COURT FILE NO.: CV-11-127
DATE: 2012-09-26
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Sharmila Heera
Robert V. Botsford, for the Applicant
Applicant
- and -
Anita Heera-Wilson and Royal Bank of Canada
N. A. Melchiorre, for the Respondent Anita Heera-Wilson
Respondents
HEARD: August 10, 2012
DECISION ON COSTS
Mr. Justice J.S. Fregeau
[1] This proceeding was an application under the Partition Act, R.S.O. 1990, c. P.4
[2] The applicant and the respondent, Anita Heera-Wilson (the”respondent”), were the owners, as joint tenants, of property known municipally as 247 Saxon Drive, Thunder Bay, Ontario, and more particularly described as Lot 4, Plan 55M605, District of Thunder Bay, being PIN 62179-0250. This is a single family residence and both parties were in possession; the applicant occupied the property with her spouse and the respondent occupied the property with her 11 year old child.
[3] In 2010, the relationship between the owners broke down. The applicant retained counsel who sought a consensual sale of the property by letter dated September 24, 2010. This correspondence stated that the applicant would proceed with an application under the Partition Act if the respondent did not agree to a sale. This letter suggested a division of net proceeds of sale substantially in favour of the applicant. The respondent did not respond to this letter.
[4] The applicant’s counsel sent two further demand letters to the respondent, in November 2010 and in February 2011. The November 2010 letter enclosed a copy of the applicant’s draft application under the Partition Act. The February 2011 letter contained an offer for the division of net proceeds more favourable to the respondent than that proposed in September 2010. The respondent did not respond to these letters.
[5] The applicant’s Notice of Application was issued on March 24, 2011 and served personally on the respondent on March 30, 2011. The application was first returnable on April 21, 2011. The respondent did not appear on this date.
[6] By Judgment dated April 21, 2011, it was ordered that the property be sold. The Judgment directed a reference to determine the conditions of sale and the distribution of net proceeds. The applicant was to have carriage of the reference.
[7] The applicant obtained an appointment for May 17, 2011, for a hearing to consider directions for the conduct of the reference. The respondent was served with the Notice of Hearing for Directions.
[8] On May 16, 2011, the respondent retained counsel to represent her on the application. On May 17, 2011, the parties were directed by the court to obtain a date during the week of May 30, 2011, to set the terms of the conduct of the sale. The subject matter of the first hearing of the reference was expressly restricted to the manner, terms and conduct of sale.
[9] As a result of delays and cancellations which the applicant attributes to the respondent, the hearing was postponed until July 28, 2011. By this date, counsel had agreed on the conditions of sale. An Interim Report on Conditions of Sale, on consent, issued on that date. Very soon thereafter, a listing agreement was signed and the property placed on the MLS system.
[10] On November 13, 2011, a sale agreement was signed, with a transaction completion date of February 29, 2012. As of approximately the end of December 2011, the applicant and respondent had resolved the issue of the distribution of net proceeds of sale on the basis of an equal division of same. Remaining at issue between the parties was the reimbursement of expenses paid by the applicant and the costs of the application. The former issue was resolved on consent and reduced to a consent order on June 22, 2011. The issue of costs was argued August 10, 2012.
[11] The applicant seeks costs from September 24, 2010, the date on which the applicant formally advised the respondent that she wanted the property sold, preferably on consent, but by court order if consent was not forthcoming. The applicant is not seeking costs from after the point in time when the Agreement of Purchase and Sale was signed.
[12] The applicant submits that as a result of the respondent’s failure to respond until May 2011, significant time and effort were expended in litigation. It is submitted that this could have been avoided if the respondent had responded in a reasonable fashion. The applicant submits that the matter proceeded in a reasonable fashion from that point in time until finally resolved in June 2012.
[13] The applicant is requesting, on a partial indemnity basis, costs of $10,980.00 for fees, $1,427.40 for HST on fees, $924.51 for disbursements and $85.53 for HST on disbursements.
[14] The respondent submits that an analysis of costs should consider costs incurred for two periods of time, firstly costs incurred for determining the terms of sale, and secondly, costs incurred in relation to the distribution of proceeds of sale.
[15] The respondent submits that the applicant’s original positions pertaining to an unequal division of proceeds and reimbursement of expenses were unreasonable. The respondent submits that their position as to an equal division of net proceeds prevailed and that the applicant did not concede this point until December 2011. The respondent submits that the applicant originally demanded that she be reimbursed $13,000.00 r for expenses she paid for the home. The applicant ultimately agreed to $4,000.00.
