ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Gale Tucker, Norel Tucker and Colleen Clancy,
Cheryl C.M. Siran, for the Plaintiffs
Plaintiffs,
- and -
Daniel Saunders, James William Saunders and Laura Charmaine Saunders,
Chris C. Santos, on Motion for Costs only, for the Defendants
Defendants
Madam Justice H.M. Pierce
Reasons On Motion For Costs
Introduction
1The plaintiffs were successful at trial in their claim for a permanent injunction, damages for trespass, and punitive damages. The judgment totalled $103,031.95.
2The plaintiffs seek full indemnity costs in the sum of $44,265.01, or in the alternative, at a minimum, partial indemnity costs to the date of the plaintiffs’ offer on April 1, 2014 and substantial indemnity thereafter. This alternative claim would total $33,439.05. Substantial indemnity costs for the action total $39,181.71.
3The trial required 2.5 days. The pleadings were amended; examinations for discovery were conducted; and two pre-trials were held. Expert surveying evidence was called at trial. The defendants changed counsel twice before representing themselves at trial.
4On the motion for costs, the defendants conceded that the plaintiffs are entitled to costs on a partial indemnity scale. They submit that the offer delivered by the plaintiffs was not a Rule 49.10(1) offer. They argue that they did not intend to mislead the court, and, having been penalized with punitive damages of $10,000, the costs award should not also contain a punitive element. As well, they submit that the costs of the articling student are excessive and should be scaled back to $50 per hour.
The Offer to Settle
5The defendants submit that although they received the plaintiffs’ offer to settle on April 1, 2014, they were not able to meet with the plaintiffs to discuss the offer before June, 2014. They concede they did not accept the offer in writing but attempted to accept it orally when the parties met. They argue that the plaintiffs inserted another condition that the defendants were unable to meet: that payment must be made prior to trial. Trial began on July 7, 2014. The defendants also say that their efforts to satisfy this new condition in the offer “contributed in part to their disorganization at trial.”
6The defendants submit that Rules 49.13 and 57.01(1) permit the court to consider the offer to settle in relation to the scale of costs but that substantial indemnity costs should not automatically be awarded after April 1, 2014.
7Rules 49.13 and 57.01 give the court discretion to consider any offers made when considering costs. The reason is simple: parties are encouraged to evaluate the merits of their own cases and exchange offers in order to avoid trials. An accepted offer leads to a speedy resolution of the case on terms that are agreeable to the parties. On the other hand, costs may be awarded against the losing party on a higher scale where an offer in compliance with the rules has not been accepted.
8Rule 49.10(1) provides:
Where an offer to settle,
(a) is made by a plaintiff at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the defendant,
and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.
9In my view, the plaintiffs’ offer to sell the property on which the trespass occurred for $30,000 falls within the terms of Rule 49.10(1). The offer was made in compliance with the rule and judgment at trial was more favourable than their offer.
10In order to bring the litigation to an end, the defendants might have simply advised the plaintiffs in writing that they accepted their offer. When the case was not resolved, trial was the inevitable result. The trial was adjourned in April 8, 2014 to accommodate the defendants. I do not accept that the reason they were not prepared for trial is that they were preoccupied with an offer they received two months prior to trial.
11Here, there is no indication that the defendants made any offers. There are no special circumstances suggesting that the court should not apply the rule. If the rule is to have any deterrent effect, it should be applied in a predictable manner.
What is the Proper Scale of Costs?
12The plaintiffs seek full indemnity costs, submitting that they are not blameworthy, and should not be out-of-pocket because of the defendants’ conduct.
13The defendants argue that partial indemnity costs are the appropriate scale of costs. They say that substantial indemnity costs should not be ordered because the award of punitive damages already reflects the court’s criticism of their conduct. I do not accept this submission.
14Full indemnity costs should be limited to very exceptional cases. In this case, the court ordered punitive damages to express disapproval of the defendants’ conduct. In my view, in addition to the cost consequences arising from the application of Rule 49.10(1), substantial indemnity costs are warranted in this case, for the reasons set out below.
15In The Law of Costs, 2d. ed. Mark M. Orkin (Toronto: Canada Law Book, 2014), 219.1.2, the author comments on whether an award of solicitor-and-client [substantial indemnity] costs is precluded when punitive damages are awarded:
Some Canadian courts have declined to award both punitive damages and solicitor-and-client costs on the reasoning that a party who has been punished for misconduct by an award of punitive damages should not be further punished by having to pay costs on the higher scale. As a variant on this theme the court refused to award solicitor-and-client costs against a defendant because it would have had the effect of punishing in costs after the court refused to punish in damages.
