COURT FILE NO.: CV-10-14295

DATE: 20120906

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hilary Payne, Lawrence Leigh, Applicants

AND:

The Corporation of the City of Windsor, Canadian Transit Company, Edgar Francis, Dave Brister, Drew Dilkens, Ron Jones, Caroline Postma, Alan Halberstadt, Fulvio Valentinis, Ken Lewenza Jr., Biagio Marra, Jo-Anne Gignac and Percy Hatfield, Respondents

BEFORE: Gates J.

COUNSEL:
Raymond G. Colautti, for the Applicants

Alan R. Patton and Paula Lombardi, for the Respondent, The Canadian Transit Company

Christopher J. Williams, Jody E. Johnson and Courtney Raphael, for the Respondent, The Corporation of the City of Windsor

William Sasso and Sharon Strosberg, for the Respondents, Edgar Francis, Dave Brister, Ron Jones, Fulvio Valentinis, Ken Lewenza Jr., Jo-Anne Gignac and Percy Hatfield

Owen D. Thomas, for the Respondent, Alan Halberstadt

Rodney M. Godard, for the Respondent, Drew Dilkens

Myron W. Shulgan Q.C., for the Respondent, Caroline Postma

Claudio Martini Q.C., for the Respondent, Biagio Marra

HEARD: Written submissions

ENDORSEMENT on costs

[ 1 ] This lengthy Application was heard by me over seven days between May 30 and June 7, 2011. In addition, substantial time was spent by all counsel in the interlocutory prosecution and preparation in advance of the Hearing.

[ 2 ] The original Application dated January 22, 2010, was amended several times to accommodate, among other things, the addition of the Mayor and all of the Windsor City Councillors as respondents.

[ 3 ] Additionally, the Canadian Transit Company (“CTC”) sought leave to be added as a party to the Application which was granted by Quinn J. on August 31, 2010.

[ 4 ] Lastly, an amended amended Application dated December 8, 2010, was filed shortly thereafter.

[ 5 ] While CTC appears as a respondent in the amended Application, it was obvious throughout the hearing and in my Reasons, that its interests and that of the applicants, were in complete harmony.

[ 6 ] It is the private owner of the Ambassador Bridge (“the Bridge”) which traverses the Detroit River between Windsor and Detroit and by all accounts, is by far the busiest commercial border crossing between Canada and the United States, accounting for approximately 40 percent of the trade and commerce passing between the two countries, amounting to hundreds of billions of dollars annually.

[ 7 ] All of this is carried back and forth by thousands of trucks which cross the Bridge on a daily basis.

[ 8 ] In anticipation of its plans to construct a second span, approximately 100 feet west of the present one, CTC began several years ago acquiring a number of private residences along Indian Road, which lies immediately west of the Bridge, in an area of Windsor known as Old Sandwich Towne.

[ 9 ] While it acquired approximately 112 houses with the ultimate intention of razing them in order to create the land necessary on which to build its second span, CTC with the applicants claimed these plans were deliberately thwarted and frustrated by the City of Windsor, its Mayor, and Councillors by the passage of the Heritage Act and Demolition Control By-laws which, they say, prevented CTC from pursuing its plans further.

[ 10 ] As years passed, the houses which were boarded up became derelict and, in the eyes of the applicants and their neighbours, a blight on their community which they say devalued their own properties and/or were becoming crime and fire hazards. By enforcing its by-laws against them, the applicants and CTC say this was done for the ulterior purpose to pave the way for a favoured second bridge referred to as the Detroit River International Crossing (“DRIC”) which would provide a new means for commercial traffic to travel to and from the United States from a new site located approximately 4.5 kilometres downstream from the Bridge.

[ 11 ] The applicants and the CTC also say that to carry out this project, the City through the Mayor and Council improperly and in bad faith, employed its by-laws to prevent the bridge from carrying out its business plan.

[ 12 ] In essence, therefore, they say that by-laws were passed for illegitimate purposes and in doing so, the City through the Mayor and its Councillors all conspired to act illegally and in bad faith against the applicants and the CTC.

[ 13 ] As I concluded in my Reasons, not only were these allegations totally without merit, the City went to an almost extraordinary length to inform the Sandwich residents of the purpose for which it anticipated passing the by-laws and undertook extensive heritage studies. In so doing virtually, at every step of the way, it engaged the local citizenry in the processes which it employed.

