SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-09-373268
DATE: 20151207

RE: MICHELLE ALICE TONDERA and MARYON TONDERA, Plaintiffs

AND:

VESELIN VUKADINOVIC, MIHAJLO (MIKE) MILICEVIC and DOROTHY ELLYN FOX, Defendants

BEFORE: Mr. Justice Graeme Mew

COUNSEL:
Scott Jones, for the Defendant Dorothy Ellyn Fox

Vesna Vojvodic, for the Plaintiff/Respondent

HEARD: In Writing

COSTS ENDORSEMENT

[1] In an endorsement dated 23 September 2015 (2015 ONSC 5843) I granted judgment in favour of Dorothy Ellyn Fox and Mihajlo Milicevic enforcing the terms of a settlement agreement and, as a consequence, dismissing this action against those defendants.

[2] In my endorsement I indicated that I was presumptively of the view that if any costs were to be payable at all they should be paid by the plaintiffs to the defendant Fox. I encouraged the parties to agree on costs but left it open to the parties to seek a determination of costs from me in the event that agreement could not be arrived at.

[3] There has been no agreement as to costs and, hence, submissions on costs have now been received on behalf of the defendant Fox and the plaintiffs.

[4] The costs outline filed by the defendant Fox claims partial indemnity costs, inclusive of disbursements and HST, of $9,499.33. Of this, $8,177.70 represents fees. The partial indemnity rates charged for senior counsel, Ms. Fotopoulos and Mr. Love, are $350 per hour and $300 per hour respectively correspond with those individuals’ “Law PRO” rates. I understand this to be a reference to the hourly rates actually paid to them for their services by the insurers of the defendant. The costs outline also includes an “actual” rate, which is not explained, but which I have taken to be the rates more typically charged by the fee earners concerned to their clients.

[5] A costs outline was also provided by the plaintiff asserting partial indemnity costs, inclusive of disbursements, of $12,547.50. A partial indemnity rate of $350 is claimed by Ms. Vojvodic compared with an actual rate of $375 per hour.

[6] Given my conclusion that the plaintiffs’ actions against the defendants, Milicevic and Fox was settled in May 2015, the subsequent litigation culminating in the motion to enforce the terms of that settlement was completely unnecessary.

[7] There are allegations and counter allegations that communications and offers made between May and the eve of the hearing date of the motion were ignored. Suffice it to say that there was an unfortunate and, in my view, unwarranted, breakdown in communications between the lawyers for the parties.

[8] The form of the release which the defendant Fox wanted the plaintiffs to execute appears to have been one of the contentious issues between the parties. But, as discussed in paras. 24 and 25 of my 23 September 2015 endorsement, that was not a sufficient reason for the plaintiffs to fail to fulfill their obligations to complete the settlement.

[9] In my review of the factums filed by the parties ahead of the motion to enforce (which was argued on 17 September 2015) and during the course of oral argument, the plaintiffs’ lawyer took an uncompromising position with respect to whether a settlement had occurred. Indeed, even in the costs submissions, submitted after my decision had been rendered, the lawyer for the plaintiffs wrote:

It has always been our submission that we have not reached the settlement in the first place but the plaintiffs were nevertheless prepared to concede to alleged relief in order to dispense with this motion.

