ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-07-249-00
DATE: 20120110
B E T W E E N:
The Corporation of the Municipality of Meaford
I. De Rijcke , for the Plaintiff/Defendant by Counterclaim
Plaintiff/Defendant by Counterclaim
- and -
Pauline Grist et al.
B. Engell and R. Uukkvi , for the Defendant/Plaintiff by Counterclaim, Pauline Grist S. M. Makuch , for the Defendants/Plaintiffs by Counterclaim, Penelope Joan Seaman, K. Orville Boyd, James Broatch Rathbun, Judith Elizabeth Rathbun, Andrew James Rathbun, Jocelyn Rathbun Gravlee, Napier Charles Rathbun, and Oliver Grant Rathbun V. Vandergust , counsel for the Defendant Fairview Trailer Park Ltd. R. Thomson , for the Defendants, Patricia Ann Schmitz, Henry John Schmidtz, Craig Wayne Roland Brooks, Kathleen Suzanne Brooks, Eileen Talarico, Anthony Talarico, David Clayton Moore, Dawson Walter Clayton Moore, Shirley Bernice Moore, Neil Wesley Wilson, Linda Louise Verhey, John Kinder Essington, Nancy Lee Essington, Kevin David Essington, and Timothy Edwin Essington B. Saunderson , for the Defendants Douglas McCutcheon and Barbara Anne McCutcheon L. Alleyne , for the Defendant Bell Canada P. Smith and P. J. Murphy , for the Defendant by Counterclaim, The Corporation of the Municipality of Meaford, to the Counterclaim of Defendant, Fairview Trailer Park Ltd.
Defendants
HEARD: May 9-13 inclusive, 2011
REASONS FOR COSTS JUDGMENT
Daley J.
Table of Contents
Introduction: 1
Position of the Parties: 2
Position of the Defendant Grist 2
Position of the Defendants Seaman et al. 3
Position of the Defendant Fairview . 4
Position of the Plaintiff 4
Analysis: 5
Conclusion . 21
Introduction:
1The plaintiff brought this action seeking a declaration that a public road existed along the shoreline of several properties on the edge of Georgian Bay.
2When this action was originally instituted, it was brought against ten property owners, whose collective shoreline along Georgian Bay was approximately 600 feet long. Subsequently, it was ordered that all parties who would be affected by a determination of the court and who owned property abutting the shoreline of Georgian Bay, within the terms of the by-law under which the plaintiff brought this action, should be added as defendants. As a result, the property owners of approximate 6000 feet of shoreline were added as defendants.
3This action was dismissed as against all defendants, following two motions for summary judgment for the reasons dated September 21, 2011.
4The defendants referred to in the reasons for decision, as Grist, Seaman et al. and Fairview each seek costs of the action.
5I have considered the submissions filed on behalf of those defendants and on behalf of the plaintiff municipality.
6In its submissions, the plaintiff responds to the defendants' claim for cost generally and raises specific objections to the cost claims of the defendants Grist and Seamen et al., in particular.
7The motions for summary judgment were brought by the defendants, Grist and Seaman et al., seeking the dismissal of the plaintiff's action. The defendant Fairview did not bring a motion, but its counsel filed material in support of the two motions and made submissions on the motions.
8The submissions on these motions were heard from May 9 to 13, 2011.
Position of the Parties:
Position of the Defendant Grist
9The defendant Grist takes the position that she is entitled to costs on a substantial indemnity basis.
10The costs claimed by this defendant on a substantial indemnity basis, total $480,000.00. Alternatively costs are sought on a partial indemnity basis in the sum of $390,000.00.
11It is submitted on behalf of this defendant that these amounts reflect reduced sums from the billable time recorded in that any duplication of effort or inefficiencies in time spent have been accounted for in these reduced amounts.
12The defendant Grist claims it is entitled to costs on a substantial indemnity basis as a result of the conduct of the plaintiff and puts forward several grounds which largely relate to the plaintiff's conduct in carrying out its responsibilities as a municipal corporation, and to a lesser degree due to its conduct as a litigant in this action.
13It is further Grist's position that the costs sought are reasonably within the range that the plaintiff could have expected to pay, if unsuccessful, given that the plaintiff had spent in excess of $600,000.00 in legal costs in prosecuting the action, and in responding to the summary judgment motions.
Position of the Defendants Seaman et al.
14These defendants also seek costs payable on a substantial indemnity basis as a result of alleged misconduct on the part of the plaintiff both in respect of this action, and in its role as a municipality.
15These defendants seek substantial indemnity costs of $490,224.97 or alternatively costs on a partial indemnity basis of $297,230.94, both sums being inclusive of disbursements and taxes.
