Ontario

Superior Court of Justice

COURT FILE NO.: 6214-12

DATE: 2014/07/28

BETWEEN:

EMINA DANOVIC
Plaintiff

– and –

GRAHAM WAGNER
Defendant

Plaintiff, self-representing

Dagmara Wozniak, for the Defendant

HEARD: In writing

Leach j.

ENDORSEMENT (COSTS)

[1] On June 23, 2014, I released my decision – since reported as Danovic v. Wagner, [2014] O.J. No. 2997 (S.C.J.) – dealing with the defendant’s motion to dismiss this action on various suggested grounds.

[2] For reasons set out in my decision, I granted the motion pursuant to Rules 21.01(3)(d) and 21.01(1)(b); i.e., because the plaintiff’s claim was frivolous, vexatious and/or otherwise an abuse of the court’s process, and because it disclosed no reasonable cause of action in any event. The latter finding made it inherently inappropriate and inadvisable to engage in summary judgment analysis, (as requested by the defendant in the alternative).

[3] Because my decision had been reserved, the parties had no opportunity to address costs when the motion was argued. In my endorsement, I therefore invited written cost submissions, pursuant to an indicated timetable, if the parties were unable to reach an agreement concerning costs.

[4] Written cost submissions were delivered by the defendant on July 7, 2014, followed by the delivery of responding written cost submissions from the plaintiff on July 14, 2014. The defendant apparently chose not to tender any further written cost submissions in reply.

Overview of Party Positions

[5] The material filed by the defendant indicates that, in dealing with this matter, he has been obliged to incur no less than $27,389.19 in actual fees, disbursements and applicable taxes.

[6] He seeks recovery of his costs of the motion and of the dismissed action on a substantial indemnity basis, fixed at $24,893.25, (90% of his actual costs, inclusive of fees, disbursements and HST). In the alternative, the defendant seeks costs on a partial indemnity basis, fixed at $18,653.41, (inclusive of fees, disbursements and HST), or on a scale somewhere between partial and substantial indemnity.

[7] In support of his request that costs be fixed at the higher scale, the defendant relies in part on a settlement offer, made by the defendant on May 4, 2012; i.e., 4-5 months after the plaintiff issued her statement of claim, and after exchange and review of the parties’ productions, but prior to further steps in the litigation, including attendance at pre-trial and oral discovery examination, and the preparation and argument of the motion leading to dismissal of the action.

[8] Pursuant to that offer, the defendant confirmed his willingness to settle the matter on the basis of a dismissal of the action on a “without costs” basis until one minute after commencement of the pre-trial, (held on July 5, 2012), after which the offer was for dismissal of the action with payment of costs incurred to the date of the offer’s acceptance on a partial indemnity basis.

[9] However, the defendant also submits that costs on an elevated scale are appropriate in any event, having regard to the particular circumstances of this case, in that the plaintiff has engaged in reprehensible conduct worthy of sanction.

[10] In her responding cost submissions, the plaintiff remained inappropriately focused, in large measure, on the substantive merits of the dispute.

[11] For example, the plaintiff indicates her strong disagreement with my substantive ruling, criticizes the justice system here in Canada, and emphasizes her certainty that “in Europe Mr Wagner would have been convicted and sentenced for his inhumane acts”. She also questions why Mr Wagner was permitted to defend himself via retained counsel, (instead of facing her directly and on a more equal footing), and why a successful litigant like Mr Wagner should be able to seek costs.

[12] Obviously, these are not proper cost submissions.

[13] Beyond such arguments, however, the plaintiff does raise considerations of financial hardship, and her suggested inability to pay any cost award.

[14] In that regard, the plaintiff emphasizes her stated inability to work, (for health reasons), her professed lack of assets, and her assertion that she and her 13-year-old son have no income on which to survive apart from her ongoing receipt of an Austrian disability pension, in respect of which she receives a monthly sum of 813 Euros, (which converts to approximately $1,000 Canadian per month).

[15] In support of such arguments, the defendant included, with her responding cost submissions, a “Bank Austria” on-line banking print out, the usefulness of which was compromised by the fact its notations are in German, without any proffered English translation. However, based on my limited facility with the German language, the document seems to offer at least some support for the plaintiff’s assertions.

[16] The plaintiff also submitted and relied upon a “Fee Waiver Certificate”, issued by the court’s Registrar, pursuant to the Administration of Justice Act, R.S.O. 1990, c.A.6. I nevertheless noted this only in passing, as such a certificate, (which exempts a litigant from having to pay certain administrative fees otherwise required by the court), obviously does not shield the plaintiff from possible obligations to pay adverse cost awards, as she mistakenly seems to have believed.

[17] In her submissions, the plaintiff does not address, in any way, the alternative amounts sought by the defendant in costs. Nor does she independently suggest a cost award that might be more appropriate. Her implicit if not express suggestion seems to be that no costs whatsoever should be ordered against her.

Analysis

[18] Given the defendant’s undivided success on the motion and therefore in relation to the action, as well as the general indemnity principle[^1], I certainly agree with the defendant that costs should follow the event.

[19] In the particular and somewhat unusual circumstances of this case, I also accept the defendant’s suggestion that it would be appropriate to address such costs on a substantial indemnity basis.

[20] In that regard, I do not do so on the basis of the defendant’s settlement offer, as it seems to me that the situation is governed by our Court of Appeal’s analysis in S&A Strasser Ltd. v. Town of Richmond Hill, 1990 6856 (ON CA), [1990] O.J. No. 2321 (C.A.). Rule 49.10 has no application where the plaintiff fails to recover any judgment, (which in itself triggers a prima facie entitlement of the defendant to at least partial indemnity costs). Nor did the Court of Appeal consider it appropriate to use Rule 49.13 in circumstances such as the one before me.

