COURT FILE NO.: DV-08-0041913
DATE: 2014/12/24
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Liliane Morin (Auger) by her litigation guardian, Emmanuel Morin, Applicant
AND
Marie Morin, Anne Morin, Normand Turcotte and Gilles Laframboise, Respondents
AND
Douglas G. Menzies, Appellant (A lawyer against whom a costs order was made personally)
BEFORE: Mr. Justice Marc R. Labrosse
COUNSEL:
No one appearing for the Applicant or the Respondents
Heather J. Williams, Counsel for the Appellant Douglas G. Menzies
HEARD: October 23, 2014 at Ottawa
ENDORSEMENT
[1] This is a Motion for Leave to Appeal Justice Charbonneau’s Costs Endorsement dated April 2, 2014. In his decision, Justice Charbonneau (the“Costs Judge”) orders the Appellant solicitor, Douglas G. Menzies, to personally pay a portion of the costs owing to the Applicant. This Motion for Leave to Appeal was unopposed, was pleaded in English and argued in both English and French.
Background
[2] The Application which brought about the Costs Endorsement was commenced by Emmanuel Morin as litigation guardian for his wife, Liliane Morin (Auger). The named Respondents were his daughters, Marie Morin and Anne Morin and their respective husbands, Normand Turcotte and Gilles Laframboise. The Application was initially brought on an ex parte basis seeking amongst other things, an Order that (1) Liliane Morin be declared incapable, (2) Emmanuel Morin be declared her attorney for personal care, (3) she be returned to the family residence and (4) a capacity assessment be performed. The requested relief was granted in the ex parte Order of Pelletier J. dated September 13, 2013.
[3] On September 12, 2013, and prior to the ex parte Order of Pelletier J., the Respondents brought Liliane Morin to the Appellant who prepared powers of attorney appointing Marie Morin and Anne Morin as attorneys for both property and personal care. At the time of signing the September 12, 2013 powers of attorney, Marie Morin believed that it was in the family’s intention for her to be power of attorney for personal care for her mother and that her father could no longer act in this capacity.
[4] Upon being served with a copy of the ex parte Order of Pelletier J., the Respondents brought a motion before the Costs Judge seeking that the ex parte Order of Pelletier J. dated September 13, 2013 be set aside, as the Applicant had failed to serve the Respondents with the original Application while knowing that the Respondents were represented by the Appellant.
[5] On September 24, 2013, the Costs Judge issued a temporary Order setting aside the ex parte Order of Pelletier J. and ordered that Liliane Morin be assessed, that the power of attorney dated October 29, 2003 was deemed valid and that the status quo be maintained until such time as Mrs. Morin’s capacity could be formally assessed. Further, the Applicant was required to pay costs in the amount of $2500, as a result of having proceeded with the ex parte Application without notice to the Respondents. In finding that the October 29, 2003 power of attorney was valid, the Costs Judge did not rely on the September 12, 2013 powers of attorney prepared by the Appellant.
[6] In the following weeks, Liliane Morin was found to be incapable. As a result of the finding of incapacity, the Respondents consented to a Final Order issued by R. Smith J. on November 8, 2013 which invited the parties to submit costs submissions in writing. As part of the Applicant’s costs submission, a request was made for a portion of the costs to be paid by the Appellant as solicitor for the Respondents. In the Respondents’ costs submissions, the Appellant advised the Court that he had retained independent counsel and requested that if the Court was seriously considering a costs award against him personally, that he have an opportunity to make his own submissions. The costs submissions were referred to the Costs Judge given his familiarity with the matter. The Costs Endorsement was issued on April 4, 2014 by the Costs Judge without the Appellant having had an opportunity to make his own submissions apart from those of his clients, the Respondents.
Position of the Appellant
[7] As this Motion for Leave to Appeal was unopposed, only counsel for the Appellant made submissions and filed materials.
[8] The Appellant presents the following four questions upon which leave to appeal is sought:
Did the Costs Judge err in principle in ordering costs against the appellant lawyer personally by failing to apply the legal test required under Rule 57.07 of the Rules of Civil Procedure?
Did the Costs Judge provide sufficient reasons in order for the Appellant lawyer to discern that the appropriate test has been applied?
Did the Costs Judge err in principle by failing to consider the criteria required by the test under Rule 57.07, or apply inappropriate criteria, in ordering costs against the Appellant lawyer personally?
Did the Costs Judge err, as a matter of procedural fairness, by failing to provide the Appellant lawyer the opportunity to defend himself against a claim for costs under Rule 57.07?
[9] The Appellant’s submissions in this Motion for Leave to Appeal can essentially be summarized as follows: the making of an Order, pursuant to Rule 57.07 is a rare and exceptional remedy which should only be made with extreme caution. Prior to making such an Order, the lawyer must be afforded the opportunity to make a full and complete answer, which may require independent representation to avoid being placed in a conflict of interest with his clients.
[10] Further, the Appellant states that reasons must be adequately detailed to enable a party to know why issues were decided against him and to allow both the general public and the appellate court to know whether the applicable legal principles and evidence were properly considered.
[11] Finally, the Appellant advances that there was a lack of procedural fairness, as the Appellant requested an opportunity to make more detailed submissions in the event that the Court was contemplating costs under Rule 57.07 and that the failure to permit him to do so prevented the Appellant from properly defending himself.
