Goetz v. Kay, 2020 ONSC 924
DIVISIONAL COURT FILE NO.: 458/18
DATE: 20200211
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Manfred Goetz, Plaintiff/Respondent
AND: James Kay, Defendant/Appellant
AND RE: James Kay, Plaintiff by Defendant’s Claim
AND: Manfred Goetz, Isabelle Goetz and Jacqueline Goetz, Defendants by Defendant’s Claim
BEFORE: Kiteley J.
COUNSEL: Conner Harris and Brynn Leger, for the Plaintiff/Respondent
Self-represented, Defendant/Appellant
HEARD at Toronto: November 26, 2019 and costs submissions in writing
Endorsement
[1] This is an appeal from the decision of Small Claims Court Deputy Judge C.L. Bocci dated June 15, 2018. For the reasons that follow, the appeal is dismissed.
Background
[2] The Respondent Manfred Goetz was a tenant living in a condominium unit. The Respondent’s landlord was A.M. In 2014, pursuant to subsection 134(1) of the Condominium Act, the condominium corporation brought an application against the Respondent, his two daughters and A.M. The corporation alleged non-compliance by the Respondent and his daughters with the by-laws related to cleaning up after their dog and parking in visitors’ parking spots.
[3] The Respondent retained the Appellant to represent him and his daughters in the application. The Respondent provided the Appellant with documentation and prepared a draft of his own responding affidavit. The Appellant did not prepare and file a responding application record. The Appellant sought an adjournment of the hearing of the application for the purpose of filing responding material and examining the corporation’s witnesses. In an endorsement dated October 20, 2014, Stinson J. granted the adjournment and, pursuant to rule 39.03, he gave leave to the Appellant to conduct examinations of two individuals referenced in a supplementary affidavit of the corporation. Stinson J. made an order on consent pending the disposition of the application, that the “Goetz Respondents” could keep the dog in the common elements on the condition that they would comply with the condominium’s by-laws. Stinson J. reserved costs to the judge hearing the application.
[4] Notwithstanding the requested adjournment, the Appellant did not serve and file a responding application record. Nor did he prepare and file a factum and book of authorities. At the hearing of the application, the Appellant took the position that the Superior Court did not have jurisdiction because the matter was governed by the Residential Tenancies Act[^1] (the RTA).
[5] On June 24, 2015, Myers J. heard the application and gave oral reasons granting the application. The transcript[^2] of his reasons includes the following:
. . . the evidence is that the Goetz’s dog has been allowed to run off leash, soil common areas of the condominium and jump on others. Despite several demands, neither the unit owner, A.M., nor the occupants/tenants, Goetz, bothered to respond for several months. The tenants did not change their behaviour, nor did the owner enforce the declaration or rules of the condo against the tenant. The Goetz also parked cars in visitor parking in breach of the condominium’s declaration and rules. They did so despite demand even after litigation commenced and despite the order of Stinson, J., prohibiting them from doing so, to which they consented.
The Goetz do not deny the allegations and submitted no evidence to the contrary at all. They did not examine witnesses at whose evidence was given by information or belief despite obtaining an adjournment of the application expressly for that purpose. Rule 39.01(5) does not prevent the use of information and belief in the absence of facts being contentious.
There was at least an evidentiary burden on the Goetz’s to respond to the applicant’s prima facie case. I infer that the Goetz’s silence indicate their inability to contradict the applicant’s evidence. This inference is consistent with their argument. They rely on the provisions of the Residential Tenancies Act and it’s primacy over any other statute to argue that they are entitled to park where they want and keep pets as they want despite the provisions of the Condominium Act, the declaration and its rules. See Sections 3 and 4 of the Residential Tenancies Act.
I agree with Ferrier, J., in MTCC No. 949 v. Ross Irvine, et al., [1992] Carswell Ontario 584, and note as well my agreement with the last sentence of the annotation preceding the report of that case.
