Court File and Parties

Court File No.: CV-14-502018-00A1 Date: 20190528 Superior Court of Justice - Ontario

Re: SHARI KRIESER, Plaintiff – AND – ANNA GARBER, MICHELLE GARBER, SUSIN GARBER, MIKE NEALON and NEALON WOOD PRODUCTS LTD., Defendants – AND – George KRIESER, Third Party

Before: E.M. Morgan J.

Counsel: Ken Prehogan, Lia Boritz, and Kelsey Gordon, for the Plaintiff and Third Party Roger Chown and David Thompson, for the Defendants, Mike Nealon and Nealon Wood Products Ltd. Irvin Schein and Whitney Abrams, for the Defendants, Anna Garber, Michelle Garber, and Susin Garber

Heard: Costs submissions in writing

Costs Endorsement

[1] On March 29, 2019, I released my judgment in this action. The Plaintiff was entirely successful in her claim and the Third Party was entirely successful in defending the Defendants’ claim against him. Both successful parties were represented by the same counsel.

[2] The trial lasted two weeks. It came on the heels of a thorough discovery process and voluminous documentary exchange. All parties went all-out in the pursuit/defense of their respective cases, including introducing expert evidence from leading authorities on boating, marine engineering, etc.

[3] The issue in the trial involved a dock built by the Defendants on the shoreline of Lake Simcoe which interfered with the Plaintiff’s use and enjoyment of their next-door property. Some three and a half years before the trial, the Plaintiff made an offer to settle which by any measure amounts to an offer under Rule 49 of the Rules of Civil Procedure. I described the offer, which was made to the Defendants, Anna Garber, Michelle Garber, and Susan Garber (the “Garber Defendants”), on a “with prejudice” basis, at para 77 of my reasons for judgment:

In a rather remarkable gesture given the nature of civil litigation, Krieser’s lawyer wrote to Garber’s lawyer on March 12, 2015 offering to pay all of the costs of moving the dock and protective boulders. This letter was explicitly written on a “with prejudice” basis, and was introduced into the evidentiary record by Krieser in his testimony. There were no caveats or words of qualification to this offer; all Garber had to do was to say yes, arrange for a builder/contractor (Nealon or anyone else up to the task), and Krieser would pay the full cost.

[4] In the trial judgment I ordered that both Defendants, at their own expense jointly and severally, remove the dock from its present location. That is doubtless an expensive proposition – in fact, the Defendant, Mike Nealon, testified that there would be considerable expense involved in moving the dock. The Defendants would certainly have done better had they (or, rather, had the Garber Defendants) accepted the Plaintiff’s offer.

[5] The Third Party Claim was brought by the Defendants, Mike Nealon and Nealon Wood Products Ltd. (the “Nealon Defendants”) against George Krieser, the spouse of the Plaintiff. I dismissed the Third Party Claim out of hand. There was no substance to that claim and virtually no evidence was led or arguments made to support it. I am not sure why the Third Party Claim was brought in the first place, except to gain discovery of Mr. Krieser to which the Defendants were not entitled and to have him endure a few years with a civil suit hanging over him.

[6] The Plaintiff and Third Party together seek costs in two different quantities: costs of the trial in the amount of $518,391.97 (including disbursements and HST), plus costs thrown away as a result of the adjournment of the trial in the amount of $166,002.65 (including disbursements and HST). The former amount is sought on a substantial indemnity basis given the way the litigation was conducted by the Defendants and the Rule 49 offer made by the Plaintiff. The latter amount is sought on a full indemnity basis given the policy of allowing a party to recover wasted costs that this claim reflects: Graziano v Ciccone, 2017 ONSC 362.

[7] In my view, the Plaintiffs/Third Party’s claim for costs of just over $518,000 for the trial and all that came before it (excluding the costs-thrown-away claim) is reasonable. It is certainly within what I would expect from a hard fought 2-week trial of this nature, with pre-trial proceedings, discovery, etc. stretching back years. If the Defendants were watching Plaintiff’s counsel in action over the course of this litigation, it is what they should have expected as well. In this respect, the amount sought by Plaintiff’s counsel fits within the guidance in fixing costs provided by Rule 57.01(1)(0.b).

[8] Each of the Defendants’ counsel complains that it is too high compared with their own costs, and that various savings could have been made by Plaintiff’s counsel. Counsel for the Garber Defendants indicates that his client’s costs were in the range of $390,000 and counsel for the Nealon Defendants indicates that his client’s costs were in the range of $180,000.

[9] In the first place, Defendants’ counsel submit that Plaintiffs’ counsel’s billing rates are higher than the Costs Subcommittee’s recommended rates for Rule 57. The Court of Appeal has specifically observed that “the cost rates set out in the Information for the Profession set out in the preamble to Rule 57 of the Rules of Civil Procedure are now out of date”: Inter-Leasing, Inc. v. Ontario (Ministry of Revenue), 2014 ONCA 683, para 5. If they were too low and out of date in 2014, they are all the more out of date today.

