receive costs for the period of the delay. This argument is specious. Decision on the application was delayed because of a campaign of internet harassment commenced shortly after argument of the application, applications for fresh evidence litigated vexatiously by Ms Atas, and a meritless allegation of bias against this court litigated by Ms Atas. The delay from the conclusion of all of these events to release of this court’s 150 page judgment – ten months – while unfortunate – was hardly surprising given the enormous volume of material involved and the time required to write such a lengthy judgment. It is no reason to deny the applicants their costs. (d) Ms Atas argues that no discernible purpose has been served by the s.140 judgment. This argument is without merit. (e) Ms Atas argues that the “facts and issues” in the underlying litigation have always been and remain contentious, and that this is not changed by the s.140 judgment. This argument may or may not be true – that is a question for another day – but it is no basis to deny costs of the s.140 application. (f) The Chahals should not get costs because there may be some merit to some of Ms Atas’ claims against them in the underlying litigation, and the Chahals applied under s.140 for “tactical reasons”. This is no reason to deny the Chahals costs as successful applicants. (g) Peoples Trust should not receive costs because the s.140 application did not decide the merits of the underlying litigation. There is no merit to this submission, for the reasons as given above. (h) LawPro applicants should not receive their costs because the s.140 order was made “irrespective of the obvious evidence” and for the “nefarious purpose” of “disposing of a contentious solicitors negligence proceeding”. The argument is without merit for the same reasons as given above.

[15] In Ms Atas’ Bill of Costs delivered March 30, 2018, at the end, Ms Atas includes brief costs arguments as follows:

No discernible purpose was served by the Application under s.140 of the Courts of Justice Act The judgment of Justice Corbett requires case management of the actions. The actions were already under case management prior to the Application under s.140 of the Courts of Justice Act. The s.140 application does not impact actions launched against me which are about half the actions. See attached submissions dated March 30, 2018.

Most of these submissions are a summary of the arguments Ms Atas makes in the improper submissions provided on September 18, 2018. I have already addressed those arguments, above. Ms Atas’ vexatious conduct has continued, and latterly seems to be intensifying, predominately characterized by escalating attacks on this court’s integrity and impartiality, and defiance towards this court’s authority. The judgment establishes a regime within which to control an ungovernable litigant and to restrain her from future misuse of the court process, to the prejudice of her opponents and the justice system itself. This is the “discernible purpose” served by the s.140 application.

[16] Ms Atas’ “Submissions” delivered on March 30, 2018, do not appear to relate to costs at all. They are 37 pages in length (a violation of the direction in paragraph 357(12) of the judgment, limiting costs submissions to 15 pages), comprised of 63 paragraphs, and I was unable to locate the word “costs” anywhere in the document. These submissions are a lengthy argument as to why Ms Atas believes the judgment is wrong and why she believes that she should not have to comply with the judgment pending decision on her appeal in the Court of Appeal. This court refused to stay the judgment on its own motion and the Court of Appeal declines to stay the judgment. And none of this has anything to do with the costs claimed by the applicants as successful litigants.

[17] In summary, Ms Atas argues that nothing has been decided, substantively, by the s.140 order, and thus the litigation has not advanced. She argues that this court had made its mind up from the outset and so the expense incurred to obtain an inevitable order ought not to be recompensed. She argues that the successful s.140 application was an abuse of process. These are defiant and contemptuous lines of argument, not proper in this court. Ms Atas has appealed the judgment, as she is entitled to do – the Court of Appeal is the place for her to raise her objections to this court’s judgment. In this court, as Ms Atas has been advised, matters proceed on the basis that the judgment is authoritative unless and until it is stayed, set aside or varied on appeal. Ms Atas’ continuing insistence on airing her grievances about this court’s judgment in this court is a continuation of the vexatious conduct described in the judgment.

Costs of the s.140 Application

[18] The applicants were successful on the s.140 application and on ordinary costs principles are entitled to their costs.

(a) Scale of Costs

First Consideration: Predicate Conduct

[19] I award full indemnity costs to the plaintiffs for two reasons. First, I consider that the conduct that led me to conclude that Ms Atas is a vexatious litigant – that is, the conduct that was at issue on the application – is itself a basis for full indemnity costs. An order under s.140 is exceptional and draconian and is only granted in extreme circumstances. The conduct by Ms Atas giving rise to the order – which is explained fully in my judgment – warrants an award of full indemnity costs. [1]

Second Consideration: Conduct in the s.140 Application

[20] Then there is conduct during the s.140 application itself. This was a difficult proceeding, because of Ms Atas, while she had counsel. However, so long as Ms Atas was represented by Mr Napal, her excessive behaviour was kept in check, and I would not consider that her conduct as a litigant – in the s.140 application itself – would warrant a punitive costs order. From shortly before the time that Mr Napal left the file, Ms Atas’ behaviour became increasingly vexatious. The details are set out in the judgment. They date from immediately after argument of the s.140 application on the merits, and include the apparent posting of defamatory comments on the internet giving rise to the 2016 Defamation Proceedings, the motions for fresh evidence, the recusal motion, up to release of the judgment in January 2018. I would apportion the costs on a 2/3:1/3 basis between the time Ms Atas was represented and the time she was not. Thus, in the absence of the predicate vexatious conduct, I would have awarded the applicants 2/3 full indemnity costs and 1/3 partial indemnity costs.

