COURT FILE NO.: 322/06 and 323/06
DATE: 20080122
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Jung v. Toronto Community Housing Corporation
BEFORE: Carnwath, Kiteley and Murray J.J.
COUNSEL: Constantine Grimanis, solicitor for Lauren Jung Tenant/Appellant
Craig Logie, solicitor for TCHC Landlord/Respondent
E N D O R S E M E N T AS TO COSTS
[1] In written reasons released November 9, 2007, the appeal by Ms. Jung was allowed. Both applications were returned to the Ontario Rental Housing Tribunal for a hearing and determination.
[2] Mr. Grimanis provided a costs outline and brief written submissions. With fees at a partial indemnity rate in the amount of $14798.50 (including GST), he asks for disbursements of $1295.23 for total costs fixed at $16093.73[^1]. Mr. Logie took the position that Ms. Jung should recover only disbursements of $1295.23 but if a fee were allowed, it ought not to exceed $2500.
Should Costs be Awarded?
[3] During the submissions at the appeal and in his written submissions as to costs, Mr. Grimanis said that he was acting on a pro bono basis because his client was impecunious. Relying on 1465778 Ontario Inc.[^2] Mr. Logie argued that there was never an expectation that the appellant would be able to pay costs if unsuccessful on appeal. For that reason, he had advised at the conclusion of submissions that, if successful, TCHC would not ask for costs. Given that expectation, she ought not to recover costs.
[4] TCHC is a publicly funded corporation that administers rent-controlled housing in the public interest. Mr. Logie noted that Mr. Grimanis had not indicated that he had entered into a fee arrangement with Ms. Jung and in the absence of such agreement, the presumption is that the costs belong to the party. Mr. Logie argued that if no fee arrangement with respect to costs exists, then a costs award represents a publicly funded windfall to a private person who, at the point of the hearing of the appeal in October, 2007, had not paid rent since the death of her grandmother in May 2006.
[5] In 1456778 Ontario Inc. the appellants were successful in setting aside orders that did not allow the sole shareholder to represent the company in the litigation, ordered security for costs against the sole shareholder and dismissed the application by the appellant for an order that the arbitration clause in the franchise agreement ought to prevail. When counsel for the appellant asked for costs, counsel for the respondent objected on the basis that counsel for the appellant was acting pro bono through the Advocates’ Society pro bono program. The Court of Appeal adjourned the issue of costs and counsel were appointed to act as amici curiae for Pro Bono Law Ontario and for the Advocates’ Society and for the Ontario Trial Lawyers Association.
[6] The Court of Appeal concluded that there should be no prohibition of an award of costs in favour of pro bono counsel in appropriate cases because the law now recognizes that costs awards may serve purposes other than indemnity. It is neither inappropriate nor does it derogate from the charitable purpose of volunteerism, for counsel who have agreed to act pro bono to receive some reimbursement for their services from the losing party in the litigation. Indeed, allowing pro bono parties to be subject to the ordinary costs consequences that apply to other parties has two positive consequences in that it ensures that both parties know that they are not free to abuse the system without fear of the sanction of an award of costs and it promotes access to justice by enabling and encouraging more lawyers to volunteer to work pro bono.
[7] The Court also confirmed that unless counsel make a fee arrangement with the client, costs belong to the client.
[8] The Court also held that although it is open to a judge to award costs to a successful pro bono party, such an award is not mandatory and will depend on the rule 57.01 factors, considerations of access to justice and the need to maintain a level playing field between the parties. The Court addressed concerns when the costs are awarded in an interlocutory matter because of the consequences that arise from non-payment. The Court held that the judge will have the discretion to make the order that fits the circumstances, including ordering costs payable to the pro bono party, reducing the quantum of those costs or limiting the order to disbursements, making the costs payable only at the end of the case, or making no order.
[9] The Court resisted developing a set of principles governing the availability of costs awards in favour of pro bono parties and opted instead to approach it on a case-by-case basis.
[10] The Court concluded that costs should follow the event and fixed costs of pro bono counsel at the amount requested, namely $4500.
[11] We agree that Ms. Jung should recover costs. The decision on the appeals was based on the appearance of bias by the Tribunal. Ms. Jung was denied procedural fairness. Mr. Grimanis had acted for her before the Tribunal. He saw what he thought (and what we found) was an injustice and he pursued it in the best tradition of the bar. It is important to ensuring access to justice to litigants such as Ms. Jung that lawyers take on such cases. But that does not mean they ought not to recover costs in appropriate cases.
[12] The second issue in a determination of entitlement to costs is offers to settle. In his submissions as to costs, Mr. Grimanis indicated that his suggestion that the appeals be settled went ignored and unanswered and on that basis, costs ought to be paid on an increased basis. Mr. Logie responded that there had been negotiations as to settlement. Ms. Jung was never in a position to pay any of the rental arrears ordered by the Tribunal without additional support from social services. Consequently, the negotiations to settle the appeals had to include Scarborough West Social Services who would be involved in paying the arrears. In reviewing the draft Minutes of Settlement provided by Mr. Logie, it is clear that the negotiations were focused on the then pending motion by TCHC for an interim order requiring payment of an occupancy fee pending the determination of the within appeals.
[13] There was no offer by Ms. Jung. The negotiations were with respect to a pending motion, although, as Mr. Logie pointed out, a settlement on the issue of the pending motion may have created a basis for settlement of all outstanding issues by providing Ms. Jung with a source of income to find alternative rental accommodation. We do not consider the settlement discussions, or lack thereof, to be a factor in the award of costs.
Amount of Costs:
[14] We turn then to the amount to be awarded. The disbursements of $1295.23 are not controversial.
[15] Mr. Logie takes issue with the fees. Mr. Grimanis was called to the bar in 1973. On a partial indemnity basis, he charged $350 per hour. He noted that, as a sole practitioner, he did everything necessary for the appeal. He allocated 6 hours to review the ORHT decisions, prepare the notices of appeal, order and peruse the transcript and prepare compendia. He allocated 25.5 hours to conduct legal research, prepare facta and book of authorities, review of respondent’s factum, appeal record and authorities. He allocated 5.5 hours to prepare for the appeal, 1.2 hours for the attendance and 1.5 hours to prepare the submissions on costs.
[16] We agree with Mr. Logie that the time allocated is excessive. It is not necessary for us to be critical of any specific item. Rather, we have a wide discretion to order costs on a global basis. This was not a complicated matter. The submissions were heard in less than 1.5 hours. The facta in the two appeals were not complex. A counsel fee of $3500. is fair.
ORDER TO GO AS FOLLOWS:
[17] The respondent TCHC shall pay to the appellant costs of the appeals fixed at $3500 inclusive of GST for fees and $1295.23 for disbursements.
Carnwath J.
Kiteley J.
Murray J.
DATE: January 22, 2008
[^1]: Mr. Logie pointed out that the costs outline contained an arithmetic error and that the correct amounts should be: $13895.00 for fees + $833.70 for GST + $1295.23 for disbursements= $16023.93.
[^2]: 1465778 Ontario Inc. v. 1122077 Ontario Ltd. (2006) 2006 35819 (ON CA), 82 O.R. (3d) 757 (C.A.)