ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-08-0012
DATE: June 25, 2013
B E T W E E N:
LINDA COLISTRO
Michael Cupello, for the Plaintiff
Applicant
- and -
TBAY TEL, THE CORPORATION OF THE CITY OF THUNDER BAY, and STEVE BENOIT
Lorne Firman, for the Defendant TBay Tel, Brian Babcock for the Defendant The Corporation of the City of Thunder Bay, Christopher Hacio for the Defendant Steve Benoit
Respondent
HEARD: Written submissions as to costs
Mr. Justice J.S. Fregeau
Decision on Costs
Introduction
[1] This is a decision on the costs of motions brought by each of the defendants TBaytel and The Corporation of the City of Thunder Bay (the” City”) seeking leave to appeal the Order of Mr. Justice McCartney dated January 23, 2013. The Order of McCartney J. granted leave to the plaintiff, pursuant to Rule 36.01(2), to examine one of its witnesses before trial for the purpose of having that witness’ testimony available to be tendered as evidence at trial. This witness is a key, material witness for the plaintiff.
[2] My endorsement of April 16, 2013 granted the defendants leave to appeal the January 23, 2013 Order of McCartney J. My endorsement provided that the parties were to file written submissions on the costs of the motion seeking leave to appeal if they were unable to agree on same.
[3] I have now received the costs submissions and Bills of Costs of TBaytel and the City and the costs submissions of the plaintiff.
The Positions Of The Parties
[4] TBaytel and the City submit that they have been entirely successful in their motions and both seek their costs as against the plaintiff payable forthwith.
[5] TBaytel suggests that several of the factors set out in Rule 57.01 should guide the court in exercising its discretion regarding the costs of this motion:
Rule 57.01(1)(0.a) – the principle of indemnity. TBaytel seeks costs of two lawyers who acted on the motion, Mr. Firman called in 1976 with an hourly rate of $360.00 and Mr. Zulianello called in 2003 with an hourly rate of $250.00. TBaytel suggests they have attempted to reduce costs by having Mr. Zulianello do most of the work on the motion.
Rule 57.01(1)(0.b)(c) and (d) – the reasonable expectations of the parties taking into account the complexity of the proceeding and the importance of the issues. TBaytel submits that the costs claimed by them are not beyond the reasonable expectations of the plaintiff in the circumstances. It is suggested that the lack of appellate jurisdiction pertaining to Rule 36 complicated the motion and necessitated extensive research, a special motion date and the preparation and filing of facta and books of authority by all parties. TBaytel further submits that the issue of the plaintiff having a key, material witness testify before trial is a very important issue to them in particular. Additionally, TBaytel suggests that the purpose, scope and application of Rule 36 is of general importance to the civil litigation bar across the province.
Rule 57.01(1)(i) – any other matter relevant to the question of costs. TBaytel submits that while the plaintiff consented to McCartney J.’s order being stayed pending appeal at the hearing of the motion, they did not do so earlier despite being asked to. It is submitted that this put TBaytel to the trouble and expense of preparing to argue this aspect of the motion.
[6] Based on the foregoing, TBaytel is asking for costs on a partial indemnity basis of $17,174.63 inclusive of fees, disbursements and HST, the fee component being $14,420.00.
[7] The City submits that the following factors from Rule 57.01(1) should be considered by this court in deciding costs on this motion:
Rule 57.01(1)(0.b)(c)(d) – the reasonable expectations of the parties taking into account the complexity of the proceeding and the importance of the issue. The City suggests that the amount they are seeking for costs is modest for a motion requiring extensive research and preparation, a special date and two hours in argument. The City suggests that the level of complexity is enhanced as a result of the importance of the issue coupled with a lack of jurisprudence, particularly appellate, regarding Rule 36. The City further submits that the matter is one of public importance given the lack of appellate jurisdiction regarding Rule 36, particularly Rule 36.02.
Rule 57.01(1)(0.a) – the principle of indemnity, the experience of counsel, rates charged and hours spent. The City notes that their lawyer of record, Mr. Babcock, has 31 years of experience with an hourly rate of $290.00. Mr. Babcock supervised the preparation of the motion materials and argued the motion. In order to reduce costs, much of the preparation for the City was done by Ms. Lohuis at an hourly rate of $185.00.
[8] Based on the foregoing, the City is asking for costs from the plaintiff on a partial indemnity basis in the amount of $11,521.84 inclusive of fees, disbursements and HST, the fee component being $9,317.30, which includes $500.00 for preparation of costs submissions.
[9] The plaintiff notes that the costs claimed by TBaytel and the City for this one-half day motion total over $28,000.00, which the plaintiff suggests is excessive. The plaintiff submits that any costs award should reflect what the court sees as a fair and reasonable amount to be paid by the unsuccessful party rather than an exact measure of the actual costs of the successful party.
[10] The plaintiff submits that I should consider the following factors in assessing the costs of the motion seeking leave to appeal:
The motion required the preparation of the Notices of Motion, Factums and Books of Authority. Transcripts were neither ordered nor reviewed. The record was familiar to all parties because they had previously argued the motion before McCartney J. As a result, the argument of this motion was confined to one-half day.
