Court File and Parties

COURT FILE NO.: 05-18169

DATE: 2013-11-14

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MIRSADA MUJAGIC, Personally, ARMELA MUJAGIC and BELMIR MUJAGIC by their litigation Guardian, MIRSADA MUJAGIC, Plaintiffs

AND:

EGON LAST and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant

BEFORE: The Honourable Mr. Justice D. A. BROAD

COUNSEL:
Mirsada Mujagic, self-repreented

Curtis C. Zizzo, for the Defendant Egon last

costs ENDORSEMENT

Background

[1] As directed in my decision released April 10, 2013 granting summary judgment dismissing the action as against the Defendant Egon Last (the “Defendant”), counsel for the Defendant delivered his Costs Submissions supported by a Bill of Costs and Costs Outline. On May 22, 2013 Ms. Mujagic delivered to the Judges’ Chambers at Hamilton a letter from her physician dated May 15, 2013 reporting that Ms. Mujagic had been advised to avoid stressful situations, including court/legal issues for medical reasons for three months, upon which was endorsed a hand written request for a three-month extension to provide her costs submissions. It was not clear who prepared and signed the handwritten endorsement.

[2] I forwarded this material to counsel for the Defendant Mr. Zizzo requesting his position/submissions with respect to the request for the extension. Although Mr. Zizzo wrote to me by letter dated May 30, 2013 consenting to the request for extension, unfortunately his letter, for whatever reason, failed to reach me. When Mr. Zizzo followed up by letter dated September 9, 2013 I wrote to both Ms. Mujagic and Mr. Zizzo on September 10, 2013 confirming that no costs submissions on behalf of Ms. Mujagic had been received and in light of the lack of complete clarity with respect to the time for her to provide her submissions, and to ensure fairness in the process, directing that Ms. Mujagic may have until October 25, 2013 to provide her written submissions on costs, and that if she is unable by reason of health issues to properly deal with costs submissions, she should arrange to have a Litigation Guardian appointed to deal with them on her behalf.

[3] I have received no costs submissions from or on behalf of Ms. Mujagic to date, and have received no notice that she has appointed a Litigation Guardian to deal with the question of costs. I therefore propose to deliver my disposition with respect to costs of the motion and the action, as follows.

Defendant’s Claim for Costs

[4] The Defendant seeks costs of the motion and the action on a substantial indemnity basis on the basis that the action should not have been initiated in the first place against the Defendant, which was acknowledged in her affidavit of the Plaintiffs’ former counsel in relation to another action that Ms. Mujagic had before the court. Moreover, the Defendant points to the unnecessary prolonging of the action due to the action and inaction of the Plaintiffs and their former counsel, despite the Defendant's efforts to move the matter forward, and that the overall litigation of the matter was unnecessary, leading to the incurring of unnecessary costs by the Defendant.

[5] The Defendant seeks substantial indemnity costs of the motion for summary judgment in the sum of $25,885.93 comprised of fees of $25,606.50 and disbursements of $279.43. In addition, the Defendant seeks substantial indemnity costs of defending the action (exclusive of the motion) of $16,352.87, comprised of fees of $15,207 and disbursements and HST on disbursements of $1,145.87. The grand total on a substantial indemnity basis is the sum of $42,238.80, stated by the Costs Outline to be inclusive of HST. The Defendant’s partial indemnity costs are stated on the Costs Outline to be $25,343.28, again inclusive of HST.

Applicable Principles

[6] The factors to be considered by the Court, in the exercise of its discretion on costs, are set forth in subrule 57.01(1), including, the principle of indemnity and the amount of costs that an unsuccessful party could reasonably expect to pay.

[7] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan (1999) O.J. No. 3707 (CA) at para. 24).

[8] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The Court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario) 92004) O.J. No. 2634 (CA) at para. 26 and Coldmatic Refrigerator of Canada Ltd. v. Leveltek Processing LLC 2005 1042 (ON CA), [2005] O.J. No. 160 (CA)).

Analysis

[9] I would decline to make an award of costs on a substantial indemnity basis in this case. The Court of Appeal in Prinzo v. Baycrest Centre for Geriatric Care (2002), 2002 45005 (ON CA), 215 D.L.R. (4th) 31 (C.A.) stated that, as a general rule, substantial indemnity costs are awarded on very rare occasions such as when a party has displayed outrageous conduct during the proceedings. This principle was more recently confirmed in the case of Davies v. Clarington (Municipality) 2009 ONCA 722 (C.A.) where Epstein, J.A., writing for the Court, stated at para. 40 that “apart from the operation of rule 49.10 [re offers to settle], elevated costs should only be awarded on a clear finding of reprehensible conduct on the part of the party against whom the costs award is being made” (emphasis in the original).

[10] Although the conduct of Ms. Mujagic certainly added significantly to the Defendant’s costs, recognizing that she was self-represented through much of the proceeding, I am not able to make a clear finding that her conduct was reprehensible in the sense of deserving of rebuke and chastisement through an award of elevated costs.

[11] Justice D. Brown observed in the case of Caci v. MacArthur [2007] O.J. No. 1395 at para. 25 that, in reviewing a party’s claim for costs, the Court need not undertake a line by line analysis of the hours claimed, nor to second guess the amount claimed unless it is clearly excessive or overreaching. The Court should consider what is reasonable in the circumstances and, after taking into account all of the relevant factors, should award costs in a more global fashion.

[12] The conduct of Ms. Mujagic and her previous counsel had the effect of turning a matter of average complexity in to a matter of above-average complexity. In reviewing the defendant’s Bill of Costs and Costs Outline I am unable to conclude that the claim for costs is excessive or overreaching. It would appear that the defendant’s counsel was careful to utilize the services of junior associates, clerks and students where appropriate in the interest of minimizing costs and to expedite the matter. The attendance of students with counsel on court appearances and the need for all communications with Ms. Mujagic to be in writing was reasonably justified due to the threat expressed by her to report the Defendant’s counsel to the Law Society of Upper Canada. Ms. Mujagic has not provided any basis for this threat having been made.

[13] I note that some of the disbursements claimed such as fax charges, computer research, postage and long distance telephone are not chargeable on a party and party assessment under the Tariff. I also question the full inclusion of 3.1 hours for Mr. Rosenkrantz to review and revise the draft Affidavit in support of the Motion as being duplicative, and the hourly rates claimed for clerks’ time as being in excess of the maximum rate of $80.00 suggested by the Costs Subcommittee of the Civil Rules Committee in its Information to the Profession.

[14] Counsel for the Defendant cited authority for the proposition that the financial circumstances of the Plaintiff are not a factor in fixing costs (see for example Gravesande v. Toronto (City). [2006] O.J. No. 1370 (Div. Ct.) In the absence of submissions from Ms. Mujagic regarding her circumstances I am not, in any event, in a position to make any finding on the impact that a large costs award to have on her except to infer that that it would likely create great difficulty.

[15] In the exercise of my discretion to fix an amount which is fair and reasonable in all of the circumstances, bearing in mind the principles of indemnity and the reasonable expectations of the unsuccessful party respecting costs, I fix the costs of the defendant Egon Last of the action and motion in the sum of $22,500.00, inclusive of fees, disbursements and HST. These costs shall be paid by the Plaintiffs within 30 days hereof.

D. A. Broad J.

Date: November 14, 2013