Position of the Defendant Fairview
16Although it was ordered, that if necessary, counsel make submissions with respect to the counterclaims instituted by the defendants Grist, Seaman et al. and Fairview, no such submissions were filed. Fairview, within its costs submissions, requested that its counterclaim be stayed pending any appeal that may be taken.
17As no submissions have been delivered by any other party as required, I will make no determination with respect to the status of the counterclaim instituted by Fairview.
18It is submitted on behalf of Fairview that it is also entitled to costs on a substantial indemnity basis, including disbursements in the sum of $42,857.81, or alternatively it seeks partial indemnity costs at 65% of the substantial indemnity fee amount, plus disbursements resulting in the sum of $28,260.30.
Position of the Plaintiff
19The plaintiff disputes the defendants' request for the payment of costs on a substantial indemnity basis and submits that the partial indemnity costs that may be payable should be paid on a formula whereby the defendants should each receive a proportionate share of their proper partial indemnity costs amount measured against the total sum of the partial indemnity costs of the three defendants claiming costs.
20The plaintiff also urged that the defendants' bills of cost should be examined having regard to several factors, including the mixed success in the litigation, over-lawyering in the handling of the case by defendants’ counsel, the parties' reasonable expectation as to costs, and the refusal of the defendants to admit facts in advance of the summary judgment motions.
Analysis:
21The summary judgment motions brought by the defendants were moderately complex and involved a consideration of various aspects of real property law; however, the issues at stake were not novel, as was urged on behalf of the plaintiff. The summary judgment motions and an injunction motion brought by the plaintiff were argued over 5 days.
22Counsel for the plaintiff submitted that the defendants' claim for costs should be considered on a global basis. That is, as if the total costs that the defendants as a group would be entitled to would be in line with partial indemnity costs payable, essentially as if all defendants were represented by the same counsel.
23I disagree with this approach. Each of the defendants, or group of defendants, seeking costs was represented by their own counsel. At no time did the plaintiff take the position that the defendants all had the same interests and, as such should combine their defence of the plaintiff's claims, and be represented by the same counsel.
24In my view, each of the defendants seeking costs was entitled to separate representation by counsel. Notably, while there was some overlap in their positions, each defence counsel advanced a different approach in the argument of the summary judgment motions.
25In assessing costs that are fair and proportionate however, the fact that the defendants on the motions had a common interest in the outcome and that, to some degree, there was overlap in the submissions represents but one factor that must be considered.
26No offers to settle were served by any party, and as a result, there is no need to consider the terms of Rule 49.
27The plaintiff has acknowledged that its own solicitor and client legal costs incurred in the course of this action through to the conclusion of the summary judgment motions were in the order of $635,000.00. It was urged, on behalf of the plaintiff, that the defendants' costs, as claimed, were excessive.
28No bill of costs was submitted on behalf of the plaintiff. It has been held that an attack on costs claimed, based on excessive time spent, is no more than an "attack in the air" where that party has not delivered its own bill of costs. It has also been held that the court may rightly infer that the party opposite devoted as much or more time to the proceeding as did the defendants. This is not determinative of a fair and proper amount for costs, but is simply one factor that may be taken into account: Risorto v. State Farm Mutual Automobile Insurance Co. (2003) 2003 43566 (ON SC) , 64 O.R. (3d) 135.
29As to the appropriate scale of costs, I am of the view that this is not a proper case for costs on a substantial indemnity basis.
30While Rule 20.06 provides costs sanctions where a party acts unreasonably in responding to a summary judgment motion or acts in bad faith for the purpose of delay, in my view, the plaintiff's conduct does not fall within the terms of this Rule.
31Further, substantial indemnity costs should only be awarded on a clear finding of reprehensible conduct: Davies v. Clarington (Municipality), 2009 ONCA 722 () , [2009] O.J. No. 4236 (Ont. C. A.) at paras. 37- 40 . Although it was determined that the plaintiff's action should be dismissed for the reasons expressed, there was no finding that the plaintiff's conduct was reprehensible or so egregious so as to warrant an elevated level of costs.
32The plaintiff claims some degree of partial success on the summary judgment motions, in that leave was granted to the plaintiff allowing for the late filing of additional evidence. Further, there was a finding that the by-law in question was validly enacted and the defendants had refused to admit this in responding to the plaintiff’s request to admit. In my view, these were minor successes in the overall context of the litigation and cannot be considered as significant factors when measuring the parties' respective degrees of success. However, I do agree that the defendants Grist and Seamen et al. claims for costs should be examined recognizing that additional time was spent on the unsuccessful argument relating to the validity of the By-Law.
