Superior Court of Justice - Ontario

Citation: Gadula v. Leroux, 2016 ONSC 6990 Court File No.: 16-56314 Date: 2016-11-10

Re: Mark Gadula, Applicant And: Paulette Leroux, the incapable person And: Georgia-Lynn Leroux, Respondent And: The Public Guardian and Trustee

Before: Justice A. J. Goodman

Counsel: B. Wiseman for Mark Gadula B. Culp for Georgia-Lynn Leroux J. Bergart, section 3 counsel No one appearing for the Public Guardian and Trustee

Heard: October 13 and 17, 2016

COSTS ENDORSEMENT

[1] In my endorsement dated October 17, 2016, I granted the motion declaring Paulette Leroux as a person incapable of managing property and appointing Georgia-Lynn Leroux as the guardian of property for the incapable person.

[2] The respective parties sought costs for the application and motion. As counsels' costs were contested and I invited further oral submissions.

[3] Mr. Wiseman on behalf of the applicant seeks his costs of $6,671.54 on a partial indemnity basis inclusive of disbursements and HST. Mr. Culp, acting for the incapable person and representing Georgia-Lynn Leroux filed a Bill of Costs in the amount of $7,106.18 inclusive of disbursements and HST.

[4] The appointed s. 3 counsel, Mr. Bergart seeks his costs in the amount of $8291.03 on a full indemnity basis, inclusive of disbursements and HST.

[5] There is no disagreement that the Public Guardian and Trustee are entitled to their nominal costs in the amount of $250.00 plus HST.

Positions of the Parties:

[6] Mr. Wiseman submits that while his client was not appointed the guardian for property, his application initiated the process that enabled such a guardian to be appointed. Counsel submits that there was opposition to the initial application that required additional effort and involvement by counsel and necessitated the appointment of s. 3 counsel. In respect of the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceedings, the opposing party failed to address concerns raised by the applicant in a timely manner that necessitated litigation.

[7] In fixing costs, counsel submits that the hourly rates and costs sought are both fair and reasonable, and accord with the principles set out under rule 57.01(1). Counsel submits that his client did not act in bad faith or otherwise conduct himself improperly.

[8] In response, Mr. Culp submits that his client was ultimately appointed guardian for personal property and was entirely successful. Given the concurrent family law proceedings, counsel submits that the applicant acted in a conflict of interest or in his own self-interest with respect to the incapable person's property and ought to bear his own costs. Counsel disagrees with the assertions raised by the applicant in respect of the history of the proceedings and the respective positions of the parties.

[9] Counsel submits that the issues in the application were of considerable importance to his client and required a full assessment of the issues. In the alternative, fees associated to s. 3 counsel ought to be reimbursed by the parties and not from the estate.

[10] Mr. Bergart submits that as s.3 counsel, he was appointed to conduct an assessment and provide the incapable persons' position to the Court. Counsel submits that he has no client per se and no basis for any recovery for his efforts other than from the parties or the estate. Counsel adds that he is entitled for full indemnity costs for his participation as s. 3 counsel.

General Principles:

[11] As a general principle, costs are in the absolute discretion of the court. The fixing of costs is not simply a mechanical exercise. The overall objective is "to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.

[12] The Court of Appeal, in Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579, (2004) 71 O.R. (3d) 291, articulated the principles that govern costs assessments. In that case, Armstrong J.A. noted that Rule 57.01(3) provides: "When the court awards costs, it shall fix them in accordance with subrule (1) and the tariffs." He continued: "...Subrule (1) lists a broad range of factors that the court may consider in exercising its discretion to award costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

Factors to be Considered in Fixing Costs:

[13] Rule 57.01(1) contains what amounts to a non-exhaustive checklist of factors that should guide the court in its reasoning when awarding costs in the exercise of its discretion under section 131 of the Courts of Justice Act. Rule 57.01(1) provides, in part:

In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider...

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(c) the complexity of the proceeding;

(d) the importance of the issue;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was

(i) improper, vexatious or unnecessary, or

(i) any other matter relevant to the question of costs.

[14] The amount of costs on a motion varies widely depending on the circumstances, including the complexity of the issue, of facts, and the witnesses from whom evidence is required.

[15] The notion of "success" is not as a significant factor in these types of case as generally the norm in civil litigation. The issue is the best interests of the person under disability: Re: Vecchiarelli, [2010] O.J. No. 4906 (S.C.) at para. 5.

Bill of Costs:

[16] It is widely accepted that the appropriate quantum of costs is not determined by multiplying hours by rates. Rather, "the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.

[17] There is no significant dispute with respect to the quantum of the various Bills of Costs filed. The amounts presented therein are relatively consistent with counsel's expectations in the amounts sought by each party. The issue is entitlement and from where the costs, if ordered, ought to be taken.