[10] Defendants’ counsel also takes issue with the amount of time and the level of lawyer assigned by Plaintiff’s counsel team to each step in the proceeding. In my view, it is neither for Defendants’ counsel nor for me in fixing costs to comb through Plaintiff’s counsel’s hourly billings in assessment officer fashion in order to second-guess Plaintiff’s counsel in this way. I also do not see much value in comparing the amount of time Plaintiff’s counsel spent on each stage of the action to the amount of time Defendants’ counsel spent. The respective submissions and supporting documentation establish that Plaintiff’s counsel did indeed invest more time in preparing the case than their adversaries. It paid off.

[11] I have no hesitation in awarding costs on a substantial indemnity scale. Defendants both took untenable positions and fought the Plaintiff’s claim tooth and nail even where what the Plaintiff claimed was self-evident. The Garber Defendants continued fighting even in the face of the most generous offer to settle I have ever seen.

[12] The Nealon Defendants were likewise unreasonable. Mr. Nealon could not properly explain how he had made such an error as to build the Garbor dock in the wrong place, and spoke as if he did not realize that the place where he did build it worked out perfectly for the Garbor walkway and landscaping. The Nealon Defendants spent years arguing that their actions were legal and reasonable when it was clear as day that they had built a dock in the wrong place (i.e. not in accordance with the building permit) and they had pled guilty to a criminal offense for those very actions. Indeed, the Nealon Defendants continue to do this in their written costs submissions, arguing that the fact that they were punished in criminal court with a fine rather than with a mandatory court order to remove the offending dock somehow authorized the existence of the wrongfully built structure for which the criminal fine was imposed. Their position suggests that they were and are determined to fight for the sake of fighting.

[13] Counsel for the Nealon Defendants submits that in fixing costs I should take into account his client’s ability to pay. I agree that could be a relevant consideration in the right case. However, I do not know anything about the Nealon Defendants’ ability to pay. I know that Mr. Nealon runs a local but successful dock building business in the Lake Simcoe area. I also know, because counsel for the Nealon Defendants has conceded, that the Nealon Defendants were at least partially insured for this matter and that their insurance company covered their costs up to the limits of the policy (which limits may still be in dispute, according to counsel).

[14] Counsel for the Nealon Defendants cites Belvedere v Brittain Estate, 2009 ONCA 691 as support for this argument. In that case, the Court of Appeal waived costs for an impecunious litigant who in an estate case had lost what she expected from an inheritance. That is not analogous to the Nealon Defendants, who I have no reason to believe cannot pay the costs of litigation in which they fought every issue as hard as possible.

[15] The one area which gives me pause is Plaintiff’s counsel’s request for costs thrown away resulting from an adjournment of the trial in January 2018. In the first place, these costs are only to be borne by the Garber Defendants. The Nealon Defendants did not seek the adjournment and any costs thrown away cannot be attributed to them.

[16] The adjournment was based on Ms. Garber’s ill health at the time. A motion was brought to adjourn the trial until she could recover from treatment for a serious illness, and Firestone J. granted the adjournment, leaving the question of costs to the trial judge: Krieser v Garber, 2018 ONSC 478. As Plaintiffs’ counsel submits, costs thrown away are awarded to a party to indemnify it for the time incurred for trial preparation or work that has to be repeated due to the adjournment: Graziano, para 8. They can be awarded even if the adjournment request is a result of matters out of the requesting party’s control such as an illness: Furr v Duhamel, 2017 ONSC 4623, para 13.

[17] Plaintiff’s counsel claims $166,002.65 in costs thrown away, presumably because they had to prepare twice for trial instead of once. That amount seems high, given that the adjournment was for just under a year and that a substantial portion of the preparation in early 2018 must have still been valuable to counsel in late 2018. Plaintiff’s counsel do not fully explain this in their written submissions. Counsel for the Garber Defendants points out that in the Plaintiff’s Bill of Costs is a breakdown of costs incurred per each stage of the action. The part for preparation in the run-up to the original January 2018 trial date includes such matters as preparation of the Trial Record, the Joint Document Brief, a Request to Admit, the Brief of Expert Reports, and a Memorandum of Law. None of these things would have had to be repeated later in the year.

[18] I will exercise my discretion under section 131 of the Courts of Justice Act to fix the costs thrown away at a rounded-off figure that is roughly one-half of what the Plaintiff requests – i.e. $80,000.

[19] The Garber Defendants and the Nealon Defendants, jointly and severally, shall pay the Plaintiffs costs in the amount of $518,000. The Garber Defendants shall pay the Plaintiffs a further amount of $80,000 in costs thrown away. These amounts are all inclusive of fees, disbursements, and HST.

Morgan J. Date: May 28, 2019