Section 14 of the Residential Tenancies Act applies only to “tenancy agreements.” That is even narrower than the statute was as it existed before Ferrier, J., when it just applied to “agreements.” Here the legislature plainly determined to only void clauses that are in “tenancy agreements.” The condominium’s declaration and rules are certainly not tenancy agreements, nor is the applicant a landlord. It has no say in how an owner leases his or her unit. It has a right to require the owner to provide it with notice of a tenancy, but that does not meet the definition of landlord in Section 2(1) of the Residential Tenancies Act. Moreover, nothing in the Residential Tenancies Act prevents a condominium corporation from enforcing its visitor parking rules.
The Goetz’s argument that they were not bound by the condominium declaration and rules has led them to continue their breaches despite a court order prohibiting such misconduct. They consented to, and hence could not, and did not, appeal from Justice Stinson’s order. As a subsisting order of the court it was to be obeyed despite legal arguments that might be made in the future in the case. . .
[6] In holding the Goetz defendants liable, Myers J. ordered costs in favour of the corporation in the amount of $20,000 and allocated $12500 to be paid by the Goetz defendants and $6500 to be paid by A.M. provided that the Respondent was required to indemnify A.M. for the costs award of $6500.
[7] The Respondent issued a Small Claims Court claim in which he asked for judgment in the amount of $25,000 for damages for professional negligence. The Appellant filed a defence and filed his own claim. He named the Respondent’s daughters as additional parties. The Respondent and his daughters filed a defence to that claim. The trial was conducted on May 12, 2017 and August 17, 2017.
Decision of the Deputy Judge
[8] The decision of the Deputy Judge is dated January 23, 2018. She released a Corrigendum and costs Decision dated June 15, 2018. She also released an Addendum dated July 6, 2018 in which she made an order amending the style of cause in both the judgment and the corrigendum and costs decision to include “Isabel Goetz and Jacqueline Goetz as defendants by Defendant’s Claim”.
[9] The Deputy Judge considered the evidence of the Appellant, the Respondent and of the lawyer who had acted for the condominium corporation and the documentation filed as exhibits and she made these findings:
- . .. . I am unable to find on a balance of probabilities that the defendant had conducted himself in accordance with the standard of care of a reasonably prudent solicitor. In particular, I find as follows:
(a) The defendant failed to adequately advise the plaintiff of his legal options and associated risks;
(b) The defendant failed to carry out the plaintiff’s instructions to cross-examine the witnesses and file responding materials even after having obtained a revised timetable as hereinbefore set out. There is no clear documentary evidence to support that the plaintiff abandoned these instructions;
(c) The defendant failed to provide the plaintiff with a breakdown of how his retainer fees were being applied to work being performed by him;
(d) Further, as hereinbefore set out, the defendant failed to obtain from the plaintiff informed instructions to argue the application solely on the basis of jurisdiction. As hereinbefore set out, I accept the plaintiff’s evidence of his understanding that at some point during the hearing process he would be permitted to give his side of what events had transpired between the parties;
(e) It is undisputed by the defendant that apart from making submissions to the court with regard to it’s lack of jurisdiction to deal with the application based on the Residential Tenancies Act, he did not provide any case authorities in support of his interpretation of the various sections of the Act and simply relied on his plain reading of the Act. Based on the evidence before me as a whole, on a balance of probabilities, I find that a reasonably prudent solicitor would have researched relevant case law and provided the court with at least a citation of the authorities relied upon in support of his client’s position or interpretation of the particular section of the statute being relied upon, particularly in light of the Applicant’s factum.
[10] In paragraphs 68 and 69, the Deputy Judge held that the Appellant’s conduct fell below the standard of care expected of a reasonably prudent solicitor and, but for his negligence, the Respondent would not have incurred the damages in costs set out in the order by Myers J. In paragraphs 70 to 72, the Deputy Judge ordered the Appellant to return $3500 of the $5500 retainer paid by the Respondent. She also granted judgment against the Appellant in the amount of $10,000 plus pre-judgment and post-judgment interest in accordance with the Courts of Justice Act. She dismissed the Defendant’s Claim. In the subsequent decision, she corrected the amount of the judgment from $10000 to $16000 and she ordered the Appellant to pay costs of the trial in the amount of $4300 inclusive of HST.
