Court File and Parties

COURT FILE NO.: 12-56059 DATE: 2016/05/24 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: GEETA CHANNA, Plaintiff

AND

JULIAN COBISA, TERRY ASSANG, MICHAEL GERVAIS, JEAN-CLAUDE MARTIN, ADRIAN MIHAI, FRANCESCO GUALTIERI, AXIA PROPERTY MANAGEMENT INC., CARLETON CONDOMINIUM CORPORATION 429, NANCY HOULE and NELLIGAN, O’BRIEN PAYNE LLP, Defendants

BEFORE: Madam Justice Sylvia Corthorn

COUNSEL: Diane Condo, for the plaintiff Samaneh Frounchi, for the defendants

HEARD: May 20, 2016

COSTS ENDORSEMENT

[1] This endorsement follows a motion on behalf of the defendants other than Nancy Houle and Nelligan O’Brien Payne LLP (“the Defendants”) for an order dismissing the plaintiff’s action for delay and requiring the plaintiff to pay the Defendants their costs of the action. By the date of return of the motion the plaintiff consented to an order dismissing her action with costs payable to the Defendants. Therefore the only matter that remained to be addressed was to fix the Defendants’ costs.

[2] The Defendants seek costs on a substantial indemnity basis. The plaintiff submits that costs are payable on a partial indemnity basis and that the fees claimed are excessive. Therefore the two issues to be determined are the scale of costs and the amount at which costs are fixed.

[3] The Defendants rely on the evidence of Adam Plenkiewicz from his affidavit sworn on May 11, 2016 (“the Plenkiewicz Affidavit”). That evidence is uncontradicted. On the return of the motion, the Defendants filed a bill of costs. The plaintiff did not file any materials in response to the motion.

Background

[4] Based on the Plenkiewicz Affidavit, the chronology of events in the action to date is as follows:

Nov. 22, 2012 The statement of claim is issued. The allegations on behalf of the plaintiff relate to the manner in which the condominium in which she resides has been managed including by the members of the board of directors of the condominium corporation (the individual defendants other than Nancy Houle), the condominium corporation, and the property management company hired to manage the premises.

Nov. 7, 2013 Motions by the defendants are heard by Justice Quigley. Upon the conclusion of the motions, Justice Quigley: a) orders that the claims against Nancy Houle, a lawyer, and Nelligan O’Brien Payne LLP are dismissed; b) orders that the names of those defendants are to be deleted from 12 paragraphs in the statement of claim; and c) reserves his decision with respect to the motion on behalf of the Defendants to strike certain paragraphs of the statement of claim, in particular as they relate to the individual board member defendants.

Dec. 2, 2013 Justice Quigley’s endorsement is released and his order is that: a) six paragraphs from the statement of claim are to be struck in their entirety; and b) the allegations against the individual board member defendants are to be struck from an additional eight paragraphs in the statement of claim.

Jul. 15, 2014 Justice Quigley’s endorsement with respect to the costs of the Defendants on the November 2013 motion is released. He orders that the plaintiff pay the Defendants their costs of the motion on a partial indemnity basis fixed at $5,000. The endorsement provides that the costs are payable “forthwith”.

Jul. 15, 2014 Counsel for the Defendants sends an e-mail message to counsel for the plaintiff requesting payment of costs. Counsel for the Defendants states that if the cheque requested is not received “by our office in the near future, we will takes steps to enforce the order.” Counsel for the Defendants also states that her clients wish to schedule examinations for discovery in the near future. A request is made of counsel for the plaintiff to provide the dates on which she and her client are available for examinations. Counsel for the Defendants does not receive a response to this e-mail message.

Jul. 30, 2014 Counsel for the Defendants follows up with counsel for the plaintiff by e-mail: a) asking that counsel for the plaintiff advise when the payment of costs may be expected; b) seeking the amended statement of claim; and c) repeating the request for availability with respect to examinations for discovery. Counsel for the Defendants does not receive a response to this e-mail message.

Sept. 10, 2014 Counsel for the Defendants sends a letter by fax to counsel for the plaintiff following up on the e-mail messages and telephone calls to counsel for the plaintiff. Counsel for the Defendants says that if the costs awarded by Justice Quigley are not paid within two weeks of the date of this letter, “we will have no choice but to bring a motion to enforce same.” Counsel for the Defendants does not receive a response to this letter.

