Court File and Parties
CITATION: Halpin v. Thibault, 2020 ONSC 1043
DIVISIONAL COURT FILE NO.: 18-DC-2428
DATE: 2020/02/21
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Aitken J.
BETWEEN:
Dr. David J. Halpin Plaintiff (Respondent)
– and –
Sangeeta and Didier Thibault Defendants (Appellants)
COUNSEL:
Robert Carew, for the Respondent
Self-Represented
HEARD: Written Submissions
REASONS FOR JUDGMENT RE COSTS
Parties Positions
[1] The Appellants are seeking their costs for the Small Claims Court trial in the amount of $15,364.55 and for the Divisional Court Appeal in the amount of $13,625.00.
[2] The Respondent argues that the fairest resolution would be for each party to pay his or her own costs. In the alternative, if costs are awarded, the Respondent seeks reasonable compensation for his trial and appeal time paralleling the number of hours claimed by the Appellants and disbursements incurred, including an additional disbursement of 741 pages @ $0.10 per page to provide a casebook dealing with the issue of bias.
Costs for the Small Claims Court Action
[3] Under s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, 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 the costs shall be paid. This is subject to the provisions of an Act or rules of court. There are particular legislative provisions and rules that apply to costs in the Small Claims Court.
[4] Costs in the Small Claims Court are dealt with under r. 19 of the Small Claims Court Rules, O. Reg. 258/98.
[5] Under r. 19.01, a successful party is entitled to have the party’s reasonable disbursements paid for by the unsuccessful party, unless the court orders otherwise. Those include any costs of effecting service or preparing a plaintiff’s or defendant’s claim or defence and expenses for photocopying. Under r. 19.03, the disbursements allowed for effecting service shall not exceed $60.00 for each person served. Under r. 19.04, the disbursements allowed for preparation of a plaintiff’s or defendant’s claim or defence shall not exceed $100.00.
[6] Under r. 19.02, any power under r. 19 to award costs is subject to s. 29 of the Courts of Justice Act. That section provides that Small Claims Court costs awards shall not exceed 15 percent of the amount claimed or the value of the property sought to be recovered, subject to a finding that a larger award is necessary in the interest of justice to penalize unreasonable behaviour.
[7] Under r. 19.04, if a successful party is represented by a lawyer, student-at-law, or paralegal, the court may award the party a reasonable representation fee at trial or at an assessment hearing. Here, Dr. Halpin was represented by counsel at the Small Claims Court trial. Neither Sangeeta Thibault nor Didier Thibault was represented by anyone with legal credentials; instead, they were represented at times by Mr. Thibault’s father, Warren Thibault, who acted as their agent. Thus, neither Sangeeta Thibault nor Didier Thibault can seek a reasonable representation fee for the work done by Warren Thibault.
[8] Under r. 19.05, the court may order an unsuccessful party to pay to a successful party who is self-represented an amount not exceeding $500.00 as compensation for inconvenience and expense.
[9] Ultimately, following the appeal, Dr. Halpin had limited success against Sangeeta Thibault in regard to the issues litigated before the Small Claims Court. He ended up with an award against her in the amount of $3,160.97 – a far cry from the $29,012.81 that he claimed in his original and supplementary claims. In reality, following the appeal, the Thibaults had far greater success than Dr. Halpin. The Small Claims Court trial was unnecessarily lengthy as a result of Dr. Halpin’s conduct in: (1) not waiting for the decision from the OLRB prior to proceeding with the Small Claims Court trial; (2) not accepting the findings of the OLRB but seeking to relitigate all issues before the Small Claims Court; and (3) making several allegations against Ms. Thibault that, ultimately, were not accepted. In my view, this behaviour on the part of Dr. Halpin would make it unreasonable for him to receive any costs award against Sangeeta Thibault in regard to the Small Claims Court proceedings – despite his having very limited success. Considering all of the unsuccessful claims Dr. Halpin levied against Sangeeta Thibault, it would be appropriate for him to pay Ms. Thibault $500.00 under r. 19.05 in compensation for the inconvenience and expense to which she was put in order to defend those claims.
[10] In regard to Didier Thibault, Dr. Halpin had no success whatsoever in regard to his claim for $10,508.00. It was unreasonable for Dr. Halpin to pursue his claim against Didier Thibault in the absence of any evidence that Didier Thibault knew that Dr. Halpin had written cheques to him that had been deposited into his joint account. When the Thibaults had been represented prior to the Small Claims Court trial, their lawyer had repeatedly requested that Mr. Thibault be let out of the litigation, but that request fell on deaf ears. As well, Dr. Halpin rejected an offer of $5,000.00 made at the time by the Thibaults. It is obvious to me that Dr. Halpin refused to let Mr. Thibault out of the litigation to put additional pressure on Sangeeta Thibault.