[ 14 ] I further found that in its desire to encourage participation and input from the Sandwich residents as well as CTC as an interested party, the City went well beyond the statutory requirements incumbent upon it in this process.

[ 15 ] Indeed, it is hard to imagine how much more could have been done before the by-laws were implemented.

[ 16 ] In a word, the entire process employed by the City, was transparent.

[ 17 ] I therefore concluded in dismissing the claim entirely, that there was virtually no evidence of any conspiracy, bad faith, lack of candour or municipal misfeasance in carrying out its project to conclusion.

[ 18 ] As a consequence therefore, the City of Windsor, the Mayor and the individual City Councillors named, are all entitled to their costs.

[ 19 ] Any discussion on costs engages s. 131 of the Courts of Justice Act , which provides that the costs are in the discretion of the court which may determine by whom and to what extent they shall be paid and, Rule 57 of the Rules of Civil Procedure , lists a number of factors that might be considered in addition to the result achieved. However, by rule 57.01(4), none of these factors affect the authority of the court under s. 131 in exercising its discretion in the award of costs.

[ 20 ] It is perhaps trite to say that the purpose of costs is to indemnify successful litigants for the cost of their litigation; to encourage settlements and to discourage and sanction inappropriate behaviour by litigants.

[ 21 ] In general terms, there are three levels of costs indemnification ranging from partial indemnity to substantial indemnity and lastly, full indemnity, the latter representing complete indemnification at actual rates.

[ 22 ] Full indemnity costs have been held to be appropriate in circumstances more exceptional than those justifying the application of substantial indemnity where, for example, there are unsubstantiated allegations of dishonesty or where there is conduct of a party that is “reprehensible, scandalous or outrageous”. (See: Baryluk (c.o.b. Wyrd Sisters) v. Campbell (2009), 66 C.C.L.T. (3d) 160 (Ont. Sup. Ct.) ).

[ 23 ] In assessing the appropriate amount of costs to be awarded, I have regard to the following factors in rule 57.01: (c) the complexity of the proceeding; (d) the importance of the issues; (e) the conduct of any party that tended to shorten or lengthen the duration of the proceeding.

[ 24 ] I also note that there is ample authority for an award of full indemnity costs where unsubstantiated allegations of dishonesty, illegality and conspiracy advanced by a party, are found to be without merit. Not only were these allegations advanced by the applicants, but they were pressed forward, with vigour, right to the end of this Application.

[ 25 ] I conclude therefore that the successful parties are entitled to their costs in the manner and at the rates set out below.

A. Hearing Costs – The City of Windsor

[ 26 ] It goes without saying that the City bore the brunt of and assumed the major responsibility for the defence of this matter. In doing so, it incurred the most significant expense which its counsel submits on the full indemnity basis is the sum of $897,641.86 for fees.

[ 27 ] I note from its submissions, that its lead counsel, Mr. Williams who at the time of this hearing was a 30 year call to the Bar, proposes a full indemnity rate of $560. Bearing in mind his level of expertise and his status as Senior Counsel, I find this rate to be appropriate.

[ 28 ] With regard to the five other counsel who assisted him and bearing in mind the principle of proportionality and their various degrees of involvement in this Application, I fix the following hourly rates, reflective of their direct participation, and their respective years of call:

Steve Zakan - $500
Courtney Raphael - $300
Jody Johnson - $300
Scott Stoll - $400
Thomas Fenton - $475

[ 29 ] With respect to the various students at law who each, arguably, have one year of experience working at the firm, I fix their rate at $175 an hour.

[ 30 ] Similarly, with respect to the clerks who doubtless would be exercising some administrative roles which are a function of business overhead, I fix them individually at $150 an hour.

[ 31 ] I reviewed the detailed docket entries from counsel and, at the hourly rates referred to I find that the total hours spent by counsel as detailed below to be reasonable.

[ 32 ] I am satisfied that the time spent by the City’s counsel from their time dockets is as follows:

Christopher Williams – 631.3 hours at $560 per hour
Steve Zakan – 5.7 hours at $500 per hour
Courtney Raphael – 342.1 hours at $300 per hour
Jody Johnson – 588.4 hours at $300 per hour
Scott Stoll – 9.2 hours at $400 per hour
Thomas Fenton – 2.6 hours at $475 per hour
Students – 230.1 hours at $175 per hour
Clerks – 76.9 hours at $150 an hour

Total: $692,245.50

[ 33 ] I therefore fix the fees at the sum of $692,245.50 plus HST of $89,991.91, for a subtotal of $782,237.41.