Appeal
[11] In the Notice of Appeal, the Appellant asks that the judgment for damages and costs be set aside, that a trial be ordered of the issues in the Claim and defendant’s Claim and costs of the appeal on a substantial indemnity basis. He listed the grounds of appeal as follows:
There is good reason to doubt the correctness of the Judgment, corrigendum and costs Decision, and Addendum of the Deputy Judge;
Without limiting the generality of the foregoing, the Deputy Judge departed from other relevant decisions and/or otherwise erred by:
(a) Not considering obligations to mitigate damages as required at Common Law and statute;
(b) Not considering the failure of Defendants by Defendant’s Claim, Isobel Goetz and Jacqueline Goetz, to testify when weighing credibility of parties, and burden of proof; and
(c) Errors in law regarding statutory interpretation.
[12] In his factum, the Appellant listed the grounds as follows:
(a) Significance of Goetz daughters not testifying and not being considered by the Deputy Judge;
(b) Failure of the Deputy Judge to consider mitigation obligations of the Goetz family and Goetz daughters in particular;
(c) Failure by the Deputy Judge to consider the provisions of the Negligence Act in the Claim and Defendant’s Claim;
(d) Failure by the Deputy Judge to properly interpret the application of the Residential Tenancies Act.
Jurisdiction and Standard of Review
[13] This court has jurisdiction pursuant to s. 31(1) of the Courts of Justice Act.
[14] The standard of review on questions of law is correctness. Questions of fact or mixed law and fact are reviewable for “palpable and overriding error” or must be “clearly wrong, unreasonable or unsupported by the evidence”.[^3]
Analysis
[15] It is important to note that the Appellant does not challenge any of the findings of the Deputy Judge as to negligence and the particulars of negligence quoted in paragraph 9 above.
Failure by the Deputy Judge to properly interpret the application of the Residential Tenancies Act
[16] At the outset, I indicated that I would not hear submissions on the fourth issue in the factum, namely the question of statutory interpretation. In his reasons for decision, Myers J. had explained why he rejected the interpretation advanced by the Appellant. To allow the Appellant to make submissions on this issue would constitute an attempt to re-argue the issue that was before Myers J. and is an impermissible collateral attack on that decision[^4]. The Respondent delivered a notice of appeal but did not pursue it. Furthermore, the correctness of the decision by Myers J. was not an issue in the Small Claims Court trial. To the extent that the decision of Myers J. was considered in the Small Claims Court trial, it was in the context of the Appellant’s professional conduct and the Deputy Judge made a finding as indicated in paragraph 67(e) as set out above. The appeal on that ground is dismissed.
Significance of Goetz daughters not testifying and not being considered by the Deputy Judge
[17] In submissions, the Appellant observed that the failure to testify was his most substantial ground of appeal.
[18] The Appellant pointed out that the names of the daughters had been listed on the Respondent’s Form 13A in the Small Claims Court proceeding. He took the position that the Respondent was therefor required to call them as witnesses. That form 13A was not included in the appeal book. At my request, Mr. Harris obtained a blank form 13A which provides that a party list the “proposed witnesses”. There is nothing on the form to indicate that it is mandatory for a party to call such proposed witnesses. The Appellant queried whether it was necessary for this court to review the relevant Small Claims Court rules. He relied on form 13A and I saw no reason to refer to the rules. I observed that once it was apparent that the Respondent closed his case in the Small Claims Court trial without calling either of his daughters, that the Appellant could have summonsed either or both of them. The Appellant’s response was that he would then have had to deal with likely hostile witnesses.
[19] I do not accept the submission that, based on listing his daughters as “proposed witness” in form 13A, the Respondent had the legal duty to call either or both of them in the Small Claims Court trial. At page 84 of the transcript, the Appellant invited the Deputy Judge to draw “whatever conclusions” she wanted from the failure to call the daughters as witnesses. The issue at the trial was whether the Appellant was professionally negligent in his handling of the condominium application. The Respondent was not required to call his daughters as witnesses in the Small Claims Court trial. The Appellant has not established that the Deputy Judge made a palpable and overriding error in not drawing any inferences against the Respondent based on the absence of evidence from the daughters.
