BARRIE COURT FILE NO.: 11-1101

DATE: 20131008

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Corporation of the Township of Oro-Medonte, Applicant

AND:
Hildegard Warkentin, Harold John and Susanne Marie Regan, Gerald and Brenda Prosser, Edward and Edith Pallister, Diane Jean and Jerry Popiuk, Thomas Foster, Stephen Wells and Diane Gerrard, Ivanka Welykanycz, Beverly Jeanne Le May, David and Krystyna Macdonald, Charles and Sheila Manley, Mina Korman, Giovanni Di Vizio, Karen Baldock, Stephen Crawford and Eleonore Hoyer, Marley Greenglass, Joseph and Pauline Bosse, Anthoula and Christopher Chadjimichaelidis, Stewart Gillis, Verna Smith, Patricia Fergusson, Bryan Fergusson, and Margaret Dynes, Justin Fetterolff, Diane Gillis, Arthur and Frances Brennan, Noreen and John Swallow, Ingeborg Kuehn, Jennifer Byrne, Alberto and Anna Maria Novelli, Kevin and Wendy Moore, Daniel Murphy and Judy Cavanaugh, Christa Schneider and Jeffrey Hutchins, Denise and Robert Gardner, Richard, Wendy, and Taylor Brown, Ruth Burleigh, Jacqueline Marie Hammond, Gilda Mercuri, Anthony Veneranda, Paula Anne Mercuri Fetterolff, and Anthony Mercuri, Respondents

BEFORE: THE HON. MR. JUSTICE P.H. HOWDEN

COUNSEL:
C. Williams and J.E. Johnson, Counsel for the Applicant

M. Green and B. Ogunmefun, Counsel for the Respondents

HEARD: By written submissions

ENDORSEMENT ON COSTS

[1] On November 14 and 15, 2012, submissions were made to this Court by counsel for the parties on the Township’s application. The submissions covered numerous issues and sub-issues in what became, despite the relative brevity of the hearing, a complex matter. On two issues, that of the immunity of municipalities from claims of possessory title against lands held for the benefit of the public and dedication for an illegal purpose, the case could be said to be precedent setting.

[2] As well, there were over forty individual respondents, owners of lots along the front tier of the subdivision abutting the disputed land called Lake Shore Promenade on the registered plan. Instead of acting or being represented individually, each with his or her own issues to be examined and tried, they combined for purposes of this proceeding to act as one, represented by one set of counsel. As I recognized during the hearing and in the judgment, they are to be commended because it has substantially limited the length of the hearing and avoided the time-consuming, often repetitive and overlapping multiple submissions based on diverse individual points of view, much of which would not have assisted the Court in its deliberations on the essential issues in this case. I will recognize later that contribution to the Court’s ability to deal with the issues in an expeditious and no less fair manner.

[3] The major issues in this case included the complexities of dedication of land for a public highway, dedication for a purpose other than a highway, the requirements of the law for highways and dedication in 1914 and before as well as present legal requirements, the subdivision process in the pre-1915 years, surveying practices in pre-1915 Ontario, adverse possession, the Limitations Act requirements then and now, and the equitable doctrines of estoppel and laches and their application to municipally owned land. It was not an easy case to explain on either side and counsel, with the help of their clients, did a remarkable job in outlining succinctly and knowledgeably the positions of their clients as well as the public and private law aspects of this case. Their efficiency and research, together with that of their clients, assisted the Court greatly in its deliberations on those issues.

[4] The Township/applicant has filed a draft bill of costs claiming costs on a partial indemnity basis. There are presently two scales of costs for practical purposes: substantial indemnity and partial indemnity costs. Neither is intended to recover the party’s full amount of costs expended during a litigation proceeding. Costs using the principle of full indemnity may be awarded by the Court but those are rare. The usual costs disposition includes an award using the lesser partial-indemnity scale, absent special and blameworthy circumstances. Here, the Township requests its costs to be calculated on the lesser scale of partial indemnity.