Discussion:

[18] Most guardianship applications are unopposed. Such was not the case here. Information was not shared. Opposing positions were solidified. Each side had a differing view as to whether it was necessary to appoint a guardian and who that individual(s) would be. The incapable person had expressed some opposition to the application.

[19] Whether the genesis of the litigation was a result of concurrent family law proceedings or sibling disagreement, this matter could not be resolved through counsel and necessitated the appointment of s.3 counsel and a motion. Recognizing that the ultimate resolution before me was arrived at by consent of the parties, with the able assistance of counsel with the Public Guardian and Trustee's office; I disagree with Mr. Culp that this is an appropriate situation that there be no order as to costs and that the parties incur their own legal fees.

[20] While Georgia-Lynn Leroux was ultimately successful in her appointment as guardian for property, that is not dispositive of the costs issue. The question is what, if any benefit did the incapable person derive from the legal work? The Court must, first and foremost, be fair and reasonable when exercising its discretion to award costs. Proportionality is of fundamental import.

[21] I am advised that there is ongoing family law litigation with a suggestion that Mr. Gadula, by his timing in bringing this application is acting solely in his own self-interests in order to enhance his position in that proceeding. However, on the evidence before me, I do not find bad faith or unreasonable conduct.

[22] In Ziskos v. Miksche, 2007 CanLII 46711 (ON SC), [2007] O. J. No. 4276 (S.C.), at para. 254, Spies J. had an opportunity to discuss the issue of reimbursement of legal costs:

As I have already said, Ontario's statutory scheme to protect adults made vulnerable through incapacity is grounded in and dependent upon, the involvement of supportive friends and relatives. Those friends and relatives cannot be expected to retain counsel and where necessary bring issues to the court if they must necessarily cover the attending legal costs.

[23] I accept that Mr. Gadula commenced this application in order to deal with the issue of the whether Paulette Leroux was incapable and thereby unable to manage her property. In considering the best interests of the incapable person for this guardianship matter, I agree with Mr. Wiseman that his client's efforts in preparing and advancing the application that resulted in the appointment of a guardian ought to be reimbursed out of the estate. I am satisfied that Mr. Wiseman's Bill of Costs at the partial indemnity rate is reasonable.

[24] The Substitute Decisions Act 1992, S.O. 1992 c. 30 is silent on the issue of costs for these types of applications. In this regard I find the comments of D.M. Brown J. (as he then was) in the case of Fiacco v. Lombardi, [2009 O.J. No. 3670 (S.C.) to be instructive.

[25] As mentioned, Mr. Bergart submits that he is entitled to full recovery for his efforts in obtaining and presenting Paulette Leroux's best interests to the parties, and ultimately to the Court. He advises that he has no source from which to seek recovery of his fees as s. 3 counsel. Counsel claims that in his extensive experience, generally, the courts have awarded full indemnity costs.

[26] There appears to be no binding authority that spells out whether s. 3 counsel ought to enjoy full recovery of his or her costs, or on a different or reduced scale. There is no doubt that Mr. Bergart's efforts, as with most s. 3 counsel tasked with assisting the court with these types of applications, provide valuable information to the parties, and to an extent, may facilitate the resolution of the matter without the necessity of a full hearing. Most importantly, they discharge their role in assisting the court with the fundamental issue of the best interests of the incapable person.

[27] It seems to me that in order that lawyers willingly accept and discharge their obligations under a s. 3 appointment, it is good public policy to permit s. 3 counsel to recover their full costs, as they generally have no other recourse for such reimbursement. Of course, it is incumbent on s. 3 counsel to convince the court that their efforts and related fees are reasonable in the circumstances. I find that is the case here.

[28] I am not certain whether Mr. Culp seeks costs for his involvement in this matter. Nonetheless, his Bill of Costs is reasonable and he is also entitled to his partial indemnity costs, if sought.

[29] While this matter ought to have been heard in one hour, the management plan was not complete and counsels' respective costs were contested. Hence, this necessitated the re-attendance of counsel on a second date. Mr. Culp raises a concern in that Paulette Leroux's estate has a limited source of funds available and argued against costs being drawn from it. I acknowledge the valid concern about the limited amount of funds available for the benefit of the incapable person. However, in my opinion, no party acted in a manner warranting a departure from the normal practice that the reasonable legal costs be paid out of the incapable person's estate.

Conclusion:

[30] In the exercise of my discretion under Rule 57.01, it is ordered that the estate of Paulette Leroux pay costs in favour of Mark Gadula on a partial indemnity basis, fixed at $6,671.54 (all inclusive); and to section 3 counsel, Mr. Bergart on a full indemnity basis, fixed at $8,291.03 (all inclusive). Should Mr. Culp seeks recovery of fees, he is entitled to his costs in the amount of $7,106.18 inclusive of disbursements and HST.

A. J. Goodman J.

Released: November 10, 2016