Court File and Parties
COURT FILE NO.: CV-10-0249 and CV-10-1309 DATE: 2014-04-14 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: ANGELINA BAILEY, Possessory Claimant AND: GERALD HARRY BARBOUR, Objector
BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY
COUNSEL: I. de Rijcke, for the Possessory Claimant J.E. Streisfield, Counsel, for the Objector
HEARD: April 9, 2014
COSTS ENDORSEMENT
Basis of the Costs Order
[1] This endorsement on costs follows from the judgment released by this Court on November 29, 2013 (Bailey v. Barbour, 2012 ONSC 7397) following a 13 day trial. It also deals with the costs of a previous trial conducted by McIsaac J. over 19 days intermittently between November, 2010 and April, 2011.
[2] By order of the Court of Appeal dated May 16, 2012, setting aside the order of Justice McIsaac and ordering a new trial, the costs of the proceeding before him were ordered to be in the cause. Accordingly, I have jurisdiction to fix the costs of both trials. For ease of reference, the trial before Justice McIsaac will be referred to as the “first appeal hearing”, and the trial before me will be referred to as the “second appeal hearing”.
[3] By order dated March 19, 2014, the argument regarding costs has been bifurcated. The first hearing, to which this endorsement relates, had as its purpose the determination of entitlement and quantum of costs. The second hearing, which will occur on May 15, 2014, will deal with the question of whether Mr. Barbour's counsel will be personally ordered to pay costs pursuant to Rule 57.07.
Ruling
[4] After reviewing the written submissions filed on behalf of the parties and hearing their counsels’ oral submissions, this Court orders:
Angelina Bailey shall be paid costs of the two proceedings fixed in the amount of $490,000, on a substantial indemnity basis, inclusive of HST.
Post-judgment interest shall not begin to run until the release of the additional decision regarding liability for payment of such costs, on or after May 15, 2014.
The payor of these costs shall be determined on or after May 15, 2014.
[5] The reasons for the above order are set out in the paragraphs that follow.
Reasons
[6] Wide discretion in fixing costs rests with the Court pursuant to section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, bearing in mind the principles enunciated in the leading Ontario cases such as Anderson v. St. Jude Medical Inc. (2006), 2006 CanLII 85158 (ON SCDC), 264 D.L.R. (4th) 557 (Ont. Div. Ct.), Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 C.A., and Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.).
[7] The Rules of Civil Procedure, R.R.O. 1990, Reg 194, that are applicable to this decision are:
1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
Proportionality
(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
Factors in Discretion
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.
Nature of the Proceedings
[8] The nature of the first and second appeal hearings was summarized in my Reasons for Judgment, as follows:
[1] This is an appeal by Mr. Gerald Barbour pursuant to s. 26 of the Land Titles Act, R.S.O. 1990, c. L.5, from the Decision and Order of the Deputy Director of Titles Rosenstein dated February 9, 2010. In that proceeding, the Deputy Director of Titles granted possessory title to Mrs. Angelina Bailey of certain lands located on the shore of Nottawasaga Bay in the Township of Tiny, lands to which Mr. Barbour holds paper title pursuant to an earlier order made under the Boundaries Act, R.S.O. 1990, c. B.10.
[2] This is the second such appeal hearing, the first having been determined in 2011 (the “first trial”) and successfully appealed in 2012. The Court of Appeal set aside the order of the trial judge and ordered a new trial (2012 ONCA 325).
[3] As directed by the order from the Court of Appeal, this is also the rehearing of an Application commenced by Mrs. Bailey as Barrie Court File No. 10-1309.[^1] In that Application Mrs. Bailey seeks, as an alternative to possessory title, an interest over the lands in question, or any part thereof, in the nature of a prescriptive easement or right of way arising from and as a result of implication, necessity, doctrine of lost modern grant, or proprietary estoppel.[^2]
[4] Both the appeal and the Application were heard over a protracted period, with several mid-trial rulings being required on issues of evidence and procedure.
