ONTARIO
SUPERIOR COURT OF JUSTICE
Court File No.: 07-15/13
Date: 2014-12-03
Re: Bhagria v. 316697 Ontario Inc.
Before: Lemon, J.
Counsel:
Wiffen, Mark, for the Applicants
Klaiman, Mark, for the Respondents
COSTS ENDORSEMENT
[1] On September 25, 2014, I dismissed the applicants’ claim to set aside a by-law passed at a general meeting of the Hindu Sabha temple. I ordered that if the parties could not resolve the issue of costs, written submissions could be made to me.
[2] I have now received those costs submissions. The respondents seek costs in the amount of $36,147.50 on a substantial indemnity basis or, alternatively, the sum of $23,500.00 on a partial indemnity basis plus HST and disbursements in the sum of $3,450.46. In support of this submission, the respondents have provided an itemized “client fees listing” totaling $36,147.50.
[3] In response, the applicants submit that there should be no order for costs as the applicants were “public interest litigants”. Alternatively, costs should be fixed in the amount of $10,000 plus agreed-upon disbursements of $3,450.46.
LEGAL PRINCIPALS
[4] Rule 57.01 of our Rules of Civil Procedure sets out the factors that the court may consider when determining costs. The relevant factors that I should consider here are:
(a) the result in the proceeding,
(b) any offer to settle made in writing,
(c) 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;
(d) 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;
(e) the amount claimed and the amount recovered in the proceeding;
(f) the apportionment of liability;
(g) the complexity of the proceeding;
(h) the importance of the issues;
(i) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(j) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution.
[5] Modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan, 1999 2052 (C.A.), 46 O.R. (3d) 330, at para. 22.
[6] Costs awards, at the end of the day, should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”: see Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (C.A.), 71 O.R. (3d) 291, at para. 24.
ANALYSIS
Public interest
[7] I will first deal with the issue as to whether Mr. Bhagria is a public interest litigant.
[8] The applicants’ costs submissions include the decision of Perell J. in Incredible Electronics v. Canada (Attorney General), 2006 17939 (ON SC), [2006] O.J. No. 2155, 147 C.R.R. (2d) 79, which discusses the definition of a “public interest litigant”. After a lengthy discussion of the case law, Justice Perell said:
[99] At this point in its legal development, there is a certain je-ne-sais-quoi quality to the nature of a public interest litigant, but having read the literature and having thought about it, it seems to me that sometimes a relevant but not determinative feature is that the public interest litigant is either the “other”, a marginalized, powerless or underprivileged member of society, or the public interest litigant speaks to the disadvantaged in society, even if he or she has his or her own selfish reasons for litigating. [References removed)
[9] As I said in my endorsement, Mr. Bhagria was president of Hindu Sabha until March 2007. The leadership of the temple has been involved in litigation over the control of the temple for many years. Most of the litigation has involved Mr. Bhagria. He has been aware of or involved in the litigation since its commencement.
[10] The dispute began with Mr. Bhagria’s letter of June 16, 2006. At that time, he was President of a 15 member Board of Directors. He chose to write to the board with the following declaration:
I have received letters from two Directors of the Board and a member of Hindu Sabha asking me to call the elections of Hindu Sabha Board.
As you are aware that the few of the monthly meetings of Board of Directors consecutively could not be conducted, as we did not have the full quorum, I feel for the best interest and smooth running of Hindu Sabha the following steps have to be taken:
- Dissolve the Board of Directors of Hindu Sabha
President to take over to run the day-to-day activities of the Temple.
So, please, take a note that effective immediately the Board of Directors of Hindu Sabha is dissolved and you are ceased to be a director from now on.
I shall call the elections for the new Board as soon as possible.
However, I shall be asking some directors, if they wish, to continue to help voluntarily to run the daily activities of the temple efficiently.
[11] Mr. Bhagria’s unilateral move to place himself in control led to heated general meetings and litigation.
[12] This application (commenced in Toronto but transferred to Brampton) is related to the ongoing proceeding in Brampton that commenced in 2008. All of the litigation is related to who should be managing Hindu Sabha.
[13] The applicants submitted that they have brought this application as there
has been no annual meeting of the membership of Hindu Sabha since 2008, no election of a new Board of Directors since June 2007, and the financial statements of Hindu Sabha have not been distributed to the membership since 2008. However, they would have known that those circumstances were entirely because of the outstanding orders within the litigation and not because of any wrong doing by the respondents. They would have known that this litigation would not have assisted that process.
[14] In any event, the Brampton litigation was settled to a large extent just before this application was heard. Those terms of settlement allowed for the calling of new elections so that the temple and its adherents could move on. This application was argued the same day as those minutes were filed. That resolution, however, was held up pending my determination of this application.
[15] In Mr. Bhagria’s April 22, 2014 affidavit, he says that he is not satisfied with the proposed settlement and new elections. There, he says:
First, the Minutes of Settlement merely provide that the settling defendants agree that the current Board of Management is at liberty to call an election. It does not state that the Board of Management will call an election. It further does not state that some other party may object to an election being called or otherwise disrupting the calling of an election.
