Court File and Parties

COURT FILE NO.: 08-CV-11411CM DATE: 20170623 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Estate of Bogoljub Visnjic and Milena Visnjic, Plaintiffs AND: The Corporation of the Town of LaSalle, Defendant

BEFORE: Howard J.

COUNSEL: Luigi DiPierdomenico, for the Plaintiffs Patrick W. Brennan, for the Defendant

HEARD: Written submissions

Costs Endorsement

Overview

[1] In my reasons for judgment released April 3, 2017, I dismissed the plaintiffs’ action with costs, if demanded. Visnjic v. Town of LaSalle, 2017 ONSC 2082 (S.C.J.), at para. 144.

[2] In para. 145 of my decision, I dealt with the issue of costs as follows:

If the defendant wishes to pursue the issue of costs, and if counsel are unable to agree on the issue, they may file brief written submissions with the court, of no more than five (5) double-spaced pages (exclusive of any costs outline, bill of costs, dockets, offers to settle, or authorities), in accordance with the following schedule:

a. the defendant shall deliver his submissions within twenty (20) days following the release of these reasons;

b. the plaintiffs shall deliver their submissions within twenty (20) days following service of the defendant’s submissions;

c. the defendant shall deliver his reply submissions, if any, within five (5) days following service of the plaintiffs’ submissions;

d. if any party fails to deliver their submissions in accordance with this schedule, they shall be deemed to have waived their rights with respect to the issue.

[3] In accordance with the prescribed schedule, the defendant delivered its costs submissions on April 20, 2017, the plaintiffs delivered their response submissions on May 8, 2017, and the defendant delivered reply submissions on May 11, 2017. The plaintiffs delivered sur-reply submissions under cover of letter dated May 11, 2017.

[4] I have read and considered all the submissions received.

[5] The defendant seeks partial indemnity costs in the total amount of $66,995.51, being comprised of $55,922.40 for fees, $5,618.93 for disbursements, and $7,954.18 for HST, less $2,500 that the plaintiffs already paid to the defendant, on February 12, 2014, by way of costs awards.

[6] The plaintiffs submit that there should be no award of costs made against them primarily because the parties were engaged in “public interest litigation,” the issues involved were novel or required clarification, and the alleged impecuniosity of the plaintiffs. Alternatively, the plaintiffs submit that the amounts claimed by the defendant are excessive or improper, and that a more appropriate amount would be $38,540.83, inclusive of fees and disbursements.

Analysis

[7] I agree with the submission of the plaintiffs that the modern principles in forming costs awards have grown beyond the historic and limited purpose of the indemnification of the successful party’s costs of litigation. The modern principles seek to advance at least five broad principles, which were well articulated by Perell J. in Sheppard v. McKenzie in the following terms:

The role of costs has grown from its historic role of indemnification for the cost of litigation. Modern costs rules are designed to advance five purposes in the administration of justice: (1) to indemnity successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage and sanction inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements. Sheppard v. McKenzie, [2009] O.J. No. 3677, 2009 ONSC 46175 (S.C.J.), at para. 17.

[8] I am guided by those principles here.

Public interest litigation

[9] I also agree that, in an appropriate case, the court has the authority to relieve an unsuccessful public interest litigant of the burden of paying costs. As Sharpe J.A. observed for the Court of Appeal in Mahar v. Rogers Cablesystems Ltd., “[w]hile the ordinary cost rules apply in public interest litigation, those rules do include a discretion to relieve the loser of the burden of paying the winner’s costs and that discretion has on occasion been exercised in favour of public interest litigants.” Mahar v. Rogers Cablesystems Ltd. (1995), 1995 ONSC 7129, 25 O.R. (3d) 690, [1995] O.J. No. 3711 (C.A.), at para. 4.

[10] That said, I do not agree that the parties here were engaged in public interest litigation. This is clearly not a case like Mahar v. Rogers Cablesystems Ltd., where the Court of Appeal noted that the applicant’s financial interest in the matter before the court was minimal, and the application was “brought to benefit the broader public interest of cable subscribers.” Ibid., at para. 3.