[5] The claim for costs by the Township comes to $165,721.28 (all figures include HST) for fees for time spent by its solicitors and staff before, during and after the hearing of the application, plus $20,809.70 incurred for disbursements in and for the purposes of this proceeding. Its total claim is therefore $186,530.98. The respondents also claim costs. The respondents claim for fees the sum of $116,432.67, and for disbursements $4,015.93, the total claimed against the Township being $120,448.60 (all figures include HST).

[6] The legal framework within which the Court must consider costs is contained in s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c.43 as amended and those factors in rule 57.01 which are relevant to this case.

Section 131(1) C. J. A.

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

Rule 57.01(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(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 to 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 of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs. R.R.O. 1990, Reg. 194, r. 57.01 (1); O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1.

Rule 57.01(2) The fact that a party is successful in a proceeding or a step in a proceeding does not prevent the court from awarding costs against the party in a proper case. R.R.O. 1990, Reg. 194, r. 57.01 (2).

Rule 57.01(3) When the court awards costs, it shall fix them in accordance with sub-rule (1) and the Tariffs. O. Reg. 284/01, s. 15 (1).

[7] Counsel for the Township asserts that it was successful in its application and therefore costs should follow in its favour. While it did not succeed on its initial submission that the Promenade was a public highway owned by the Township, it did succeed in its claim that the Promenade was held by the Township for the benefit of the public and was not subject to a claim for possessory title. In addition, even if it was open to the respondents to claim adverse possession, their evidence failed to meet the indicia required by law. The respondents did succeed in obtaining an order for trial of claims by lot owners in the subdivision to retain the use of any structures erected by them on the Promenade (including the bank down to the lake shore) on the ground of the doctrine of laches. However, in the Township’s view, the costs related to that issue should be considered only after the trial of individual claims have concluded and findings have been made on the issue of entitlement on laches principles. To this last point, I agree.

[8] Counsel for the Township submits that, because it ended up in the position of the judicially declared owner of the Lake Shore Promenade free of claims by abutting lot owners for adverse possession, though not as a public highway, it was the more successful party and should be entitled to its partial indemnity costs.

[9] Counsel for the Respondents disagrees and submits that success was divided and any award of costs should reflect that. The issue of rights to the Lake Shore Promenade had simmered for many years and every so often it would flare up as it did in the 1980s over back lot owners being denied entry and enjoyment of the Promenade by some front lot owners. The respondents say that this application is public interest litigation and they are public interest litigants and that it was brought only because the respondents, or some of them, had objected to the Ministry of Natural Resources to issue of a shoreline permit allowing the Township to remove structures like docks or boat houses. As a result, the ministry refused the permit and the Township brought this application. The respondents did succeed in obtaining a hearing on the issue of the right to retain docks and boathouses built many years ago, if they qualify on laches principles. It was the respondents who had raised the laches issue and whose submissions against dedication of the Promenade as a public highway, carrying with it an automatic immunity from private claims, were successful.

[10] The respondents state that the pre-trial motions for conversion of the application to a trial proceeding and for adjournment of the hearing of the application from July 3, 2012 to its eventual hearing in November were reasonably brought. There should be no costs included in the Township’s favour arising out of either motion and nominal costs in the respondents’ favour because of late production by the Township, particularly of the apparent duplicate plan with non-faded colouring on its back unlike the original plan filed with the registry office. This plan appeared suddenly on June 15, 2012, well after documents should have been produced in this proceeding and only three weeks before the scheduled hearing in July.

[11] The respondents’ claim for costs rests on their conduct during the process which saved time, the Township’s limited success on the highway and laches issues, and an offer they made to settle the matter in December 2012, which would have saved all parties considerable costs. They ask that, though the eventual judgment was more favourable to the applicant, that offer and the applicant’s rejection of it should be considered under rule 57.01(i): “any other matter relevant to the question of costs”. Counsel for the respondents submits that,

(w)ith this decision, the Township becomes responsible for the maintenance of the Promenade, including any insurance required, and the respondents have the opportunity after a trial to retain the exclusive use of their structures, which was a right they sought to protect in the offer to settle.

(Resp.’s factum, para. 36).

They do concede that the Township is now the owner of considerably more of the Promenade than the public walkway which was all they offered before trial to the Township for public use.

