ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-12-467873
DATE: 20150820

BETWEEN:

Zalia Conde
Plaintiff

– and –

Robert Ripley, Mary Guzman and 1216784 Ontario Limited
Defendants

Tim Gleason and Jonathan Schachter, for the Plaintiff

D. Larry Todd, for Mary Guzman and 1216784 Ontario Limited

HEARD: May 21, 2015

SUPPLEMENTARY REASONS: COSTS

SEAN F. DUNPHY, J.

[1] In reasons released May 26, 2015 I dismissed the motion of the defendants Ms. Guzman and 1216784 Ontario Limited for summary judgment against the plaintiff Zalia Conde. Having received the costs submissions of the parties as directed by my ruling, the following is my ruling on the matter of costs.

[2] As a preliminary matter, I received correspondence from counsel regarding a dispute about a settlement offer on the costs issue. In summary, the successful plaintiff made a settlement offer which was not accepted by the moving party defendants who instead replied with a counteroffer. The counteroffer was not accepted and the plaintiff filed her costs submissions with this court.

[3] The moving party defendants sought to treat the original offer as open for acceptance and communicated the details of that offer to me. No explicit agreement to leave the offer open for acceptance after it was rejected by means of a counteroffer has been suggested here.

[4] Counsel on both sides are experienced, seasoned counsel. I do not need to remind either of them that settlement discussions are privileged and breach of privilege is a serious matter. If counsel for the moving party defendants believed that a settlement had been reached – and he appears today to accept that such is not the case – the proper procedure would have been to move to enforce it. It would have been a simple enough matter to remove dollar amounts from correspondence and seek a ruling on whether there had been offer and acceptance, whether circumstances existed by which the offer remained open for acceptance despite a counteroffer or any other matters upon which the parties were unable to agree. The moving party defendants should not have provided me with details of the amounts of the actual offers of either side. I have of course entirely disregarded that information in assessing the submissions of the parties.

[5] The criteria for fixing costs are well established in the Rules and by the jurisprudence. Costs are always discretionary, but Rule 57.01 of the Rules of Civil Procedure provides a non-exhaustive list of criteria that the court may consider. In the normal course, such criteria are a useful guide and largely sufficient. Occasionally other unique factors of a case acquire additional weight. I have not found this case to present any such unusual elements.

[6] This was a motion for judgment brought by the only defendants who have responded to the claim to this point. The former spouse of the plaintiff, Mr. Ripley, has left the jurisdiction and efforts to serve him or track down his assets are on-going. The plaintiff is a woman of limited means who is bringing this proceeding with the assistance of Legal Aid. The claim advanced in this case concerns real estate in Ontario and may be the only source of potential recovery for her if she is able to establish the elements of her claim. In short, this motion was of critical importance to the plaintiff.

[7] It was also an important motion for the moving party defendants as well. From their vantage point, the obligations of the plaintiff’s former spouse to her are not their concern (the moving party defendants are the sister of the former spouse and her holding company). A successful motion for judgment would entirely end the claim as against them and enable them to have no further role in the matter.

[8] The stakes were high for both sides and it was necessary and appropriate for both parties to treat the matter accordingly. The mere fact that oral argument consumed half a day is not determinative. Oral argument is often the tip of the legal iceberg in terms of the time and expense consumed in bringing a matter to that stage: preparation of affidavits, cross-examinations upon them, legal research and preparation of written arguments and facta all contribute to the ability of the parties to condense a complex matter into a shorter hearing that uses the court’s time most efficiently.

[9] Where, as here, the issue was of existential importance to both parties, I am inclined to be less particular in examining the necessity of each and every step in the pre-hearing process. Cross-examinations on affidavits, for example, can often be a protracted and expensive affair delivering little if any useful evidence for the hearing on some kinds of motions and a necessary step on others, even if similarly resulting in little useful evidence. Examining both costs outlines, I see no indications of steps undertaken by the successful plaintiff which were abusive, unnecessary or excessive.

[10] The plaintiff was successful on the motion. Her action will proceed and she will have the opportunity to establish whether her claim is a valid one on the merits. The moving party defendants seek to argue that her victory was less than complete since she was unsuccessful on one of the arguments advanced. There is an old saying among pilots: any landing you walk away from is a good one. Ms. Conde walked away from this motion with her action intact. That was her objective and she achieved it. She was successful and in my view is unquestionably untitled to partial indemnity costs without any implicit reduction for “partial success” or “mixed success”. She needed only one argument to succeed in defeating the limitations defence advanced against her. She advanced all reasonable grounds in response – one of them proved successful. She achieved what she set out to do and the means employed were appropriate and reasonable to the task and the stakes.

[11] The plaintiff has included costs associated with two other matters in her outline. Firstly, she included (as I requested) costs in respect of a separate motion to effect substituted service on the defendant Robert Ripley (her former spouse). That was a separate motion for which costs are properly chargeable to Mr. Ripley as and when he is located, but cannot reasonably be laid at the doorstep of the other defendants. She has not sought to do so. She also included costs related to a proposed amendment to the Statement of Claim. That amendment was agreed to by the moving party defendants, but only very, very late in the day (at the hearing). It should have been dealt with from the outset – even if “without prejudice” to the summary judgment motion. I consider it proper for the plaintiff to have included those costs and include them in my assessment.

