SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-12-458713 &
CV-13-471302
DATE: 20131114
RE: Morgan Reiner and Leslie Reiner (Applicants and Respondents by Counter-Application) and Leslie Paul Truxa and Lydia Lilianne Sani (Respondents and Applicants by Counter-Application)
BEFORE: Frank J.
COUNSEL:
Michael Fleischmann, for the Applicants and Respondents by Counter-Application
Ron Craigen, for the Respondents and Applicants by Counter-Application
HEARD: By way of written Submissions
C O S T E N D O R S E M E N T
[1] The respondents in the first application were successful in that application and in the counter-application brought by them. They seek full indemnity costs of the two applications.
[2] The applications arose out of a boundary dispute between neighbours. What was in issue was a strip of land between the two residential properties roughly a foot in width at its maximum. I found the applicants’ title to the strip of land to have been extinguished and that the respondents were entitled to exclusive possession of it.
[3] The respondents seek costs on a full indemnity basis in the amount of $82,593.00 plus disbursements of $6,395.64 plus applicable taxes. Five witnesses, including an expert were cross-examined on their affidavits and the hearing of the applications took the better part of a day.
[4] The applicants dispute that this is an appropriate case for full indemnity costs and submit that costs in the amount sought are not warranted based on the relevant factors to be taken into account in determining the costs. They submit that an appropriate award is $25,000 all inclusive.
[5] Substantial indemnity costs are available pursuant to R. 49, based on offers to settle. Otherwise, substantial indemnity costs, let alone full indemnity costs which appears from the respondents’ submissions to be what they are seeking, are the exception and “are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.” (Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at para. 251)
[6] In seeking these costs, the respondents rely on the submission that it was obvious from the outset that the applicants could not succeed and their proposal to settle the dispute. But, the outcome of their application was not as certain as the respondents maintain. By seeking a determination from the court of whether the applicants could rely on the surveyed lot line between the properties, the applicants conduct did not approach what is required to warrant an award of substantial indemnity costs.
[7] The respondents submit that while they made no formal offer to settle that would attract substantial indemnity costs, the offer to compromise they made in September 2010 is sufficient to warrant those costs being awarded. In correspondence between the parties prior to the commencement of the application, regarding the erection of a fence between their properties, the respondents offered to proceed on the basis of the property line being roughly midway between their respective positions as to its location. While offering to compromise is laudable and while the outcome was more favourable to the respondents than what they were prepared to do, this proposal is falls short of what is necessary for the cost consequences of offers to apply. However, it is something to take into account in the overall assessment of what is a fair and reasonable amount for costs.
[8] The applicants submit that the costs sought are excessive based on the following:
(a) They argue that the matter was not complex. I agree. The respondents submit that the matter was of moderate complexity because the applicants relied on an expert report - a report that was not itself complex by any measure - and because there were challenges in locating and obtaining statements from witnesses. But, these things do not raise this matter to one of complexity. The matter was neither factually nor legally complex.
(b) The applicants argue that the issue between the parties was of no real consequence to the respondents and rely on correspondence from their counsel in 2009 in which counsel characterized the strip of land in issue as having no impact on the use or value of either property. That is inconsistent with the position now taken by the respondents. It is also inconsistent with the facts as presented as the narrowing of the respondents’ driveway seems to be of real significance. In spite of the comment of counsel for the respondents, in my view, the issue was of importance to the respondents. However, I have heard nothing by way of evidence or cost submissions that would allow for the conclusion that the costs sought are proportionate to what was in issue. The costs sought on a partial indemnity basis are $54,842.50 plus disbursements of $6,395.64. That means that the partial indemnity costs, let alone the costs actually incurred by the respondents, are greater than the value of what was in issue.
(c) I agree with the applicants that they facilitated the efficient processing of the application by consenting to the admission of otherwise inadmissible evidence thereby saving the respondents from additional effort. The respondents do not suggest that there was any conduct on the part of the applicants that was improper and would therefore warrant a more generous cost awarded.
(d) The respondents’ cost outline includes time related to their claim for damages which they did not proceed with on the hearing before me. The applicants are correct in submitting that the respondents are not entitled to recover any costs incurred in relation to their claim for damages.
(e) The applicants submit that the indicators of what they might reasonably expect to pay if unsuccessful are what they have been charged by their own counsel and what has been awarded for costs in similar actions. The fees charged to the applicants is roughly one third of that being sought for costs by the respondents. This is a significant relevant factor to be taken into account. At the same time, however, I am mindful that the resources applied in responding to a motion will be more generously viewed in assessing the reasonableness of time spent than those of the party that initiated the proceedings as the responding party does not control the process. As for other actions, among the cases relied on by the applicants is 393 Queen Officer St. Jean Niagara Limited v. Cserpes, (2010), 188 A.C.W.S. (3d) 45 (S.C.J.). In that case, the successful party was awarded costs of $12,500 all inclusive in an action discontinued just prior to trial by which time preparation for trial had been completed, and in which there had been two days of discoveries, factums had been prepared and in which the issue was of significant importance to the defendant. This case is relevant as a guide.
(f) Finally, the applicants submit that both the hourly rates and time spent are excessive. The hourly rates and amount of time spent must be assessed in the context of my findings that the matter was not complex but was of some significance to the respondents. In this context, while the time spent may accord with counsels’ retainer, it is excessive from the perspective of what the applicants should have to pay for costs. These applications do not warrant the number of hours docketed, at the rates claimed. This is particularly so if it was beyond question that the applicants could not succeed, as the respondents now state. The hourly rate of $375 for senior counsel is excessive on a partial indemnity basis in a straightforward matter such as this. Further, although the respondents are entitled to retain counsel of their choice, when that choice results in additional costs for travel time, the applicants should not be responsible for those additional costs. There is no indication that no amount has been included for travel.
[9] The applicants did not raise any issue with respect to the disbursements claimed. I assume, on that basis, that they accept them as reasonable. I am not in a position to remark on their reasonableness as I have not been provided with any breakdown. I do note, however, that the total is surprisingly high.
[10] Having regard to all of the above, including the fact that the respondents were willing to compromise at the outset, I have concluded that an appropriate award for costs is $25,000, plus applicable taxes, plus disbursements as claimed, plus applicable taxes.
Frank J.
Date: November 14, 2013