Failure of the Deputy Judge to consider mitigation obligations of the Goetz family and Goetz daughters in particular
[20] The Appellant takes the position that, as counsel, he had no control over the actions of Manfred Goetz or his daughters. Myers J. found that Manfred Goetz and his daughters were responsible for the costs incurred by the condominium corporation. The Respondent retained different counsel and filed a notice of appeal from the decision of Myers J., which, among other grounds, included ineffective assistance of counsel, but he did not pursue the appeal.
[21] The Appellant argues that Manfred Goetz had an obligation to mitigate so that his daughters did not do what they had been doing. In paragraph 7 of his factum, the Appellant took the position that if the Respondent had pursued the appeal, it precluded any possible findings on appeal that would have mitigated some or probably all of the damages claimed from the Appellant.
[22] The factum and submissions are by no means clear. It appears that the Appellant takes the position that mitigation consists of the following: the daughters should not have done what was alleged; that, because Myers J. found they had done what was alleged, the Deputy Judge should have found that the Respondent failed to mitigate; and the Respondent did not pursue the appeal. The Appellant has not established that the Deputy Judge made a palpable and overriding error in not considering and making findings on the issue of mitigation.
Failure by the Deputy Judge to consider the provisions of the Negligence Act in the Claim and Defendant’s Claim
[23] In his Claim, the Appellant asserted in the alternative that:
(t)he Plaintiff and Daughters are jointly and severally liable of any and all alleged damages and costs, pursuant to the provisions of the Negligence Act.
[24] The Appellant argues that the Deputy Judge was obligated to apportion responsibility as between the Appellant on the one hand and the Respondent and his daughters on the other hand. In his factum he asserted that the Deputy Judge had made an error of law on the issues of negligence, mitigation, failure to weigh and failure to consider the Goetz family and the Goetz daughters’ failure to testify.
[25] The reasons for decision of the Deputy Judge are silent on the issue of joint and several liability. The Appellant asserts that the absence of apportioning any negligence to the Goetz family indicates that the Deputy Judge did not consider their joint and several liability.
[26] The Appellant was unable to identify any part of the transcript of the submissions in which he had raised this issue with the Deputy Judge. The Appellant has not established that the Deputy Judge made a palpable and overriding error with respect to the Appellant’s assertions related to the Negligence Act.
Amendment of Style of Cause in the Appeal
[27] In the notice of appeal, the Respondents were listed as follows: Manfred Goetz, Isobel Goetz and Jaqueline Goetz. At the conclusion of submissions, the Appellant asked that I correct the spelling of the first name of both of the daughters. The daughters were not represented in the appeal. The Respondent did not oppose. I saw no prejudice to the daughters and made the order amending the style of cause as above.
Costs
[28] At the conclusion of submissions on the appeal, I reserved decision on the appeal and asked for submissions as to costs. The Appellant did not have a costs outline. He asked only for disbursements to cover transcripts and filing costs. He was unable to document revenue unearned as a result of acting for himself and therefore he did not seek a counsel fee.
[29] Counsel for the Respondent advised that they were appearing through Pro Bono Ontario’s Appeals Assistance Program. Counsel provided a costs outline with calculations based on partial indemnity and based on actual rate. If the Respondent was found successful on the appeal, counsel asked for costs on a partial indemnity basis including fees of $5368.50 and HST of $697.90 and disbursements (including HST) in the amount of $1304.11 for a grand total of $7370.50. The Respondent relied on the decision in Dhawan v. Shails et al.[^5]
[30] The Appellant queried whether Mr. Goetz or the law firm would be the recipient of the costs, if ordered.
[31] As that was a new issue, I created a schedule for the parties to make written submissions on the issue of costs recovered by a party who was represented by a pro bono lawyer. I received written submissions from the Appellant and from counsel for the Respondent.
[32] The Appellant referred to 1465778 Ontario Inc. v. 1122077 Ontario Ltd.[^6] and Abdelrazik v. Canada (Minister of Foreign Affairs)[^7]. In his submissions, the Appellant conceded that the court has jurisdiction to order costs when a party is represented by Pro Bono Ontario’s Appeal Assistance Program. He noted that the rule 57.01 factors were relevant and reiterated his concern that it would be extravagant and unjust for the court to make an award of costs to a party who keeps those funds when he has incurred no costs. He asserted that the Court should only make an award, in whatever amount, taking into account the relevant factors in rule 57.01 if the Court has been satisfied that there is an arrangement between the Respondent and his counsel that any costs awarded will be paid and retained by counsel. The Appellant noted that he had asked for a copy of the retainer agreement but counsel for the Respondent had refused to provide it. As a measure of the costs that a successful litigant might expect, he said that if he were successful, he asked only for disbursements for transcripts and filing fees and that that ought to be a consideration in fixing the amount of costs ordered to be paid if he did not succeed in the appeal.
