ONTARIO
SUPERIOR COURT OF JUSTICE
CITATION: Isaac v. Law Society of Upper Canada, 2015 ONSC 1635
COURT FILE NO.: CV-13-472-00
DATE: 2015 03 11
BETWEEN:
DAVID GRANT ISAAC, JUDY ISAAC, ANDREW ISAAC
David Grant Isaac, for the Plaintiffs
Plaintiffs
- and -
THE LAW SOCIETY OF UPPER CANADA, LAWRENCE HADBAVNY, MARGARET COWTAN, NADIA MUSCLOW, JANICE DUGGAN, ROSEMARIE ABRECHT, SPENCER DENNIS, LOUIS ROSELLA, MISSISSAUGA NEWS AND TORSTAR CORPORATION
Allison Speigel, counsel for the Defendants
Joanne MacMillian, counsel to The Law Society of Upper Canada, Trustee Service department
Respondent
COSTS ENDORSEMENT
EMERY J.
[1] The Law Society of Upper Canada (“the LSUC”), its counsel and employees named as defendants in this action, seek costs against the plaintiffs in the amount of $44,333.52 for achieving success on:
having the first cross motion of the plaintiffs dismissed and the other cross motion declared unnecessary;
having the amended statement of claim struck in its entirety, without leave to amend; and
having the action dismissed.
[2] The LSUC defendants engaged counsel to represent them on a LawPro retainer, likely because the lawyers acting for the LSUC were at all material times joined to the action for reasons that triggered coverage under an errors and omissions policy. That retainer did not extend to those allegations made in the amended statement of claim against the Trustee Services department at the LSUC. Therefore, Ms. MacMillan from Trustee Services appeared on the motion to represent the LSUC in that capacity.
[3] The plaintiffs’ cross motion to challenge the trusteeship order made on February 2, 2011 by Justice Penny and to claim related relief was dismissed. As I found there to be no reasonable cause of action alleged by the plaintiffs for any issue related to obtaining and executing the trusteeship order, Ms. MacMillan seeks costs for the LSUC in the amount of $3,155.60.
[4] Mr. Isaac seeks “full costs” in the amount of $82,500 for fees representing 150 hours of his legal time at $550 an hour, even though the plaintiffs were the unsuccessful parties on the motions. He relies upon Rule 57.01(2) as authority for this position. He claims an additional $10,725 for HST for a total of $93,225. Mr. Isaac makes this claim for costs despite the fact he did not file affidavit material on any one of the three motions. He seeks to recover the value of his time having only filed two notices of motion and a factum in which he relied on the case of Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 SCR 959.
[5] Mr. Isaac opposes the claim for costs of the LSUC for Ms. MacMillan’s attendance. He challenges her standing to appear on the motions because Ms. Speigel was already before the court as counsel for the LSUC and the other moving defendants.
[6] Mr. Isaac further takes the view that counsel for the moving defendants “overworked” the motion. He alleges that Ms. Speigel’s review of the background materials was unnecessary to bring the motion under rule 21.01(1)(b). Under Rule 21(1)(b), facts are to be taken as proven for the purpose of the motion to determine whether there is no reasonable cause of action.
[7] The question of whether Ms. MacMillan can claim costs as a direct expense to the LSUC, in addition to the costs Ms. Speigel is seeking, should be addressed at this point. I have been advised that Ms. MacMillan appeared for the LSUC in her capacity as counsel for the Trustee Services department. Ms. MacMillan appeared to represent the interests of the Trustee Services department in response to the plaintiffs’ motion for an order to set aside the trusteeship order. If successful, that order would have had the effect of retroactively terminating the trusteeship order, and would have called into question the validity of all steps taken under its authority. Ms. MacMillan’s function as counsel was separate and distinct from Ms. Speigel’s function, which as I understand it, was based on her representation of the LSUC and its employees on a “LawPro” retainer.