[11] On the contrary, a review of the statement of claim and, in particular, its prayer for relief makes it quite clear that the litigation here was, at its core, essentially a private dispute between a local resident and the municipality over access to the plaintiffs’ garage by way of an unopened road allowance, all of which started when the individual plaintiffs sought a building permit for the construction of their detached garage at the back of their property.

[12] The plaintiffs are essentially correct that at paras. 87-94 of my reasons for judgment, I found that on May 8, 2007, the defendant municipality enacted By-Law No. 6807 to restrict the public’s use of unopened road allowances, consistent with the powers given municipalities by s. 35 of the Municipal Act, 2001, S.O. 2001, c. 25. However, as the defendant correctly points out, the plaintiffs did not challenge the By-Law, the amendments to the Municipal Act, 2001, or the authority of the defendant municipality to restrict the use of all unopened road allowances within its jurisdiction. As I found in para. 104 of my reasons, the plaintiffs made no claim that the Town did not have jurisdiction to enact the By-Law, and in keeping with that position, counsel for the plaintiffs repeatedly submitted in final argument that the plaintiffs do not want an open public road at the Bondy Avenue unopened road allowance.

[13] The plaintiffs sought only a remedy specific to their individual property. No doubt the case may have been of some interest to other property-owners in the Todd Lane neighbourhood; but that does not transform the plaintiffs’ dispute with the defendant into public interest litigation. In the instant case, the plaintiffs sought no public remedy on behalf of their neighbours, no declaration of invalidity, and no remedy that was not specifically limited to their individual property and circumstances.

Impecuniosity of the plaintiffs

[14] The plaintiffs also submit that “impecuniosity is a serious factor for the court to consider in this case” and that there is authority “to warrant the alleviation or reduction of a costs burden for impecunious litigants.” The defendant counters that there is no evidence before the court as to the alleged impecuniosity of the plaintiffs, nor any evidence as to “the equity in the plaintiffs’ home, other real estate holding, other property holdings, valuable chattels, investment holdings or income, employment income, or any other financial means at the plaintiffs’ disposal.”

[15] Anticipating the defendant’s reply, the plaintiffs state that if the defendant disputes the individual plaintiff’s circumstances, the plaintiffs “rely on their right to adduce viva voce evidence before the trial judge makes its costs decision in this case.” Respectfully, I do not agree that the plaintiffs have such an unfettered right and, in any event, I am not at all tempted by the implicit suggestion of the plaintiffs that a further hearing is warranted.

[16] On the latter point, I would remind the parties of the provisions of subrule 57.01(7) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, regarding the process for fixing costs, which state:

The court shall devise and adopt the simplest, least expensive and most expeditious process for fixing costs and, without limiting the generality of the foregoing, costs may be fixed after receiving written submissions, without the attendance of the parties.

[17] Insofar as the circumstances of the individual plaintiff are concerned, I believe the court must always be conscious of the typically high cost of litigation, its impact on the litigants, particularly individual litigants, and access to justice barriers that can be created. Beyond that, I make no specific finding here.

[18] That is to say, I would decide the issue on other grounds.

Factors under subrule 57.01(1)

[19] The defendant’s submissions highlight a number of the factors enumerated under subrule 57.01(1). While I have considered all of those submissions, I comment on only a few of them here.

[20] The defendant points to the complexity of the proceeding, a factor specified by subrule 57.01(1)(c). I give little or no weight to that consideration because, in my view, this proceeding was not particularly complex. Indeed, I agree with the submissions of counsel for the defendant, which he made in final argument at the trial – as did counsel for the plaintiffs – when counsel said, “What I do agree with my friend on is that this case is a relatively simple one.” In my view, the defendant’s submission in final argument at trial, with which I agree, belies any reliance of the defendant on the supposed complexity of the proceeding for the purposes of a costs award and subrule 57.01(1)(c).

[21] I also give little weight to the defendant’s Rule 49 offer to settle, served October 15, 2014. Under that offer, the defendant offered to settle the action on the basis of a consent dismissal without costs up until October 31, 2014, after which time the defendant offered to settle on the basis of a consent dismissal with costs payable by the plaintiffs to the defendant on a partial indemnity basis.

