COURT FILE AND PARTIES
COURT FILE NO.: 03-CV-245569CM3
DATE: 20120926
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: ANNA JANICE FREEMAN , Plaintiff
AND:
MNJIKANING FIRST NATION AND JEAN LEMAY , Defendants
BEFORE: Stinson J.
COUNSEL:
Larry J. Levine , Q.C, for the plaintiff
Awanish Sinha and Julie Parla , for the defendants
HEARD: By written submissions
ENDORSEMENT AS TO COSTS
[ 1 ] In my reasons for decision released February 1, 2012, I dismissed the plaintiff's action. This endorsement addresses the issue of costs, based upon the written submissions filed by the parties.
[ 2 ] The successful defendants claim partial indemnity costs in the total sum of $143,891.09. The plaintiff does not dispute the hours claim to have been spent. The plaintiff does not dispute the amounts allegedly incurred by way of disbursements, including the expert's report included in the defendants' claim for disbursements. Further, the plaintiff does not dispute the hourly rates set out in the defendants' submission.
[ 3 ] The plaintiff argues, however, that an appropriate fee having regard to the principle of proportionality should be $75,000, together with the disbursements claimed by the defendants.
[ 4 ] Based on the foregoing, there is no dispute with respect to liability for costs. As the successful parties, the defendants are entitled to an award of costs in their favour. The plaintiff does not argue otherwise.
[ 5 ] With respect to the scale of costs, the defendants seek only partial indemnity costs. Accordingly, any award in their favour should be determined on this basis.
[ 6 ] The true issue between the parties concerns the quantum of costs that should be awarded in relation to professional fees. As noted, the plaintiff takes no issue with the disbursements claimed by the defendants. Including the invoices from the expert witness, these total $40,533.09. The balance of the defendants' cost claim is comprised of fees of $103,358. (Since MFN is a First Nations government, no taxes are charged to it and thus GST and HST are not a factor in calculating an award of costs.)
[ 7 ] The dispute between the parties, therefore, centers on the appropriate quantification of fees, the plaintiff's position being $75,000 and the defendants' being $103,358. The basic thrust of the plaintiff's position is that, based on the principle of proportionality, the amount sought by the defendants is excessive and not fair and reasonable.
[ 8 ] In Clarington (Municipality) v. Blue Circle Canada Inc ., 2009 ONCA 722 at paras. 51 and 52 , Epstein J.A. stated as follows:
51 In Andersen v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC) , 264 D.L.R. (4th) 557, the Divisional Court set out several principles that must be considered when awarding costs:
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): Boucher, Moon, and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA) , 75 O.R. (3d) 638 (C.A.).
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: Boucher . 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: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.), at para. 4 .
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": Murano v. Bank of Montreal (1998), 1998 5633 (ON CA) , 41 O.R. (3d) 222 (C.A.), at p. 249.
The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher .
52 As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher , this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at para. 37, where Armstrong J.A. said "[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice."
[ 9 ] As the Court of Appeal also said in Zesta Engineering Ltd. v. Cloutier (2002), 2002 25577 (ON CA) , 21 C.C.E.L. (3d) 161 at para. 4 :
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 parties rather than any exact measure of the actual costs to the successful litigant. …
[ 10 ] The amount claimed by the successful defendants in the present case is a straight calculation of the costs incurred by it. While plainly this is a relevant factor, it is by no means the paramount or governing one. There is no question that this litigation had a level of complexity and that it involved a potential claim for millions of dollars. It is therefore understandable that counsel for the defendants prepared accordingly.
[ 11 ] That said, the case did proceed as a five-day trial. I acknowledge that part of the defendants' preparation time was due to the fact that it was not until late in the proceedings that the plaintiff abandoned a number of her claims and causes of action, and also decided not to call her expert accounting witness. Nevertheless, in my view, an award of fees of over $100,000 is excessive, particularly in light of the fact that the offers to settle exchanged between the parties were in the low six figure range.
[ 12 ] Taking into account the parties' reasonable expectations, the time spent, the result obtained, the complexities of the case and the offers exchanged, I conclude that a just result would be to fix the fees payable to the defendants at $80,000.
[ 13 ] Based on fees of $80,000 plus disbursements of $40,533.09 I fix the costs payable by the plaintiff to the defendants at $120,533.09.
Stinson J.
Date: September 26, 2012