SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: C-919-11

DATE: 2014-04-29

RE: Geoffrey Bellew, Plaintiff

AND:

Matthew Bellew and Christina Kelemen-Bellew, Defendants

BEFORE: The Honourable Mr. Justice C. S. Glithero

COUNSEL:
J. Krotz, Counsel for the Plaintiff

M. Milczarczyk, Counsel for the Defendant,
Matthew Bellew

Dennis Tousenard, Counsel for the Defendant,
Christina Kelemen-Bellew

Ruling on Costs

[1] In this matter I released reasons for judgment on March 11, 2014, in which I ordered that judgment issue in favour of the plaintiff in the amount of $98,497.29 together with interest in the amount of $24,302.04 for a total of $122,799.33 and that the Judgment be against both defendants jointly and severally. I invited written submissions on costs, with those of the plaintiff, the successful party, within 21 days, those of Mathew within a further 21 days, and those Christina Kelemen-Bellew within a further 21 days.

[2] The plaintiff’s submissions on costs were received March 28, 2014. Those on behalf of Matthew Bellew were received on April 16, 2014, and those on behalf of the female defendant were received on April 16, 2014.

[3] The submissions on behalf of the defendant Christina Kelemer-Bellew consist of an assertion that there is an automatic stay of the cost proceedings upon the filing of a consumer proposal she made under s.66.13 (2) of the Bankruptcy & Insolvency Act, R.S.C.,1985, C. B-3. It was filed on March 27, 2014. A copy of the proposal is annexed to the submisions of her counsel, as are sections of the Act relied upon. Section 69.2 of that Act provides that no creditor has a remedy against the debtor or shall commence or continue any action for the recovery of a claim until the consumer proposal has been withdrawn or otherwise negated, or the administrator has been discharged. Counsel for her submits that accordingly there is an automatic stay of proceedings. I am not convinced that is so in respect of costs flowing from a trial judgment already decided and released. It appears that costs may still be set and pursued in the opinion of the authors in L. W. Houlden, G.B. Morawetz and Janis Sarra, Bankruptcy and Insolvency Law of Canada, 4th edition revised (Toronto: Carswell 2009) at section F.16, pages 3.360.1 to 3.361

[4] The submissions of the female defendant also point out that s.69.4 of the Bankruptcy & Insolvency Act also provides that a creditor may apply to the court for a declaration that other sections of s.69 do not apply. The court must then consider whether the creditor is likely to be materially prejudiced by the continued operation of those sections or that for some other equitable or other ground such a declaration ought to be made.

[5] There is no application before me for relief by the plaintiff or the co-defendant under s.69.4. It would seem to me that any such application would have to be on notice to all creditors.

[6] Notwithstanding the above, it seems to me that it would be appropriate to nevertheless determine the quantum of costs. If I did not do so, the plaintiff and the co-defendant would not know whether it is worth pursuing any relief under s.69.4, at least insofar as costs go.

[7] There is no need to repeat the observations made in my reasons for judgment. Suffice it to summarize by saying that the plaintiff was entirely successful. Also noteworthy is the fact that the male co-defendant did not dispute the plaintiff’s claim, but merely sought to have the female co-defendant held equally responsible for the debt to the plaintiff.

[8] Looking at the factors enumerated in Rule 57.01, the plaintiff was entirely successful. The matter was of some complexity in that the plaintiff was required to prove a significant number of financial transactions stretching over a number of years. In my view, the matter was of some significant importance to the plaintiff as it appears that he borrowed this money to lend to the male plaintiff and his then wife, the female defendant. He is mostly retired and hence the loss of the monies is significant.

[9] As indicated in my reasons, in my view there was no merit to the female defendant’s position. She made no offer to settle and did not respond to offers to settle by both the plaintiff and her male co-defendant. She refused to admit certain things sought by virtue of a request to admit, which in fact were obviously not in dispute as the trial unfolded. For example, she refused to admit that the first loan was in fact a loan, although at trial she admitted it was a loan and not a gift.

[10] The plaintiff made a written offer to settle for an amount which was less than one-half of the amount recovered by the plaintiff. The offer also included an offer to settle the issue of costs. Importantly, the offer also provided that if accepted the plaintiff would not seek to recover from the female defendant any amounts over and above the settlement amount regardless of the outcome of trial if it proceeded as against the other defendant.

[11] The plaintiff achieved a better result at trial than that offered in the offer to settle.

[12] Matthew Bellew made a written offer to settle the cross claim. The offer was in an amount which was less than half of the amount recovered by the plaintiff.

[13] No offer to settle was made by the female defendant.

[14] The trial lasted three and a half days. The plaintiff seeks costs on a partial indemnity scale in the amount of $2,682.11, inclusive of HST, to April 10, 2012, the date of his offer. He then seeks costs on a substantial indemnity basis in the amount of $36,544.37, inclusive of HST from April 11, 2012 to the end of trial, for a total of $43,256.54, inclusive of disbursements and applicable HST.

[15] I reviewed the plaintiff’s bill of costs in detail. In my judgment the hourly rates charged are appropriate to the experience of those lawyers involved. I have no doubt that the hours charged were in fact spent.

[16] Ms. Krotz was relatively new to the file and in my estimation there was some overlap in terms of duplication as a result. Ms. Krotz charged 71.3 hours in preparation for the trial. I am quite aware that there is often a direct relation between the amount of time spent preparing and the resulting savings in trial time. In my judgment, Ms. Krotz presented the plaintiff’s case in a well-organized and efficient manner. Nevertheless, with respect, I am of the view that the amount of preparation time, although undoubtedly spent, is somewhat beyond what an unsuccessful party could reasonably expect. I would accordingly reduce the fees charged for trial preparation by 20 hours at $225 equalling $4,500.

[17] I would fix the plaintiff’s costs in the amount of $31,140.45, plus HST and disbursements as claimed in the amount of $4,030.06, inclusive of HST.

[18] In respect of the claim for costs on behalf of Matthew Bellew, it is noteworthy that he did not oppose the plaintiff’s claim. His only interest in the case was to protect himself as against the female defendant from bearing the sole responsibility for the plaintiff’s claim. In this he succeeded.

[19] I accept his submission that there should be no order for costs as against him, as he did not oppose the plaintiff’s claim, and succeeded in resisting the co-defendant’s position. He succeeded at trial beyond the terms offered in his offer to settle.

[20] On his behalf, costs are claimed in the amount of $11,165.00, on a partial indemnity basis to the date of his offer and on a substantial indemnity basis thereafter, together with disbursements in the amount of $1,133.59, plus HST in the amount of $1,451.45 for a total of $13,750.04. His counsel’s hourly rates are very reasonable. The amount of time for which he claims fees is reasonable. Mr. Milczarczyk conducted his client’s case in a very efficient and direct manner. His involvement in the trial was only in respect of those issues as between his client and his co-defendant. Given the evidence provided by the co-defendant, in my judgment it was necessary for Matthew Bellew to have counsel throughout. I would fix the costs of Matthew Bellew in the amount claimed as set forth above.

[21] For these reasons, I fix the costs of the plaintiff in the amount of $39,218.77. I also fix the amount of costs of the male defendant, Matthew Bellew in the amount of $13,750.04. Both are payable by Christina Kelemen-Bellew.

[22] As the trial had been concluded and reasons for judgement released prior to the making of the consumer proposal, I leave to counsel the issue of the extent to which these amounts may be pursued as against Christina Kelemen-Bellew, a.k.a. Christina Bellew, in light of her consumer proposal filed after trial, and after written submissions on costs had been invited, but before such submissions were received.

C. S. Glithero J.

Date: April 29, 2014