ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No.: CV-09-373023
Date: 20120821

RE: Michael Romanic v. Michael Johnson, Dan Nywening, Larry Chartier, George McCabe, Joe Matthews, Wendy Southall, and the Niagara Regional Police Services Board

BEFORE: Mr. Justice Kenneth L. Campbell

COUNSEL:
Margaret A. Hoy, for the Plaintiff, Michael Romanic

C. Kirk Boggs, for the Defendants, Dan Nywening, Larry Chartier, George McCabe, Joe Matthews, Wendy Southall, and the Niagara Regional Police Services Board

ENDORSEMENT (COSTS)

A. Introduction

[ 1 ] On June 12, 2012, I released Reasons for Judgment granting the summary judgment motion brought by the moving party defendants and dismissing the plaintiff’s action against them. See: Romanic v. Johnson, 2012 ONSC 3449. The only remaining issue is costs. Following the release of the Reasons for Judgment, I received and considered the parties’ written submissions and other accompanying materials on that outstanding issue, pursuant to rule 57.01(7) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[ 2 ] The moving party defendants seek the costs of the summary judgment motion and the action, on a substantial indemnity basis, in the total amount of $85,610.36, including disbursements and taxes. More particularly, the defendants seek costs of $26,520.08 for the summary judgment motion, and costs of $59,090.28 for the action. The defendants claim that they are entitled to substantial indemnity costs in light of the unsubstantiated allegations made against them by the plaintiff. In his $1.1 million action, the plaintiff claimed that the moving party defendants were liable for “malicious prosecution” and “negligent investigation.”

[ 3 ] The plaintiff, on the other hand, contends that the defendants are only entitled to their costs on a partial indemnity basis. The plaintiff argues that, in any event, the costs claimed by the defendants are excessive. The plaintiff contends that, properly assessed, the successful moving party defendants should only be entitled to approximately $10,000 in costs for the summary judgment motion and $20,000 for the action plus disbursements ($3,295.94).

[ 4 ] There are two issues to be determined, namely: (1) whether the moving defendants are entitled to their costs on a substantial indemnity basis, or only on a partial indemnity basis; and (2) the appropriate quantum of the costs to be fixed in favour of the successful defendants.

B. Are the Defendants Entitled to Substantial Indemnity Costs?

1. Introduction

[ 5 ] The moving defendants argue that they are entitled to substantial indemnity costs, both in relation to the summary judgment motion and the action itself. The defendants advance two reasons in support of this position.

[ 6 ] First, the defendants argue that substantial indemnity costs are appropriate given the unsubstantiated allegations of wrongdoing that were advanced by the plaintiff. The plaintiff alleged that the defendants were liable for the torts of negligent investigation and malicious prosecution. The allegation of malicious prosecution necessarily involved an allegation by the plaintiff that the defendants acted with malice against him. This allegation of malice was, in effect, an accusation that the defendants deliberately and improperly perverted their public office so as to perpetrate a fraud on the criminal justice system.

[ 7 ] Second, the defendants contend that certain dilatory conduct by counsel for the plaintiff during the course of the summary judgment motion proceedings justifies substantial indemnity costs in relation to that motion.

[ 8 ] For the following reasons, I reject the defendant’s arguments that substantial indemnity costs are merited in the circumstances of this case. In my view, partial indemnity costs are the appropriate scale of costs in this matter, both with respect to the summary judgment motion and the action.

2. The Malicious Prosecution Allegation

[ 9 ] There is no doubt that in some actions involving allegations of malicious prosecution, substantial indemnity costs are appropriate. There are few allegations potentially more damaging and prejudicial to the personal and professional reputation of Crown Attorneys or police officers than the allegation that they abused their office to maliciously prosecute an innocent accused. Such allegations challenge, in a fundamental way, their honesty and integrity. When such allegations are publically advanced by a plaintiff and then subsequently abandoned or found to be unsubstantiated and baseless, substantial indemnity costs may well be appropriate. Such serious allegations cannot properly be made based on mere conjecture and speculation, but must be based on a solid foundation of evidence supporting the cause of action. See: Hawley v. Bapoo (2006), 2006 24333 (ON SC), 82 O.R. (3d) 382 (S.C.J.) at para. 21-31; Varied: 2007 ONCA 503, but affirmed on this issue, at para. 18.