Analysis

[12] As I considered the submissions of both parties on the issue of costs, it became clear to me, particularly from the positions being taken by counsel for the respondents on the history and importance of status of the Promenade, that there may be a case for considering this as public interest litigation. The respondents state in their factum:

21. The issue of title to the Promenade, its intended use and who was entitled to use same has been a source of conflict amongst residents of the Township of Oro-Medonte, as well as between owners of properties abutting the Promenade and the Applicant for decades.

22. The necessity of a legal determination from the courts was particularly important to the respondents, as prior to commencing this Application, the Applicant started requiring property owners with structures on the Promenade to enter into encroachment agreements, whereby the property owners would be responsible for maintaining and insuring the structures, but would be required to leave them open for use by the general public. The financial and legal implications of these encroachment agreements were matters to be adjudicated by the courts and not unilaterally imposed by the Township...

23. The Respondents submit that there was a public interest in having the courts address the issues in the Application.

[13] I therefore ordered counsel to file submissions with me on the issue of public interest litigation and whether the Respondents could be considered as public interest litigants, with the implications that finding might carry for the Respondents argument of entitlement to costs from the Township or whether there should be a costs order at all. Counsel made detailed submissions on this point. I will deal with it first because of the particular weight such a finding would have on the rest of the costs submissions.

[14] In addition to the issue of public interest litigation, counsel have raised the following issues which fall to be determined under rule 57.01 and the various factors set out therein:

· whether this is a case of success on one side or one of divided success;

· costs of an earlier motion by the Respondents to convert this proceeding into a trial proceeding and adjournment of the hearing of the Application from its first scheduled date in July 2012;

· complexity of the factual and legal issues;

· importance of the issues;

· conduct of the parties that tended to lengthen or shorten unnecessarily this proceeding;

· other matters relevant to the question of costs, including an offer made by the Respondents before the hearing of the Application not accepted by the Applicant.

1. Should This Proceeding be Considered Public Interest Litigation for Purposes of Costs?

[15] Whether a proceeding is considered public interest litigation does often have an impact on cost orders. This is because there is a strong policy concern that issues of public importance in the law should not be out of reach of persons of lesser means or groups that act without regard to their own economic interests in order to raise a constitutional or other important legal issue. In other words, matters of costs and public interest litigation involve a significant concern for access to justice.

[16] There is nothing automatic in the relation of public interest litigation to issues of costs. As Perell J. found in his survey of such cases in Incredible Electronics Inc. v. Canada (Att.-Gen.), 2006 17939 (ON SC), [2006] O.J. No. 2155 (S.C.J.), results in cases of public interest litigation reveal an unpredictability because the court’s discretion as to costs remains on a case-by-case basis even in applying the factors relevant to costs to public interest cases. Nevertheless, there is in the cases a recognition that the concern for access to justice should be given more weight in public interest litigation. In fact, in British Columbia (Min. of Forests) v. Okanagan Indian Band, the Supreme Court of Canada endorsed the policy that costs in public interest cases require special treatment.[^1] In Incredible Electronics, Perell J. cited an article by Professor Tollefson entitled “When The Public Interest Loses: The Liability of Public Interest Litigants for Adverse Costs Awards”, (1995), 29 U.B.C. Law Review 303 at p.319:

Over the last twenty years, but particularly in the last decade or so, the phenomenon of public interest litigation in Canada was expanded dramatically...At least rhetorically, there has been strong support for enhancing the opportunities of disadvantaged or marginalized interests to make their voices heard in the judicial process...And while access to justice has been broadly recognized as a highly-valued social good in itself, a variety of other public benefits are also generally perceived as being associated with broader public participation in the legal system.

Perell J. concluded that in the case before him, the applicants should not be subject to

the normal two-way costs regime if they can satisfy the court that they are special interest

litigants (para. 83).

[17] The case law has developed a set of factors which serve to guide the court’s discretion. In St. James’ Preservation Society v. Toronto (City), 2007 ONCA 601, [2007] O.J. No. 3293, the Ontario Court of Appeal adopted the following criteria from the applications judge in its review of his reasoning as to whether the application had a public interest element that would justify a departure from a typical costs order:

(1) the nature of the unsuccessful litigant;

(2) the nature of the successful litigant;

(3) the nature of the lis - was it in the public interest;

(4) whether the litigation had any adverse impact on the public interest; and

(5) the financial consequences to the parties.