[22] In my view, it cannot be said that, in principle, the defendant’s offer to settle provided a result that was more favourable than the judgment obtained. Pursuant to my reasons for judgment, the action was dismissed with costs, if demanded. That is essentially all that the defendant’s October 2014 provided – a dismissal of the action with costs to be agreed upon or assessed – although obviously the quantum of costs incurred will have increased since the date of the offer.

[23] However, in Peter Lombardi Construction Inc. v. Colonnade Investments Inc., the court concluded that where an offer proposes an amount plus assessed party-and-party costs, the assessed costs are not included as part of the comparison between the offer and the judgment. Peter Lombardi Construction Inc. v. Colonnade Investments Inc. (2000), 2000 ONSC 22718, 51 O.R. (3d) 551, [2000] O.J. No. 4803 (S.C.J. per Master Sandler). There, Master Sandler explained that: “[s]o the costs element under the combined offer was constantly increasing as the lawsuit progressed. … The party-and-party costs under the offer would be the same as the party-and-party costs under the judgment, viewed at any particular point in time up until the start of the trial when the offer expired.” Ibid., at para. 167 [emphasis in the original]. See also D’Addario v. Smith, 2016 ONSC 4690 (S.C.J.), at para. 36.

[24] Moreover, I would note that Mr. DiPierdomenico, counsel for the plaintiffs who appeared at trial, stated in his submissions that he was unaware of the defendant’s offer, as it predated his retainer by several months and, apparently, it was not brought to his attention subsequent to his involvement on the file.

[25] The provisions of subrule 57.01(1)(e) authorize the court to consider “the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding.” In this regard, the defendant points to numerous instances in the somewhat lengthy and difficult history of this proceeding and submits that the “numerous pre-trial hearings and case conferences resulted in extensive preparation work frustrated by the plaintiff’s unpreparedness and unwillingness to comply with court-ordered timetables and deadlines.”

[26] I can understand the frustration of the defendant. The action was commenced on July 10, 2008, and did not come to trial until June 2016, a period of almost eight years.

[27] That said, I do not think it would be entirely fair to the plaintiffs to suggest that they personally were the cause of that entire period of delay. In my view, in fairness to the plaintiffs, it must be recognized that:

1. Mr. Bogoljub Visnjic, who could be fairly characterized as the “main” plaintiff, passed away on December 18, 2010.
2. The plaintiff’s original lawyers, who prepared the statement of claim, obtained an order removing themselves as solicitors of record on June 12, 2012.
3. The plaintiffs evidently had some difficulty retaining new counsel, and following service of a motion by the defendant to dismiss the action for delay and failure to appoint new counsel, the defendant was advised that the plaintiffs had retained new counsel on March 25, 2013.
4. Unfortunately, many of the instances of delay complained of by the defendant occurred while carriage of the file was in the hands of the plaintiffs’ second counsel over a two-year period. That counsel was subsequently suspended by the Law Society of Upper Canada;
5. At or about the time that the defendant learned of the suspension of plaintiffs’ second counsel, the matter was placed on the trial list commencing May 2015. The defendant brought a motion for directions. Coincidentally, counsel for the plaintiffs who appeared at trial appeared as amicus curiae on the return of the defendant’s motion, which came before me, at which time the court adjourned the May 2015 trial date, ordered the plaintiffs to retain new counsel within 30 days, and scheduled a case conference for June 16, 2015, which conference was also held before me.
6. The plaintiffs’ current counsel was retained shortly before the June 2015 case conference. At the case conference, the matter was placed on the trial list for the sittings commencing October 13, 2015.
7. Plaintiffs’ counsel had considerable difficulty securing a copy of the plaintiffs’ file from the previous solicitors. Indeed, a complete copy of the original file never was secured.
8. However, the matter was not reached for trial at the October 2015 sittings, and it was then traversed to June 2016.

[28] In these circumstances, it does not strike me as entirely fair to saddle the plaintiffs with the sole responsibility for the entire period of the eight-year delay in bringing this action to trial. I am not satisfied that the actions of the plaintiffs themselves required particular sanction under the auspices of subrule 57.01(1)(e).

[29] That said, I am concerned about certain conduct of the defendant, which, I believe, is relevant to subrule 57.01(1)(e).