[ 34 ] I have also reviewed the disbursements claimed, in the sum of $58,667.14, and likewise view these to be reasonable.

[ 35 ] Therefore, I fix the total fees, disbursements and HST for the City of Windsor for the Hearing portion of this matter at the sum of $840,904.55.

B. Costs on Procedural Motions

[ 36 ] On March 15, April 4 and May 9, 2011, I released decisions arising out of motions brought by the applicants seeking answers to certain refusals given at the previous examinations for discovery of the applicant Hilary Payne and three members of the City of Windsor administration.

[ 37 ] As I previously noted, the City of Windsor was successful on all of these motions and I awarded it costs for the work involved in these specific motions on the partial indemnity basis.

[ 38 ] Because counsel were unable to agree, I invited written submissions.

[ 39 ] The motions in question were argued on March 11, 24 and 31 as well as April 5, 2012 and entailed four days of argument. There were voluminous materials filed including motion records, responding records, facta and written submissions and the issues involved complex legal issues of privilege and confidential documentation.

[ 40 ] The fees relate to the necessary work and effort preparing motion materials for all four motions; preparation for each of the individual motions in question; attendance as counsel at each of the motions; and the preparation of the Bills of Costs associated with each of them.

[ 41 ] The City claims the sum of $47,722.99, broken out as follows:

i. Total fees $34,488.74
ii. Counsel fee for appearance March 11, $762.75
iii. Counsel fee for appearance March 12, $3,870.25
iv. Counsel fee for appearance March 31, $3,079.25
v. Counsel fee for appearance and April 5, $2,287.12
vi. Disbursements $3,234.88

All of these items are inclusive of HST.

[ 42 ] In comparing the hourly rates on the partial indemnity scale for each of the lawyers involved, I find them to be proportionately appropriate to the fees I have already allowed for argument on the Application itself.

[ 43 ] The time spent, in my view is reasonable in the circumstances as are the disbursements incurred.

[ 44 ] Therefore, the City of Windsor will also have its costs payable for these interlocutory proceedings in the total sum including disbursements and HST of $47,722.99.

[ 45 ] In total, the City is entitled to be compensated in the sum of $888,627.54.

C. Costs for the Respondents Francis, Brister, Jones, Valentinis, Lewenza Jr., Gignac and Hatfield

[ 46 ] My reasoning relating to the costs to the City on a full indemnity basis will likewise apply to the Mayor and Councillors and need not be repeated except to underscore the principle that by choosing to name the Mayor and Council personally and allege conspiracy, secrecy, bad faith and misfeasance against each of them, this brought into question the integrity, honesty and credibility of these individuals on a personal basis. Such unproven allegations could undermine the elements of trust and respect which are integral to the exercise of their duties by the Mayor and Council and unfairly besmirch their personal and professional reputations.

[ 47 ] In my view the applicants could have limited their claim to the City which was obviously directing its administration and the collective wisdom of the Council, thereby sparing these individuals potential personal embarrassment. I note too, that while the entire Council were named as respondents, the applicants and CTC chose to examine only one or two of them, leaving the rest to twist in the wind.

[ 48 ] That said, the applicants chose the forum and the participants and with the result at hand they must now answer to the City and these individuals in costs.

[ 49 ] While the applicants in their submission assert that they made no allegations of bad faith or improper conduct against the Mayor and Councillors, my Reasons speak for themselves. My conclusions flowed from the extensive argument on both sides of the issue and in my view those issues are res judicata .

[ 50 ] In the context of all of the respondents, there is no doubt but that the target defendant from the applicant’s perspective was the City of Windsor. It carried the greatest burden and assumed the most responsibility in the defence of this Application. For that reason I ordered the payment of its costs accordingly.

[ 51 ] At this juncture, the principle of proportionality must be introduced into the costs discussion as it relates to the Mayor and all of the individual Councillors.

[ 52 ] Given that counsel for the City did the heavy lifting during the interlocutory stages and subsequently at the hearing of the Application, it has been compensated accordingly for its fees in the sum of $692,245.50.

[ 53 ] With the exception of the Mayor and one or two other Councillors, the rest would appear to have very limited interlocutory participation and their involvement in the matter came about because they were individual members of a Council which made collective decisions and gave collective directions to the City administration and to its counsel.

[ 54 ] These seven individual respondents also request full indemnity costs in the total sum of $318,813.83 which comprises $268,433.00 for fees, HST of $34,896.29 and disbursements of $15,484.54.