[18] In that case, the Court of Appeal reversed the decision of the applications judge to assign liability to the directors of the applicant Society personally for the costs of the proceeding. The costs decision against the Society was not appealed and therefore remained in place. In reaching its conclusion, the Court of Appeal found no error in the use of the criteria outlined above. I will therefore use them to determine whether I am dealing with public interest litigants when I consider the respondents’ possible liability or immunity from costs.

(a) The Nature of the Unsuccessful Litigant

[19] In this case, the respondents were successful in obtaining the determination that the Promenade was not a public road and in obtaining the trial of an issue regarding retention of their lake-related structures built on the Lake Shore Promenade. However, the central issue joined by the parties was ownership and control over the Lake Shore Promenade as an integral part of each of the respondents’ properties. On that issue, the respondents did not succeed.

[20] The respondents are all owners of front-tier lots abutting the Promenade. Not all of the front-lot owners in the subdivision joined them but the respondents took it upon themselves to defend this application by the Township in the interests of all of them. These owners had largely maintained the Promenade area which covers the intervening area from the front of their lots to the shore of Lake Simcoe but had never occupied it to the exclusion of others. Some had built lake-related structures on the Promenade in the belief, uninformed or not, that the Promenade was theirs. Despite this personal proprietary interest, there is no doubt that over the nine decades since registration and early development of the subdivision plan, occasional open conflicts and continuing bad feeling developed between front and back-lot owners and the public over the use of the Promenade.

[21] The Township took no action to have the question of ownership and control of the Promenade determined by the Court for decades, despite these occasional outbreaks of open conflict. Its paper title it considered clear; the plan dedicated it as a public road. However, the real issue was title by adverse possession. Some of the respondents finally decided that the issue should be dealt with. They retained a lawyer (not their present counsel) who brought to the Ministry of Natural Resources their position on ownership of the Promenade shoreline in the context of applications being brought by the Township for permits to remove some of the structures built on the Promenade and close to the lake. They suggested that the Township was not the party who should be deemed to control the Promenade lands and so should not be allowed to obtain the shoreline permits from the Ministry. When the Ministry refused to grant further permits to the Township until the question of ownership was determined, then after many years of not acting to obtain a judicial determination, the Township brought this application.

[22] The parties for years were at loggerheads over whether the Promenade was dedicated as a public highway. That issue was decided in the respondents’ favour despite the registered plan treating it in the same way as the roads in the subdivision. Their counsel successfully argued that neither the intention to dedicate the Promenade as a public highway nor its legality according to the law of the time could be established. The respondents, in defending this application, were acting in the interest of other owners in the subdivision and the public generally in seeing that this matter of importance to the community at large was tested by the court. While they did not bring forward the application, their actions precipitated it. Therefore, unlike most cases of public interest litigants who act to bring an important issue before the court, the respondents in this case or some of them acted so as to bring a judicial determination about. There is no absolute requirement that it must be the applicant who brings the matter of public importance on for judicial determination.

(b) The Nature of the Successful Litigant

[23] As in virtually all cases of public interest litigation, the other party in this case is an organ of government, in this case the local legislative and governing authority, the municipality. Typically, the parties to public interest litigation are a combination of: a government or regulator, a public interest litigant, a private interest litigant, a private interest intervenor and/or a public interest intervenor. As the municipal authority with combined financial resources of the tax base at its disposal, the Township can be regarded as an empowered defendant in comparison with forty individuals who each own one subdivision property within the Township. Incredible Electronics, at paras. 86 and 87.

(c) The Nature of the Lis - Was it in the Public Interest?

[24] The factors to be considered on this question were helpfully set out in St. James. The first asks whether the litigation involved an issue or issues of importance beyond the immediate interests of the parties involved?