[5] From the commencement of the Boundaries Act application, this trial has been eleven years in the making.
The Outcome of the Second Appeal Hearing
[9] The outcome of the second appeal hearing was determined to be in favour of the possessory claimant, Mrs. Bailey, as this Court adjudged and declared that:
[423] For the foregoing reasons, this court adjudges and declares that:
The Objection of Gerald Barbour is dismissed.
Angelina Bailey is the owner in fee simple of Part 2 on the Hiley Plan.
The local Land Titles Registrar for Simcoe County at Barrie shall make all necessary entries and corrections to the PINs for the parcels of land owned by Angelina Bailey and Gerald Barbour that have been at issue in this proceeding to reflect the results and order of this court.
The parties may, if necessary, schedule an appointment before me through the office of the trial co-ordinator to speak to the issue of costs of this proceeding, and potentially the proceedings below that have not yet been the subject of a final cost order. Such an appointment may also be made if there is any disagreement between counsel about the wording of the judgment to issue.
Rule 49 Offers
[10] Mrs. Bailey made five offers to settle throughout the course of these proceedings. In each instance, the determination made following the second appeal hearing was more favourable to her than her offers. These offers can be summarized as follows:
Mrs. Bailey’s initial offer was dated July 26, 2010, and therefore predates the first appeal hearing. Mrs. Bailey offered, while retaining fee simple ownership of the disputed land, to provide Mr. Barbour with an easement over the land for himself, his immediate guests, and family for the purpose of providing access to the beachfront and water north of Tiny Island for the rest of his life. She also offered to minimize the visibility of her car after delivery of passengers and baggage to the island.
On November 24, 2010 a second offer to settle was delivered, containing essentially the same terms as above, but in addition, offered payment of $25,000 to Mr. Barbour.
Another offer was delivered by Mrs. Bailey on April 8, 2011, prior to the hearing of the appeal before the Court of Appeal in relation to the first appeal hearing. Mrs. Bailey again offered to provide an easement to Mr. Barbour over the subject land to allow him to reach the sandy beach and to provide access to Nottawasaga Bay north of Tiny Island for a period of 10 years. As noted earlier, Mrs. Bailey was successful at the Court of Appeal, and $25,000 in costs were awarded to her. Those costs have not yet been paid.
On September 27, 2012, she made another offer, this time deleting any time limitation attached to such easement.
Her last offer was made on November 14, 2012, prior to the second appeal hearing, and remained open for acceptance at the commencement of the trial. This offer was far more beneficial to Mr. Barbour than any previous offer, as it offered to leave title to the disputed lands with him, and required him to simply grant a right-of-way to Mrs. Bailey for ingress and egress to Tiny Island, with her being responsible for all maintenance costs. It also granted rights of use to her, her family and guests over all of the disputed lands for purposes of cottage-related activities. In addition, she offered to pay Mr. Barbour $100,000, which included forgiveness of the $25,000 ordered by the Court of Appeal.
[11] Not only did Mr. Bailey not accept the final offer, I have no evidence that any response was provided.
[12] Mr. Barber made two Rule 49 offers, one dated September 21, 2010, and the other dated December 16, 2010. Both offered a right-of-way over the disputed lands for access to and from Tiny Island, but offered no additional access to any of the remaining portion of the disputed land. The first offer required payment to him of $200,000; the second required payment of $175,000.
[13] The final offer of Mrs. Bailey is most remarkable in terms of its substantial compromise of the issues in this litigation.
[14] Given the content of the offers, I see no reason to exercise my discretion under Rule 49.10(1) to deprive Mrs. Bailey of the cost consequences mandated by that Rule. She has met the burden of showing that she is entitled to claim the benefit of Rule 49.10(1), and the trend in her offers shows her increasing attempts and willingness to compromise her interests in order to avoid lengthy and costly trials.