[ 10 ] Not every allegation of malicious prosecution, however, will necessarily and invariably result in a substantial indemnity costs order if the plaintiff’s action is ultimately not successful. Costs are a discretionary matter and each case will turn on its own unique set of factual circumstances. One important factor to be considered in this regard is the reason why the plaintiff was unsuccessful. If, for example, the action was dismissed solely because it was commenced beyond the applicable limitation period, then it is hard to conceive of how substantial indemnity costs would be justified simply because the plaintiff had accused the defendant of malicious prosecution. In such theoretical circumstances, the dismissal of the action would not have determined the merits of the plaintiff’s allegation of malicious prosecution.

[ 11 ] Accordingly, it is important to recall the legal basis on which the summary judgment motion in this case was granted. As indicated in my Reasons for Judgment, at para. 5-7, 56, 60, the motion was successful because the plaintiff was unable to establish that the criminal proceedings against him ended in his favour, a necessary element in both of the alleged torts. The evidence demonstrated that the Crown withdrew the criminal charges against the plaintiff because the parties reached a resolution agreement wherein, in exchange for the plaintiff’s resignation from his job with the Niagara Regional Police Service (NRPS), the charges would be withdrawn, as the proceedings would no longer be in the “public interest.” As I concluded, this was a bona fide, good faith resolution agreement between the parties that required the plaintiff to take an important remedial step, or quid pro quo, in order to secure the Crown’s withdrawal of the charges. The law dictates that, in such circumstances, the termination of the criminal proceedings cannot properly be viewed as having been concluded in favour of the accused. As the plaintiff was unable to establish this necessary element of the two torts that he had alleged, his action was destined to fail. This was the reason the summary judgment motion by the individual police defendants and the NRPS was granted and the plaintiff’s action against them was dismissed.

[ 12 ] In these circumstances, there is no justification for a costs order on a substantial indemnity scale. Like the theoretical plaintiff whose malicious prosecution action was dismissed because it was commenced beyond the limitations period, the plaintiff’s action in the present case was dismissed without any judicial consideration or determination of the allegation of malice. I hasten to add that nothing said here should be viewed as any comment, one way or the other, on that issue. My point is simply that the plaintiff’s allegation of malice, which might attract a substantial indemnity costs order in some circumstances, was never judicially considered or determined on its merits or lack thereof. In the absence of such judicial determination (or an abandonment of the allegation by the plaintiff in circumstances that amount to an admission that the allegation was baseless), the mere allegation of malice cannot properly justify the imposition of a substantial indemnity costs order.

3. The Conduct of the Plaintiff on the Summary Judgment Motion

[ 13 ] The defendants’ secondary argument in support of their request for costs on a substantial indemnity scale in connection with the summary judgment motion, is that counsel for the plaintiff, in responding to the motion, ignored the timetable that had been agreed upon by the parties and set by the court for the filing of materials.

[ 14 ] It is apparent from the materials that the defendants are factually accurate in this allegation. More particularly, the materials provided by the parties reveal the following:

• On November 1, 2011, the parties appeared in Motions Scheduling Court before Low J. At that time, the court scheduled the defendants’ summary judgment motion for a full day hearing on May 30, 2012 and set the “timetable” that would govern the parties in the perfection of the motion in the interim. This timetable was set with the agreement of the parties. This timetable required the plaintiff to file the Respondent’s Record by March 9, 2012, complete all examinations by March 30, 2012, and file the Respondent’s Factum and Authorities by May 14, 2012.

• In mid-November of 2011, the entire timetable that had been set by Low J., including these various deadlines for the Respondent, was confirmed in writing between counsel. At the same time, plaintiff’s counsel was clearly reminded of the potential costs consequences for the plaintiff’s action if the defendants’ summary judgment motion was successful.

• Counsel for the plaintiff did not abide by the timetable set by Low J. On May 22, 2012, counsel for the defendants confirmed with the court office that notwithstanding the fact that counsel for the plaintiff had not yet filed any materials, the defendants intended to proceed with the summary judgment motion, still scheduled for May 30, 2012.

• Finally, on May 23, 2012, counsel for the plaintiff sent her Respondent’s Factum, together with two accompanying affidavits (one sworn by the plaintiff) to counsel for the defendants. When the defendants complained about the tardy delivery of these materials, the plaintiff’s counsel replied that they were “served in accordance with the rules,” and if the defendants were not prepared to accept them because of non-compliance with the “timetable,” she would “be forced to look for an adjournment.”