[25] While the respondents admittedly have an interest in the outcome, as I read over my summary of the issues, their submissions went beyond that interest. The respondents asserted that the right of the public including the back lot owners to enjoy the Promenade was in question. Their evidence and submissions showed that uncertainty over the use of the Promenade had been a nagging source of conflict and some hard feelings. The public rights to the Promenade were a part of their alternate theories of the case as was the case for different reasons by the Township. The odd coincidence in this case of badly faded colour designations on the registered plan, a change to the plan after the Township’s meeting to approve it, no record of a further meeting to accept the change which was made in a different colour, late registration, the changing laws regarding registered plans and the resulting changes in surveyors’ practices, the change in the law regarding dimensions of public highways, and the right of the public and the back lot owners to enjoy the access that the Promenade allowed to the lake - all of these issues converged in this case. So yes, I accept that the importance of the interests involved went beyond the immediate interests of the parties. It represents one of the few places on the lakes in Simcoe County where the public could have some right to enjoy lake access and the park-like setting.

[26] The second factor is an easy one to deal with. I find without hesitation that the issues surrounding the Promenade had long needed to be litigated and a judicial determination made to end the uncertainty and the resulting conflicts arising from it.

[27] Did the litigation address a matter of practical importance? Again, for the reasons I have already given, the Promenade issues certainly were of more than theoretical interest, and held practical meaning for control of the Promenade lands. It had been a live issue for many years whether the public and even the back lot owners could be excluded from the Promenade by the front tier lot owners. The use and control of the Promenade was a matter of practical importance as well as a novel confluence of issues in law.

[28] Is there broad public support for the position advanced by the respondents? The respondents have not presented evidence of some broad public support beyond the lot owners in this subdivision, though there was some indication that members of the public did use the Promenade from time to time. Counsel points out the interest of the respondents in settling a long-standing conflict but not of any broader support beyond the respondents themselves. This factor, however, is by no means a precondition necessary to a case being in the public interest. As Perell J. stated in Incredible Electronics, at para. 99:

Sometimes a relevant but not determinative factor is that the public interest litigant is either the “other”, a marginalized, powerless or underprivileged member of society or the public interest litigant speaks for the disadvantaged in society.

Public support for the position advanced by the unsuccessful party can be some indication that the resolution of the issue was in the public interest. I find that that is not so here.

[29] Has the public benefitted from the consideration by the Court of the issues raised in the case? The Promenade has been defined now to include the bank down to the water’s edge. And the public now have a judicially declared right to enjoy the Promenade, something that was not clear before, and that lack of prior clarity resulted on occasion in embarrassing situations for individuals where the abutting owner might order the visitor off the Promenade because if it occurred on the land in front of the owner’s lot, that land at times was perceived by that owner to be his or hers. Such situations with the general public and with the back lot owners cannot happen anymore as the public now has a judicially defined right to the enjoyment of the Promenade as a lakeside park for passive activities. It is not a matter that would appear to go beyond the local Township, unlike many public interest cases where certain disadvantaged persons are benefitted across the country. However within the confines of the Township and Simcoe County, I find that the public has benefitted from the litigation.

(d) Has the Public Interest been Impacted Adversely by this Litigation?

[30] There is no suggestion by anyone of a negative impact due to, for instance, poor conduct causing abuses of the process. Neither party acted in any way that was frivolous or vexatious or abusive. And the decision, as I have said, clarified a public right to use of the Promenade where such rights before this case could be held hostage by the lot owners or the Township acting unilaterally. The answer to this question is clearly no.

(e) The Financial Consequences

[31] As for the financial consequences to the parties, obviously the Township, including within it for tax purposes the properties of all residents of the Township, is better able to absorb an award of costs. However, this conclusion and similar findings in other cases have not been determinative of whether a party qualifies as a public interest litigant. In any event, no evidence has been put forward to establish the financial position of the respondents, and therefore the litigants’ financial position cannot be determined in this case. What is known is that each of the respondents or responding couples own a seasonal residence fronting on Lake Simcoe; most no doubt also own a permanent home elsewhere. There is no evidence that they are disadvantaged or marginalized.