Mar. 6, 2015 Counsel for the Defendants sends a letter by fax to counsel for the plaintiff following up with respect to the amended statement of claim (which had not yet been served). The letter appears to be sent in follow up to correspondence from counsel for Houle and Nelligan O’Brien Payne which was sent in 2014 or 2015 with respect to the amended pleading. In his letter, counsel for the Defendants inquires as to the plaintiff’s potential lack of “appetite to continue with the litigation”. Counsel for the Defendants indicates that the matter of costs would remain to be discussed if the plaintiff no longer has an appetite for the litigation.

Mar. 6, 2015 Counsel for the plaintiff responds with a single-page, fax note, in which she: a) states that her office will be filing a copy of the amended statement of claim and requisition with the Court on March 9; and b) apologizes for “any unnecessary delay’s that were caused as there was a miscommunication error on our end.” Although the “miscommunication error” is not explained, it appears that the error was in sending a copy of the amended pleading to counsel for Houle and Nelligan O’Brien Payne as opposed to sending the document to counsel for the Defendants.

Mar. 11, 2015 Counsel for Houle and Nelligan O’Brien Payne sends to counsel for the Defendants copies of two letters sent to the former in January 2015 and a copy of the proposed amended statement of claim.

Apr. 1, 2015 Counsel for the Defendants sends a letter by fax to counsel for the plaintiff addressing the delays in the litigation to that point, the failure to provide a copy of the proposed amended statement of claim, and problems with the proposed amended statement of claim. Counsel for the Defendants notes that the proposed amended statement of claim is not in keeping with the order of Justice Quigley. Paragraphs that were to have been struck are repeated and references to the individual board members that were to have been deleted have not been deleted. Following on the endorsements of Justice Quigley, two draft orders for approval as to form and content are provided to counsel for the plaintiff. Counsel for the Defendants does not receive a response to this letter.

Jun. 22, 2015 Counsel for the Defendants sends a letter by fax to counsel for the plaintiff once again addressing the failure of the plaintiff to pay costs awarded, the failure of the plaintiff to amend her statement of claim in accordance with the endorsement of Justice Quigley, the two orders to be approved as to form and content, and the intention of the Defendants to pursue a motion for an order dismissing the action. Counsel for the Defendants states that if by June 30 various matters are not addressed the Defendants shall take steps in the action unilaterally. Counsel for the Defendants does not receive a response to this letter.

Nov. 13, 2015 Counsel for the Defendants sends a letter by both fax and courier to counsel for the plaintiff serving notices of appointment to appear on November 30, 2015 before the Registrar to settle the terms of the two orders of Justice Quigley (substantive and as to costs).

Nov. 25, 2015 Counsel for the plaintiff sends a single-page fax note stating that the November 30, 2015 appointment before the Registrar can be cancelled and attaching the two draft orders approved as to form and content.

Mar. 28, 2016 Counsel for the Defendants sends a letter by fax to counsel for the plaintiff stating that because the plaintiff has failed to comply with the two orders of Justice Quigley a notice of motion for an order dismissing the action for delay is to follow shortly thereafter. Counsel for the Defendants does not receive a response to this letter.

Apr. 6, 2016 The notice of motion for an order dismissing the action for delay is served on the plaintiff, by sending a copy of same to counsel for the plaintiff.

May 11, 2016 The motion record, factum, and book of authorities for the motion are served on the plaintiff, by sending copies of same to counsel for the plaintiffs.

May 13, 2016 Counsel for the plaintiff acknowledges receipt of the motion record and requests that the Defendants agree to either: a) adjourn the motion; or b) an order dismissing the action without costs, the latter assuming counsel for the plaintiff is able to secure from her client instructions to that effect.

May 18, 2016 Counsel for the plaintiff advises counsel for the defendant that the plaintiff agrees to the dismissal of her action.

[5] On May 20, 2016, counsel for the Defendants and counsel for the plaintiff appeared before me and advised of the terms pursuant to which the motion was settled, with the only issues to be addressed being the scale and quantum of costs payable by the plaintiff to the Defendants.

Positions of the Parties

[6] The Defendants submit that they are entitled to their costs of the action on a substantial indemnity basis. The Defendants rely on two factors: a) the lack of response to the communication sent over time by counsel for the Defendants; and b) the failure of the plaintiff to comply with the substantive and costs orders of Justice Quigley.

[7] The bill of costs filed on behalf of the Defendants identifies full indemnity fees totaling $16,903.50, with HST over and above that amount. That amount does not include any of the work which is addressed by the $5,000 costs award made by Justice Quigley with respect to the motion heard in November 2013.

[8] The disbursements identified total $485.31 inclusive of HST. The amount claimed for disbursements is not disputed by the plaintiff.

