COURT FILE NO.: 100/15 and CV-16-0523-00 DATE: 20170410
SUPERIOR COURT OF JUSTICE - ONTARIO
ORANGEVILLE COURT FILE NO.: 100/15
RE: KELLY DARNLEY Applicant
v.
ALLAN THOMPSON Respondent
BRAMPTON COURT FILE NO.: CV-16-0523-00
AND:
CHARLES BRISTOLL Applicant
v.
ALLAN THOMPSON Respondent
BEFORE: Daley RSJ.
COUNSEL: K. D. Sherkin, for the Applicants Darnley and Bristoll A. J. Lenczner Q.C., for the Respondent Thompson
C O S T S E N D O R S E M E N T
Background:
[1] The applicants in the above styled proceedings each brought applications to have the respondent removed from his position as mayor of the Town of Caledon due to an alleged conflict of interest in accordance with the Municipal Conflicts of Interest Act (S.C. 2006, c. 9, s. 2).
[2] The applications were dismissed for the reasons released and the respondent seeks costs of the applications. The applicants filed submissions with respect to costs and acknowledged that the respondent is entitled to costs on a partial indemnity scale subject to a modest increase on the basis that the respondent was successful on all issues.
[3] The respondent proposes essentially three options with respect to the appropriate award of costs, namely;
(a) costs on a substantial indemnity basis throughout in the sum of $101,394.90;
(b) blended partial and substantial indemnity costs in the sum of $88,979.60; or
(c) costs on a partial indemnity basis throughout in the sum of $79,179.10.
[4] In addition to the fee component, the respondent seeks reimbursement of disbursements incurred in the total sum of $10,498.93. Notably, the applicants incurred assessable disbursements totaling $9,863.24 and they take no issue with respect to the disbursements claimed by the respondent.
[5] The applicants submit that the respondent is not entitled to substantial indemnity costs and further that the time spent by the respondents’ counsel was excessive. It is further submitted that the applicants would reasonably have expected an award in favour of the respondent in the all-inclusive sum of $45,000, recognizing the degree of success achieved on the applications.
[6] The applicants have not asserted that they should be insulated from any liability to pay costs to the successful respondent on the basis that the applications were brought in the public interest and for unselfish reasons, and as such the factors considered in St. James’ Preservation Society v. Toronto (City) (2006), 272 D.L.R. (4th) 149 (Ont. S.C.) need not be examined in this case.
Analysis:
[7] As will be considered below, oftentimes there is no direct symmetry as between costs incurred by an unsuccessful plaintiff or applicant and those incurred by a defendant or respondent in opposing a proceeding. Often the responding party must do far more in the way of investigation and marshaling of evidence to defend the claim and in preparing the legal positions necessary than does the party who is advancing the claim. That is the case here.
[8] Three matters must be considered at the outset. Firstly, it is asserted by the respondent that the applicant Darnley was in reality advancing a municipal planning agenda by way of her application to have the respondent removed from office based on a pecuniary conflict of interest and that in the course of that strategy she was having this litigation funded by Solmar Developments Ltd. No evidence was offered that would support the position that the applicants were participating in champerty or maintenance with respect to the funding of the costs of these applications.
[9] Secondly, in her counsel’s responding submissions, the applicant Darnley acknowledges that counsel representing her on the application acted pro bono. This may affect how the applicant would know what reasonable costs she could expect to be exposed to if her application were dismissed, as in this case.
[10] Thirdly, it is asserted on behalf of the applicants that the respondent was being indemnified by the Town of Caledon with respect to his solicitor and client costs in defending these applications. No such evidence was offered on behalf of the applicants and as such this submission cannot be considered.
[11] In fixing costs in accordance with Rule 57.01 (1) of the Rules of Civil Procedure and in examining the factors outlined, the court must recognize, in exercising its discretion, that the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay, rather than fixing an amount based on the actual costs incurred by the successful party: Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (Ont.C.A.) at para 26.
[12] Contrary to the position taken by the applicants, the proceedings instituted by them were far from simple in that the proceedings instituted by both applicants involved a growing and ever-increasing number of alleged pecuniary interests on the part of the respondent, which allegedly gave rise to conflicts of interest. The applicant Darnley instituted an application in 2015, following which a supplementary application was submitted by her followed by the Bristoll application. As a result of these layered applications, the evidentiary record relied upon by the applicants continued to grow over time, as counsel for the respondent investigated the alleged breaches and prepared responding evidence and conducted cross examinations on affidavit materials.
[13] This was not a case where an application, along with supporting affidavit material, was served and responded to and then proceeded onto argument in court. The applicants presented evidence in a piecemeal and scattered fashion based on their ongoing search for evidence of conflicts of interest on the part of the respondent.