Conclusion

[21] I award the applicants their costs on a full indemnity basis throughout.

(b) Quantum of Costs

[22] No issue has been taken by Ms Atas with the hours claimed, the rates applied or the disbursements claimed in the bill of costs. [2] The court is entitled to adjudicate the costs issue on the basis on which it has been litigated by the parties, and Ms Atas has chosen not to address these issues. I do, however consider the overall costs claims in light of general costs principles and the proportionality principle set out in Boucher v. Public Accountants Council. [3] I consider that the overall costs awards should be reduced on the basis that Ms Atas should not have to bear the cost of three sets of counsel and on the basis of the overall proportionality of total costs.

(c) Three Sets of Counsel

[23] Mr Caplan took the lead on the application. I consider that counsel for Peoples Trust had a substantial burden preparing affidavit evidence and participating in cross-examinations. There was some expense involved in preparing affidavit evidence for the Chahals, but that evidence was not nearly so extensive. If these tasks had not been done by counsel for Peoples Trust and counsel for the Chahals, lead counsel’s costs would have been higher to do this work. There may also have been other work apportionment among counsel that is not evident to the court on the face of the bills of costs.

[24] I appreciate that this issue may be more symbolic than practical: on the information before the court it seems unlikely that Ms Atas will pay any costs award, and so the extent to which the global award is reduced may have no practical consequences. Nonetheless, I consider that the parties should have a chance to address this issue with the court, which they may do at the case management conference scheduled for October 19, 2018. I have previously indicated that counsel not participating in the Defamation Proceedings need not attend on October 19th – if counsel interested in the costs issue are not available on October 19th, they should so advise my office or Mr Caplan, who may then advise me on October 19th, and I will then schedule a different day to hear from affected parties on this issue.

[25] The court is concerned with three issues arising from this point which counsel for the applicants should be prepared to address on October 19th:

a. Why should Ms Atas be ordered to pay for three sets of costs? b. If she should not be, should some allowance be made for work apportionment among the three sets of counsel? c. If the court awards a global amount for one set of costs, how are those costs to be divided among the applicants? d. What is a fair and proportional global amount?

Even though she did not address any of these issues in her previous submissions, the court will entertain submissions from Ms Atas on these points on October 19th.

Next Case Management Conference: October 19, 2018

[26] Ms Atas has written a steady stream of improper correspondence to this court. She has been ordered court to stop doing this. She has defied this order. In her latest email she writes that she will not be attending the case management conference on October 19, 2018.

[27] Ms Atas is required to attend the case management conference on October 19th. I order that she do so. She may then address the question of whether, in future, her attendance at scheduled steps in the litigation should be mandatory, and the consequences for non-attendance.

Proceedings in the Court of Appeal

[28] I am aware from the schedule posted on the website for the Court of Appeal that a motion to review the decision of a single judge of that court is scheduled to be heard in this case on October 18, 2018. The only orders of single judges of the Court of Appeal in this case, of which I am aware, are the decisions of Trotter J.A. and Rouleau J.A. on Ms Atas’ motions to stay aspects of my judgment of January 3, 2018.

[29] The case management conference scheduled for October 19, 2018 will proceed before me as scheduled, unless the Court of Appeal expressly orders otherwise. If an order is made by the Court of Appeal that impacts on case management, that should be brought to my attention by the parties at the outset of the case management conference on October 19, 2018.

Case Management Conference on October 19, 2018

[30] The court previously indicated that on October 19, 2018, it would deal only with scheduling of steps in the Defamation Proceedings (not in respect to the interlocutory injunction, for which steps have been scheduled already and which will next be addressed at the case management conference on December 7, 2018, but in respect to the status of the pleadings, the status of any counterclaims brought by Ms Atas, signing the consent order that the trials be heard together or one after the other by the same trial judge, deadlines for affidavits of documents, dates for examinations for discovery, and any other issues bearing on scheduling these steps). The court, on October 19, 2018, will now also deal with the costs issues identified in this endorsement, and any issues that may have arisen as a consequence of any order that may be made by the Court of Appeal as a result of the review motion scheduled before that court on October 18, 2018.

[31] Ms Atas must attend this conference on October 19, 2018. Counsel for the plaintiffs in the Defamation Proceedings are also expected to attend this conference. Parties interested in the costs issues should attend by counsel or by agent for counsel, if possible, or should advise Mr Caplan of their unavailability and their alternative proposed dates.

D.L. Corbett J. Date: October 15, 2018

Footnotes

[1] Beard Winter LLP v. Shekhdar, 2017 ONSC 4846; Crich Holdings v. Becky, 2016 ONSC 1652; Best v. Ranking, 2015 ONSC 6269.

[2] To be clear, Ms Atas argues that the applicants should not get any costs at all – she makes no arguments about how much they should get, in the alternative, if I conclude that they are entitled to costs.

[3] Boucher v. Public Accountants Council (2009), 2009 ONCA 722, 100 OR (3d) 66 (CA).