[ 55 ] In addition to proportionality however, the concept of fairness must also be borne in mind when assessing the costs payable to these individual respondents. The presence and contribution of their counsel throughout the proceedings was no doubt desired and appropriate but as I have noted, counsel for the City took the lead and substantially carried it through to the end of the day.

[ 56 ] Accordingly, in exercise of my ultimate discretion I have tempered their claim for fees and hereby fix them in the sum of $200,000 plus HST of 13% in the sum of $26,000 and disbursements of $15,484.54 for a grand total of $241,484.54.

[ 57 ] While most councillors and the Mayor elected to retain the same law firm to represent them, the remaining four chose, as it is their right to do so, to retain their own lawyers. Their costs assessments therefore follow.

D. Costs for Respondent Drew Dilkens

[ 58 ] On behalf of Councillor Drew Dilkens, his counsel, obviously recognizing his reduced participation in the process, proposes a fee of $9,004 plus HST of $1,170.52 for a total of $10,174.52.

[ 59 ] In reviewing his docket references, I find that they are reasonable and I approve the fee requested together with disbursements and HST of $379.45 for a total of $10,553.97.

E. Costs for Respondent Alan Halberstadt

[ 60 ] Councillor Halberstadt’s counsel’s submissions, I think it fair to say, also reflects in relative terms, a fairly minor role in the proceedings.

[ 61 ] While a review of his dockets as compared with those of counsel for Mr. Dilkens would indicate that he was present more frequently, however, he had very little participation during the course of the lengthy hearing before me.

[ 62 ] Again, I underscore the significance of the principles of proportionality and fairness.

[ 63 ] While his proposed full indemnity fee rate of $300 per hour is reasonable given that he is a 14 year call to the Bar, I feel compelled to moderate the fee claimed and fix it at $30,000. HST on this sum would be $3,900 for a total of $33,900. The disbursements claimed of $2,709.40, inclusive of HST are appropriate.

[ 64 ] Therefore the total costs owing to Mr. Halberstadt is $36,609.40.

F. Costs for the Respondents Caroline Postma and Biagio Marra

[ 65 ] The participation of counsel for these two Councillors was likewise on a reduced basis and similarly I am mindful of the principles of proportionality and fairness.

[ 66 ] In comparing the time dockets for each of these two with those of counsel for Mssrs. Dilkens and Halberstadt, I conclude that the time spent here is somewhere between the other two.

[ 67 ] I accept the fee rates for Mr. Shulgan, a 38 year call, of $550 per hour, Mr. Martini, a 22 year call, of $500 per hour, and Ms. Marusic, an 18 year call, of $400 per hour.

[ 68 ] Their clients ran the same risk and received the same vindication as the others and are likewise entitled to full indemnity costs subject to the same considerations for proportionality and fairness, referred to earlier.

[ 69 ] Therefore, I have fixed the fees claimed on behalf of Caroline Postma at $30,000 plus HST of $3,900 and disbursements including HST of $711.46, for a total of $34,611.46.

[ 70 ] Reflective of the lesser involvement of his counsel, I accept the fees claimed on behalf of Biagio Marra of $21,532.50, plus HST of $2,799.23 and disbursements of $964.38, for a total of $25,296.11.

[ 71 ] Therefore, the fees, disbursements and applicable HST set out below will be paid by the applicants and the CTC:

A. City of Windsor = $840,904.55 + $47,722.99 for a total of $888,627.54

B. Mayor Francis and Councillors Brister, Jones, Valentinis, Lewenza Jr., Gignac and Hatfield the total of $241,484.54

C. Councillor Dilkens - $10,553.97

D. Councillor Halberstadt - $36,609.40

E. Councillor Postma - $34,611.46

F. Councillor Marra - $25,296.11

Total: $1,237,183.02

[ 72 ] As has been noted previously, CTC obtained an Order to add itself as a respondent in these proceedings. However, it was patently clear throughout the hearing that it was not adverse in interest to the applicants but rather it fully supported their positions against the City, the Mayor and Council.

[ 73 ] One might be tempted to assume that CTC was a respondent in name alone; it assumed in reality the role of an applicant, adverse in interest to all other respondents.

[ 74 ] For this reason, I conclude that the payment of the costs of this proceeding is the joint and several responsibility of the applicants and CTC.

Original signed by “Richard C. Gates”

Richard C. Gates
Justice

Date: September 6, 2012