The better view appears to be that the two issues are legally distinct or, putting it another way, the issue of indemnifying a plaintiff for legal costs is sufficiently distinct from punishing a defendant for misconduct that an award of punitive damages should not automatically preclude the awarding of solicitor-and-client costs…. Consequently, depending on the circumstances, courts have not hesitated to award solicitor-and-client costs in addition to an award of exemplary, or aggravated, or punitive damages…. [Citations omitted].
16In this case, punitive damages were awarded because of the defendants’ conduct in trespassing on the plaintiffs’ land and causing damage, even after an order issued prohibiting them from trespassing. I concluded that legal fees as well as significant survey costs could have been avoided completely and damage minimized had they paused to consider that they might be wrong. Instead, they built a road across the plaintiffs’ forest, in an arrogant manner. When the plaintiffs objected to the construction, Daniel Tucker drove his vehicle towards them aggressively; the Tuckers jumped into the ditch to avoid being hit.
17Apart from damaging the plaintiffs’ property, I concluded that it was probable that the defendants were responsible for slashing tires at the plaintiffs’ property, damaging their plantings, and destroying a vegetable cart. One of the defendants tried to throw Mr. Tucker’s camera in the creek.
18The plaintiffs were put to considerable expense and disruption as a direct consequence of the defendants’ unjustified conduct. Mr. Tucker was under-going cancer treatment at the time the trespass occurred. The plaintiffs were also put to considerable legal expense as a result of their misconduct.
19In determining costs, the court is also entitled to consider the defendants’ conduct during the litigation. Examples of their reprehensible conduct extended into their conduct in this case. For example, they ignored an interim order enjoining them from trespassing. Ultimately, Daniel Saunders was prosecuted for breach of a court order under the Criminal Code.
20On more than one occasion, Daniel Saunders complained to the police that Gale Tucker was trespassing on his land, when there was no foundation for his complaint. Nevertheless, the police felt bound to investigate, thereby disturbing Ms. Tucker and taking up police time when Mr. Saunders knew that no offence had taken place. It was pure harassment.
21On the eve of trial, the defendants advised the court that a woman who was not a lawyer would conduct the case for the defendants. The defendants were advised that leave would not be granted for her to represent them.
22On the night before trial, the same woman called the plaintiffs threatening to have Mr. Tucker charged with sexual assault if they did not “drop the case.” The telephone call originated from Daniel Saunders’ telephone.
23During trial, the defendants were unprepared. The trial process threatened to descend into chaos. The defendants had not marshalled their evidence. Despite the court’s direction to the contrary, they insisted on having more than one defendant conduct the case. They requested adjournments, ostensibly because of illness. For example, Daniel Saunders complained that he was not well enough to proceed due to a back injury but then abruptly took over the handling of the case when he felt his father was not proceeding appropriately.
24Daniel Saunders interrupted his father’s cross-examination, claiming that his father was ill when James Saunders made no complaint about illness and insisted that he was comfortable in proceeding. In fact, he completed his testimony.
25Daniel Saunders refused to admit the obvious during trial. He denied that he was served with a trespass notice by a bailiff, even though he admitted that he retained counsel about the dispute immediately after. He disputed ownership of the land. Credibility findings were made against him and his son, who also testified.
26The defendants counterclaimed that the plaintiffs had defamed them, and then refused to abandon this claim at trial, even though they called no evidence and made no submissions about the counterclaim.
27In summary, the defendants’ conduct was outrageous, both in and out of the court room.
Quantum of Costs
28As I have concluded that substantial indemnity costs are warranted, what is the amount of those costs?
29Because no costs were awarded or reserved on the interim injunction, the plaintiffs cannot recover costs of the injunction in the action. On a substantial indemnity basis, the plaintiffs’ costs are reduced by $2,445 plus applicable HST.
30The defendants complain that the partial indemnity rate of $100 per hour attributable to Mr. Downs for the period March 1 – May 18, 2012 is excessive because he was then an articling student. They submit that an hourly rate of $50 is appropriate for this period of time, but take no issue with the other charges for Mr. Downs. Having disallowed all costs claimed for the interim injunction, this submission is largely redundant. Given that substantial indemnity costs are ordered, I am not prepared to reduce the hourly rate.
31The defendants are ordered to pay costs to the plaintiffs fixed at $36,418.86 inclusive of fees, disbursements and HST.
___”original signed by”
Madam Justice H.M. Pierce
Released: March 3, 2015
CITATION: Tucker v. Saunders, 2015 ONSC 1398
COURT FILE NO.: CV-12-32
DATE: 2015-03-03
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Gale Tucker, Norel Tucker and Colleen Clancy,
Plaintiffs,
- and -
Daniel Saunders, James William Saunders and Laura Charmaine Saunders,
Defendants
REASONS ON MOTION FOR COSTS
Pierce J.
Released: March 3, 2015
/mls