[9] The plaintiff’s position is that the full indemnity fees are excessive and that costs be payable on a partial indemnity basis. The plaintiff submits that given the work done with respect to the November 2013 motion is not being considered, the Defendants were not required to take many steps in the proceeding. The only step required was to deliver a pleading in response to the original statement of claim. The plaintiff’s position is that subsequent to the November 2013 motions she effectively abandoned her action.

[10] The plaintiff submits that because she effectively abandoned her litigation following the November 2013 motions, her failure to pay the costs subsequently awarded by Justice Quigley does not amount to disregard of that order. The plaintiff argues that, in any event, the solution to her failure to pay the costs awarded was to take steps to enforce that payment and not to pursue a motion to dismiss the action for delay.

Analysis

[11] The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Those factors include the result in the proceeding, the principle of indemnity, the amount the unsuccessful party could reasonably expect to pay, the amount claimed and the amount recovered, the complexity of the matter, the importance of the issues, the conduct of any party which unnecessarily lengthened the proceeding, offers to settle, the principle of proportionality, and the hourly rate claimed in relation to the partial indemnity rate set out in the Information to the Profession.

a) Scale of Costs

[12] In support of the request for costs on a substantial indemnity basis, the Defendants rely on: a) the lack of response to the communication over time from counsel for the Defendants; and b) the failure of the plaintiff to comply with the substantive and costs orders of Justice Quigley.

[13] There are no responding materials filed on behalf of the plaintiff on the motion. There is no explanation before the Court as to why:

• The letters, e-mail messages, and telephone calls from counsel for the Defendants did not generate a response from counsel for the plaintiff;
• The plaintiff failed to abide by the order of Justice Quigley as relates to the amendments required to her pleading; and
• The plaintiff failed to pay the costs ordered by Justice Quigley in June 2014 to be paid “forthwith”.

i) Lack of Response from Plaintiff

[14] There is nothing before the Court to indicate that counsel for the plaintiff was in any way unable to secure instructions permitting her to respond to the correspondence and communication over time from counsel for the Defendants. Regardless of any communication difficulties counsel for the plaintiff may have been having with her client, it was incumbent upon her to acknowledge the correspondence and communication from counsel for the Defendants. It would not have been difficult for counsel for the plaintiff to respond; stating that she was having difficulty securing instructions – assuming that was the case.

[15] The evidence supports a finding to the contrary – that counsel for the plaintiff was not having difficulty securing instructions. Had she been experiencing difficulty securing instructions it was open to counsel for the plaintiff to seek an order removing her as lawyer of record for the plaintiff. That step was never taken. Once served with the motion record, factum and book of authorities, counsel for the plaintiff responded: a) within two days by entering into settlement discussions; and b) within a week with the consent of the plaintiff to an order dismissing the action with costs.

[16] There is no evidence before the Court as to why counsel for the plaintiff was able to so quickly secure instructions following service of the motion record et cetera and yet unable to secure instructions from her client so as to respond at all, let alone in a meaningful way, to the letters and e-mail messages from counsel for the Defendants in 2014, 2015 and 2016.

[17] The argument on behalf of the plaintiff that the Defendants did not have to take any ‘steps’ in the proceeding subsequent to Justice Quigley’s endorsements because the plaintiff had effectively abandoned her action at that stage entirely misses the point. First, there is no evidence before the Court from the plaintiff to the effect that she had decided to abandon her action. If, in fact, she had abandoned her action following the release of the endorsements of Justice Quigley in 2013 and 2014 then it was incumbent upon her to be pro-active and take steps to bring the action to an end. She was not entitled to sit back, do nothing, and hope that the action would simply ‘disappear’.

[18] Regardless of whether or not the plaintiff consciously abandoned her action following the release of the endorsements of Justice Quigley, it is the plaintiff’s inaction since 2013 and 2014 which caused the Defendants to incur costs thereafter. I find that the efforts made by counsel for the Defendants to secure payment of the costs awarded, move the pleadings stage of the action forward, resolve the terms of the orders made by Justice Quigley, and move the litigation forward to the discovery process were entirely warranted and reasonable. Those efforts were not excessive in any way. I find that the Defendants took a measured approach and gave the plaintiff any number of opportunities to pay costs awarded and be a responsible litigant.

ii) Failure to Pay Costs Award

[19] The Defendants rely on two cases: Baksh v. Sun Media (Toronto) Corp. (2003), 63 O.R. (3d) 51 (S.C.J.) [Baksh] and Greta Energy Inc. v. De Lange, 2015 ONSC 3027 [Greta Energy Inc.]. In the former, costs were awarded on a substantial indemnity basis for a portion of the litigation. In that portion of the litigation the self-represented plaintiff, a lawyer, had made comments about opposing counsel that infringed both the Rules of Professional Conduct and the Principles of Civility developed by The Advocates’ Society. The plaintiff in Baksh had also failed to pay costs awarded against him. However, that failure was not a factor in the award of substantial indemnity costs. It was the lack of professionalism and civility which resulted in the award of costs on a substantial indemnity basis.