[8] I find that Ms. MacMillan had standing as counsel for the LSUC independent of Ms. Speigel’s retainer. Her representation was necessary to protect the interests of the Trustee Services department. Section 36 of the Solicitor Act provides that costs should not be disallowed in a proceeding merely because they relate to a salaried solicitor for a party.
[9] Ms. Speigel as counsel for all moving parties had the greater role to communicate with Mr. Isaac, and to prepare materials for and make submissions on the motion under Rule 21 to strike all or part of the amended statement of claim. The responsibility fell to her to present an all-encompassing argument against the pleadings of the plaintiffs. Therefore, the defendants’ motion by its nature provided the basis for a much larger claim for costs than the costs claimed by Ms. MacMillan.
[10] Mr. Isaac submits that the moving defendants should not have relied upon the affidavit of Jonathan Speigel. He refers to the decision of Justice Nordheimer in Leadbeater v. Ontario (2001) 2001 CanLII 28341 (ON SC), 16 CPC (5th) 119. That case involved a motion to strike out all or part of a statement of claim alleging malicious prosecution and a number of other causes of action. It was not a costs case.
[11] A preliminary issue in Leadbeater related to what scope of materials referred to in the pleading were permissible for the court to consider on a motion under rule 21.01 (1) (b). On the motion before me, those materials were identified in my reasons. The moving parties did not rely on Mr. Speigel’s affidavit as a basis for that part of the motion, on which I struck the amended statement of claim. Indeed, the cross-motion to strike that affidavit was considered unnecessary.
[12] The sheer volume of materials that make up the documentary history between Mr. Isaac and the LSUC was made relevant by the amended statement of claim itself. This volume in itself created a great deal of preparatory time for all parties.
[13] Mr. Isaac also refers to the recent decision of the Court of Appeal in D’Mello v. D’Mello, 2014 ONCA 912 as authority to limit the amount he may be ordered to pay for costs as the unsuccessful party. In that case, the Court of Appeal considered a situation involving a lawyer bringing an action in defamation against the LSUC. That action was dismissed on a motion for summary judgment and upheld by the Court of Appeal. The costs order of the motions judge fixed in the amount of $5,000 was left undisturbed on appeal. Mr. Isaac relies on D’Mello to cap his exposure to costs on the motions at $5,000 if costs go against him.
[14] Each case in which costs are claimed turn on its own facts and circumstances. Costs are within the discretion given to the court by section 131(1) of the Courts of Justice Act, and on taking into consideration applicable factors set out in Rule 57.01(1) and general principals in the law of costs. I have taken into account the relevant factors on the motions before me under Rule 57.01 (1) when exercising my discretion on costs in this case.
[15] The amount the plaintiffs were seeking in the action amounted to $30 million. The fact that the plaintiffs pleaded damages on this scale makes it a factor to consider, even though the claim for damages of this magnitude defied belief based on the allegations of fact pleaded.
[16] The issues, by their nature and by how they were pleaded, were unnecessarily complex. Those issues in turn made the motions before the court of great importance to the parties. The serious allegations made against the LSUC and individual defendants on top of the quantum of damages claimed in the amended statement of claim simply magnified the importance of the motions to each of the parties named.
[17] Mr. Isaac is pursuing an amount for costs of almost double the costs the moving defendants seek. This leaves little room to question what the plaintiffs could reasonably expect to pay in costs as the unsuccessful parties on the motion and in the action. In view of the fact that Mr. Isaac and the defendants are both seeking costs, this reasonable expectation is a factor for the court to consider: Boucher et al. v. Public Accountant’s Council for the Province of Ontario et al., 2004 CanLII 14579 (ON CA), [2004] 71 O.R. (3d) 291 (Ont. C.A.). By making his own claim for costs, Mr. Isaac effectively removes the argument that counsel for the moving parties are seeking costs on the motions that are excessive or disproportionate.