[33] Counsel for the Respondent made brief written submissions noting that the parties agreed on the basic principles of awarding costs to pro bono counsel. They noted that costs belong to a party and pro bono counsel may make arrangements with their clients that allow costs to be paid to the lawyer. At the hearing of the appeal counsel had advised the Court that the Respondent had agreed that costs would be paid to counsel and counsel asserted that that complied with the requirement to establish that an arrangement existed and for that reason, the production of the retainer agreement was not required.
[34] In 1465778 Ontario Inc. the plaintiffs successfully appealed from the order denying the corporate plaintiff the ability to be represented by its sole shareholder, from the order for security for costs against the personal plaintiff and from the order dismissing the action by the plaintiff for failing to pay security. In paragraph 34, the Court of Appeal held that there should be no prohibition on an award of costs in favour of pro bono counsel in appropriate non-Charter cases. Indeed, in paragraph 35 the Court held that allowing pro bono parties to be subject to the costs consequences that apply to other parties has the consequence of ensuring that both the non-pro bono party and the pro bono party know that they are not free to abuse the system without fear of the sanction of an award of costs and that promotes access to justice by enabling and encouraging more lawyers to volunteer to work pro bono in deserving cases.
[35] In paragraph 36, the Court noted that costs are awarded in favour of a party and therefore the costs belong to that party. The Court held, however, that pro bono counsel may make fee arrangements with their clients that allow the costs to be paid to the lawyer which ensures that there will be no windfall to the client who is not paying for legal services.
[36] In paragraph 37, the Court held that the Court should consider the rule 57.01 factors, as well as access to justice and the need to maintain a level playing field.
[37] In paragraph 49, the Court noted that the Appellant had been successful and in the ordinary course, costs would be ordered. The Court made an order for payment in the amount of $4500 inclusive of disbursements and G.S.T. in a case of greater complexity and importance, and taking into account an earlier order of costs in relation to the costs awarded on a motion to extend the time for bringing the appeal.
[38] In Abdelrazik, the Federal Court made an order requiring the Minister of Foreign Affairs to return the applicant to Canada. Pro bono counsel asked for costs in the amount of $127600. In paragraph 31, the Court held that there was no principled basis to refuse an order for costs solely on the basis that counsel agreed to act pro bono. The Court observed that, in taking on the Appellant’s case in the circumstances where he was unable to do so personally and was impecunious, counsel had conducted themselves in the best tradition of the bar. The Court endorsed the observations of the Court of Appeal in 1465778 Ontario Inc. in paragraph 35 to which reference is made above.
[39] In paragraph 32, the Federal Court held that as costs awarded belong to the successful party and not his counsel, the Court should only make an award of costs if satisfied that there is an arrangement between the litigant and his counsel that any costs awarded will be paid over to the counsel to prevent the litigant from being unjustly enriched. In that case, one of the lawyers had advised the Court that the Appellant had agreed that any costs awarded would be paid to counsel. The Court observed that the usual practice was to award costs on the basis of Column II of Tariff B. The Court applied the factors set out in Rule 400(3), similar to this court’s rule 57.01 factors. The Court made an order for costs considering the complexity and importance of the issues but directed that the costs be paid after the Appellant “provides a written direction to the respondents that the costs awarded to him hereby are to be paid directly to the law firm”.
[40] In Dhawan, the Superior Court heard an appeal from the order of a Master in which the plaintiffs were awarded partial summary judgment in the amount of $244057 and costs of $17000 based on the interpretation of a personal guarantee. Gomery J. allowed the appeal and dismissed the claim based on the guarantee. In paragraph 69 Gomery J. noted that the appellant’s counsel had advised that he was acting in a pro bono capacity pursuant to Pro Bono Law Ontario’s Appeals Assistance Program. She relied on the decision in 1465778 Ontario Inc. and held that costs may be awarded in favour of parties represented by pro bono counsel in appropriate cases which promotes access to justice by encouraging more lawyers to take on deserving cases even if the client cannot afford to pay counsel. She applied the usual criteria for awarding costs taking into consideration some of the unique circumstances.
