Elias Hazineh v. Hazel McCallion, 2013 ONSC 6619

SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-12-1130-00
DATE: 2013-10-24

RE: ELIAS HAZINEH, Applicant

v.

HAZEL McCALLION, Respondent

BEFORE: Sproat J.

COUNSEL:
Elizabeth J. McIntrye and Freya J. Kristjanson, for the Applicant

Thomas A. Richardson and Monique Atherton, for the Respondent

COSTS ENDORSEMENT

1Mayor McCallion claims partial indemnity costs of $394,529 inclusive of HST and disbursements. Mr. Hazineh has not taken issue with the fact that the case was staffed appropriately or with the hourly rates claimed. Mr. Hazineh has also not presented any evidence or even argument to suggest that the hours spent and rates charges by counsel for Mayor McCallion were disproportionate to the hours spent and rates charged by his own counsel.

2I infer that Mr. Hazineh’s costs were similar to those of Mayor McCallion. As such I do not see how the amount of costs claimed can be said to exceed his reasonable expectations. I, therefore, find and proceed on the basis that the amount claimed is reasonable on a partial indemnity basis.

3Magder v. Ford, [2013] O.J. No. 1489 (Div. Ct.) makes the point that there is no “blanket public interest exemption for electors who pursue an application under the MCIA”.

4To address whether Mr. Hazineh should be excused from paying costs because this litigation was in the public interest I weigh the factors discussed in St. James’ Preservation Society v. Toronto (City), 2006 22806 (ON SC), [2006] O.J. No. 2726 (S.C.) being:

(a) the nature of the unsuccessful litigant.

(b) the nature of the successful litigant.

(c) was the litigation in the public interest.

(d) has the litigation had an adverse impact on the public interest.

(e) the financial consequences to the parties.

5As to the first factor, one must consider whether Mr. Hazineh had any personal, proprietary or pecuniary interest in the proceeding; whether he had a bona fide belief the litigation was in the public interest; whether he had a “genuine interest in the matter as opposed to being a mere busybody or interloper” (para. 19, St. James’); and whether there were other potential litigants better suited to bring the litigation.

6Mayor McCallion’s conduct generally relating to the WCD development, and in aid of her son Peter, had already been the subject of public inquiry at considerable cost to the public. Mr. Hazineh’s interest in the case resulted from his friendship and political association with Ms. Parrish a political opponent of Mayor McCallion. By the time the application was commenced the WCD project had failed. WCD and Peter could not possibly benefit. The conclusion is inescapable that this application was more about ending Mayor McCallion’s political career and tarnishing her legacy than about municipal law.

7As to the second factor, Mr. Hazineh submits that he is just an “ordinary hard working individual” who would be ruined by the requested costs order. Mayor McCallion submits that, “This was litigation between two individuals”. These are, however, over-simplifications. Mr. Hazineh was the named applicant but obviously a representative of a group who were prepared to spend hundreds of thousands of dollars to mount this challenge to the Mayor. On her part the Mayor has recourse to insurance with a $50,000 limit. She also has the ability to ask that Council indemnify her.

8As to the third factor, at one level it is clearly in the public interest that the MCIA be complied with to the letter. Having said that, as discussed, the public interest related to Mayor McCallion’s involvement with WCD and potential conflicts of interest had already been addressed in a necessarily lengthy and expensive public inquiry. As mentioned there was little practical importance to Mr. Hazineh’s application as the WCD project was dead. The litigation did address some issues of general importance such as that members voting on development charges must be concerned about possible conflicts of interest.

9As to the fourth factor, particularly given the number of issues Mr. Hazineh was successful in, I conclude that this litigation has not had any adverse impact on the public interest.

10As to the fifth factor, Mr. Hazineh’s background would suggest he is a middle income person. I have no evidence as to how much money he raised to fund this litigation and whether any amount was committed to protect against an adverse costs award. I also have no evidence as to his assets. As such it is difficult to assess the financial consequences to him of a costs award. It is also difficult to assess the consequences to Mayor McCallion given that she can seek full indemnity from Council. Mayor McCallion also obviously has supporters who, like Mr. Hazineh’s supporters, may offer support to ensure at the end of the day she is not out of pocket.