[20] Greta Energy Inc. relates to commercial litigation in which the defendant failed to pay costs pursuant to a number of awards of costs in favour of the plaintiff. Ultimately, the plaintiff’s motion to strike the defendant’s pleading was not successful. The defendant was given one last chance to comply with the orders of the Court. The facts in Greta Energy Inc. are, for a number of reasons, distinguishable from the facts of the matter before me. For example, the plaintiff in the matter before me is in default of a single costs order ($5,000), as opposed to two costs orders (totaling $40,000).

[21] In summary, the case law relied upon by the Defendants does not support an award of costs on a substantial indemnity scale on the basis of the failure of the plaintiff to pay the single award of costs to date in the amount of $5,000.

iii) Scale of Costs Awarded

[22] In all of the circumstances, I find that the conduct of the plaintiff in this matter does not amount to conduct which warrants an award of costs on a substantial indemnity basis. The plaintiff shall pay to the Defendants their costs of the action on a partial indemnity basis.

b) Amount of Costs

[23] As noted above, the bill of costs identifies fees totalling $16,903.50 plus HST in the amount of $2,197.45. Counsel for the plaintiff did not take issue with the hourly rates set out in the bill of costs for each of the four lawyers whose time is included in work for which the fees are claimed. I have compared the full indemnity rates of each of the four lawyers to the rates set out in the Information for the Profession prepared by the Costs Subcommittee of the Civil Rules Committee. The hourly rates claimed by each of the four lawyers are within the ranges recommended in that document.

[24] Therefore, when fixing costs I use as a starting point the full indemnity rates identified in the bill of costs.

[25] With respect to the amount of the lawyers’ time for which the Defendants are seeking costs, the plaintiff’s position is as follows:

• The time claimed with respect to the pleadings portion of the work should be reduced from 12.6 to 10.0 hours for Ms. Dutt’s time (at $240 per hour).
• The time claimed for ‘Correspondence with client’ is excessive (at 13.4 hours in total). The plaintiff questions the extent to which there is overlap in communicating with the clients.
• The time claimed for Ms. Frounchi’s work on the motion to dismiss for delay (44.2 hours at $150 per hour – for the motion record, factum, book of authorities, and correspondence) is excessive. A total of 20 hours for the work by Ms. Frounchi on the motion is suggested as reasonable.

[26] Counsel for the Defendants highlighted that her office was reporting to three different types of clients – the individual defendant board members, the condominium corporation, and the property management company. As a result, it was not a matter of singular reporting to all of the defendants whom Nelligan O’Brien Payne represents. The interests and positions of the defendants differed from one type to the next.

[27] This matter has gone on for a number of years. As a result, carriage of the file was transferred from one senior lawyer to another over time. Despite the transfer in the carriage of the file, the time recorded by senior counsel is reasonable and does not appear to include duplication of effort. As noted above, counsel for the Defendants took a measured approach in dealing with the lack of any pro-active steps by or responses on behalf of the plaintiff over time.

[28] I have reviewed the bill of costs in detail and am satisfied that with one exception the time docketed in the matter is entirely reasonable. The only reduction I would make to the time claimed is that of Ms. Frounchi for the preparation of the motion materials. I agree with the plaintiff that 44.2 hours is in excess of what might be reasonably expected for a motion of this kind. I reduce the time for that aspect of the work from 44.2 hours to 35 hours.

[29] The full indemnity fees claimed of $16,903.50 are therefore reduced by $1,380 (9.2 hours at $150 / hr.) to $15,823.50. Partial indemnity fees are calculated as 60 per cent of that amount – $9,314.10. The HST on that amount is $1,210.83.

[30] The disbursements and HST are not disputed and total $485.31.

Summary

[31] The plaintiff shall pay to the Defendants their costs of the action on a partial indemnity basis in the amount of $11,010.24 calculated as follows:

Fees $ 9,314.10 HST on fees $ 1,210.83 Disb. (incl. HST) $ 485.31 Total $ 11,010.24

[32] Costs are payable forthwith and bear interest from the date of release of this endorsement at the post-judgment interest rate prescribed by the Courts of Justice Act, R.S.O. 1990, c. C.43.

Madam Justice Sylvia Corthorn Date: May 24, 2016