ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 826-2011
DATE: 2012/07/04

BETWEEN:

COME BOURBONNAIS et DENISE BOURBONNAIS Applicants – and – GILLES STE-MARIE et LORRAINE CAROL STE-MARIE Respondents

Julie Paquette, for the Applicants
Christian Pilon, for the Respondents

HEARD: March 9, 2012

DECISION REGARDING COSTS

R. Smith J.

Positions of Parties

[ 1 ] The applicants seek costs on a substantial indemnity basis of $16,112.08, because the respondents acted unreasonably by ignoring their request that they remove the Hydro lines from their property.

[ 2 ] The respondents dispute both the hourly rate claimed and the number of hours spent in preparation for the application. The respondents further submit that the amount claimed exceeds the amount the losing party would reasonably expect to pay. The respondents also dispute the disbursements claimed for computerized legal research and for searching title. In addition, the respondents further submit that the amounts claimed are not proportional to the complexity and importance of the question raised and argue that they acted reasonably in offering to remove the Hydro lines by June 15, 2012 and to have the issue of costs determined by written submissions.

Factors

[ 3 ] The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure and include in addition to success, the amount claimed and recovered, the complexity and importance of the matter, unreasonable conduct of any party which unduly lengthened the proceeding, scale of costs and any offer to settle, the principle of indemnity, hourly rate claimed the time spent and the principle of proportionality, and the amount that a losing party would reasonably expect to pay.

Success

[ 4 ] In this case the applicants were successful and an order was made on consent that the respondents remove the Hydro cables from the applicants’ lands by July 1, 2012. While the applicants were successful, the order was obtained on consent and the respondents had offered to move the Hydro lines by June 15, 2012 as of February 7, 2012.

Complexity and Importance and Proportionality

[ 5 ] The issues involved were not complex namely if the Hydro lines were privately owned and were built on the applicants’ lands then in the absence of a right of way, the respondents were obliged to move their Hydro lines onto their own property. The issues were important to the parties, however, the Hydro lines had been in their present location for more than 20 years before July 31, 2003 when the applicants purchased the adjoining property.

Unreasonable Conduct of Any Party

[ 6 ] I do not find that there is evidence of unreasonable conduct by either party other than not responding to the demand letters. The Hydro lines had been in their present location for a lengthy period of time without objection by either party. The respondents acquired the property in 2003 and were not aware that the Hydro lines were on the applicants’ property. In their submissions the respondents stated that they met with the applicants to try to discuss a settlement and also telephoned the applicants to discuss matters and were unable to discuss matters or to reach a settlement.

[ 7 ] The respondents submitted that they telephoned the applicants after receiving both legal demand letters; however, they failed to retain a lawyer or to respond in writing to the demands to move the Hydro lines. They were also advised that if they did not respond an application would be brought. I find the respondents’ failure to respond in writing to the demand letters was not reasonable in these circumstances.

Scale of Costs and Offers to Settle

[ 8 ] The applicants seek costs on a substantial indemnity basis both before February 3, 2012 and after February 3, 2012 of $16,112.08 because they allege that the respondents did not act reasonably by ignoring and not responding to their demand letters.

[ 9 ] Costs on a substantial indemnity basis are awarded in only two circumstances in Clarington (Municipality) v. Blue Circle Canada Inc. , 2009 ONCA 722 , 100 O.R. (3d) 66; a) either where the conduct of a party was reprehensible, scandalous, or outrageous or b) if a party exceeds a Rule 49 offer to settle. In all other cases costs will be awarded on a partial indemnity basis. I do not find that either party’s conduct was so outrageous that costs should be ordered on a substantial basis. Neither party made a formal Rule 49 offer to settle, and as such, costs on a substantial indemnity basis will not be awarded on that basis. However, under Rule 49.13 any offer to settle made by either party may be considered by the court when awarding costs.

[ 10 ] On or about February 7, 2012 the respondents offered to move the Hydro lines from the applicants’ property by June 15, 2012 and offered to pay $5,000.00 for costs. This was a reasonable offer to settle the dispute at that time. The applicants refused the offer and sought $9,000.00 for costs.

[ 11 ] The applicants also refused to consent to an adjournment on March 9, 2012 after settlement was reached on the issue of the moving of the Hydro lines, and to have the issue of costs decided after written submissions. Initially, the applicants agreed to this proposal but then withdrew their agreement. This proposal would have saved both parties the costs of attending at court on March 9, 2012 and it was a reasonable proposal.

[ 12 ] In addition, on or about February 11, 2012, counsel for the respondents advised that he was awaiting instructions from the title insurance which the respondents had obtained when they purchased the property. Ultimately, the title insurance company agreed to assume responsibility for the costs of moving the Hydro lines, but this confirmation had not been received by the respondents. An adjournment on consent in these circumstances would have been reasonable. Ultimately, both parties and counsel acted reasonably in settling the issue of the removal of the Hydro lines by July 1, 2012 and the respondents were successful at the motion on March 9, 2012 to have written submissions on the issue of costs.

Hourly Rates, Time Spent, Proportionality and Indemnity

[ 13 ] The respondents object to the hourly rates claimed by the solicitor for the applicants. Counsel for the applicants claim an hourly rate of $170.00 and $180.00 per hour. The partial indemnity hourly rate should be approximately 60 per cent of this rate which would be $102.00 per hour, which I find is reasonable in the circumstances.

[ 14 ] The applicants claim their full indemnity costs in the amount of $16,112.08. The respondents submit that 92 hours of preparation, with 81.1 hours being spent by the applicants’ solicitor, is excessive. I agree and find that the amount of time spent on a straightforward application was not proportional to the complexity and importance of the matter.

[ 15 ] The respondents object to the amount claimed for disbursements for searching title. I find that the disbursements incurred for searching title was reasonable in the circumstances. I would reduce the amount of $601.49 claimed by the applicants for computer research, by $300.00 as the issue was not complex.

Amount the Unsuccessful Party Would Reasonably Expect to Pay

[ 16 ] The respondents offered to pay $5,000.00 in their offer to settle and at which time the applicants sought $9,000.00 for legal costs and disbursements. This indicates that the respondents reasonably expected to pay approximately $5,000.00 for legal costs at that time. I have found that the matters were not complex or of significant importance other than to the parties.

[ 17 ] The application was settled and was never argued and I find that the unsuccessful party would not have reasonably expected to pay $16,000.00 for legal costs for an application to move Hydro lines which was resolved on consent. I do however find that the respondents are responsible for not responding in writing to the legal demand letters they received. They did respond promptly and reasonably after they retained the services of their lawyer and they should have taken similar action earlier, either through counsel or on their own behalf.

Disposition

[ 18 ] Having considered all of the above factors the respondents are ordered to pay costs to the applicants fixed in the amount of $5,500.00 plus HST plus disbursements of $1,393.30 plus HST.

[ 19 ] From this amount the amount of $800.00 previously ordered by Charbonneau J. shall be deducted.

R. Smith J.

Released: July 4, 2012

COURT FILE NO.: 826-2011
DATE: 2012/07/04

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: COME BOURBONNAIS et DENISE BOURBONNAIS Applicants – and – GILLES STE-MARIE et LORRAINE CAROL STE‑MARIE Respondents DECISION REGARDING COSTS R. Smith J.

Released: July 4, 2012