[ 15 ] In these circumstances, it seems only appropriate to remind counsel that, when the court schedules a motion hearing date and sets a timetable for the parties to follow in the perfection of that motion, the parties are obliged to abide by that timetable. It is an order of the court that should be followed. Such timetables are frequently set, and are set for good reason. Such timetables permit the perfection of motions to unfold in a timely way, which is fair to all of the parties, and allows the valuable court time set aside for motions to be utilized effectively and not wasted by needless, last-minute adjournments. It is not for counsel to unilaterally determine that the court’s timetable is inconvenient and need not be followed. The timelines prescribed in the Rules of Civil Procedure for the service and filing of motions materials certainly apply in the absence of any court order to the contrary. However, once the court has set a timetable for such events, then that court order governs the conduct of the parties. If the parties find that the timetable is unworkable for whatever reason, the parties should quickly take steps to return to Motions Scheduling Court to address the issue. In the absence of another order setting a different schedule, the original timetable must be followed.

[ 16 ] That said, the clear departure from this accepted practice by counsel for the plaintiff did not, as it turned out, result in any delays or other problems in the hearing and determination of the defendants’ summary judgment motion. The motion proceeded as scheduled and was determined. Given that the tardy nature of the plaintiff’s materials did not, in fact, result in any adverse consequences, I decline to premise a substantial indemnity costs order on that basis.

4. Conclusion

[ 17 ] For these reasons, while the defendants are certainly entitled to their costs in relation to both the summary judgment motion and the action, there is no proper basis on which to order the payment of those costs on a substantial indemnity scale. Rather, the costs will be ordered on the usual, partial indemnity scale. Having resolved that issue, I turn to the question of the appropriate quantum of the costs order to be made against the plaintiff.

C. What Should Be the Precise Quantum of the Costs Order?

[ 18 ] As already noted, the defendants seek substantial indemnity costs totaling $26,520.08 for the summary judgment motion and $59,090.28 for the action, including taxes and disbursements. In total, the defendants claim substantial indemnity costs in the amount of $85,610.36, including all taxes and disbursements.

[ 19 ] In support of these claims, the defendants have helpfully provided dockets that reveal the hourly work of those involved in the litigation. Unfortunately, the defendants have not provided their costs calculations on a partial indemnity basis. I am, therefore, obliged to perform my own calculations in this regard.

[ 20 ] The plaintiff argues that, even when properly viewed on a partial indemnity scale, the defendants’ claims, are excessive. As already mentioned, the plaintiff contends that the defendants’ partial indemnity costs should be assessed at approximately $10,000 for the summary judgment motion and $20,000 for the action, plus disbursements ($3,295.94). This submission would result in a total costs award of approximately $33,295.94. Counsel for the plaintiff has provided her own bill of costs and costs outline in support of the reasonableness of this position.

[ 21 ] In my view, the appropriate partial indemnity costs order falls somewhere between the two more extreme positions presented by the parties. The time spent by counsel for the defendants in this matter is entirely reasonable given the gravity of the allegations made by the plaintiff, and the size of the $1.1 million claim advanced by the plaintiff. There are, contrary to the submissions of the plaintiff, no excessive claims or duplicate entries as to the time spent by counsel for the defendants on this matter. However, I have concluded that the defendants are only entitled to their costs on a partial indemnity scale.

[ 22 ] According to the definition of “substantial indemnity costs” in rule 1.03 of the Rules of Civil Procedure, substantial indemnity costs are meant to be 1.5 times the amount of partial indemnity costs. Dividing the defendants’ claimed substantial indemnity legal fees by that 1.5 figure, recalculating the applicable taxes on those fees, and then adding the disbursements and taxes, results in a total partial indemnity costs figure of $62,240.49. This total includes the costs of both the summary judgment motion and the action. Having regard to all of the circumstances of this case, and taking into account all of the relevant factors outlined in rule 57.01 of the Rules of Civil Procedure, I conclude that this is a “fair and reasonable” amount, and one that an unsuccessful plaintiff could reasonably expect to pay. See: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); Davies v. Municipality of Clarington (2009), 2009 ONCA 722 (), 100 O.R. (3d) 66 (C.A.) at para. 50-56. I hereby fix the total of the defendants’ costs in that amount.

D. Conclusion

[ 23 ] In the result, the plaintiff shall pay the defendants’ partial indemnity costs, both in respect of the defendants’ summary judgment motion and the plaintiff’s action, in the total amount of $62,240.49, including all taxes and disbursements.

[ 24 ] An order shall issue accordingly.

Kenneth L. Campbell J.

DATE: August 21, 2012