[11] In that Didier Thibault was not represented by a lawyer, student-at-law, or paralegal, there can be no award for a representation fee under r. 19.04. However, he was put to considerable inconvenience and expense in defending against Dr. Halpin’s claim in Small Claims Court. The maximum amount of $500.00 is awarded in his favour against Dr. Halpin under r. 19.05 as compensation for inconvenience and expense. He is also entitled to his disbursements associated with the Small Claims Court action. Those are assessed at $100.00 for preparation of a defence and $71.76 for photocopying plus HST for a total of $194.00.
[12] The Thibaults filed in support of their claim for costs an invoice submitted to them by SKS Law. The invoice appears to cover work done by three individuals from October 17, 2017 to June 18, 2018. Unfortunately, it is impossible to tell from the invoice what work, if any, that was done prior to the OLRB hearing on June 13, 2018, may have related to the Small Claims Court action rather than the OLRB hearing. The Thibaults were represented by SKS Law at the OLRB hearing, but not at the Small Claims Court hearing. I find that the time docketed by SKS Law following the June 13, 2018 OLRB hearing did relate to the Small Claims Court proceedings. The total value of those entries is $250.50. Dr. Halpin is ordered to pay costs to the Thibaults in the amount of $283.07 inclusive of HST, in addition to the amounts payable for compensation and disbursements. Unfortunately, the scant amount of evidence produced regarding the work done by SKS Law for the Thibaults does not enable me to make an award of costs greater than $283.97 in regard to the Small Claims Court proceedings.
[13] In summary, in regard to the Small Claims Court proceedings, the following order is made:
- Dr. Halpin shall pay Didier Thibault the sum of $694.00 inclusive of compensation, disbursements, and HST on the disbursements;
- Dr. Halpin shall pay Sangeeta Thibault the sum of $500.00 as compensation; and
- Dr. Halpin shall pay Didier and Sangeeta Thibault the sum of $283.07 as costs, inclusive of HST.
Costs in Divisional Court
[14] There are no limitations relating to the costs that can be awarded in the Divisional Court, such as those set out in s. 29 of the Courts of Justice Act and r. 19 of the Small Claims Court Rules in regard to Small Claims Court matters. Instead, costs are in the discretion of the court under s. 131(1) of the Courts of Justice Act. In exercising that discretion, the court must be guided by the principles set out in r. 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[15] Here, neither Sangeeta Thibault nor Didier Thibault was represented by counsel on the appeal. Instead, they presented their own case with the assistance of their agent, Warren Thibault. It was clear from the arguments advanced on the appeal that the Thibaults had devoted much time to reviewing the audiotapes from the Small Claims Court trial, reading the transcript from the trial, and marshalling both evidentiary and legal arguments to challenge the Small Claims Court decision. They did their best to organize their case and ensure that they could refer to specific items of evidence or specific interactions from the transcript to support their arguments. Their success on the appeal, against experienced counsel, reflects the significant efforts they undertook to properly present their case on appeal.
[16] In Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330 (C.A.), at paras. 21-26, Sharpe J.A. of the Ontario Court of Appeal offered guidance regarding costs awards for self-represented litigants.
[T]he preponderance of modern authority supports the contention that both self-represented lawyers and self-represented lay litigants may be awarded costs and that such costs may include allowances for counsel fees. … Two provincial appellate courts have held that lay litigants may recover costs, including counsel fees. The clear trend of both the common law and the statutory law is to allow for recovery of costs by self-represented litigants.
Quite apart from authority and as a matter of principle, it seems to me to be difficult to justify a categorical rule denying recovery of costs by self-represented litigants. As noted in Fellowes McNeil, supra, and in Skidmore, supra, modern cost rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behaviour by litigants. It seems to me that all three purposes are fostered by allowing the trial judge a discretion to award costs to self-represented litigants.
Since the Chorley case over 100 years ago, it had been accepted that self-represented lawyers are entitled to indemnity on the "time is money" or opportunity cost rationale. It is difficult to see why the opportunity cost rationale should not be more generally applicable to self-represented litigants. The self-represented lawyer possesses legal skills, but lacks professional detachment when acting in his or her own cause. If the law is prepared to compensate lawyers for this loss of time when devoting their efforts to their own cause, I fail to see any basis for denying the same entitlement to self-represented lay litigants who are able to demonstrate the same loss.