[32] In conclusion, I wish to draw one last conclusion on the issue of public interest litigation and how this case does not fit easily into either a case of purely private interests or exclusively public interest-driven. It can be said that this case was driven by the respondents’ desire to break up the Promenade and add each abutting part, together with any shore-related structures on it, to each abutting lot owner’s property to the exclusion of everyone else. On the other hand, as the respondents submit, their case addressed issues which affect the public generally, not only the respondents’ personal interest which they now suggest is minor. The Township characterizes the respondents’ personal interest much differently. It suggests that the respondents’ real interest was to establish the Promenade as ‘other municipal property’ and not a public highway rendering it susceptible to claims for possessory title and the addition to each of their properties of large portions of waterfront land that would enhance significantly the value of their individual properties and remove any rights of back lot owners and of the public to the use and enjoyment of the Promenade. Neither side produced real evidence, something more than words, to argue the minor or major nature of any such addition to their properties.

[33] All of this points up the truth of what I had observed during the hearing. At p.38 of the Reasons for Judgment, I wrote the following:

It has been perhaps unavoidable in view of the position the respondents have taken on this application that throughout their case, their position on adverse possession has seemed ambivalent, wavering between assertions of possession by the respondents of the parts in front of their lots adverse to the Township right of possession for the public benefit, and at other times , an acceptance that the Promenade is and has been kept an open area for good reason, i.e. the common benefit and use of the public including the front and back lot owners as a lakeside park and trail. The evidence particularly of Beverley Lemay, whose family have historic roots in this subdivision, seemed genuine and concerned with just telling things as they were, including the sense that “it was understood that this was land that the public had a right to walk over or otherwise traverse and enjoy beside the lake.”

(Reasons, para. 131.)

[34] “Public interest litigation” was defined by Perell J. as,

litigation that involves the resolution of a legal question of importance to the public as opposed to private-interest litigation, which I will define as litigation that involves the resolution of a legal question of importance mainly to the parties” (para. 59).

[35] This case does involve both aspects and both were put forward strongly and contributed to the final result. I will apply a significant reduction to any costs found to be owing to the Township on this account in the area of one-third to recognize the respondents’ substantive contribution to development of the law on publicly owned land held for the benefit of the public generally. This was not a series of submissions that they were compelled to make or that contributed to their case for acquisition personally of the Promenade.

2. The Award of Costs

[36] In my view, the Township was clearly the more successful party. It established its position as the owner of the Promenade and as the party entitled to control the use of the Promenade within the limits of the public right to its use and enjoyment, and that as a public authority, its ownership is immune from claims based on adverse possession or possessory title. In any event the respondents have failed to establish even a prima facie case for possessory title. The respondents’ claims to the Promenade on the basis of adverse possession - a finding that The Township had failed to oppose by asserting its right of ownership in court in recent decades - and until now their evidence and suggestion that Kempenfelt Land Co. or some other entity had somehow retained ownership in the Promenade were all rejected by the Court. The respondents did obtain trial of an issue as to the right of lot owners to maintain their boat houses, docks and stairways down the bank on laches principles. They also succeeded in the defeat of the Township on its initial submission that the Promenade had been accepted by the Township as a public highway. This was a pyrrhic victory because on the issues of right of ownership and control of the Promenade, the Township established its position and that was the key issue in this litigation. The Township succeeded in obtaining a result more favourable to it than the respondents’ pre-trial offer, after the hearing of the Application.

[37] As to the costs of the motion by the respondents to convert the application into a trial process, I find that in the circumstances, the respondents were reasonable in bringing the motion. If claims for adverse possession were to be heard with the legal issues over dedication as a highway or as other municipal property there were factual issues to be addressed on the possessory claims. The matter was argued and DiTomaso J. dismissed the motion, leaving the costs issue to me as the judge hearing the application. The parties later resolved the conversion issue by the respondents not going beyond requesting a future trial of an issue on individual claims for possessory title and on the laches claims to retain the lot owners’ lake-related structures. As earlier attempts to settle were met with rejection, the motion came before the court only 3 weeks before the hearing date.

[38] At the same time, the Township suddenly produced the supposed duplicate copy of R.P. 626 well after document production had been completed. I dealt with that document as part of the Reasons for Decision, finding that its late production prevented inspection by an expert document examiner and the clarity of the colouring was so different from the registered plan in the Township’s favour, that I denied any significant weight to it. The respondents were rightly successful in their request for adjournment of the hearing of the application given this late production and the denial of their conversion motion. There will be no costs ordered on the pre-trial motions for conversion and for adjournment; success was divided on these motions.

