SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: C-772/07
DATE: 2012-11-07

RE: The Children’s Lawyer, Applicant

• and -

Sheila Anne O’Donovan, Steven O’Donovan aka Stephen O’Donovan, Christopher O’Donovan, Simon Paul O’Donovan, Brian O’Donovan, Patrick O’Donovan, Tyler O’Donovan, Gerry O’Donovan, Fuyuko O’Donovan, Loretta O’Donovan aka Lori O’Donovan, Edward Kalkstein, Zeifman & Company LLP, Cosimo Fiorenza, Brans Lehun Baldwin LLP, Bennett Jones LLP, The Denova Foundation, Lisaard House, MVO Investments Ltd., 1213756 Ontario Limited, 1228101 Ontario Limited, 1253939 Ontario Limited, 1327478 Ontario Limited , 1327479 Ontario Limited , 1341993 Ontario Limited, Com Dev Atlantic Ltd. (formerly 3293076 Canada Limited ) , Com Dev Satellite Communications Inc. , Com Dev International Ltd., 1001338 Ontario Limited, 1407199 Ontario Limited, 1403627 Ontario Limited, 1431298 Ontario Limited , 1431248 Ontario Limited, 1181526 Ontario Limited, 3373312 Canada Inc., Technology Horizons Ltd., Paul Ross, KPMG LLP, BDO Dunwoody LLP, Rae & Lipskie Investment Counsel Inc., Caroline Peplar aka Caroline O’Donovan, Rudolf Rivero and Ron Donovan aka Aaron Donovan , Respondents

BEFORE: The Honourable Mr. Justice D.J. Gordon

COUNSEL:
T. Walsh, for Wayne Rudson, the Court Appointed Expert
M. Rodenburg, for The Children’s Lawyer
V. Toppings, for Steven O’Donovan and Christopher O’Donovan
P. Amey for Sheila O’Donovan
S. Dawe for Edward Kalkstein and Zeifmans & Company

SUPPLEMENtaRY ENDORSEMENT re costs

[ 1 ] In my endorsement, released September 10, 2012 ( 2012 ONSC 4726 ), I invited written submissions from counsel on the issue of costs.

[ 2 ] This was the second motion by the court appointed forensic accountant, Wayne Rudson, seeking payment of his accounts. Other matters raised by counsel involved a request for production of working papers and the costs of Mr. Kalkstein and Zeifman & Company arising out of a prior order.

[ 3 ] In my endorsement on the first motion, released July 27, 2010 ( 2010 ONSC 4190 ), I directed payment of Mr. Rudson’s invoice for $519,110.08, along with $100,000.00 to complete his report.

[ 4 ] In this second motion, Mr. Rudson sought payment of $288,000.00, in addition to the above $100,000.00. This motion was dismissed.

[ 5 ] Written submissions from counsel indicate the parties and the court appointed expert have incurred expense of $223,445.00 on this motion claiming $288,000.00. While cross-examination of Mr. Rudson took place prior to the hearing, the motion was essentially fact driven. Submissions on law, particularly as to Rule 52.03, were minimal. The expense, in my view, is disproportionate given the nature of the issues and amount involved. As has been the case in prior motions, little consideration has been given to communication. Despite the action being governed by case management, at the request of the parties at the outset, the parties have continued to ignore the use of case management conferences.

[ 6 ] The following chart sets out the present cost claims, and actual expense:

Party Cost Claim Actual
Claim Against Expense

Wayne Rudson no claim N/A $ 69,806.91

Children’s Lawyer $ 28,391.57 Steven & Christopher $ 28,391.57
O’Donovan and
Sheila O’Donovan

Sheila O’Donovan $ 22,435.01 Wayne Rudson $ 33,241.15

Steven & Christopher
O’Donovan $ 36,313.78 Wayne Rudson $ 71,547.18

Edward Kalkstein and Steven & Christopher
Zeifman & Company $ 17,203.99 O’Donovan $ 20,458.19

Total: $104,344.35 $223,445.00

[ 7 ] Rule 52.03 provides for compensation of a court appointed expert. The rule is silent on the issue of costs.

[ 8 ] Counsel’s written submissions do not include any reference to the principles of cost awards against non-parties. They should have.

[ 9 ] Section 131, Courts of Justice Act , is normally restricted to cost claims between the parties: see Rockwell Developments Ltd. v. Newtonbrook Plaza Ltd. (1972), 27 D.L.R. (3d) 651 (Ont. C.A.); and Television Real Estate Limited v. Rogers Cable T.V. Limited (1997), 34 O.R. (3d) 291 (Ont. C.A.).

[ 10 ] The court has an inherent common law jurisdiction to award costs against a non-party in limited circumstances: see Sturmer v. Beaverton (Town) (1911), 25 O.L.R. 190 (CL) , aff’d 1912, 25 O.L.R. 566, 2 D.L.R. 501 (Div. Ct.); Television Real Estate Limited v. Rogers Cable T.V. Limited, supra .

[ 11 ] In these, and other cases, often the discussion pertains to a party being a “man of straw” for the real litigant. The court’s jurisdiction is called upon to prevent an abuse of its own process. Such is not the case here.

[ 12 ] In Takis v. Takis (2003), 38 R.F.L. (5th) 422 (Ont. S.C.J.), I was asked to grant a cost award against The Children’s Lawyer given the impact of a deficient social worker’s investigation and report. I declined to do so.

[ 13 ] Costs should only be awarded against a non-party in unusual and rare circumstances: see Elliott v. Dalbergs , 2010 ONSC 7072 , 100 R.F.L. (6th) 405; and Children’s Aid Society of Sudbury & Maintoulin (Districts) v. J. (M.) , 2009 ONCJ 591 .

[ 14 ] There is some comparison between Takis and the case at bar. Mr. Rudson is the court appointed expert. The Children’s Lawyer was invited to participate by court order.

[ 15 ] I am not persuaded the circumstances of this case warrant a cost award against Mr. Rudson. While he ought to have considered his prior representation regarding the $100,000.00 to complete the report, it was not unreasonable to request further direction. He has had to deal with many challenges in completing his mandate as a result of escalating conflict with some of the parties.

[ 16 ] Accordingly, the requests for a cost award against Mr. Rudson are denied.

[ 17 ] Several parties claim costs against other parties. There is no merit in the claim against Sheila O’Donovan. There is some basis for the request against Steven O’Donovan and Christopher O’Donovan. Their positions have been a moving target on several occasions, even changing during submissions. Other parties, therefore, had to have counsel present even when the issues did not involve them.

[ 18 ] Nevertheless, I decline to award costs against any of the parties at this stage. Rather, any such claims are reserved to the trial judge.

D.J. Gordon J.

Released: November 7, 2012