33The defendants were entirely successful in obtaining the relief they sought and as such are entitled to costs on a partial indemnity basis.
34The overarching requirement that the costs awarded be reasonable in the circumstances is to be considered by the examining of the following principles:
(a) the discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01 (1);
(b) consideration of the experience of counsel, the rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness, as applied to the factual matrix of the particular case and the quantum should reflect an amount that the court considers to be fair and reasonable, rather than an exact measure of the actual costs to the successful litigant;
(c) the reasonable expectation of the unsuccessful party is one of the factors to be considered in determining the amount that is fair and reasonable;
(d) the court should seek to avoid inconsistency with comparable awards in other cases; and
(e) the court should seek to balance the indemnity principle with the fundamental principles of access to justice: Davies , at paras. 51-52 .
35It is submitted, on behalf of the plaintiff, that although it has incurred solicitor and client costs of $635,000.00, of that sum $100,000.00 relates to time and disbursements incurred in adding additional parties to the action, as ordered by the court. It is urged on behalf of the plaintiff that this was not a reasonably anticipated aspect of costs to be incurred. It is therefore the plaintiff's position that on a substantial indemnity basis, its own solicitor and client costs exposure would have been $535,000.00 and on converting that sum to a partial indemnity level (at 65%) it would be reasonably anticipated that the exposure to partial indemnity costs would be in the sum of $347,750.00.
36It is the plaintiff's position that the defendants, as a group, should only be entitled to partial indemnity costs in the total sum of $347,500.00 and that each defendant should only receive costs in proportion to the percentage amount that each defendants’ partial indemnity costs claim bears to the total partial indemnity amount in that sum.
37On this basis, it is submitted on behalf of the plaintiff that the defendants should receive partial indemnity costs as follows:
(1) Grist -- $189,672.36;
(2) Fairview -- $13,724.87; and
(3) Seaman et al. -- $144,352.77.
38As indicated above, I disagree with this approach. No authority has been offered that supports this position.
39Having determined that the defendant Grist is entitled to partial indemnity costs, it must then be determined what costs are reasonable and proportionate in all the circumstances having regard to the considerations listed above.
40I have considered the bill of costs submitted on behalf of the defendant Grist. The number of lawyers, articling students, and support staff who were involved in this matter on behalf of Grist is most significant. Over the course of the action, 8 lawyers, 4 students, 2 librarians, 2 planners, and 4 law clerks have devoted various amounts of time to this matter.
41There were two principal lawyers involved in representing the defendant Grist. The first is Bruce Engell, who was called to the bar in 1989. His hourly rates, on a partial indemnity basis over the course of the case from 2009 through 2011, range between $300.00 and $325.00 per hour. The second lawyer acting for the defendant Grist was Raivo Uukkivi, who was called to the bar in 2004 and whose partial indemnity hourly rate over the course of the case was $225.00.
42These partial indemnity hourly rates are, in my view, reasonable given the seniority of counsel and the nature of the action.
43While these two lawyers were primarily responsible as counsel, a considerable amount of time was charged by other members of their firm.
44The position put forward, on behalf of the plaintiff, is essentially that the lawyers for the defendant Grist over-lawyered the handling of this matter.
45No dockets were submitted with the bill of costs delivered on behalf of the defendant Grist. It is submitted on behalf of Grist that the partial indemnity costs amount, as proposed at $390,000.00, already takes into account reductions in time related to duplication of effort and inefficiencies.
46It is not for the court to second-guess, with 20:20 hindsight, the time spent by counsel on a particular matter. However, it is open to the unsuccessful party to assert that the time spent on the matter was excessive or a matter had been over-lawyered.
47It is clear from the bill of costs submitted on behalf of the defendant Grist that there would, by the nature of the services provided at various points in time, be a significant overlap in responsibility and duplication of time spent on certain aspects of the management of this litigation.
48While a team approach to litigation was successful in this case, and may offer many professional and strategic benefits, it is an approach which by definition drives legal fees higher and such an approach may be entirely appropriate as between a law firm and its own client.
49However, parties who adopt such an approach to litigation cannot reasonably expect that, even when they are successful, the greater costs arising from this approach will always be borne by the unsuccessful party: Real Group v. Core Precision , [2011] O.J. No. 4454 .
50Considering the details as to time spent by these two principal lawyers, as set out in the bill of costs, with respect to the cross-examination of witnesses on the summary judgment motions, preparation for the motions, written submissions, and attendance in court on the motions, these two lawyers docketed approximately 764 hours which, with their average hourly rate of $283.00, results in a partial indemnity costs for those aspects of the case as conducted by these two lawyers in the sum of $216,212.00.