[16] Counsel for the respondent submits that the matter proceeded essentially on a consent basis from May 2011, the point in time when he became involved in the file, in regard to the terms of sale, division of net proceeds and reimbursement of expenses to the applicant. Counsel for the respondent further submits that the respondent was the successful party on the issue most important to the parties, that being the division of proceeds.
[17] Counsel for the respondent candidly conceded that the respondent may ultimately bear some responsibility for costs incurred prior to her retaining counsel in May 2011, but submitted that the respondent should have her costs after May 2011.
[18] The respondent’s Bill of Costs sets out costs beginning in May 2011. The respondent seeks costs of $12,300.95, including disbursements, on a full recovery basis and $8,257.60, including disbursements, on a partial indemnity basis.
Discussion
[19] An award of costs is a matter in the discretion of the judge by virtue of s. 131(1) of the Courts of Justice Act, which reads as follows:
“Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.”
[20] Rule 57.01(1) of the Rules of Civil Procedure provides:
57.01 (1) Factors in discretion—In exercising its discretion under s. 131 of the courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer: and
(i) any other matter relevant to the question of costs.
[21] Rules 57.03 (1) of the Rules of Civil Procedure provides:
57.03 (1) Contested motion – On the hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall;
(a) fix the costs of the motion and order them to be paid within 30 days; or
(b) in an exceptional case, refer the costs of the motion for assessment under Rule 58 and order them to be paid within 30 days after assessment.
[22] In Anderson v. St. Jude Medical Inc., (2006) O.J. No. 508 (Ont. Div. Ct.), at para. 22, the Divisional Court set out the principles to be applied by the court in exercising its discretion (citations omitted):
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).
A consideration of experience, 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. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant.
The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: Rule 57.01(1)(0.b).
The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases (if they can be found), should conclude with like substantive results.”
The court should seek to balance the indemnity principle with the fundamental objective of access to justice.
[23] The Court of Appeal has made it clear that in assessing costs, the overriding principle is one of reasonableness, and that the failure to follow that principle can produce a result that is contrary to the fundamental objective of access to justice (Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (Ont. C.A.), at p. 302.
[24] In Serra v. Serra (2009), 66 R.F.L. (6th) 40 (Ont. C.A.), at p. 42, the Court of Appeal reiterated the fundamental purposes which modern costs rules are designed to foster, as set out in Fong v. Chan (1999), 46 O.R. (3d) 330 (Ont. C.A.), at para. 22:
(1) to partially indemnify successful litigants for the costs of litigation;
(2) to encourage settlement; and
(3) to discourage and sanction inappropriate behaviour.
[25] In Zesta Engineering Ltd. v. Cloutier, (2001) O.J. No. 4495 (Ont. C.A.), at para. 4, the Court of Appeal did not make a specific finding with respect to the amount of time spent or the rates charged by counsel, and stated:
“In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.”
[26] The applicant shall have her costs from September 2010 until May 2011, at which point in time the respondent retained counsel. Once the relationship between the parties/co-owners deteriorated to the point that the applicant retained counsel, it would have been obvious to the respondent that a sale of the property was inevitable. While the applicant’s initial position as to a division of the net proceeds of sale was unreasonable from the respondent’s perspective, in my opinion this did not entitle the respondent to simply ignore the entire issue.
[27] From September 2010 until May 2011, the applicant, as a result of the respondent’s intransigence, was forced to commence what became unnecessarily protracted and involved litigation simply to complete the sale of a jointly owned residence. Had the respondent responded to the matter rather than ignore it, litigation in all likelihood could have been avoided entirely.
[28] I think it fair and reasonable that the respondent pay costs to the applicant to May 2011 in the amount of $7,500.00, inclusive of fees, disbursements and HST.
[29] From May 2011, with the assistance of counsel for the respondent, this matter proceeded in a reasonable manner and at a reasonable pace. The parties eventually agreed on the terms and conditions of sale, the division of net proceeds of sale and the expenses to be paid back to the applicant. In my opinion, both parties should bear their own costs from May 2011 to the conclusion of this matter.
[30] The respondent shall be paid costs incurred for her counsel to review the real estate documents for the sale of the residence, which sale the applicant’s counsel had carriage of. The respondent is awarded these costs of $550.00.
___________________________
Mr. Justice J.S. Fregeau
Released: September 26, 2012
COURT FILE NO.: CV-11-127
DATE: 2012-09-26
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Sharmila Wilson
Applicant
- and –
Anita Heera-Wilson and Royal Bank of Canada
Respondent
DECISION ON COSTS
Mr. Justice J.S. Fregeau
Released: September 26, 2012
/sf