BARRIE COURT FILE NO.: 11-0710

DATE: 20120518

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Corporation of the Township of Ramara, Applicant

AND:

Darcey Paul Mullen, Respondent

BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY

COUNSEL:
M.M. Miller, Counsel for the Applicant
C.A. Manners, Counsel for the Respondent

HEARD: By written submissions

ENDORSEMENT ON COSTS

[ 1 ] This is the ruling on costs in relation to this court’s judgment released on April 11, 2012 ( 2012 ONSC 2220 ), arising out of an application by the Corporation of the Township of Ramara ("the Township") for a permanent injunction restraining the respondent Darcey Paul Mullen from operating an outdoor wood burning furnace on his property. The judgment reached by the court was that Mr. Mullen and his tenants, invitees and guests are permanently enjoined from operating the outdoor wood burning furnace located on his property between April 1 to, and including, October 15 on an annual basis, this court having determined that the gravity of the interference to the neighbours’ enjoyment and use of their properties during a portion of the year was outweighed by the utility of the respondent’s use of his furnace.

[ 2 ] The Township seeks its costs of the application on a partial indemnity basis in the amount of $20,264.49, on the basis that Mr. Mullen’s settlement position was unreasonable, that the Township was required to proceed with its application to obtain a permanent injunction, and succeeded in doing so for that portion of the year when the effects of the smoke had most impacted on the lives of Mr. Mullen’s neighbouring property owners.

[ 3 ] Mr. Mullen likewise seeks partial indemnity costs of $18,869.79 on the basis that he made an offer to settle, that the Township made no counter-offer, and also taking into account the factors of novelty and public interest. Alternatively, he submits that costs should be borne by each party on the basis of divided success.

[ 4 ] The settlement offer made by Mr. Mullen in October 2011 is one that, in his submission, would have left the Township in a preferable position than did the judgment of this court because in that offer, Mr. Mullen offered to discontinue use of the furnace completely. However, that offer contained additional terms, which were that the Township must pay for the cost of the installation of a propane-fired furnace and propane tank at a cost of $5,650, and all of his legal fees incurred and to be incurred to the finalization of the matter if the offer was accepted, capped at $15,903.36, for a total of $21,553.36. The respondent argues that, had that offer been accepted, the Township would have been spared the legal fees incurred from the date that their settlement could be finalized and would therefore be in a better position. This offer followed a four-way settlement meeting held in August 2011, at which Mr. Mullen advanced the position that the Township must pay his legal fees and the cost of relocation of the wood burning furnace in order to reach a resolution. The respondent’s argument in this regard is difficult to evaluate given that there is no breakdown of the time expended by counsel prior to, and following, the making of that offer. Mr. Mullen’s argument does not take into account that, had his offer been accepted, the Township would have paid the $21,553.36 plus all of its own legal fees for the proceeding at that point, and therefore would have been paying, based on actual rates, some amount beyond that which it now seeks to recover.

[ 5 ] More significantly, by insisting that the Township pay all legal fees, Mr. Mullen signalled that, despite his offer to move the furnace, he was unwilling to accept that there was any infringement on his neighbours enjoyment and use of their property – in other words, taking the position that the application was without merit.

[ 6 ] The respondent also submits that costs should be awarded against the Township because, in part, the Township made no formal offer to settle. The authorities indicate that it would be an error in law to penalize by cost the failure of a party to make an offer. Also, the Township's participation in the settlement meeting signals its willingness to discuss resolution.

[ 7 ] There is nothing in this case the triggers a consideration of a novel issue, nor one of public policy nature. The case of Baldwin v. Daubney , 2006 33317 (Ont. S.C.J.) [" Baldwin "] stands for the proposition that novelty will be established if the moving party can show that it had no reasonable expectation that it would fail. This proposition is explained at para. 19 of Baldwin as follows:

[ 8 ] The rationale for the "novel issue" policy, as suggested in Metropolitan Toronto Civic Employees Union v Metropolitan Toronto (Municipality) (1988), 65 O.T. (2d) 47 (Div. Ct.) at page 62 is that, in novel cases, the plaintiff is "proceeding along a path which is not encumbered by a precedent which would warn him not to proceed further". For an issue to be novel in a way that is legally significant, it might be argued that the issue should not only be one which has not been decided in the factual context in which it now arises in the instant case, but is also one on which the law in the decided cases does not provide adequate guidance as to its resolution (whether that is so because of conflicts among the cases or a limitation on the appropriate scope of their application or some other factor). Such an issue could properly be regarded as "open".

[ 9 ] Although the By-law had only been recently passed by counsel, the interpretation of By-laws is a routine matter for courts.

[ 10 ] While the Township was successful in obtaining its injunction, Mr. Mullen was successful in part. This case involved a balancing of competing interests, and the evidence of interference caused by smoke disclosed that the interference was considerably less, perhaps negligible, during the winter months. During the other seasons the interference caused by the smoke was an unacceptable infringement on the respondents’ neighbours use and enjoyment of their property. The injunction accordingly applies only to a 6 1/2 month period in each year. In the result, the injunction was necessary to restrain the respondent from using his furnace - unless the Township met his demands. The order sought by the Township, however, was without the parameters imposed by the court and therefore its success is qualified by those time limits contained in the judgment. The Township should have its costs, with the reduction to recognize the respondent’s partial success on this application.

[ 11 ] Turning to the factors cited in rule 57.01 of the Rules Civil Procedure , beginning with Rule 57.01(1)(a), this was a matter of considerable importance to the parties – to the respondent because of the potential interference with his rights as property owner, and to the Township because of the long-standing nature of the neighbours’ complaints and the fact that this was the first case arising from the invocation of the By-law.

[ 12 ] Turning to Rule 57.01(1)(0.a), the hourly rates set out in Bill of Costs of the Township are within the Practice Direction established by the Costs Subcommittee of the Civil Rules Committee. It is noted in that Practice Direction that these are, normally, to be maximum rates when fixing partial indemnity costs.

[ 13 ] Taking into consideration what the losing party could expect to pay, the parties cost outlines are similar and therefore the amount sought by the Township had to be within Mr. Mullen's reasonable expectations.

[ 14 ] Accordingly this court fixes costs to the Township payable by the respondent in the amount of $15,000 inclusive of HST, payable in 30 days.

HEALEY J.

Date: May 18, 2012