COURT FILE NO.: CV-11-5154

DATE: 2015/10/20

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: RENEE CHARLEBOIS, Plaintiff

AND:

SSQ LIFE INSURANCE COMPANY INC., Defendant

BEFORE: Valin J.

COUNSEL: James C. Simmons, Q.C., for the Plaintiff

Christine G. Carter, for the Defendant

HEARD: October 5, 2015

ENDORSEMENT

[1] In this action, the plaintiff seeks an award of damages from the defendant as a consequence of the defendant terminating benefits the plaintiff claims are owed to her under a policy of disability insurance.

[2] In January of this year, the defendant brought a motion before me for an order removing the firm of Larmer Stickland P.C. as counsel for the plaintiff. In written reasons released on January 19, 2015, I dismissed that motion. Mr. Simmons appeared as counsel for Larmer Stickland P.C. on that motion.

[3] Paragraph 75 of that endorsement provided:

In the event they are unable to agree on the issue of costs, counsel may obtain an appointment from the trial coordinator in North Bay to address the matter by way of long distance telephone conference.

[4] The defendant moved for leave to appeal my decision on the motion. The leave motion was argued before Ellies J. He dismissed the motion for leave. The last paragraph of his endorsement made provision for the parties to make written submissions on costs in the event they were unable to agree on costs.

[5] In a series of emails between counsel, the costs on the motion for leave were settled. Counsel for the plaintiff agreed to accept the sum of $6,500, inclusive of disbursements and HST, for costs only on the motion for leave to appeal, and notified counsel for the defendant that Mr. Simmons would be dealing with the issue of costs of the motion below. Counsel for the defendant accepted that offer.

[6] The costs of the motion before me have not been settled. Because of the nature of the motion before me, counsel for the plaintiff retained the firm of Weaver Simmons to represent the plaintiff on the motion. Mr. Simmons has delivered a solicitor and client account to Mr. Larmer for services rendered on this file to and including August 20, 2015. Although he did not argue the motion before me, Mr. Larmer was actively involved in the preparation for and defence of the motion.

[7] Counsel for the plaintiff prepared a draft bill of costs on the substantial indemnity scale with respect to the motion before me. Mr. Simmons made the submissions on behalf of the plaintiff.

[8] The issues that arose during submissions were: (a) the plaintiff’s entitlement to costs; (b) if the plaintiff is found entitled to costs, on what scale should costs be awarded; and (c) if the plaintiff is found to be entitled, the quantum of costs to be awarded having regard to the principle of proportionality.

(a) Entitlement to Costs

[9] Counsel for the defendant argued that, in the circumstances of this case, I am functus and therefore unable to make any award of costs on the motion before me. As I understand her argument, I released my decision on the motion on January 9, 2015. The plaintiff’s request for costs on the motion was not received until September 24, 2015, over eight months after the motion was heard. In the meantime, the defendant sought leave to appeal my order. Ellies J. denied that motion on May 29, 2015.

[10] Counsel for the defendant argued that, once an order is final, the decision cannot be revisited. She submitted that, because my order was the subject of a motion for leave to appeal, my order can no longer be varied or amended.

[11] I fail to see how those submissions are relative. My endorsement clearly makes provision for costs of the motion. The plaintiff is now requesting that I make an award of costs. No variation or amendment of my endorsement is necessary before the plaintiff may seek such an award.

[12] Counsel for the defendant next argued that, since leave to appeal my order has already been sought and denied, the defendant is now prejudiced in having to seek leave to appeal the same order twice and is potentially without recourse on this issue. In addition, she argued that the defendant undertook negotiation of the costs of the leave motion in good faith on the understanding that the plaintiff was not seeking costs of the motion below.

[13] With respect, the record flies in the face of those submissions. As noted earlier, the plaintiff’s offer to settle the costs of the leave motion clearly reserved the entitlement to pursue the costs of the motion argued before me. The defendant accepted that offer.

[14] I therefore conclude that the plaintiff is entitled to an award of costs on the motion argued before me.

(b) The Appropriate Scale of Costs

[15] Counsel for the plaintiff argued that I should award costs on the substantial indemnity scale for three reasons. The first reason was the substantial delay in the plaintiff’s ability to prosecute its action against the defendant caused by the motion. Defence counsel informed Mr. Larmer on August 16, 2011, that if he did not remove himself from the record, a motion would be necessary. Mr. Larmer informed defence counsel on September 2, 2011 that he had no intention of removing himself as counsel of record. The defendant did not bring its motion until March 27, 2014. Cross-examinations followed and the motion was eventually argued before me in January 2015. Counsel for the plaintiff submitted the delay of almost three and a half years was completely unnecessary.

[16] Before any obligation to pay under the policy of disability insurance arises in this case, the defendant is entitled to offsets resulting from the plaintiff’s tort action and CPP benefits. The plaintiff settled her tort action on August 29, 2012. Her entitlement to CPP disability benefits was determined on November 29, 2012. To date, despite repeated requests, counsel for the plaintiff has not disclosed the plaintiff’s recovery in the tort action or from CPP. In those circumstances, I do not find the delay argument to be persuasive.

[17] The second reason was the nature of the defendant’s motion and the relief requested. In addition to the request for an order removing the plaintiff’s chosen lawyer as counsel of record, the defendant requested substantial indemnity costs against Mr. Larmer personally.