A rule precluding recovery of costs, in whole or in part, by self-represented litigants would deprive the court of a potentially useful tool to encourage settlements and to discourage or sanction inappropriate behaviour. For example, an opposite party should not be able to ignore the reasonable settlement offer of a self-represented litigant with impunity from the usual costs consequences. Nor, in my view, is it desirable to immunize such a party from costs awards designed to sanction inappropriate behaviour simply because the other party is a self-represented litigant.
I would add that nothing in these reasons is meant to suggest that a self-represented litigant has an automatic right to recover costs. The matter remains fully within the discretion of the trial judge, …
I would also add that self-represented litigants, be they legally trained or not, are not entitled to costs calculated on the same basis as those of the litigant who retains counsel. As the Chorley case, supra, recognized, all litigants suffer a loss of time through their involvement in the legal process. The self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case. Costs should only be awarded to those lay litigants who can demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation, and that as a result, they incurred an opportunity cost by foregoing remunerative activity. As the early Chancery rule recognized, a self-represented lay litigant should receive only a "moderate" or "reasonable" allowance for the loss of time devoted to preparing and presenting the case. This excludes routine awards on a per diem basis to litigants who would ordinarily be in attendance at court in any event. The trial judge is particularly well-placed to assess the appropriate allowance, if any, for a self-represented litigant, and accordingly, the trial judge should either fix the costs when making such an award or provide clear guidelines to the Assessment Officer as to the manner in which the costs are to be assessed.
[17] As reinforced in Mustang Investments v. Ironside, 2010 ONSC 3444, [2010] O.A.C. 302 (Div. Ct.), at para. 18, to receive costs, the self-represented litigant must show that the work done by him or her resulted in a loss of foregoing remunerative activity. (See also Edelstein v. Monteleone, 2017 ONSC 7446 (Div. Ct.), at para. 5; and McLaughlin v. Maynard, 2018 ONSC 263, at para. 5.)
[18] In their submissions, the Thibaults claimed to have devoted 86 hours to the preparation of all documents and submissions to be used on the appeal. They were seeking costs at the rate of $100.00 per hour for this time, an hourly rate recognized as reasonable in many cases involving self-represented litigants. I do not doubt that the Thibaults devoted this amount of time to reading the transcripts from the Small Claims Court file, listening to the audiotapes from the trial, preparing the Notice of Appeal and grounds of appeal, preparing the Appeal Book and Compendium, preparing the Factum, reviewing Dr. Halpin’s materials, and preparing their notes and submissions. This is all work that would have been done by a lawyer, had the Thibaults had the financial resources to retain one for the appeal. The real question is whether they incurred an opportunity cost by foregoing remunerative activity. Although I would have preferred to see more specific evidence in this regard, I am persuaded by the body of evidence that Didier Thibault did incur an opportunity cost. Due to lack of specific evidence about her level of work leading up to the appeal, I am not persuaded that Sangeeta Thibault incurred such a cost.
[19] Didier Thibault is an RCMP officer assigned to provide security for high-ranking officials. He has a top security clearance. He works full-time in a high-stress environment and, it is reasonable to infer, has the opportunity to work over-time on security details. As a result of this litigation, he was subject to an internal investigation and file review by the RCMP and lost the opportunity of working to the extent he normally would. In submissions, Mr. Thibault advised that his loss of income is reflected in his most current T-4.
[20] Prior to the inception of this litigation, Sangeeta Thibault also worked full-time. As testified to during the Small Claims Court trial, Ms. Thibault has excellent skills as a dental office administrator, and such skills are in demand. I do not doubt that Ms. Thibault has suffered depression and anxiety since Dr. Halpin commenced his lawsuit against her, and that this has impacted her ability to seek full-time employment. That, however, is a different issue from whether the time she had to spend preparing for the appeal prevented her from having other remunerative work.
[21] For a Small Claims Court matter being heard on appeal, this case was reasonably complex. In regard to Sangeeta Thibault, it involved a number of discrete claims in regard to which specific evidence had to be reviewed. This required a careful review of the OLRB decision and the findings of fact made therein. Different legal principles applied to different claims, and the question of issue estoppel had to be researched and argued. The claim against Didier Thibault was more focused and one-dimensional.
[22] As well, there was the overarching issue of alleged bias on the part of the trial judge, which required the Thibaults to carefully review the entire audiotape and transcript from the Small Claims Court hearing and be able to point to various interactions between themselves and the trial judge and various rulings made by the trial judge to support their claim of bias.