[12] An issue was raised in the submissions of the parties regarding the impact if any of the discounts agreed to by plaintiff’s counsel. It is common ground that the plaintiff’s counsel agreed to work at a discounted rate in presenting this motion. Their reasons for doing so are, of course, their own affair. Far be it from me to suggest that such arrangements should be discouraged or penalized. The plaintiff’s outline of costs appropriately breaks down actual amounts charged as well as the claimed partial indemnity fees. The total amount of fees charged to the client in respect of this motion (including the pleadings amendment consented to at the hearing) was $19,161.41. In my view, that is an appropriate ceiling to be applied to the plaintiff’s cost request. The principle of indemnity will normally preclude the plaintiff from recovering more than her actual costs. I do not view the rule as being inflexible but I see no factors in this case warranting a departure from it. By the same token, where counsel has agreed to work for a discount in some particular case, the amount of partial indemnity costs to which their client may become entitled is not fixed on some arbitrary percentage of actual costs including any discount negotiated in a particular case. The losing party does not benefit from that bargain beyond the normal rule of not permitting the successful party to be compensated beyond actual costs.

[13] I have carefully reviewed the hours claimed in the outline of the plaintiffs as well as the proposed partial indemnity rates. The plaintiff appears to me to have appropriately allocated tasks as between junior and senior counsel in a cost efficient manner. The rates requested for both on a partial indemnity basis are lower than the rates the moving party defendants sought for Mr. Todd on a partial indemnity basis. They are also reasonable in my view for counsel of the experience and seniority of Mr. Gleason and Mr. Schachter respectively. That fact that such rates are also the rates they agreed to charge their client is relevant only for the purpose of establishing a ceiling on recovery.

[14] The principal disagreement between the two costs submissions are (i) total hours charged; and (ii) reasonable expectations of the losing party. Mr. Todd suggests that the 47 hours that he recorded in his own costs outline would be a more appropriate guideline than the 73 hours incurred by the plaintiff. He also suggests, on similar grounds, that the reasonable expectations of the defendant ought to be conditioned by his own costs outline. I disagree.

[15] Firstly, Mr. Todd’s own costs outline was prepared and delivered after the fact. A costs outline delivered in anticipation of possible victory and in fear of possible defeat has its own internal checks and balances which one delivered after the fact lacks. While a costs outline contains a certificate of counsel that the time claimed was actually spent, it does not of course certify that counsel did not spend additional time not recorded or claimed. Mr. Todd’s own costs outline is certainly a factor in establishing reasonable expectations of the defendants, but it is only a factor.

[16] Secondly, I view Rule 57.01(0.b) as considering the objective expectations of reasonably informed parties having regard to the other factors in Rule 57.01 of the Rules of Civil Procedure. This single factor – which is but one of several which inform the exercise of the judge’s discretion – suggests that the losing party normally ought not to be surprised, or at least not unduly surprised, by a costs ruling if they have objectively considered the same criteria examined by the deciding judge. Obviously, the actual costs incurred by counsel on one side of the table, is a factor that will enter into that equation. This criterion invites the court to take a step back and consider the award as a whole and in context.

[17] There is only limited use that can be made of Mr. Todd’s argument regarding the disparity in claimed hours. While the plaintiff’s cost outline may have included 26 hours more total time than the moving party defendants’, this does not necessarily imply excessive or wasted time. Mr. Todd’s total of hours outline excluded the time associated with the hearing and preparation for it – these were instead included in a block appearance fee. The plaintiff, on the other hand, broke down all hours, including for the hearing. Mr. Schachter, a more junior level counsel, performed the lion’s share of the hours charged in the plaintiff’s outline. One reason for having a rate differential between junior and senior counsel, after all, is to recognize the likelihood that the experience of senior counsel enables them spend less time that junior counsel might require in a number of tasks (certainly not all!). As well, Mr. Todd was able to draw upon his longer history with the file. The plaintiff’s counsel – by reason of the nature of his retainer – was new to the file through no fault of his own or his client’s. Adjusted for these factors, the differential in raw hours between the two outlines becomes quite a bit smaller if it does not disappear altogether.

[18] I have given the competing positions of the parties careful thought and determined that the plaintiff ought to receive an award at the high end of what she has claimed. The rates charged (on a partial indemnity basis) are reasonable and the hours not excessive having regard to the factors to be considered here. I am nonetheless compelled to attribute some weight to the reasonable expectations factor in adjusting the claim downwards by a moderate amount.

[19] As regards Mr. Ripley (who has not yet appeared in these proceedings and seems to have left the jurisdiction at least in part because of them), I made an order for substituted service upon him following a motion brought by the plaintiff (necessarily ex parte). I asked for the plaintiff’s costs submissions which I have now received. The total amount claimed is $1,860.26. The history of this matter justifies me making a costs award, even on an ex parte basis. I am satisfied that Mr. Ripley has been seeking to frustrate or defeat his former spouse’s claims arising from the dissolution of their relationship. His departure from the jurisdiction is at least partly motivated by a desire to avoid facing his former spouse and her claims against him. Accordingly, I am fixing costs in the amount claimed by the plaintiff which I find to be reasonable in the circumstances. The rates claimed are the same discounted rates discussed above as appropriate for partial indemnity rates while the hours charged are, having regard to the difficulties encountered, reasonable.

[20] Accordingly, I have decided to fix costs as follows:

a. The Moving Party Defendants (Ms. Guzman and 1216784 Ontario Limited) are ordered to pay the plaintiff costs fixed at $17,500 in fees and $508.36 in disbursements, in both cases including all applicable HST for a total of $18,008.36;

b. Mr. Ripley is ordered to pay costs in the amount of $1,860.26 inclusive of fees, disbursements and applicable HST;

c. Both costs awards are payable forthwith and bear interest at the post-judgment interest rate under the Court of Justice Act, R.S.O. 1990, c. C.43.

Sean F. Dunphy, J.

Date: August 20, 2015