[30] In this regard, I would remind the parties that in para. 106 of my reasons for judgment, I said the following:

That said, I should say in passing that I am somewhat concerned about what would appear to be the uneven enforcement measures adopted by the Town in relation to their understanding of the environmental designation of the lands in question. That is, the evidence is clear that the Town directed the Visnjics to cease cutting the grass behind their property. The Town took the position that because the lands were designated Natural Environment, they must remain in their natural state to be managed for wildlife enhancement and conservation purposes. In particular, the Town issued a written direction to the Visnjics dated July 4, 2008, directing them to stop cutting the grass on those lands. The state of the evidentiary record is incomplete and does not permit a finding as to whether other residents in the Todd Lane neighbour also received similar directives and written warnings from the Town. That said, it would appear from many of the photographs tendered at trial that other residents in that neighbourhood were also cutting the grass behind their properties. Given the state of the evidence before me, I am unable to make any findings of differential treatment. But the question would surely arise in the mind of anyone viewing the photographs tendered.

[31] The concerns I expressed in para. 106 arose out of the plaintiffs’ belief that they were singled out for particular treatment by the defendant municipality. That belief is supported by many of the photographs of the properties in the neighbourhood in question. That is, the plaintiffs were directed to cease cutting the grass behind their property over the Bondy Avenue unopened road allowance; however, the photographs indicate that the neighbours of the plaintiffs to the immediate east (and others in the Todd Lane neighbourhood) regularly cut the grass on the lands to the rear of the property and, indeed, appeared to maintain the lands almost as if they owned it themselves. The photographs tendered support the plaintiffs’ belief that “uneven enforcement measures” had been adopted by the Town.

[32] The plaintiffs’ perceptions were echoed in the evidence of Mr. Guy Santarossa. Mr. Santarossa was not cross-examined on point.

[33] As I referenced in my decision, there was no evidence that similar letters or directives were sent by the Town to the neighbours. Perhaps they received the same letters that the plaintiffs received. Perhaps, unlike the plaintiffs, those neighbours simply chose to ignore the Town’s directives. Perhaps there was separate enforcement action taken by the Town against those neighbours to the same degree as was taken against the plaintiffs.

[34] That said, one would have thought, if that were the case, that evidence would have been led by the defendant at trial, especially in order to counter the plaintiffs’ very clear allegation that they believed they were being singled out for uneven treatment by the Town when their neighbours were not.

[35] It is certainly fair to say that the plaintiffs were not aware of any similar enforcement efforts taken against their neighbours by the Town. Hence, in my view, it is understandable that the plaintiffs would harbour their belief that they were being singled out for differential treatment by the Town.

[36] It was precisely because of my concerns regarding the appearance of “uneven enforcement measures” by the Town that I expressed my costs disposition in terms of the action being dismissed with costs “if demanded.” In keeping with the traditional usage of that phrase by the courts, I had meant to signal to the defendant that, in my view, it would not be an inappropriate or unjust result in the circumstances of this case if the defendant were to decide not to pursue their entitlement to costs against these particular plaintiffs.

[37] Certainly, the defendant is entirely within its rights to pursue its claim for costs. However, I must then consider the defendant’s claim in the context of, inter alia, the considerations enumerated in subrule 57.01(1), including, in particular, the question of whether any party’s conduct tended to lengthen the proceeding. In this regard, I think a relevant consideration is whether the plaintiffs would have maintained this proceeding had they not believed that they were being subjected to uneven enforcement measures. In this context, I am of the view that the defendant’s conduct tended to reinforce the plaintiffs’ seemingly reasonable belief that they were being subjected to uneven enforcement measures at the hands of the defendant, thus motivating them to maintain their proceeding against the defendant. In that way, in my view, the defendant’s conduct tended to lengthen unnecessarily the duration of this proceeding. I take this factor into account in considering the defendant’s claim for costs.

Excessive or improper amounts claimed

[38] The plaintiffs take issue with various aspects of the amounts claimed by the defendant. I tend to agree with many of the objections taken.

[39] Items 6 and 7 in the defendant’s bill of costs claim a total of $4,530.74 (all inclusive) on account of the defendant’s attendance at the third pre-trial conference held on August 12, 2012, and the defendant’s motion to dismiss the claim for delay, initially returnable March 26, 2013. As properly indicated in the defendant’s bill of costs, on February 12, 2014, the plaintiffs paid the total amount of $2,500 to the defendant in respect of costs awards made in respect of the two outcomes, $750 for the third pre-trial and $1,750 for the motion to dismiss. The defendant does properly give the plaintiffs credit for the $2,500 ordered to be paid; however, it is improper to claim for the balance of the costs where the court has made an order in respect of same.