[41] In this appeal, the Respondent was successful, thereby sustaining the judgment in his favour and the dismissal of the Appellant’s claim. In applying the rule 57.01 factors, the following are relevant. The amount claimed and recovered was within the Small Claims Court jurisdiction. The appeal was heard in the Superior Court and the amount at stake was material. The appeal was not frivolous or vexatious. In rule 57.01, the court may consider “any other matter relevant to the question of costs”. The Respondent retained a lawyer for the Small Claims Court trial. The Appellant did not. The Respondent retained a lawyer for the appeal. The Appellant did not. Given that the Appellant had the skills and knowledge to represent himself, it was important to leveling the playing field that the Respondent have counsel for the appeal, particularly where the underlying facts arose out of the decision of Myers J. and in circumstances in which the Deputy Judge found that the Appellant had fallen below the standard of care of a reasonably prudent solicitor, a finding that was not challenged in this appeal. I do not agree that the fact that the Appellant, if successful, would have asked only for disbursements is an indicator of what a party might expect to pay because the self-represented Appellant had the benefit of not retaining counsel.
[42] With respect to the amount of costs claimed, I see no reason for the unsuccessful Appellant to be required to pay for fees incurred by two lawyers, one called in 2014 and the other in 2019. The total hours claimed were 36 of which the senior lawyer logged 14.2 hours, the junior lawyer logged 21.3 hours and a law clerk logged 0.5 hours. Both lawyers attended and made submissions at the appeal. The fees must be reduced to reflect the lack of complexity, overlap and possible duplication, most importantly in the category of “draft, revise and finalize Compendium, Affidavit, Factum, Brief of Authorities, Draft Order, etc.” in which the senior lawyer logged 11.3 hours and the junior lawyer logged 18.1 hours. I reduce the fees to $2500 (inclusive of HST) on a partial indemnity basis. Counsel seeks to recover $1004 for “photocopies/printing/binding” and $100 and $49.94 for process server and courier. I consider it unfortunate that the lack of adoption of technology in the court is such that over $1000 has been incurred for expenditures that ought not to exist. But this is not the case in which the claim for such disbursement should be refused.
[43] I do agree with the Appellant’s submission based on the decision by the Federal Court that this Court must be satisfied that there is an arrangement between the litigant and his counsel that any costs awarded will be paid over to the counsel. In Abdelrazik, one of the pro bono counsel had confirmed that the Appellant had made that agreement. Yet the Court imposed a condition to ensure that that was the case.
[44] In this case, pro bono counsel has confirmed that the Respondent has made the same arrangement. But in order to be satisfied that the Respondent does not have a windfall, I will impose a condition similar to the Federal Court. In this case, the Appellant had asked for a copy of the retainer agreement and pro bono counsel had refused. I am not ruling that the Respondent should have produced the retainer agreement because it may well contain privileged information. However, in order to be satisfied that there is an arrangement in place, in my view, when making submissions as to costs, the party represented by pro bono counsel must confirm in writing that that is the case.
Order to Go As Follows:
[45] The appeal is dismissed.
[46] The Appellant shall pay costs to the Respondent in the amount of $3500.00 inclusive of fees, disbursements and HST after the Respondent provides a written direction to the Appellant that the costs awarded to him are to be paid directly to the law firm Rayman Beitchman LLP.
Kiteley J.
Date: February 11, 2020
[^1]: 2006 c. 17 [^2]: There are many typographical errors in the transcript that I have corrected. [^3]: Housen v. Nikolaisen, [2002] SCR 235 at paras 5-6 [^4]: Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.) Local 79, 2003 SCC 63, 2003 3 S.C.R. 77, at para. 34 [^5]: 2018 ONSC 7116 [^6]: 2006 ONCA 35819, 2006 CarswellOnt 6582 OCA [^7]: 2009 FC 816