CITATION: Johanson v. Hinde, 2016 ONSC 6553
COURT FILE NO.: 35/38/013355/12
DATE: 20161020
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Lynn Anne Johanson Applicant
– and –
Virginia Anne Hinde Respondent
COUNSEL:
Mark Simpson, for the Applicant
Self-Represented
HEARD: In Writing
BEFORE: Raikes J.
Ruling on Costs
[1] This decision deals with costs of the trial and related costs in this matter. My trial decision was released September 22, 2015. I regret the delay in releasing this costs decision and appreciate the patience of the parties.
[2] The respondent, Ms. Hinde was the successful party at trial and is presumptively entitled to her costs: r. 24(1).
[3] At trial, I found that the dispute between the parties was settled in May 2013, which the applicant, Ms. Johanson denied on subsequent motions she brought to force the sale of the three jointly held properties. Ms Johanson was awarded costs on those motions. She only admitted the settlement during cross-examination at trial.
[4] There is $8,200 in outstanding costs awards made against Ms. Hinde for the motions that followed from Ms. Johanson reneging on their settlement.
[5] It is entirely unfair and inappropriate for Ms. Johanson to reap the reward of costs orders in these circumstances where she misled the court as to the agreement between the parties.
[6] Jurisdiction for those costs orders rests with the judges who made them. They were never appealed. Nevertheless, it cannot be that the applicant should gain an undeserved windfall from misleading the court.
[7] Accordingly, I permanently stay the enforcement of those costs orders. That relief follows from my findings at trial regarding the settlement in May 2013 and my finding that Ms. Hinde should be put in the position she would have been in but for Ms. Johanson reneging on their agreement.
[8] I turn now to the costs of the trial including steps in preparation. Ms. Hinde seeks costs of the trial in which she was self-represented. Ms. Johanson points to conduct by Ms. Hinde relating to the sale of the properties and her management of same which she asserts should negate any entitlement to costs.
[9] Ms. Hinde was represented by counsel for much of the proceedings, but before trial she began to represent herself given the expense she was incurring. She acted for herself at trial.
[10] The trial lasted 5 days. It was Ms. Hinde’s cross-examination of Ms. Johanson that elicited the admission of the settlement. But for Ms. Johanson reneging on the settlement reached and persisting in denial of same, no trial would have been necessary.
[11] I note that Ms. Hinde was somewhat scattered and unfocused at trial. Her materials were not well organized which contributed to the length of the trial. No doubt that can be attributed to her lack of experience in litigation.
[12] Both sides accuse the other of frustrating prior efforts to sell the properties before the settlement, and point to same to justify higher or lesser costs. All of that was canvassed at trial and, frankly, it seemed to me that each party bore some responsibility.
[13] On the whole, I see nothing in the conduct of Ms. Hinde that would justify a departure from the usual rule that costs should follow the event; viz. the successful party should have her costs.
[14] With respect to the scale of costs, an award of substantial indemnity costs is merited. Ms. Johanson’s conduct prolonged proceedings and forced an unnecessary trial which required Ms. Hinde to be in court instead of at her business. Her failure to admit the fact of settlement until she was cross-examined at trial was egregious.
[15] There is little doubt that the matters in issue were very important to the parties. The issues were factually complex. Ms. Johanson undoubtedly knew and expected that if she was successful, costs would likely be awarded against Ms. Hinde. I do not have bill of costs for Mr. Simpson’s time but based on my experience, they could not reasonably be less than $25,000.
[16] The leading case on costs recoverable by successful self-represented litigants is Fong v. Chan, 1999 2052 (ON CA). In Fong v. Chan, supra, the court recognized that the three fundamental purposes of costs rules are fostered by allowing the trial judge the discretion to award costs to self-represented litigants. Those purposes are:
o to indemnify successful litigants for the cost of the litigation
o to encourage settlements, and
o to discourage and sanction inappropriate behaviour by litigants.
[17] The court cautioned that its decision was not intended to suggest that a self-represented litigant has an automatic right to recover costs; rather, the matter remains within the discretion of the trial judge whether to make an award of costs and to determine the quantum (see para 25).
[18] At para 26, Sharpe J.A. wrote:
“I would also add that self-represented litigants, be they legally trained or not, are not entitled to costs calculated on the same basis as those of the litigant who retains counsel. As the Chorley case, supra, recognized, all litigants suffer a loss of time through their involvement in the legal process. The self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case. Costs should only be awarded to those lay litigants who can demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation and that, as a result, they incurred an opportunity cost by forgoing remunerative activity. As the early Chancery rule recognized, a self-represented lay litigant should receive only a “moderate” or “reasonable” allowance for the loss of time devoted to preparing and presenting the case. This excludes routine awards on a per diem basis to litigants who would ordinarily be in attendance at court in any event.…”
[19] These principles from Fong v. Chan, supra, have been applied in a family law context: see Kerr v. Erland, 2014 ONSC 5768; Cassidy v. Cassidy, 2011 ONSC 791; and, Jahn-Cartwright v. Cartwright, 2010 ONSC 2263.
[20] Ms. Hinde is a part owner of a business. Evidence of a single transaction of her business by which she would have earned a modest profit was provided. There is otherwise very limited, if any, evidence before me from which I can calculate the value of the lost opportunity with any degree of mathematical certainty.
[21] I am satisfied and find that but for Ms. Johanson’s failure to honour the settlement agreement reached, there would not have been a trial. Ms. Hinde would not have spent the many hours that she did preparing for or attending the trial. She lost five days at work for a trial that should never have happened. She lost additional time preparing for court, including attending before me on the issue of costs.
[22] It is not sufficient to say that Ms. Hinde should be deprived of any costs because she would have been at trial anyway or she has not satisfactorily demonstrated a specific loss of opportunity. I am satisfied that there is a loss of opportunity.
[23] It is equally insufficient to award only nominal costs. Such an award would signal that bad faith conduct will attract little measurable consequence when the successful party is self-represented.
[24] I fix Ms. Hinde’s costs of the trial including all steps in preparation for trial (excluding everything not trial related which includes the various motions) at $7,500. This figure is inclusive of any disbursements she may have incurred and HST to the extent it would be applicable.
[25] For greater certainty, I find that the applicant’s failure to adhere to the settlement and her subsequent conduct in misleading the court by denying the existence of the settlement constitutes bad faith under r. 24(8). Such conduct requires an award of costs to fulfil the purposes underlying costs awards stated above.
[26] I hereby direct that the funds being held in the real estate solicitor’s account be paid out as follows:
a. the monies found payable to Ms. Hinde at trial together with interest thereon to be paid first;
b. the costs awarded herein to be paid secondly from the balance of the funds held for Ms. Johanson; and
c. the balance, after payment of a. and b., to be paid to Ms. Johansson or her counsel as she may direct.
“Original signed by R. Raikes”
Russell M. Raikes
Justice
Released: October 20, 2016
CITATION: Johanson v. Hinde, 2016 ONSC 6553
COURT FILE NO.: 35/38/013355/12
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Lynn Anne Johanson Applicant
– and –
Virginia Anne Hinde Respondent
ruling on costs
R. M. Raikes, J.
Released: October 20, 2016