[14] As a result of the strategy implemented by the applicants, counsel for the respondent were required to spend significantly more time than would otherwise have been incurred were it not for the filing of the applicant Darnley’s supplementary application and the institution of the application on behalf of the applicant Bristoll.
[15] The respondent seeks costs of substantial indemnity basis throughout or alternately on a blended basis of partial and substantial indemnity costs for the time period over which the first Darnley application proceeded and during the time devoted to investigating and responding to the supplemental Darnley application and the new application instituted on behalf of Bristoll.
[16] While the applicants may have been misguided and overly broad in making assertions of conflict of interest against the respondent, I cannot conclude that they have conducted themselves in a reprehensible or egregious fashion and as such I have determined that this is not a proper case for an award of substantial indemnity costs: Davies v. The Corporation of the Municipality of Clarington (2009) 2009 ONCA 722, 100 O.R. (3d) 66.
[17] Two lawyers represented the respondent on these applications, namely Alan Lenczner Q.C. and Andrew Parley who were called to the bar in 1969 in 2008 respectively. These lawyers seek payment for partial indemnity hourly rates at $400 and $300 per hour respectively. No issue was taken by the applicants as to the hourly rates as claimed and in fact the partial indemnity hourly rate set out in the Costs Outline submitted by the applicant’s lead counsel, who was called to the bar 1987, is $400 per hour.
[18] It was urged on behalf of the applicant that the time spent by counsel for the respondent on the applications was excessive. The costs outline submitted by the respondent as counsel shows that the total of 252.4 hours was spent by Mr. Lenczner (86.1), Mr. Parley (104.3) and a student-at-law (62).
[19] Although the time devoted to argument of these applications was modest at 1 ½ days, the time spent in the investigation, preparation of responding affidavit materials, cross examinations, drafting of facta, responding to the supplemental application brought by the applicants, as well as the Bristoll application, based on my review of the costs outline submitted by the respondent, all appears to have been reasonably incurred time spent in responding to the applications.
[20] Turning to some of the factors considered in Rule 57.01 (1) of the Rules of Civil Procedure that are to be considered in exercising the discretion to fix costs, I have concluded that contrary to the position taken by counsel for the applicants, the application proceedings were modestly complex, particularly from an evidentiary standpoint given the very broad and sweeping allegations and evidentiary record presented by the applicants.
[21] Clearly, these applications were very important to the respondent in that his elected position as the mayor of the Town of Caledon and as a councilor for the Region of Peel were at stake on these applications, as well as his personal reputation in the town and in the region.
[22] As to the conduct of the applicants in these applications, as a result of the many broad and unsupported allegations made against the respondent, the complexity of these applications was increased unnecessarily. Similarly, even where no evidentiary basis whatsoever was contained in the application records and no submissions were made regarding certain alleged conflicts of interest, the applicants continued on advancing those assertions, again unnecessarily expanding the record and the requirement that the respondent defend against these allegations.
[23] Although the applicants had the assistance of counsel on a pro bono basis, I have concluded that they should have reasonably realized that if unsuccessful on these applications they would be exposed to costs payable to the respondent somewhat in the order of the costs claimed by him on a partial indemnity basis.
[24] The total fees claimed in the costs outline on behalf of the respondent, on a substantial indemnity basis, exclusive of HST total $89,730. Although I have concluded that the time spent as reflected in the costs outline by counsel on behalf of the respondent was reasonable and that the tasks were shared between the two lawyers involved, which adequately reflected their seniority, applying the rule of thumb that partial indemnity costs should be in the order of approximately 2/3 of the substantial indemnity costs, the fee component of the partial indemnity costs claimed by the respondent at $70,070 is approximately $10,000 more than 2/3 of the substantial indemnity costs referenced above and as such I have concluded that that component of the costs claim must be reduced accordingly: 790668 Ontario Inc. v. D’Andrea Management Inc. 2015 ONCA 557, [2015] O.J. No. 4018 (ON CA) at paragraph 23.
[25] In the result, I have concluded that the respondent is entitled to the payment of costs on a partial indemnity basis throughout of $60,000 plus HST of 13%, of $7800.00, plus disbursements inclusive of HST of $10,498.93 for an all-inclusive total of $78,298.93.
[26] As to the attribution of the costs as fixed as between the applicants Darnley and Bristoll, supplementary submissions were requested from counsel.
[27] After considering those additional submissions I have concluded that the applicant Bristoll shall pay $12,000 all inclusive and the applicant Darnley the remainder of $66,298.93 all inclusive.
[28] Judgment shall issue accordingly.
Daley RSJ.
DATE: April 10, 2017