Rule 57.01 Criteria
[15] Turning now to a consideration of Rule 57.01(1) for each proceeding, an analysis of the factors, cumulatively, have led to the further decision that costs should be awarded on a substantial indemnity basis throughout the proceedings.
Costs associated with the First Appeal Hearing
(i) Principle of Indemnity and Reasonable Expectations
[16] Mr. Streisfield argued that Mrs. Bailey should be bound by her initial costs submission to Justice McIsaac, wherein it was argued that the sum of $50,285 was a reasonable amount for fees and disbursements for that 19 day trial. Notably, Justice McIsaac rejected that submission and ordered costs of $151,215.80 plus HST.
[17] Mr. Barbour was seeking costs in the sum of $275,000 plus HST following the first appeal hearing.
[18] Mr. Streisfield also argued, as had Mr. de Rijcke in Mrs. Bailey's submissions on costs to Justice McIsaac, that preparation time would have been reduced by the fact that the appeal was a repeat of the hearing before the Deputy Director of Titles. Again, Justice McIsaac rejected that submission. At paragraph 9 of his Ruling on Costs, he wrote:
[9] If this was a regular appeal on the record, I would accept that the need for trial preparation would not exist. However, since this was a completely new trial process, I accept there was a legitimate need for fresh preparation. I am unable to say that this was either unnecessary or wasteful.
[19] For the same reason, I agree. As a new trial, although counsel may have been familiar with the facts and evidence, rigorous trial preparation is a necessity. This is all the more so given the time lapse; the Land Titles Act hearing began in the fall of 2007 and continued during the first half of 2008, with the decision being rendered on February 9, 2010. Also, the testimony of a new expert was introduced at the first appeal hearing, being that of Chester Stanton. Having observed the high standard of preparedness exhibited by Mr. de Rijcke during the second appeal hearing, which helped the trial progress more smoothly, I have little doubt that the same standard was applied to preparation for the first appeal hearing, all of which was warranted.
[20] Having reviewed the Bill of Cost submitted by Mr. de Rijcke in respect of the first appeal hearing, I am satisfied that claiming costs of $201,000, inclusive of disbursements and HST, is both reasonable and well within the reasonable expectation of Mr. Barbour.
(ii) Complexity of the Proceeding
[21] The first appeal hearing took 19 days. There was testimony given by three experts, all of which I read in its entirety as part of the record before me in the second appeal hearing. Their testimony was lengthy and technical. During an organizational pretrial hearing with counsel, Mr. Streisfield initially objected to the Court simply accepting their testimony by way of transcript evidence due to its complexity. The documentary evidence, much of it quite historical, was voluminous. There were several lay witnesses.
[22] The legal principles involved were also complex, involving a riparian property with very unusual geographic characteristics, and the law of adverse possession and prescriptive easements.
[23] The costs claimed for the first appeal hearing are in proportion to the complexity.
(iii) Importance of the Issues
[24] The dispute centers on a tract of land that is not only monetarily valuable, but which has historically provided the sole access by land to Mrs. Bailey’s property, and without which she would have a "water access only" property. The potential severance of any land access to Tiny Island would fundamentally change the nature, use and, undoubtedly, value of Mrs. Bailey's property. Given her substantial investment in renovations to the buildings on the island, this financial significance was elevated.
[25] The issues litigated were important for riparian property owners and may have future significance for such properties in the face of fluctuating water levels in the Province's inland lakes and bays.
(iv) Conduct that Unnecessarily Lengthened the Proceeding
[26] I agree that the evidence from this trial demonstrates that even at the time of the first appeal hearing, the evidence of Mr. Stewart, who was Mr. Barbour's expert witness, was tainted by the role he had assumed during the course of this proceeding. The evidence shows that he was a biased expert even by the time of the first appeal hearing, as discussed further below. Accordingly, the time taken up in relation to his testimony was a waste of resources.
