ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 10-48766
DATE: 2012/11/14
BETWEEN:
Garry Lackner, Linda Lackner, Eric Thomson, Susan Desjardins and Patricia Tite Applicants/Plaintiffs – and – Shane Hall, 2219160 Ontario Limited, Stanley Thomas Wallace, William Robert England, Allan Keys, Catherine Keys, Wayne Morris, and Vikki Storie Respondents/Defendants
John Parr Telfer, for the Applicants/ Plaintiffs
James L. Shields, for the Respondents/ Defendants
HEARD: (By written submissions)
DECISION ON COSTS
McNAMARA J.
[ 1 ] This action was heard by myself over the course of seven trial days in April, 2012. In my decision released on July 23, 2012 I found the Plaintiffs were entitled to relief by way of a declaration as set out in those reasons, and I also directed that if the parties were unable to agree on costs, I would receive their written submissions.
[ 2 ] Mr. Telfer on behalf of the Plaintiffs and Mr. Shields on behalf of the Defendants have now provided me with their submissions and I have had the opportunity to consider same.
[ 3 ] It seems common ground that the Plaintiffs, having been successful in this matter, are properly entitled to an award of costs. The real issues are the scale of costs and quantum.
[ 4 ] Mr. Telfer has delivered a Bill of Costs which seeks an award on a partial indemnity basis to the date of a written Offer to Settle on March 7, 2012 and thereafter costs at a substantial indemnity rate. He also seeks a junior counsel fee for Ms. Leduc-Pomerleau who assisted him at the trial. According to his arithmetic and approaching costs on that basis he suggests an entitlement to fees of $155,721.50 plus HST and disbursements.
[ 5 ] Mr. Shields in his submissions and for the reasons cited therein takes the position that costs at best should be on a partial indemnity basis throughout, and that the time and quantum claimed is not fair and reasonable.
[ 6 ] Dealing firstly with the scale of costs, the case law that has developed has repeatedly stated that elevated costs are warranted in two circumstances. The first involves the operation of an Offer to Settle under rule 49.10 where substantial indemnity costs are explicitly authorized. The other circumstance is where the losing party has engaged in behaviour worthy of sanction. In this case, the only argument open to the Plaintiffs is under rule 49.10. Certainly there was no inappropriate conduct requiring sanction. The trial was well presented and argued by all parties, and required considerable review and analysis before the Court was in a position to render a decision. Are then the Plaintiffs entitled to elevated costs pursuant to rule 49.10?
[ 7 ] Subsection (1) of the rule provides that where an Offer to Settle is made by a Plaintiff at least seven days before the commencement of the hearing, is not withdrawn and does not expire before the commencement of the hearing, is not accepted by the Defendant, and the Plaintiff obtains judgment as favourable as or more favourable than the terms of the offer, the Plaintiff is entitled to partial indemnity costs to the date the Offer to Settle was served and substantial indemnity costs from that date, unless the Court orders otherwise.
[ 8 ] There was an offer in this case, it was not withdrawn nor did it expire before the commencement of the trial, and it was not accepted by the Defendant. The offer provided as follows:
The Plaintiff/Applicants offer to settle this proceedings on the following terms:
Jointly against both of the respondents/defendants Shane Hall and 2219160 Ontario Limited for consent to judgment and the plaintiffs/applicants’ taxed partial indemnity costs to the date of settlement, less the amount of $20,000.00;
Severally against the respondents/defendants Stanley Thomas Wallace, William Robert England, Allan Keys, Catherine Keys, and Vikki Storie, each now in default, for their individual consents to judgment and payment from each of $2,000.00 inclusive of HST.
[ 9 ] I am not persuaded on the material before me that the result achieved was as or more favorable than the offer. Firstly, it seeks consent to judgment from the various Defendants but it does not specify a judgment to what! The Statement of Claim in this case sought other relief over and above the declaration that was eventually granted. Next, in para. 2, it requires from the named individual Defendants consent to judgment but also payment from each of $2,000.00, one would assume as some form of damages. Very little if any mention was made about these individuals at trial, and certainly there was no specific award of damages made as against them.
[ 10 ] In all the circumstances, then, I am not persuaded that this is a case where substantial indemnity costs should be awarded but rather they will be fixed on a partial indemnity basis.
[ 11 ] Having found there is an entitlement to costs and having determined the scale, I now turn to quantum.
[ 12 ] It is generally accepted in this region that if the actual fees billed by a lawyer to his or her client represents an appropriate hourly billing rate, the partial indemnity rate should be in the range of 60 percent of that rate. The materials disclose that Mr. Telfer billed his client at the rate of $300 per hour and Ms. Leduc-Pomerleau at $150 per hour. Those rates, in my view, are clearly acceptable on a full indemnity basis but, of course, this is not one of those rare cases, as already decided, where an elevated rate of costs is relevant. Rather at a partial indemnity rate (60 percent) that translates to $180 per hour for Mr. Telfer and $90 per hour for Ms. Leduc-Pomerleau.
[ 13 ] The materials filed on behalf of the Plaintiffs indicate Mr. Telfer spent 531 hours in total on this file and Ms. Leduc-Pomerleau 76.3 hours. It is conceded by Mr. Telfer in his materials that the time set out in his records and spent on a motion where he was unsuccessful (the Morris matter) should be deleted from that total. Mr. Telfer indicates he spent 36.7 hours on that matter and I accept his figure in that regard. That lowers his total time to 494.3 hours in addition to Ms. Leduc-Pomerleau’s time. The issue then is whether or not that amount of time is fair and reasonable.
[ 14 ] In exercising my discretion under s. 131 of the Courts of Justice Act , R.S.O. 1990, c. C.43, to award costs, I must take into account the factors set forth at rule 57.01(1) of the Rules of Civil Procedure . In fixing an appropriate quantum I must be guided by the overriding principle of reasonableness and fairness, and in deciding what is fair and reasonable the expectation of the parties is a relevant factor. I must also have regard to principles of proportionality. Considering all of those factors, it is my view that the time spent as outlined in the Bill of Costs is somewhat excessive and beyond what might reasonably be expected for a seven-day trial. The time claimed is the equivalent of roughly 70 full-time work days in a case that while interesting, was not overly complex. In the circumstances, and also mindful that there is a real issue as to whether or not it was necessary for Plaintiffs’ counsel to participate in the Wallace matter, I reduce Mr. Telfer’s time by 50 additional hours, which in turn reduces his recoverable time from the Defendants on a partial indemnity basis to 444.3 hours. In terms of Ms. Leduc-Pomerleau, the time spent by her seems entirely reasonable at 76.3 hours and I would not reduce it. Doing the necessary arithmetic results in costs of:
(Mr. Telfer) 444.3 hours x $180/hour $79,974.00
(Ms. Leduc-Pomerleau) 76.3 hours x $90/hour $6,867.00 .
Total $86,841.00
These costs of $86,841.00 plus HST would be fair, reasonable, and proportionate. The disbursements claimed appear in order and are added to the costs award.
[ 15 ] If there are any difficulties with the arithmetic or if other points require clarification, I may be spoken to.
The Hon. Mr. Justice James McNamara
Released: November 14, 2012
COURT FILE NO.: 10-48766
DATE: 2012/11/14
ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Garry Lackner, Linda Lackner, Eric Thomson, Susan Desjardins and Patricia Tite Applicants/Plaintiffs – and – Shane Hall, 2219160 Ontario Limited, Stanley Thomas Wallace, William Robert England, Allan Keys, Catherine Keys, Wayne Morris, and Vikki Storie Respondents/Defendants DECISION ON COSTS McNamara J.
Released: November 14, 2012