[21] However, I do think the plaintiff’s conduct in this matter warrants an award of costs on an elevated scale.

[22] In saying that, I am mindful that, although the court has a broad discretion in relation to costs, confirmed by s.131 of the Courts of Justice Act, R.S.O. 1990, c.C.43, as expanded by Rule 57.01 of the Rules of Civil Procedure, our appellate courts repeatedly have emphasized that awards of costs on a partial indemnity basis generally strike the proper balance as to the burden of costs that should be borne by the “winner”, and that elevated cost awards should be reserved for “rare and most exceptional” cases. See, for example, Foulis v. Robinson (1987), 21 O.R. (2d) 179 (C.A.), and Isaacs v. MHG International Ltd., (1984), 1984 1862 (ON CA), 45 O.R. (2d) 693 (C.A.)

[23] The sort of conduct meriting elevated cost awards has been described in various ways.

[24] In Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p.134, McLachlin J. indicated that elevated cost awards are warranted “only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties”.

[25] In Mortimer v. Cameron (1994), 1994 10998 (ON CA), 17 O.R. (3d) 1 (C.A.), and McBride Metal Fabricating Corp. v. H&W Sales Co. (2002), 2002 41899 (ON CA), 59 O.R. (3d) 97, whose principles were echoed and emphasized again by the Court of Appeal in Davies v. Clarington, 2009 ONCA 722, [2009] O.J. No. 4236 (C.A.), conduct warranting elevated cost awards was described as “reprehensible”, “egregious”, or “acts that clearly indicated an abuse of process”, justifying enhanced costs as a form of chastisement.

[26] In this case, for the reasons set forth at length in my substantive decision, I believe the conduct of the plaintiff in this case meets that description.

[27] As noted in my decision, this action not only failed to disclose any reasonable cause of action, but was also clearly an abuse of process. Its real and unacceptable predominant purpose was further harassment and/or oppression of the defendant, consistent with the plaintiff’s broader goal of inflicting punishment and exacting vengeance by scaring, tormenting and publicly shaming the defendant.

[28] In my view, this is precisely the sort of situation which awards of costs on a substantial indemnity basis are designed to address, on an exceptional basis.

[29] To date, the plaintiff’s sustained campaign of vengeance, (through unwanted but persistent and escalating communications and threats, inflicted both openly and anonymously on the defendant, his relatives, and his employer), seems to have been carried out with impunity. This no doubt produced little cause for reflection or hesitation before she engaged the court’s process as the latest means of inflicting torment on the defendant.

[30] It needs to be made abundantly clear that the court will not tolerate such an abuse of its process.

[31] Having said that, an award of costs on a substantial indemnity basis does not entail accepting the successful litigant’s “base figure” without question.

[32] In particular, facing an abusive and meritless claim is not an effective licence to run up excessive legal expense with the expectation of substantial reimbursement.

[33] In addition to the discretionary factors set forth in Rule 57.01, (which I have considered), the court is also still obliged to consider the “overriding principle of reasonableness” as applied to the factual matrix of the case, pursuant to the ultimate “cross check” required by such authorities as Boucher, Moon and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.), and Anderson v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557 (Ont.Div.Ct.).

[34] In this case, the defendant and his counsel understandably took a serious approach to this matter, which raised certain novel issues.

[35] However, I think it must also be said that the defendant’s legal efforts really met with very little in the way of complicated or troubling “push back” by the plaintiff, who advanced almost no legal theory or arguments, and did little but repeat almost exactly the same factual account and allegations over and over again, (in her pleading, discovery evidence, motion material and oral submissions).

[36] In such circumstances, I therefore am concerned by the total amount of fees and disbursements devoted to what was formally a $100,000 claim involving just one motion; a motion which entirely resolved the matter after a discovery examination that seems to have substituted for cross-examination on the plaintiff’s motion material.

[37] Moreover, the number of timekeepers who docketed time to this matter, (including three lawyers, four law students, three law clerks and four legal assistants), inherently suggests a significant degree of overlapping attention to this matter.

[38] Finally, I also have regard to the plaintiff’s claims of impecuniosity.

[39] In that regard, the authorities establish that impecuniosity, as a rule, generally should not and does not eliminate or reduce a party’s liability for costs, as such an approach generally would infuse the process with considerable uncertainty, and eliminate an important “reality check” on the manner in which even impoverished litigants pursue litigation. However, if established, impecuniosity may be one of the factors a court has the residual ability to consider, in extraordinary cases, in the exercise of its general cost discretion. See, for example, Agius v. Home Depot Holdings Inc., 2011 ONSC 5272, [2011] O.J. No. 4424 (S.C.J.), and the additional cases examined and cited therein. See also Boucher v. Public Accountants Council for the Province of Ontario, et al., supra, at paragraph 37, and Guelph (City) v. Wellington-Dufferin-Guelph, 2011 ONSC 7523, at paragraph 14.

[40] In my view, the circumstances of this case provide an excellent example of why the prospect of an adverse cost award must not effectively be cast aside as a deterrent to litigation by an impoverished but abusive and vexatious litigant. On the other hand, it seems clear that a cost award of any substance is likely to be a crushing and effective deterrent, as far as the plaintiff is concerned. In other words, from a deterrence perspective, the point of “overkill” will be reached at much lower amounts than those sought by the defendant.

[41] On the whole, I think justice will be done in this matter by an order directing the plaintiff to pay the defendants costs on a substantial indemnity basis, fixed in the total amount of $14,000.00 (inclusive of fees, disbursements and HST), payable forthwith.

“Justice I. F. Leach”

Justice Ian F. Leach

Released: July 28, 2014

[^1]: See Rules 57.01(1)(0.a) and 57.01(1)(b).