[10] At the conclusion of oral argument, I indicated to the parties that I would withhold my decision to give the parties one further opportunity to discuss further the possibility of resolving the motion without the necessity of a formal decision from the court. I invited the parties to let me know in the event that they were not able to reach such agreement. The following day the lawyers for the defendant Fox sent the plaintiffs’ lawyer a consent and draft order for consent to the dismissal of the action against Milicevic and Fox without costs. The email communicating this offer was sent at 9:34 a.m. on 18 September. The offer was left open until 11:00 a.m. that morning. At 12:17 p.m., the lawyers for Fox advised the court that the parties had “not been able to resolve the outstanding issues” and asked the court to proceed to render its decision. At 12:35 p.m., the lawyer for the plaintiffs advised that her “client does not take my advice and wishes to act contrary to my advice by signing the order drafted by [Fox’s lawyer]” and that “Ms. Tondera will act in person from now on and represent herself in this matter. I cannot obtain instructions from Maryon Tondera.” At 1:15 p.m., the plaintiff Michelle Tondera sent an email advising that she had authority to act on behalf of her brother, Maryon Tondera, that she wished to act in person on her behalf and that she and her brother would sign the order and consent prepared by the lawyer for Fox. In response to an inquiry from the court, by an email at 2:01 p.m. on 18 September, one of the lawyers for Fox advised that the correspondence from Ms. Tondera “does not change the position of the moving party. We look forward to the decision on the motion”.

[11] The email traffic that went backwards and forwards on 18 September 2015 does not make any difference to my determination of costs as between the moving parties and the plaintiffs. In my view, virtually all of the machinations that occurred after the May 2015 pre-trial in this matter were the result of the plaintiffs’ often erratic efforts to resile from the settlement agreement.

[12] However, the communications on 18 September 2015 do raise a concern on my part as to whether those costs should, ultimately, be borne by the plaintiffs themselves.

[13] The quantum of costs claimed by Fox is based on what are, effectively, the full indemnity rates paid or payable by LawPRO to the solicitors retained to represent Fox. However, in 790668 Ontario Inc. v. D’Andrea Management Inc., 2015 ONCA 557, it was held to be an error in principle to award partial indemnity costs in the full amount of the actual costs paid by an insurer to the lawyers representing its insured on the basis that the hourly rates paid to the lawyers were already discounted, having regard to the hourly rates typically charged by lawyers practising in the same area with comparable experience.

[14] The costs submissions made on behalf of the defendant Fox indicate that after my endorsement was released, an offer was made to settle costs on the motion for the all-inclusive amount of $7,500.

[15] Having regard to the discretionary factors set out in Rule 57.01(1) and the circumstances of this case, I am of the view that the all-inclusive amount of $7,500 does, indeed, represent a reasonable amount for costs, on a partial indemnity basis, to be paid to the moving party Fox, and would so order.

[16] Given the evidence, my observations in court and the subsequent email traffic on 18 September I am, however, concerned about whether it would be fair to require those costs to be borne by the plaintiffs or whether the interests of justice would be more appropriately served by some or all of those costs being borne by their lawyer. On the surface at least, it seemed to me that there could be good reason to believe that it was the actions of the lawyer, rather than the instructions of the clients that resulted in the considerable waste of time and resources that the dispute over whether a settlement occurred has generated.

[17] Accordingly, if the defendant Fox proceeds to demand payment of the costs of $7,500 that I have awarded, I intend to consider whether to make an order, pursuant to Rule 57.07(1)(b) directing the plaintiffs’ lawyer to reimburse the plaintiffs for all or part of that amount.

[18] Rule 57.07(2) requires the lawyer against whom such an order is being contemplated to be given a reasonable opportunity to make representations to the court. I therefore direct that, by no later than 18 December 2015, Vesna Vojvodic or her representative, should advise the court, via my judicial assistant:

(a) Whether she wishes to make representations to the court on whether an order should be made directing her to reimburse the plaintiffs all or part of the costs of $7,500 which have been awarded; and, if so,

(b) Whether she wishes to make written representations or to appear in person.

[19] Pending determination of the Rule 57.07(1)(b) reimbursement issue, enforcement of the costs award against the plaintiffs is stayed. Should the defendant Fox decide that she will not pursue collection of the costs award, the need for submissions on the Rule 57.07(1)(b) reimbursement issue would be avoided.

[20] Depending on the position that is taken as a result of the foregoing, further directions will be given regarding the mode and time for the making of submissions.

Graeme Mew J.

Date: 7 December 2015