ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 77516/12
DATE: 2013-07-02
BETWEEN:
DONALD THOMAS UPCHURCH & CARLA PAULINE UPCHURCH
Plaintiffs
– and –
CITY of OSHAWA
Defendant
S.R. Fairley, for the Plaintiffs
N. Nicola-Howorth, for the Defendant
HEARD: Written Submissions
Justice B. Glass
[1] On June 7, 2013, the reasons for judgment were released. The focus of the trial had been allegations of negligence by City officials with respect to the need for a building permit when the Plaintiffs constructed a deck at the front of a multi-unit residential property in the City of Oshawa.
[2] There had been a claim for malicious prosecution, but that claim was abandoned at the commencement of the trial. The City did not have confirmation of that decision until two days before the trial commenced. That advice came to Defence counsel on the Sunday of the Holiday Weekend in May of this year. This came after the Defence had to prepare for the malicious prosecution claims. Even though the Plaintiffs withdrew the malicious prosecution claim, they continued with a claim for aggravated and punitive damages and focused on conduct by City officials as being reprehensible.
[3] The City in its costs submissions submits that substantial indemnity scale of costs be applied because of the allegations of improper actions by City officials. They are allegations of dishonesty and improper conduct by City officials. Such allegations cause the Defence to take extra steps to defend against such claims that were unfounded.
[4] This trial progressed into a fourth day. There had been discoveries. As counsel for the Defendant prepared for trial, the malicious prosecution claims were in place and required additional preparation work.
[5] If parties choose to pull out all stops and proceed with a very aggressive approach to the litigation, then, there can be a heavy price to pay.
[6] The approach of the Plaintiffs’ evidence was that the City was acting improperly and unfairly to them. The Plaintiffs suggested that the City officials were attempting to gather evidence for a search warrant of the property, but there is simply no evidence to support such a suggestion. Further, the Plaintiffs indicated a high degree of antagonism to the City officials; however, I did not see a foundation for such an approach.
[7] The Plaintiffs decided to fire their previous counsel because that law firm had the effrontery to attempt to negotiate a settlement with the City when the Plaintiffs wanted to proceed with their litigation regarding orders issued by the City. That was an indication that come what may, the Plaintiffs intended to see the litigation to the end of a trial with the City being ground into submission.
[8] The claims for damages were not shown as minor ones. With claims for aggravated and punitive damages, the Plaintiffs sought damages well in excess of $100,000. Although the Plaintiffs abandoned their claims for malicious prosecution, their claims for aggravated and punitive damages reflected a continued complaint of reprehensible behaviour by City officials in a manner akin to very improper and harassing conduct. I did not see that type of foundation in the evidence presented at the trial. Rather, the Plaintiffs offered speculative allegations at most.
[9] One might ask whether or not litigants in the position of the Plaintiffs would anticipate costs in the dollar figures submitted by the City for such an action. I am persuaded that the Plaintiffs would have sought significant costs.
[10] When losing litigants present their case as if the successful party were a bad actor who has been unfair with a ratepayer, they must demonstrate such to be the case in their evidence. On the other hand, if the losing litigants fail to show such conduct by the successful litigant, they cannot expect to step back from the litigation bar as if they are hard-done-bye persons who should then be allowed to walk away from the conclusion of the trial free of paying a price for pulling out all stops and alleging that the other side was one who acted improperly in the extreme.
[11] Ms. Nicola-Howorth, counsel for the City, properly submits that this litigation was extensive, requiring counsel for the City to undertake considerable efforts, meetings, research, preparation and presentation at trial. The bottom line of the submissions is that time costs money. If the losing parties carry on their litigation with a no-holds-barred approach and then lose, they must expect significant costs will be considered. When they present a case stating that the winner has acted improperly in a manner that is virtually heinous, they cannot dismiss costs on a forgive and forget basis.
[12] The Defendant made three offers to settle in March and April 2013.
[13] In Dentec Safety Specialists Inc. v. Newmarket Property Corp., 2011 CarswellOnt 13923, the court noted at paragraph 7 the Ontario Court of Appeal decision in Zesta Engineering Ltd. v. Cloutier 2002 25577 (ON CA), [2002] O.J. No. 4495 at its paragraph 4 where the Court of Appeal 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.”
At paragraph 8 in the Dentec decision, the court referenced the Ontario Court of Appeal in Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 at paragraph 52 where the Court of Appeal stated:
“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 an exact measure of the costs of the successful litigant.”
[14] There is a foundation for awarding costs on a substantial indemnity basis because there were excessive and speculative claims by the Plaintiffs and there were offers to settle from the Defendant. The failure to discontinue the malicious prosecution claim until late in the proceedings caused the Defendant to prepare that claim for trial. Even with a discontinuance of the malicious prosecution claim, the Plaintiffs continued with the same malicious prosecution theme by advancing claims for aggravated and punitive damages.
[15] DiBattista v. Wawanesa Mutual Insurance Co., 2005 CarswellOnt 6604 from Justice Coats of the Ontario Superior Court of Justice provides helpful guidance. In paragraph 4 of that decision, the court noted that there the losing side alleged very improper conduct without foundation. The conduct had been in the category of bad faith. Punitive damages had been claimed together with aggravated damages for high-handed, spiteful and malicious conduct. The conduct of Wawanesa had been alleged to be dishonest. When the Plaintiff’s claims were rejected, costs were fixed on a substantial indemnity scale.
[16] Ms. Nicola-Howorth has established that costs should be awarded on a substantial indemnity basis.
[17] The quantum presented in the bill of costs by the Defendant is shown to be $79,901.80 on a partial indemnity scale and $113,761.54 on a substantial indemnity scale. Ms. Nicola-Howorth shows that the actual account to the client is $137,898.01. These figures include HST. In addition, there are disbursements of $4,003.41 subject to HST of $520.44 and disbursements not subject to HST of $233.74.
[18] I am prepared to fix costs on a substantial indemnity scale, but I shall do so for a lesser quantum than advanced by the Defence. Taking into account a fair and reasonable amount for costs in the flavour of the analyses in cases referred to above, the quantum of costs to the Defendant shall be fees of $70,000 inclusive of HST.
Justice B. Glass
Released: July 2, 2013
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ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
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REASONS FOR JUDGMENT
Judge
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