Costs Associated with the Second Appeal Hearing
[27] All of the same considerations that were at play in the first appeal hearing apply, as well as additional ones.
[28] One of the most significant contributors to the unnecessary lengthening of the second appeal hearing were the issues that concerned Mr. Stewart, detailed in my Reasons for Judgment at paragraph 317 to 324. The court initially heard his testimony on May 13, 2013, and then Mr. Stewart was permitted to testify again in reply to Mr. Brubacher's evidence. He did so for part of the day on May 24, 2013, and continued on May 27. Ultimately, I found that, had I not rejected his testimony outright due to bias, it would have had little evidentiary value to the Court for the reasons outlined in paragraphs 325 to 331 of the Reasons for Judgment. Considerable time, one day at a minimum, was expended on the voir dire required to be conducted regarding the e-mails that were of concern to the Court.
[29] The Court was required to issue a lengthy mid-trial decision regarding the e-mails and Mr. Stewart's utility as an expert witness. All of this detracted from the main issues in the proceeding and was an unnecessary expenditure of resources. In response to closing arguments from Mrs. Bailey's counsel that addressed the issue of Mr. Stewart's bias, Mr. Streisfield’s limited response was to submit that "all of Mr. Stewart's opinions were accepted at the Boundaries Act Hearing".
[30] In addition to the issue of Mr. Stewart, there were many other issues raised by Mr. Barbour and/or his counsel that were in my view unnecessary and improper, and which wasted trial time and that of Mrs. Bailey's counsel. The most glaring examples, of which there were others, were:
On March 4, 2013, Mr. Streisfield asserted that the Court was not hearing the second appeal hearing as a judge of the Superior Court, but rather suggested that the Court "stood in the shoes" of the Deputy Director of Titles. He argued that the second appeal hearing was a Land Titles Act hearing, and that the Court was functioning effectively as an administrative tribunal under the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (“SPPA”). Time was taken for argument and for the Court to rule on the issue. Despite the very clear direction and ruling given in the resulting mid-trial ruling made on June 27, 2013 that the Rules of Civil Procedure applied to this proceeding and that neither s. 41 of the Land Titles Act or s. 15(1) of the SPPA apply, in his Costs Submissions filed for this hearing, Mr. Streisfield continued to argue that s. 24(2) of the Land Titles Act applied to the costs hearing.
On March 4,, 2013 during his opening statement, Mr. Streisfield asserted that all of the claims in both proceedings were statute-barred, and that Mrs. Bailey's application had been commenced outside of a limitation period. This argument caused a diversion for the Court, as it required a "teasing out" of Mr. Streisfield’s vague argument in order to gain a better understanding as to whether he was making an allegation of professional negligence against Mr. de Rijcke. Ultimately Mr. Streisfield’s position was articulated on the record in a way that laid the allegation to rest, although remarkably, it was further alluded to during Mr. Streisfield’s closing submissions. The raising of the issue was as spurious and vexatious as it was serious, and ultimately a waste of the Court's time. There were further cost-related repercussions of the allegation that are discussed later in these Reasons.
On March 5, 2013, judicial resources became available for a mid-trial settlement conference. Mr. Streisfield indicated to the court that Mr. Barbour rejected the opportunity to engage in an attempt at settlement.
On May 13, 2013, Mr. Streisfield attempted to read-in from transcripts of evidence from prior proceedings, notwithstanding the direction of the Court that the evidence of lay witnesses was to be given orally. This necessitated the Court delivering a further lengthy endorsement clarifying the use of prior transcripts, and making a written order for the oral testimony of lay witnesses.
Notwithstanding that ruling, later in the hearing Mr. Streisfield brought a motion, which was unsuccessful, to permit him to read into evidence portions of Mrs. Bailey's transcript of evidence from the Land Titles Act hearing.