[40] The difference of $2,030.74 must be deducted from the defendant’s claim.

[41] Item 9 in the defendant’s bill of costs claims $4,493.78 (all inclusive) for the defendant’s motion for directions, returnable on May 12, 2015. As reflected in my endorsement, I ordered that there would be no costs of the motion. It is therefore not proper to claim costs of the motion at this point.

[42] The amount of $4,493.78 must be deducted from the defendant’s claim.

[43] Item 10 of the defendant’s bill of costs claims $30,665.60 (all inclusive) for the defendant’s preparation for trial. The total number of hours claimed, collectively on behalf of five different professionals, is 269.9 hours. Even if one were to assume that one professional worked on nothing else but preparation for this trial for 40 hours per week, the 269.9 hours claimed represents almost seven straight weeks of trial preparation. Respectfully, that strikes me as somewhat excessive.

[44] I note that included in the total 269.9 hours of trial preparation is a total 35.8 hours, or the equivalent of $6,386.08, recorded by another lawyer in Mr. Brennan’s firm, a somewhat more senior lawyer of some 15 years’ call to the bar. That lawyer did not appear at trial before me. I suspect it may be that this other lawyer may have been involved in the file when the matter was scheduled for trial in October 2015 but not reached at that time. It goes without saying that whenever a matter is not reached on the trial list, there will be a certain inevitable amount of work that the trial counsel will have to re-do or at least review. The duplication of that work can often be limited where the same counsel who invested the hours of the preparation the first time can simply review her work when the matter comes to trial the second time; however, that recoupment of savings is much more difficult where another lawyer subsequently assumes carriage of the trial, as happened here. In those circumstances, it is not appropriate, in my view, that the losing party be saddled with the full burden of the previously incurred preparation time.

[45] I would also note that Mr. Brennan, who appeared as counsel for the defendant at trial, incurred 100.2 hours of preparation time, or the equivalent of $12,907.76 in fees. I say simply that those amounts strike me as both fair and reasonable for trial preparation.

[46] I would make the same comment with respect to Mr. Brennan’s time for attendance at trial, as set out in item 11 of the bill of costs, in respect of which the defendant claims 54.2 hours, or the equivalent of $6,982.04 in fees. Again, those amounts are eminently fair and reasonable.

[47] In sum, the amount claimed for total trial preparation time of $30,665.60 is somewhat excessive in the circumstances of this case and ought to be reduced.

[48] I also agree with the plaintiffs in respect of the defendant’s claim of $2,070 disbursement cost paid to “Valco Real Estate Appraisers & Consultants” for, presumably, an expert’s report. Neither the report nor the author of the report was produced at trial. In such circumstances, the disbursement amount is not recoverable as against the plaintiffs.

[49] Accordingly, having considered, inter alia, the history of the litigation; the factors enumerated in subrule 57.01(1) of the Rules of Civil Procedure; the principles that should guide the court’s exercise of its discretion under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 to award costs, many of which were discussed in the Ontario Court of Appeal’s leading decision in Boucher v. Public Accountants Council (Ontario) (2004), 2004 ONCA 14579, 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.); and my concerns regarding impact of the conduct of the defendant in this case, as expressed in paras. [29] to [37], I assess the defendant’s costs on a partial indemnity basis and fix them in the amount of $30,000 (inclusive of HST and disbursements).

[50] At para. 26 of Boucher, the Court of Appeal observed: “[o]verall, as this court has said, 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.”

[51] For all of the reasons set out above, I find that the amount of $30,000 is fair and reasonable in the circumstances of the instant case.

Conclusion

[52] Therefore, an order shall go for the payment by the plaintiffs to the defendant of its costs, on a partial indemnity basis, fixed in the total amount of $30,000 (inclusive of HST and disbursements), payable within 90 days from the date hereof.

“original signed and released by Howard J. ”

J. Paul R. Howard Justice

Date: June 23, 2017