[23] The amount in issue totalled $29,012.81 in that this was the total of the various claims being advanced by Dr. Halpin. This meant that the Thibaults had to have a clear understanding of the legal basis for each claim and the underlying evidence to support or refute each claim even though, ultimately, the Small Claims Court could not have made an award in excess of $25,000. Dr. Halpin only recovered $3,160.97 of the sums claimed.
[24] The Thibaults had no choice but to advance an appeal because: (1) Dr. Halpin refused to accept that many of the issues he was pursuing in Small Claims Court against Sangeeta Thibault had been decided by the OLRB; and (2) Dr. Halpin pursued claims against Didier Thibault when there was no legal foundation for such claims.
[25] The issues raised in this litigation were very important to the Thibaults. From Sangeeta Thibault’s perspective, the allegations made against her by Dr. Halpin were prejudicial to her reputation in her chosen field of work. From Didier Thibault’s perspective, the allegations made against him carried the risk that his security clearance, which is central to the type of work he performs, could be prejudiced.
[26] No evidence was tendered as to the costs that Dr. Halpin could reasonably have expected to pay in regard to the Divisional Court appeal; however, it would not be unusual for an appeal in Divisional Court to result in costs ranging anywhere from $7,500 to $20,000.
[27] The existence of offers to settle is one factor that helps a court assess the reasonableness of each party’s behaviour leading up to a court hearing. The information provided to the court regarding offers to settle is the following. On October 17, 2017, shortly after Dr. Halpin commenced his Small Claims Court action, the Thibaults offered to settle with Dr. Halpin for $5,000 all in. A copy of that offer was not submitted as part of the costs submissions, but its existence is not in dispute. If that offer was in addition to the last paycheque to Sangeeta Thibault, which the OLRB decided Dr. Halpin could withhold, Dr. Halpin would have netted almost $2,000 more under the offer than he eventually received under the Divisional Court decision. If the last paycheque was included in the $5,000, Dr. Halpin would have received approximately the same amount as he received under the Divisional Court decision, without having to incur any legal costs on the appeal or pay any of the Thibaults’ legal costs. In any event, Dr. Halpin declined the offer and made a counter-offer of a $13,500 payment to himself by the Thibaults. This was rejected by the Thibaults. On February 22, 2018, Dr. Halpin offered to settle for the sum of $8,500, which included the OLRB award. That was rejected by the Thibaults. On October 4, 2018, the Thibaults offered to settle the case for $10,000 all in and payable immediately in order to obviate the need for an appeal. This offer was open for acceptance for a week. Dr. Halpin did not accept it. The offer was much more favourable to Dr. Halpin than the decision rendered on appeal. Dr. Halpin’s rejection of the Thibaults’ offers throughout was unreasonable.
[28] The disbursements on the appeal are $3,925.00, broken down as follows:
- Cost of transcripts: $3,075
- Fee to file Notice of Appeal: $120.00
- Fee to obtain audiotape of Small Claims Court hearing: $80.00
- Fee to file certificate of perfection: $450.00
- Service fees: $0.00 (not adequately identified)
- Printing fees: $200.00
[29] Taking these factors into account, I conclude that a just determination of costs before the Divisional Court, keeping in mind the principle of proportionality, would be the following:
- Dr. Halpin shall pay Didier Thibault his costs on the appeal fixed in the amount of $8,600.00. I am not including disbursements, as I have assigned them all to Sangeeta Thibault. If, for any reason, the costs order in favour of Sangeeta Thibault does not stand, then the disbursements I have allowed her would be added to Didier Thibault’s costs order.
- Dr. Halpin shall pay Sangeeta Thibault the disbursements on the appeal fixed in the amount of $4,435.25, inclusive of HST. Had I not been bound by the Ontario Court of Appeal’s decision in Fong in regard to the need for evidence regarding lost opportunities, I would have made an order of costs in favour of Ms. Thibault in the amount of $6,000.00 plus disbursements. Even though there were several claims against Sangeeta Thibault that she had to defend, and that resulted in the preparation time for her defence being greater than the preparation time for Didier Thibault’s defence, Dr. Halpin did achieve some, though minor, success in the small amount Ms. Thibault was ordered to reimburse him.
Aitken J.
Released: February 21, 2020
CITATION: Halpin v. Thibault, 2020 ONSC 1043
DIVISIONAL COURT FILE NO.: 18-DC-2428
DATE: 2020/02/21
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Dr. David J. Halpin Plaintiff (Respondent)
– and –
Sangeeta and Didier Thibault Defendants (Appellants)
REASONS FOR JUDGMENT RE COSTS
Aitken J.
Released: February 21, 2020