On May 13, 2013, at the commencement of Mr. Stewart's evidence-in-chief, Mr. Streisfield expressed surprise that a time limit was placed on Mr. Stewart’s testimony. That direction had been set out in a procedural order dated January 17, 2013, made on consent. Mr. Streisfield asked the Court to direct his attention to the order in question. He was permitted an indulgence of an additional 15 minutes for his direct examination of Mr. Stewart.
On May 17, 2013, time was spent in argument concerning Mr. Streisfield’s intention to introduce medical evidence, apparently to support an assertion of health-related difficulties that interfered with Mr. Barbour's ability to use the beach for a period of time. No notice was served under the Evidence Act, R.S.O. 1990, c. E.23 prior to the request being made to the Court. After hearing argument, it was revealed that the period of hospitalization in question was one week in length. Given that Mr. Barbour acquired the property in 1949, and the time period in question spanned decades, raising such an issue was vexatious and a further waste of time.
Mr. Streisfield took positions throughout that were untenable at law, such as the position discussed at paragraphs 362 and 363 of the Reasons. He asserted to the Court that the state of the law was that possession had to be "literally over every inch of the land to which the party claims possession". He also attempted to raise a limitations defence that was never fully articulated. A party who advances unmeritorious arguments, to which the other must spend time responding, unnecessarily wastes time.
As a further example of this, in his closing Mr. Streisfield suggested that two of the statutory declarations that were in evidence in the trial were "manufactured to feed a possessory claim, and are self-serving documents". Such allegations are assertions of fraud-based behavior, which Mr. Streisfield did not come close to proving in evidence.
A further example of this is that Mr. Streisfield requested that the Court make a specific finding that Mrs. Bailey and her family deliberately created a roadway across the disputed land where none had existed before. This submission was advanced despite the preponderance of evidence showing otherwise.
Following the delivery of Mrs. Bailey's offer to settle dated September 27, 2012, the response from Mr. Streisfield was both factually erroneous and unprofessional in tone. By e-mail dated October 1, 2012, he wrote to Mr. de Rijcke as follows:
There is no interest in the Bailey offer to settle. Bailey should consider throwing in the towel and calling it a day as there is no factual foundation to its (sic) claims to an interest in Barbour's property (when not covered by water, since when the part 2 lands are covered by water they are owned by the Crown). The time period in which this occurred is well-documented. Even if Bailey could demonstrate that the lands remained dry and thus owned by Barbour, there is no evidence of occupation or use, let alone exclusive occupation or use for the requisite time statutory time periods.
[31] Mr. Streisfield argued that there has been duplication of work done by Mrs. Bailey’s lawyers and that his client should not be responsible for the fees of both Mr. de Rijcke and Mr. Fairley in the second appeal hearing. There were also additional fees incurred for Mr. Fenn, who had argued the appeal before the Court of Appeal (but for which costs are not currently being claimed), and whose assistance was required in this proceeding for other reasons explained below.
[32] There were several reasons given to the Court for having multiple lawyers involved. Having watched the conduct of Mr. Streisfield as this trial unfolded, I have no difficulty accepting the reasons provided by Mrs. Bailey's counsel as being well-advised.
[33] First, counsel advised that the lack of civility shown by Mr. Streisfield to Mr. de Rijcke had escalated tensions to a point where Mr. de Rijcke felt that a change in counsel was in order. The division of responsibility between Mr. de Rijcke and Mr. Fairley was evident through the trial; Mr. Fairley dealt with the lay witnesses and Mr. De Rijcke dealt with the experts. This was sensible given that Mr. de Rijcke has been counsel throughout and was familiar with the more technical evidence, and given that he also holds the designation of Ontario Land Surveyor.