[39] The respondents’ claim for costs rests on the results of the motion to convert the application and to adjourn the hearing to the extent that counsel claims nominal costs in favour of the respondents due to late production by the applicant. But primarily, the respondents claim costs on account of the conduct of the Township in making the matters more complex by refusing to remove some parties who agreed not to join in defending against the application, by requiring owners to enter into encroachment agreements without adjudication by the court, the importance and novelty of the issues, and by not accepting the respondents’ offer which included “a substantial amount” for the Township’s legal fees and disbursements. Apart from the conduct of the respondents in continuing to expedite the process, I do not see this as a case of divided result. The Township maintained its position as the owner of this shore-land for the benefit of the public, which the offer would in large part have denied it. The failure to agree to remove certain respondents who did not respond is regrettable but those who were named became parties for all purposes, including recovery of costs and therefore it no doubt had reason for not consenting without more. And as for the encroachment agreements, I did not understand that anyone was “required” to enter such agreement if they did not choose to. The respondents’ claim for costs is denied.

[40] I do recognize the contribution of the respondents to the orderly process that this application followed. I also recognize that at least one of the issues was novel (the intent to dedicate land for a purpose not in compliance with the law of the time, i.e. a public road with dimensions, geography and shape that did not come within the letter and spirit of the law at the time). As well, the case had an unusual complexity of issues with which the evidence from some of the respondents in the form of old photographs and historical knowledge assisted the court greatly. On the other hand, the respondents at times took positions which simply were not in keeping with the evidence such as the faded colour of all the roads and the Promenade somehow showing a different intent from that indicated by the certificates on the plan. Or the suggestion that the final phase regarding structure retention may sterilize large portions of the Promenade. This will not occur.

[41] Nevertheless, the positive contributions of the respondents to the process outweighed the negatives of some of their submissions. In sum, this is not a case where the respondents should bear a substantial burden of the costs, despite their lack of success. This factor is separate and distinct from the public interest allowance which I am granting. I am granting the respondents a further credit of one-third of the net costs. Their conduct here helped to produce a result which benefits the Township as a whole in bringing clarity to a situation which was taking up the time needlessly of past councils and in reducing the overall costs of this process.

[42] This was a complex matter to deal with and involved a novel confluence of events and issues that I described earlier (at pp. 24-5 of these Reasons) and a serious issue in law as to the immunity of municipally owned land held expressly for the benefit and enjoyment of the public to claims based on adverse possession. This was the first case where a court in Ontario considered this issue without qualification regarding the need for a “high public interest”. Considering all of the converging issues in this case, it became a novel exercise in to some extent uncharted waters, especially dealing with the intersection of issues of changing laws, late change without approval to the registered plan after the municipal decision, and intent to dedicate for a purpose that conflicted with the new highway laws in force at the time.

[43] The offer before trial by the respondents may be considered by me, as suggested, under “other relevant matters”. It clearly was less favourable to the Township than the result achieved after the application was fully argued and so is not decisive respecting scale of costs or entitlement. It provides no basis for an award of costs against the Township for not accepting it.

[44] The Township’s claim for fees is $165,721.28. After deducting $16,899.15 for the fees claimed on the respondents’ motion to convert and for the adjournment, the claim on account of fees is $148,822.13. With disbursements, the costs come to $169,631.83. I have decided that in recognition of the public interest contribution made by the respondents’ research and submissions that were not in their personal interest, a deduction of 1/3 is in order and in recognition of their contribution to the expeditious process, a further credit of one-third.

[45] In conclusion, the applicant’s costs on a partial indemnity basis come to:

For fees $148,822.13
For disbursements $ 20,809.70
Sub-total $169,631.83
Less 1/3 $ 113,087.89
Less 1/3 $ 75,392.26

Costs due the Township $ 75,392.26

[46] The Township shall have its costs fixed at $75,392.26, payable by the respondents. So ordered.

HOWDEN J.

Date: October 8, 2013

[^1]: 2003 SCC 71, [2003] 3 S.C.R. 371.