The plaintiff was reasonable and accommodating in consenting to the stay of McCartney J.’s order until the hearing of this motion and during the period of time my decision on the motion for leave to appeal was under reserve, the latter consent being given only at the actual hearing of the motion. Despite this fact, the plaintiff notes that time dockets of both TBaytel and the City include docketed time for work related to the issue of the stay of the Order of McCartney J.
The plaintiff asks the court to note that TBaytel and the City were communicating with each other while preparing the motion seeking leave to appeal, as evidenced by their respective time dockets. The plaintiff submits that these two defendants have taken the same position on all interlocutory matters and motions in this litigation to date. The plaintiff further submits that the only reason the City has been named in this case is because of the agency relationship between the City and TBaytel. Bearing in mind this relationship, the plaintiff suggests that it is not fair and reasonable for the plaintiff to be called upon to pay costs of four lawyers who brought two separate, but essentially identical, motions on behalf of their respective clients.
In any event, the plaintiff submits that the total hours docketed by TBaytel and the City are “excessive to the extreme”. The junior lawyer for the City docketed 53.9 hours; the junior lawyer for TBaytel docketed 36.2 hours and TBaytel’s senior lawyer docketed 33 hours. This is all submitted to be excessive for a one-half day motion.
The plaintiff submits that they were successful on the motion seeking leave to appeal pursuant to Rule 62.02(a) while the defendants were successful on the Rule 62.02(b) argument. As a result, the plaintiff submits that success on the motion was at least partially divided.
[11] The plaintiff submits that costs should be fixed within a range of $6,000.00 to $10,000.00 and reserved to the Divisional Court.
Discussion
[12] An award of costs is a matter in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act, which provides:
Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in the proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.
[13] In Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330, para. 22, the Court of Appeal held there were three fundamental purposes for the modern costs rules:
to indemnify successful litigants for the cost of litigation;
to encourage settlement; and
to discourage and sanction inappropriate behaviour by litigants.
[14] It is settled law that the court has wide discretion to award costs, provided the discretion is exercised judicially: Toronto Star Newspapers Ltd. v. Fraleigh, (2011) 2011 ONCA 555, 107 O.R. (3d) 288 (C.A.), para. 32
[15] Rule 57.01 of the Rules of Civil Procedure sets out the general principles to be considered in the exercise of the discretion to award costs. In addition to the outcome of the proceeding and any written offer to settle, these include:
0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the 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 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 or refusal to admit anything that should have been admitted;
h) ...
i) Any other matter relevant to the question of costs.
[16] A costs award must be fair and reasonable, and balance the objective of access to justice. It should also reflect the reasonable expectations of the parties: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), paras. 37 – 38. In Boucher, the court also noted:
...There are obviously cases where the prospect of an award of costs against the losing party will operate as a reality check for the litigant and assist in discouraging frivolous or unnecessary litigation...(para.37)
[17] I agree with the submission of the plaintiff that the costs sought by the defendants on this motion are excessive. While the issue is of obvious importance to all parties, it was not unduly complicated nor did it require excessive research or preparation. The submissions of four counsel were completed within three hours, in the case of TBaytel and the City much of it repetitive.
[18] I am also sensitive to the plaintiff’s submission questioning the utility and fairness of the plaintiff being called upon to pay the costs of two parties with consistent interests, advancing virtually identical arguments on the motion. While I recognize that TBaytel and the City divided the submissions at the hearing of the motion, one directing their submissions to Rule 62.02(a) and the other to Rule 62.02(b), this efficiency is most certainly not reflected in their respective Bills of Costs.
[19] TBaytel suggests that work was undertaken primarily by the junior lawyer in an effort to control costs. Mr. Zulianello has docketed 36.2 hours to reflect his work on the file. However, the Bill of Costs of TBaytel also includes dockets of Mr. Firman for four hours to review motion materials and 21 hours to prepare for the motion. I am at a loss as to how 25 hours of preparation could be required by a senior lawyer in addition to the 33 hours of a junior lawyer.
[20] I note that Mr. Babcock has docketed only 2.1 hours for preparation for the motion in contrast to Mr. Firman’s 25 hours. However, Mr. Babcock’s time is also in addition to his junior lawyer’s 53.9 docketed hours. I also find this to be excessive.
[21] Quite simply, it is my opinion that, while such hours may very well have been expended, it was not necessary to do so in order to thoroughly prepare for and to competently argue this motion.
[22] Taking into account all of the factors discussed and in the context of the particular facts of this case, it would be fair and reasonable to award costs of $3,000.00 to each of TBaytel and the City to be paid by the plaintiff forthwith.
The Hon. Mr. Justice J.S. Fregeau
Released: June 25, 2013
COURT FILE NO.: CV-08-012
DATE: June 25, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
LINDA COLISTRO
Applicant
- and –
TBAY TEL, THE CORPORATION OF THE CITY OF THUNDER BAY, and STEVE BENOIT
Respondent
DECISION ON COSTS
Fregeau J.
Released: June 25, 2013
/sf