51Both of these lawyers were in attendance on the summary judgment motions and made submissions on behalf of the defendant Grist.
52Counsel for the defendant Grist, in their bill of costs, seeks partial indemnity costs of $322,762.87 as to the fee component of the bill. It was submitted this partial indemnity amount reflects some reduction for any duplication of effort and inefficiencies.
53Having considered the bill of costs submitted, and without the benefit of having detailed dockets available, I conclude that a proper sum for partial indemnity fees would be in the amount of $300,000.00, inclusive of applicable taxes. This sum reflects a further reduction of the fee component of the partial indemnity costs claimed to further take into account duplication of effort and inefficiencies and to recognize costs unnecessarily incurred in disputing the validity of the by-law in question.
54The defendant Grist also seeks payment of disbursements incurred, in the amount of $67,370.83, which includes applicable taxes.
55The only item of disbursement which the plaintiff expressly disputes relates to the expert opinion fee account of Dearden and Stanton Limited (Land Surveying Services) in the sum of $45,528.00. It is urged on behalf of the plaintiff that given the absence of any details offered in support of this fee account a more reasonable amount would be $10,000.00.
56Similar experts were retained by the plaintiff; however, the plaintiff did not disclose the costs it incurred with respect to hiring its experts.
57Rule 57.01 (5) requires that a party who is awarded costs shall file a bill of costs in accordance with Form 57A which, in respect of disbursements, requires that a claim for disbursements be supported by attaching copies of invoices or other relevant evidence.
58The expert evidence offered by the land surveyor retained by Grist was used as evidence on the summary judgment motions and in my view, was reasonably necessary for the determination of the issues at stake.
59However, expert witness fees must be examined and justified in terms of the hourly rates applied, the time spent and on considering the nature of the services rendered. No detailed fee account, nor particulars of any kind were provided with respect to the surveyor's fee account.
60It is not for the court to guess at the reasonableness of fees incurred in the retaining of expert witnesses, nor is it the court's responsibility to try to conduct a forensic analysis of the evidence offered by the expert in order to ascertain whether the expert fee charged is reasonable and proper.
61While it is clear that the evidence of the surveyor was used and had some value, given the defendant Grist's failure to submit a proper bill of costs with supporting documentation, I fix the cost with respect to the surveyor's account at $20,000.00. This represents a reasonable sum as best as I can determine from the review of his work and the available record.
62The disbursements otherwise claimed by this defendant, in my view, were reasonably incurred and no issue was taken with them by counsel for the plaintiff. I find that the defendant Grist is entitled to payment of assessable disbursements in the sum of $41,842.00 inclusive of applicable taxes. Thus, I conclude that the defendant Grist's total partial indemnity costs, inclusive of applicable taxes are in the sum of $341,842.00.
63Having determined the partial indemnity costs, on examining the considerations discussed above, I see no basis upon which to further reduce the otherwise determined partial indemnity costs. In my view, costs in this amount is reasonable and proportionate, particularly when measured against the solicitor and client costs incurred by the plaintiff in the prosecution of this action. I therefore fix the costs payable by the plaintiff to the defendant Grist in the sum of $341,842.00.
64With respect to the costs claimed by the defendants Seamen et al., these defendants have filed a bill of costs outlining partial indemnity costs inclusive of disbursements and applicable taxes in the sum of $297,230.94.
65For the reasons already expressed, I disagree with the position put forward on behalf of the plaintiff that the defendants’ costs should be viewed on a global basis. I have considered the costs claimed by the defendants Seamen et al. in the same fashion as with respect to the defendant Grist.
66It was submitted on behalf of the plaintiff that excessive time was spent by counsel for the defendants Seaman et al., and that inefficiencies resulted from the involvement of several lawyers, law clerks, and support staff.
67The submissions filed on behalf of the defendants Seamen et al., in large part, related to their claim for costs on a substantial indemnity basis. A detailed bill of costs including particulars of docketed time was filed on behalf of these defendants.
68From the bill of costs and docket entries filed it is evident that counsel Stanley Makuch was the principal lawyer involved during the most significant stages of this litigation. More junior lawyers assisted throughout. In total, six lawyers in addition to Mr. Makuch were involved in the matter along with a number of articling students and law clerks.
69Having considered the dockets produced and the detailed breakdown of the services rendered, while some overlap and duplication is apparent, it is also evident that while the representation of the defendants Seamen et al. was done on a team basis, the services rendered by the various lawyers were entirely in keeping with their level of experience and the work was pushed down to the most appropriate level of lawyer or law clerk, thereby achieving some economies.