11Weighing all of these factors, and particularly the partisan political motivation and the fact the WCD project was already dead, I conclude that the application by Mr. Hazineh was not public interest litigation. The fact that he brought this application out of time provides additional support for this conclusion.

12Mr. Hazineh asks me to take into account the fact that the MCIA permits Mayor McCallion to ask Council to indemnify her for her costs and the contingency that she may be able to obtain indemnity. If Council indemnifies her this, of course, shifts the costs to taxpayers generally.

13In my opinion this is not a factor that I can or should take into consideration. I have no basis upon which to assess the likelihood that Council will agree to indemnify Mayor McCallion. Any decision whether to indemnify would be a political decision. I have no knowledge of the politics involved but speaking generally it would be unfair to a person in the position of Mayor McCallion to discount the costs to which she is entitled due to the possibility of indemnity only to find that a council, perhaps for reasons unrelated to the merits of the case, declined to indemnify.

14There was evidence that Mr. Hazineh raised funds to bring this application. It seems to me that it is only reasonable to expect someone in his position to also raise funds, or secure agreements to indemnify him, in the event costs are awarded against him. Put differently, I do not think it reasonable to raise hundreds of thousands of dollars to bring an application and then take the position there is little or no ability to pay costs.

15The issue then is what is a reasonable costs award.

16This clearly was a complex matter involving over 5000 pages of affidavits and documents and 2500 pages of transcript. There were 13 days of out of court cross-examinations. There were 11 days in court.

17I do not agree that Mr. Hazineh litigated this case in the media such that he should pay an enhanced amount in costs. I also do not agree that counsel for Mr. Hazineh, by citing evidence from the Public Inquiry, significantly complicated or prolonged this matter. All counsel cooperated and presented this case efficiently and effectively.

18Mr. Hazineh asks me to take into account that Mayor McCallion could have asked that the limitation period issue be addressed in advance which, in hindsight, would have avoided the hearing on the merits. In my view Mr. Hazineh could equally have asked that this issue be decided in advance of the hearing dates. As such this is not a factor I consider against Mayor McCallion.

19Success was divided on the issues argued. In this regard:

(a) Mayor McCallion argued that her son had no ownership interest in WCD. I found the evidence overwhelming that he was an owner.

(b) Mayor McCallion testified that she was unaware that her son was an owner of WCD. I found that she did know.

(c) Mayor McCallion argued, and I agreed, that WCD was not eligible to benefit from the transitional bylaw because it had not filed a complete site plan application by a specified date. On Mayor McCallion’s own evidence this was fortuitous in the sense that she made no effort to ascertain what WCD had filed and when.

(d) Mayor McCallion argued that in voting she was exempt under the MCIA because her deemed financial interest was an interest in common with electors generally. I rejected this argument.

(e) I agreed that Mayor McCallion was exempt under the MCIA in that her deemed financial interest was remote and insignificant. Again this was fortuitous for Mayor McCallion because that finding rested on evidence concerning the internal affairs of WCD. Mayor McCallion testified she made no effort to apprise herself of the status of the WCD application at the time she voted.

(f) I rejected Mayor McCallion’s argument that any contravention was due to inadvertence or by reason of an error in judgment.

(g) I agreed with Mayor McCallion that Mr. Hazineh was out of time to commence the application.

20Out of seven major issues, Mayor McCallion was successful on only three. On two of the three issues Mayor McCallion was successful, not because of any prudence or diligence, but only because WCD’s project had not progressed at a faster pace.

21As stated there was divided success and the issues raised unsuccessfully by Mayor McCallion occupied considerable time prior to and at the hearing. All of the issues were important and argued at length. For present purposes I regard them as contributing equally to the length and costs of the proceeding.

22Recognizing the divided success and aiming to achieve some balance between a costs award so high that it deters citizens from bringing applications and an award so low that it would deter citizens from seeking public office, I order that Mr. Hazineh pay costs in the amount of $170,000 payable within 30 days. This is well within what were, or should have been, Mr. Hazineh’s reasonable expectations.

Sproat J.