[34] Second, Mr. Fenn, for the same reasons, became involved to attempt to settle the matter at the pretrial stage in the fall of 2012, prior to the second appeal hearing. Further, as a result of Mr. Streisfield alluding to, but again not fully articulating, an allegation of professional negligence on the part of Mr. de Rijcke with respect to a missed limitation period, Mr. Fenn was waiting in the wings to take over carriage of the trial should the issue resurface, in order to avoid an adjournment. As earlier indicated, the allegation was raised by Mr. Streisfield at the outset of the trial, seemingly being that Mr. de Rijcke had failed to commence Mrs. Bailey's application within a limitation period. As explained in my Reasons regarding the limitations argument, Mr. Streisfield’s argument had no merit.
[35] In terms of the reasonable expectation of the parties, in light of the necessity of additional counsel, the addition of further expert testimony in the form of Mr. Brubacher, and faced with an order that the lay witnesses were all to testify in person, there should be no surprise over the fees involved in the second appeal hearing. Although both parties were to produce a joint document brief, only Mrs. Bailey's counsel did the associated work because Mr. Streisfield maintained that he had commitments on other files that would not allow him to participate in that endeavor. Further, Mr. Fairley was solely responsible for compiling a compendium of experts' evidence for the Court's use, which was a time-consuming and costly process, but of great assistance to the Court. And although the second appeal hearing was a "re-run" of the first appeal hearing, as argued by Mr. Streisfield, the same considerations apply as they did to the first appeal hearing. A trial as complicated and involved as this one was, both procedurally, factually and legally, with lengthy breaks between hearing dates, requires extensive preparation. Mrs. Bailey's counsel presented the case in a thorough and professional manner, which assisted the ends of justice, and that can be attributed in part to their thorough preparation.
[36] Accordingly I find that the fees and disbursements claimed for the second appeal hearing of $274,338.81 is reasonable and within Mr. Barbour's reasonable expectations.
[37] Some criticism was leveled at the disbursements. After hearing submissions I am satisfied that it is difficult to parse out any one of them as being required strictly for the Land Titles Act hearing. The work done that generated the invoices from Northway-Photomap Inc., Gary Preston, OLS, and Mark Kolberg was all work that supported the creation of documents that became exhibits in both appeal hearings.
[38] In Boucher v. Public Accountants Council (Ontario), Justice Armstrong held that the fixing of costs involves more than merely a calculation using the hours docketed and the costs grid. Courts fixing costs are required to give further consideration to quantum. At para. 24 of Boucher, Justice Armstrong directed that “it is also necessary to step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable.” He reiterated what the Court of Appeal said in Zesta Engineering Ltd. v. Cloutier, 2002 CanLII 45084 (2002), 164 O.A.C. 234 (Ont. C.A.), at para. 4:
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 parties rather than any exact measure of the actual costs to the successful litigant.
[39] These authorities require that I step back to assess whether the cost claimed are fair and reasonable in the circumstances. Given all of the factors and considerations outlined above, I am fully satisfied that the costs ordered are fair and reasonable for this protracted and complex proceeding. While the award is high, it is what Mrs. Bailey has had to spend in order to obtain a ruling regarding her ownership rights to the land in question, in the face of Mr. Barbour's unwillingness to meaningfully compromise to avoid the costs of trial.
[40] Counsel for Mrs. Bailey also seek costs for the preparation of their material for the costs hearing, and attendance for argument of the matter. It is apparent that considerable work went into the preparation of both written Submissions on Costs, and a Costs Brief. I have reviewed the Bill of Costs prepared and find that the amount of $15,000 is also fair and reasonable, which sum I have added to the costs claimed for the two appeal hearings.
[41] This Court orders that an order shall issue in the terms outlined in paragraph 4 of these Reasons.
HEALEY J.
Date: April 14, 2014
[^1]: As amended by an order of this court made on January 17, 2013. [^2]: According to the grounds set out in her Amended Notice of Application, the application was commenced due to submissions made by Mr. Barbour’s counsel at the first trial, to the effect that the Superior Court of Justice did not have the jurisdiction to consider any interest less than fee simple ownership, such as an easement or right of way.