[18] I am concerned that Mr. Isaac’s position on costs is not properly grounded. I say this with the greatest of respect given his years at the bar and the professional difficulties he has encountered. However, I question whether the pressures upon him may have altered his perception of the facts and his grasp of the law. I question whether he had the authority to join members of his family as plaintiffs in this action to put them at risk for costs. It would seem that Mr. Isaac reacts compulsively even when it is not necessary; that every move by an opponent requires a counter-move. The facts outlined in my reasons for decision give a brief history of the time and effort spent by Mr. Isaac in this regard. The two cross-motions brought in connection with the defendants’ motion under rule 21 were but recent examples.
[19] I do not know if Mr. Isaac, like a modern-day Sisyphus, feels compelled to push the same boulder up a different hill time and time again. If so, the time has come for Mr. Isaac to accept the reality that the unforgiving facts in the case against the LSUC defendants makes it a rock that will not roll, and up an incline too steep to climb.
[20] There were submissions but no evidence given about whether Mr. Isaac has paid the costs ordered against him by LSUC tribunals at different times during the last two years, or by other judges in related proceedings on other occasions. I can only conclude that if he was in a proper frame of mind, he would have paid those costs as they were incurred and taken prudent steps to avoid further cost orders. Such prudent steps would have included assessing whether Mr. Isaac and his family had a proper basis to make the claims alleged in the amended statement of claim.
[21] Unfortunately, they have not done so.
[22] The normal rule that costs follow the event should apply here. It is a rare occasion when costs are awarded to an unsuccessful party on a motion under Rule 57.01(2), and this is not one of those occasions.
[23] The moving parties in this action were successful on the motions and they are consequently entitled to their costs against the plaintiffs. An entitlement to costs under the current circumstances was recognized in the Leadbeater case that Mr. Isaac relies upon. In Leadbeater, costs were awarded to the defendants in any event of the cause. Here, the amended statement of claim was struck without leave to amend and the action was dismissed. There is no basis or reason to defer the fixing or the payment of costs to a later date under the circumstances of Mr. Isaac’s case.
[24] The motion required extensive preparation and the better part of two days to argue. But for my observations about Mr. Isaac’s loss of perspective, I would have had no difficulty in giving serious consideration to granting costs in the amount claimed by Ms. Speigel.
[25] I must make an order as to costs according to what I see as fair and reasonable when exercising my discretion under s. 131 of the Courts of Justice Act. After considering various factors under Rule 57.01(1), I have also taken into account Mr. Isaac’s circumstances and resulting behavior on the motions at issue under subrule 57.01(1)(i) as a matter relevant to the question of costs, and as it relates to members of his family who are plaintiffs. As a consequence, I have determined that it would be fair and reasonable to exercise restraint when setting the amount of costs awarded to the moving defendants and payable by the plaintiffs.
[26] I therefore award costs to the moving parties on a partial indemnity basis as follows, payable within 90 days:
$2,500 all-inclusive to the LSUC Trustee Services department for Ms. MacMillan’s representation;
$17,500 all-inclusive to the moving parties collectively for Ms. Speigel’s representation. Of those costs, $10,000 shall be payable jointly and severally by the plaintiffs; and
the balance of the costs made up of $7,500 to the moving parties and $2,500 to the LSUC Trustee Services department shall be payable by Mr. Isaac exclusively.
[27] The claim for costs made by Mr. Isaac both personally and on behalf of the plaintiffs is dismissed.
EMERY J.
Released: March 11, 2015
CITATION: Isaac v. Law Society of Upper Canada, 2015 ONSC 1635
COURT FILE NO.: CV-13-472-00
DATE: 2015 03 11
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DAVID GRANT ISAAC, JUDY ISAAC, ANDREW ISAAC
Plaintiffs
- and -
THE LAW SOCIETY OF UPPER CANADA, LAWRENCE HADBAVNY, MARGARET COWTAN, NADIA MUSCLOW, JANICE DUGGAN, ROSEMARIE ABRECHT, SPENCER DENNIS, LOUIS ROSELLA, MISSISSAUGA NEWS AND TORSTAR CORPORATION
Defendants
COSTS ENDORSEMENT
EMERY J.
Released: March 11, 2015