Court File and Parties

COURT FILE NO.: 10-48976 DATE: 2017/04/07

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: GEORGE FARLEY, Plaintiff, Responding Party AND: THE OTTAWA POLICE SERVICES BOARD, Defendant, Moving Party

BEFORE: MR. JUSTICE CALUM MACLEOD

COUNSEL: Stuart Zacharias, for the Defendant, Moving Party Diane Condo, for the Plaintiff, Responding Party

HEARD: August 18th, 2016

COSTS ENDORSEMENT

[1] Summary judgment was granted to the defendant on December 22nd, 2016 and for reasons set out at 2016 ONSC 7817 the action was dismissed. I must now deal with the costs of the motion and the action. The defendant seeks costs of both.

[2] The plaintiff does not dispute his liability for costs. He recognizes that absent extraordinary circumstances, it is the law in Ontario that an unsuccessful plaintiff will be liable to the defendant in costs. For its part, the defendant only seeks the ordinary scale of costs (“partial indemnity) and does not seek a higher recovery. Costs will therefore follow the event and the plaintiff is required to pay costs of the motion and the action on a partial indemnity scale.

[3] The only dispute is the amount that should be ordered. The plaintiff relies upon the “reasonable expectation” and “fair and reasonable” criteria emphasized by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario and in Zesta Engineering Ltd. v. Cloutier. I note however that plaintiff’s counsel has not provided me with evidence such as her own dockets or billings by which I can assess the reasonable expectation of her client in any precise fashion.

[4] Fixing costs is not an “assessment” and does not involve weighing of evidence. Rather the judge is expected to proceed in a summary fashion exercising discretion with due regard to the applicable factors set out in Rule 57 of the Rules of Civil Procedure in order to fashion an award that is just in all of the circumstances. In this exercise, the judge brings his or her experience to bear. Ultimately fixing costs is an exercise of discretion and not a precise calculation.

[5] Although fixing costs is not a mathematical exercise, the actual fees incurred by the successful party are relevant. This is because of the importance of the indemnity principle and because partial indemnity awards are to be two thirds of substantial indemnity. Even substantial indemnity costs are not 100% of the actual fees.

[6] The Court of Appeal has directed that an award of costs must be proportionate to the amount actually incurred by the successful party but it has rejected an automatic or mathematical discount. See 790668 Ontario Inc. v. D’Andrea Management Inc., 2015 ONCA 557; Whitfield v. Whitfield, 2016 ONCA 720. It is nevertheless useful to consider 60% of the actual fees incurred as a starting point for calculating partial indemnity costs. See Inter-Leasing, Inc. v. Ontario (Minister of Revenue), 2014 ONCA 683; Sycor v. Kiaer et al, 2017 ONSC 128. See also Whitten, supra.

[7] Before applying HST, the fees incurred in defending the action are shown to be $134,326.00 and the fees for pursuing the summary judgment motion are shown to be $22,912.00. Sixty percent of those amounts would be $80,595.60 and $13,747.20 respectively although the partial indemnity amounts sought by the defendant are $78,562.40 and $14,431.81. As noted, the 60% calculation is neither automatic nor binding but measured against that benchmark, these requests are not unreasonable. By contrast, the $20,000.00 all-inclusive number proposed by the plaintiff cannot be justified.

[8] That is not to say that the numbers proposed by the defendant are appropriate. Without second guessing counsel or criticizing the amount charged to the client, I must nevertheless consider what amount is reasonable and just to impose upon the unsuccessful plaintiff. The defendant chose to engage out of town counsel and it was for counsel to determine how best to organize the work within the law firm. While there appears to be no travel time included in the bill of costs, fees that appear to be internal costs due to the allocation of work within the law firm should be adjusted for.

[9] Various lawyers and law clerks charged time to the file. I have no reason to believe this was unreasonable but it does not follow that all of that time should be recognized in awarding costs. In particular it is important not to utilize internal billing that might appropriately be regarded as law firm overhead. Law clerk time is legitimately a factor when it is a separate paralegal service that would otherwise require time and attention by a lawyer but not if it is merely clerical in nature. See Dunk v. Kramer, 2017 ONSC 1547 and cases referred to therein.

[10] Originally there was a second plaintiff but the claim of Mr. Chenier was resolved. It is reasonable to believe that some of the time spent on the file may have overlapped with that claim.

[11] Having due regard to the Rule 57 factors and the written arguments of counsel, I consider that $9,000.00 + HST ($10,170.00) and the disbursements of $496.92 (inclusive of HST) is a reasonable amount for the partial indemnity costs of the motion. With respect to the action, I fix the liability of the plaintiff at $45,000.00 + HST ($50,850.00) and I will allow $10,000.00 (inclusive of HST) for disbursements.

[12] The plaintiff will therefore pay costs of the motion and the action fixed at $71,516.92.

Mr. Justice Calum MacLeod Released: April 7, 2017