Test for Granting Leave
[12] While the Costs Endorsement is a Final Order, as it finally disposes of the matter, there is no appeal as of right from such an order. Subsection 133(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43 states that where an appeal is only as to costs, such appeal can only be made with leave.
[13] The test for granting leave of an order for costs was set out by the Ontario Court of Appeal in Brad-Jay Investments Ltd. v. Szijjarto, 2006 42636 (ON CA), 218 O.A.C. 315, [2006] O.J. No. 5078 (Ont. C.A.) at para. 21, where the Court of Appeal stated:
Leave to appeal a costs order will not be granted save in obvious cases where the party seeking leave convinces the court there are "strong grounds upon which the appellate court could find that the judge erred in exercising his discretion".
Analysis
[14] The authorities provided by the Appellant support the position that in awarding costs personally against a solicitor, a court must demonstrate that it has considered that such an order must be made with extreme caution, to be exercised sparingly, with care and discretion and only in clear cases. In Walsh v. 1124660 Ontario Ltd., 2007 CarswellOnt 982 at para. 7, Lane J. states:
… However, courts must be “extremely cautious” in making such awards given the duties of the lawyer to bring forward the client’s case with courage. Hence, such orders should be made sparingly, with care and discretion, and only in clear cases.
[15] It has also been determined that there is a two‑part test to awarding costs personally against a lawyer. Firstly, the conduct must fall within subrule 57.07(1) in causing costs to be incurred unnecessarily. Secondly, the court must exercise its discretion (and apply the extreme caution principle) and determine if an award of costs against the lawyer is warranted in the particular circumstances. (Carleton v. Beaverton Hotel, 2009 92124 (ON SCDC), [2009] 96 O.R. (3d) 391 (Ont. Sup. Ct. Jus. Div. Ct.) at para. 21.
[16] Finally, the Court of Appeal has stated that prior to making an award of costs against a lawyer, the lawyer must be put on notice by the judge that he or she is considering an order against the lawyer and what the basis for the potential order would be. (Schwisberg v. Perry Krieger & Associates, 1997 522 (ON CA), 99 O.A.C. 75, (1997) 33 O.R. (3d) 256 (Ont. C.A.).)
[17] In the Costs Endorsement, the Costs Judge made a finding that the Appellant gave “bad advice” to the Respondents in preparing new powers of attorney before Mrs. Morin was assessed as to her capacity and that the result was that “he added fuel to the fire” in this litigation. It should then follow that the preparation of the powers of attorney must be the cause of costs being incurred unnecessarily to fall within Rule 57.07. However, at para. 4 of the Costs Endorsement, the Costs Judge reviewed the September 24, 2013 temporary Order, which included a provisional finding that the 2003 powers of attorney were valid. There is no indication that the September 12, 2013 powers of attorney prepared by the Appellant caused costs to have been incurred unnecessarily. It does not seem that the Costs Judge relied on the September 12, 2013 powers of attorney at all. In addition, the Costs Judge awarded $2500 in costs to the Respondents following the September 24, 2013 appearance, which suggests that it was proper for them to have brought the matter back before the Costs Judge.
[18] Other than the preparation of the September 12, 2013 powers of attorney, the only other conduct attributed to the Appellant is his role in the useless exchanges of correspondence between counsel. There is no finding here that such exchanges caused costs to be incurred without reasonable cause, although it may have been implied. At para. 22 of the Costs Endorsement, the Costs Judge made a finding in conclusion that the Appellant caused costs to be incurred without reasonable cause; however, as stated above, the conduct attributed to the Appellant is unclear. Further, there is no reference to the applicable case law or that he was mindful of the extreme caution principle in exercising his discretion.
[19] In reviewing the Costs Submissions of the Respondents, as submitted by the Appellant, I note that paragraphs 66 to 68 make reference to the extreme caution principle and the request by the Appellant to provide a separate response to the request for costs against him through his own counsel. There is no reference to this request in the Costs Endorsement.
[20] I am therefore satisfied that there are grounds upon which the appellate court could find that the Costs Judge erred in exercising his discretion to award costs personally against the Appellant. The appellate court should evaluate the Costs Endorsement and determine if the Costs Judge properly addressed the two‑step process as set out in Carleton v. Beaverton Hotel as referenced above. Further, the appellate court should evaluate if the Appellant was to be given an opportunity to make his own separate submissions on the request for costs payable by him personally.
Conclusion
[21] In finding that the required test for granting leave to appeal as set out in Brad‑Jay Investments Ltd. v. Szijjarto cited above has been met, I hereby grant leave to appeal the Costs Endorsement.
Costs
[22] Finally, with respect to costs of this Motion for Leave to Appeal, the question shall be left to the appellate court hearing the Appeal.
Mr. Justice Marc R. Labrosse
Date: December 24, 2014
COURT FILE NO.: DV-08-0041913
DATE: 2014/12/24
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Liliane Morin (Auger) by her litigation guardian, Emmanuel Morin, Applicant
AND
Marie Morin, Anne Morin, Normande Turcotte and Gilles Laframboise, Respondents
AND
Douglas G. Menzies, Appellant (A lawyer against whom a costs order was made personally)
BEFORE: Mr. Justice Marc R. Labrosse
COUNSEL: No one appearing for the Applicant or the Respondents
Heather J. Williams, Counsel for the Appellant Douglas G. Menzies
ENDORSEMENT
Labrosse J.
Released: December 24, 2014