[18] The jurisprudence dealing with the circumstances under which counsel will be removed from the record suggests that such an order will only be made where counsel of record has acted inappropriately, in bad faith, or where he/she has been clearly derelict in his/her duties as an officer of the court. In its motion material, the defendant alleged that Mr. Larmer deliberately and inappropriately accessed solicitor-client privileged information and/or litigation privileged information to gain a tactical advantage in this action. The defendant alleged that Dr. Phillips and Deborah Hillborn were its litigation experts and that Mr. Larmer failed in his professional responsibility to advise those health care practitioners that they were in a conflict of interest.

[19] The substance of my endorsement dismissing the defendant’s motion to remove Mr. Larmer as counsel of record was that the defendant failed to provide any evidentiary foundation in support of the relief requested. The defendant placed Mr. Larmer’s professional integrity squarely in issue and its motion failed.

[20] In its motion, the defendant was seeking substantial indemnity costs against the plaintiff and Mr. Larmer personally. This is a classic case of “what is sauce for the goose is sauce for the gander.”

[21] Third, I agree with counsel for the plaintiff that the principles enunciated by Stinson J. in Girgis–Boktor v. Reddy[^1] are applicable to this case. Allegations that impugn the professional integrity of counsel for an adverse party, and which are found to be unproven, warrant a punitive award of costs.

[22] I agree that the plaintiff is out of pocket for all costs associated with the motion argued before me. The time expended by Mr. Simmons and Mr. Larmer on the motion will be of no use to the plaintiff in advancing her claim. In those circumstances, it is only fair that the defendant should indemnify the plaintiff for the expense she has incurred in defending the motion.

[23] I therefore conclude that this is an appropriate case in which to make an award of costs on the substantial indemnity scale.

(c) Quantum of the Award of Costs

[24] The plaintiff has submitted a bill of costs on the substantial indemnity scale in the amount of $50,537.03, inclusive of disbursements and HST. Mr. Simmons requested a further amount of $1,500 for the responding material prepared over the weekend before the motion was argued and the attendance by telephone to argue costs.

[25] Counsel for the defendant argued that Rule 57 of the Rules of Civil Procedure requires that, when fixing costs, the court should take into account proportionality. Given the continuing failure of the plaintiff to advise how much she has recovered from the tort defendant and CPP disability benefits, counsel for the defendant suggested that it is quite possible that the plaintiff has received an overpayment and could owe money to the defendant.

[26] Counsel for the defendant argued that to spend $50,000 on a motion where the claim in the action has little or no value is clearly not in accordance with the proportionality rule. She further submitted that both the motion and the incurring of legal fees could and should have been avoided altogether.

[27] I have no way of knowing whether there is any substance to defence counsel’s suggestion that the plaintiff’s claim has little or no value.

[28] However, counsel for the defendant fails to see or acknowledge that the defendant’s motion was a substantial attack on the professional integrity of Mr. Larmer. In my view, if the defendant seriously wished to pursue settlement of the plaintiff’s claim, the act of withdrawing the motion would have sent a signal of good faith of the defendant’s desire to pursue settlement. Counsel for the defendant complained of the plaintiff’s continuing failure to disclose the results of the tort action and claim for CPP disability benefits. The defendant had other steps available to it to pursue production of that information short of a motion attacking Mr. Larmer’s professional integrity. The defendant chose not to withdraw the motion, but rather to proceed to argue it. It must now live with the consequences of failing to prove the allegations against Mr. Larmer.

[29] In any event, proportionality is but one factor for me to consider under Rule 57. Among other things, I must also consider the conduct of any party that tended to lengthen the duration of the proceeding. Counsel for the defendant submitted that the defendant had no way of knowing that Mr. Larmer had not received any solicitor-client or litigation privileged information from either of the two health care practitioners until I made such a finding after the motion was argued. With respect, I disagree. That fact should have been clear to the defendant after the cross-examination of Mr. Larmer was completed. The defendant chose to proceed with the motion notwithstanding what it knew by that time.

[30] Counsel for the plaintiff pointed out that, in Girgis-Boktor v. Reddy, Stinson J. made no reference to the value of the plaintiff’s claim, but rather focused on the actions of the defendant in bringing the motion in the first place. Stinson J. awarded substantial indemnity costs in the amount of $50,000, an amount almost identical to the amount of costs requested by the plaintiff in this case.

[31] Counsel for the defendant pointed out that the solicitor and client account from Mr. Simmons to Mr. Larmer contains 31 entries that post-date the hearing of the motion. A close examination of those entries suggests that perhaps 3.7 hours billed might have been related to the leave motion. In the end, any reduction I might otherwise make is offset by the plaintiff’s modest request for the additional sum of $1500 as counsel fee for the preparation for and attendance to argue the costs issue.

[32] In all other respects, the bill of costs tendered by counsel for the plaintiff, while at the high end of the scale, is reasonable and not excessive.

[33] I fix the costs payable by the defendant to the plaintiff on the substantial indemnity scale in the amount of $50,537.03, inclusive of disbursements and HST. That amount is payable in 30 days.

The Honourable Mr. Justice G. Valin

Date: October 20, 2015

[^1]: Girgis–Boktor v. Reddy, 2014 ONSC 4411 (Superior Court of Justice).