More significantly, the settlement as a whole only binds Hindu Sabha and the four settling defendants to the Sharma Action. It has no broader application.
The intent of this Application is to have a court-directed resolution to internal governance litigation that has plagued our otherwise wonderful temple for so many years. It is my firmly held view that without a court order in this Application, a private settlement between Hindu Sabha and four of the defendants in the Sharma Action will have no lasting impact on Hindu Sabha. Indeed, even if there were an election called as a result of that settlement, it would be on terms controlled by the existing directors which could again lead to the concerns that Justice Baltman found were important enough to prevent an election from proceeding.
[16] It appeared to me that Mr. Bhagria seeks, for good reasons or bad, control of Hindu Sabha and intended to carry on the litigation despite the resolution.
[17] I also noted in my endorsement that “It is simply breathtaking to have Mr. Bhagria complaining that others have not followed the right procedures while simply proceeding to sign whatever documents he wishes despite his lack of position. Given his long-standing position with Hindu Sabha, his plea of ignorance is untenable”.
[18] Mr. Bhagria has been endeavoring to put himself back in control of the temple. For him to suggest that he was bringing this proceeding primarily for the public good, is equally breathtaking. Whatever the definition of a public interest litigant might be, it does not apply to the applicants.
[19] In their costs submissions, the applicants submit “Given the issues with the numerous forged membership applications, there was a public interest in raising the concerns in this proceeding”. However, as found in my endorsement, there was insufficient evidence to support such an allegation. There was no public interest of practical importance that needed to be litigated in 2014 relating to a 2007 election. See: St. James’ Preservation Society v. Toronto (City). 2006 22806 (ON SC), [2006] O.J. No. 2726, 272 D.L.R. (4th) 149 (S.C.J.).
[20] Further, the applicants submit that there was a substantial imbalance in the means of the parties in this action; the Hindu Sabha has a significantly higher ability to bear the costs of this proceeding than the applicants. Again, this submission is breathtaking. The temple is a charitable organization. Its means would not be best spent on any legal dispute. Effectively, it has much less ability to pay then does the applicant.
Costs Assessment
[21] Reviewing the principles of rule 57.01, I find as follows.
[22] The respondents have been successful and are entitled to costs.
[23] I am not advised of any offers to settle.
[24] The disbursements of $3,450.46 are agreed.
[25] The respondents seek costs on a substantial indemnity basis but counsel has attached the full account to the client. Accordingly, they are actually seeking full indemnity costs. There is nothing here that would allow for full indemnity costs.
[26] The respondents’ counsel charges his client $500 per hour and spent no more than 68 hours on the file. Although I asked for a proper bill of costs on two occasions, I have only received a copy of the bill from the respondents’ lawyer to his client. I cannot do a proper assessment based on that document.
[27] The written material and submissions ( other than the bill of costs ) were of very high quality. There were several volumes of materials and cross examinations were held on the affidavits. The argument took place over one day. There had been one contested adjournment when the matter was transferred from Toronto to Brampton.
[28] For unexplained reasons, this matter was first brought in Toronto. Justice McEwan ordered it back to Brampton as should have been plainly obvious to all concerned. That was a wasted attendance.
[29] Mr. Bhagria has been involved in this lengthy litigation and has seen other costs orders in the past. The applicants’ counsel has attached his own bill of costs in the amount of $24,127.37. Mr. Bhagria would be well aware of the potential cost consequences of this litigation. I can safely assume that Mr. Sharma would be so advised by both his counsel and Mr. Bhagria.
[30] The proceeding was not terribly complex because many of the issues had already been resolved in prior litigation. In the end result, I found little merit in the applicants’ arguments. The determination of the governing body for this institution and bringing an end to this litigation after so long was an extremely important point for all parties.
[31] Taking all of that into consideration, I award substantial indemnity costs to the respondents fixed in the amount of $30,000. The applicants shall be responsible for those costs on a joint and several basis.
FINALITY
[32] Further, in my endorsement, I said:
If I am wrong in my assumption that I have dealt with all outstanding issues, counsel shall arrange a conference call with me within 30 days to fix a timetable for the completion of those matters. If I am correct that this completes the matter, that confirmation shall be included in the costs submissions.
[33] I have received neither the conference call nor a confirmation in the costs submissions. I will therefore, by this endorsement, dismiss all of the outstanding issues in this application.
Lemon, J.
DATE: December 03, 2014
COURT FILE NO.: 07-15/13
DATE: 2014-12-03
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: BHAGRIA V. 316697 ONTARIO INC.
BEFORE: Lemon, J
COUNSEL: Mark Wiffen, for the Applicants
Mark Klaiman, for the Respondents
COSTS ENDORSEMENT
Lemon, J.
DATE: December 03, 2014