70Counsel for the defendants Seamen et al., in advancing additional positions in support of the summary judgment motions brought on behalf of his client, took somewhat of a secondary role during the argument of the motions and overall the bill of costs reflects this.
71A partial indemnity hourly rate of $350.00 is put forward on behalf of Mr. Makuch, who was called to the bar in 1977. He is very experienced counsel and no issue was taken by the plaintiff with respect to his hourly rate. In my view, this rate is in keeping with his seniority and the nature of the proceeding.
72The total fee component of the costs claimed on a partial indemnity basis is $249,058.50. Of that amount, approximately $116,000.00 relates to time spent by Mr. Makuch. Also involved in the matter was solicitor Carlton Thorne, who was called to the bar in 2007, and whose partial indemnity hourly rate was set at $180.00. In my view, this rate is reasonable having regard to the level of experience and the nature of his involvement in the matter.
73On reviewing the dockets submitted, it is apparent that there is overlap and some duplication of activities as between the lawyers involved. As noted, while this team approach has its advantages, the unsuccessful party in litigation should not be required to pay all costs incurred and some reduction in the partial indemnity fee amounts must be considered. The dockets reflect several meetings as between lawyers within the firm over the course of the action.
74In my view, in order to fairly assess the partial indemnity costs, the resulting inefficiencies of this approach must be taken into account. Also, as was the case with the defendant Grist, I am of the view that a reduction in the partial indemnity costs must be taken into account with respect to these defendants' refusal to admit the validity of the by-law in question. In these circumstances I conclude that in total a $35,000.00 reduction would be appropriate thereby reducing the fee component of the partial indemnity costs to $214,058.50.
75As to the disbursements claimed on behalf of the defendants Seaman et al., counsel for the plaintiff takes issue with only one item of disbursements, namely the account of the municipal planner retained by these defendants The Bousfield Inc. account was in the sum of $9,500.60. No particulars are provided with respect to that account, nor has a copy of the invoice produced.
76Having considered the record relating to this expert witness I am satisfied that in spite of the fact that no detailed account is available, the fee, as claimed, is reasonable and was necessarily incurred.
77I have considered the disbursements claimed on behalf of the Seaman et al. defendants and I am satisfied that they were reasonably incurred in the total sum of $32,912.15.
78Thus I conclude that the total partial indemnity costs for these defendants should be fixed in the sum of $246,970.65.
79Considering the other factors to be examined, I also conclude that these partial indemnity costs are overall reasonable and proportionate and are in an amount that the plaintiff would reasonably have expected to pay, if unsuccessful.
80As to the costs claimed by the defendant Fairview, this defendant also sought substantial indemnity costs. For the reasons expressed above, I conclude that this defendant is not entitled to substantial indemnity costs.
81Although this defendant did not bring a motion for summary judgment, its counsel participated in the motion proceedings in a measured way. Its counsel also advanced arguments which were unique to its position.
82Counsel for the plaintiff did not take issue with any aspect of the bill of costs submitted on behalf of Fairview.
83Fairview was represented by counsel, Victor Vandergust, who was called to the bar in 1976. On a partial indemnity basis, the hourly rate put forward was in the sum of $243.75. Given the seniority of counsel and his level of participation in the summary judgment motions, this is a reasonable hourly rate.
84Having considered the detailed bill of costs and dockets submitted by counsel, I also conclude that the time spent by counsel and a law clerk at 107 hours was reasonable. The fee component of the bill totals $23,990.85 exclusive of applicable taxes.
85No issue was taken with respect to the disbursements claimed on behalf of Fairview in the sum of $1,034.83. I have reviewed the disbursements and they were reasonably incurred.
86I see no basis for any reduction in the partial indemnity costs as sought by Fairview on examining the considerations discussed above. The costs in my view are overall reasonable, proportionate and represent costs that the plaintiff would reasonably have anticipated to pay if unsuccessful.
87Fairview's costs are therefore fixed at $28,260.30, which is the total of the fees and disbursements and applicable taxes.
Conclusion
88In summary, the plaintiff shall pay to the defendants their costs within 90 days as follows:
(a) to the defendant Grist - $341,842.00;
(b) to the defendants Seaman et al.- $246,970.65; and
(c) to the defendant Fairview - $28,260.30.
Daley J.
Released: January 10, 2012
COURT FILE NO.: CV-07-249-00
DATE: 20120110
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: The Corporation of the Municipality of Meaford Plaintiff/Defendant by counterclaim - and – Pauline Grist et al. Defendants REASONS FOR COSTS JUDGMENT Daley J.
Released: January 10, 2012