Furr v. Duhamel, 2017 ONSC 4623
COURT FILE NO.: 14-62967
DATE: 20170802
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: STEVEN FURR AND KATHLEEN LUNDGREN, Applicants
-and-
MICHEL DUHAMEL, EMMY VERDUN AND JACK HUGHES, Respondents
BEFORE: Mr. Justice Robert N. Beaudoin
COUNSEL: Scott McLean, for the Applicants
Eric Appotive, for the Respondents
Bruce Simpson for the Intervener
HEARD: By written submissions
costs ENDORSEMENT
[1] On June 12, I granted the Applicants’ request for an adjournment of the hearing of this Application due to a health issue on the part of their counsel on the following terms:
Counsel are to provide me with their written submissions with respect to costs “thrown away.” Counsel for the Respondents is to provide his submissions within 20 days and counsel for the Applicants is to respond 20 days thereafter.
This Application will be adjourned to a date which will be peremptory to the Applicants.
[2] This was the second adjournment sought by the Applicants. The Application had been originally scheduled to proceed on November 21, 2016. On November 17- 18, counsel for the Applicants indicated that he may be required to seek an adjournment of the Application which was opposed by counsel for the Respondents. Counsel for the Intervener was also ready to proceed on November 21, 2016.
[3] On November 21, 2016, counsel for the Applicants advised that he was too ill to argue his clients’ request for the adjournment. The issue of costs thrown away for the November adjournment was not argued on that date nor did the Respondents forfeit or waive their right to seek costs thrown away at that time. Moreover, the Respondents are not asking that the issue of the November costs thrown away be determined at this time and are content that these be considered after the final determination of the Application. This is nevertheless a relevant factor in addressing the matter of costs thrown away on this second request for an adjournment.
The Respondents and the Intervener’s Submissions
[4] The Respondents are represented by Mr. Eric Appotive and Ms. Allison Russell. Mr. Appotive was called to the bar in 1980 and is a certified specialist in civil litigation. He is billing at an hourly rate of $350 per hour for this matter. Ms. Russell was called to the bar in 2005. She is billing at an hourly rate of $240 per hour on this matter. The Respondents are seeking costs thrown away in the amount $24,507 plus HST of $3,192.41 for a total of $27,789.41 made up by the following four categories:
a. the litigation budget;
b. preparing for the hearing;
c. attending at the hearing in the aftermath of adjournment;
d. cost submissions
[5] The Respondents’ counsel have provided detailed information with respect to the hours spent under each of these headings and they seek 66% of the fees incurred for the first two steps; 100% of the fees incurred for their attendances at the hearing and in the aftermath of the adjournment, as well as the sum of $1990.00 for their preparation of these costs submissions which costs are claimed on a substantial indemnity basis.
[6] The Intervener seeks a modest amount for costs, namely $2000 plus HST of $260. While her counsel has tried to exclude all of the time that will not have to be re-spent, he maintains that his client has been financially prejudiced by the adjournment, although to a much lesser extent than the Respondents.
The Applicant’s Position
[7] The Applicants submit that the Application was adjourned due to health issues on the part of their counsel that could not be controlled or avoided. Neither the Applicants nor the Respondents bear any fault for the adjournment. They rely on this my discretion to defer the awarding costs under the circumstances, and they request that I do not award costs.
[8] In the event that I decide to award costs, the Applicants argue that the Respondents should be limited to costs which have been wasted and which will have to be redone as a result of the adjournment. They argue that the Respondents have failed to identify what steps have been wasted and what costs have been thrown away. They submit that some of the time spent will be of use when the matter is heard at a later date.
[9] The Applicants also object to the claim for the work of two counsel. They argued that this matter involved the interpretation of the language in a Co-Tenancy Agreement as well as the jurisdiction of the Committee in defining and implementing responsibilities under the Agreement. This matter was to proceed as a “paper trial.” The Applicants maintain that they bore the greater onus and have been represented by one counsel for virtually all of the substantial process.
[10] The Applicants submit that a 66% discount should be applied to the fees claimed suggest that a costs order in the amount of $11,370.77 in favour of the Respondents is more appropriate. They take no issue with respect to the Intervener’s claim for costs.
The Law
[11] Both the Applicants and the Respondents rely on the same decision in support of their submissions. In Caldwell v. Caldwell, 2015 ONSC 7715, 70 R.F.L. (7th) 397, Justice Quinlan held at paras. 8 through 13:
8 The phrase “costs thrown away” refers to a party’s costs for trial preparation which have been wasted and will have to be re-done as a result of the adjournment of the trial: Pittiglio v. Pittiglio,2015 ONSC 3603at para. 7; Middleton v. Jaggee Transport Ltd., 2014 ONSC 3041, at para. 5.
9 There are three general categories of cases in “costs thrown away” decisions:
(i) the first category deals with fault where, for example, one of the parties or their counsel neglect to call a witness or a last-minute amendment is required. The court will grant the adjournment on conditions, including the payment of costs thrown away;
(ii) the second category is where the trial is adjourned because of the court’s scheduling problems. No costs are awarded in this circumstance as no party bears responsibility for the adjournment; and
(iii) the third category deals with adjournments sought by one of the parties as a result of no fault on their part. Costs thrown away are still awarded against the party applying for the adjournment, notwithstanding lack of fault: Goddard v. Day, 2000 ABQB 799.
10 The court noted in Goddard, at para. 20:
The third category…is really one of responsibility for the adjournment as opposed to fault or lack of fault…situations where someone is responsible for an adjournment, but cannot be faulted for that responsibility… [B]eing responsible for an adjournment…carries with it a costs consequence.
11 Costs thrown away are generally payable on a full recovery basis: Pittiglio,at para. 5; Milone v. Delorme, 2010 ONSC 4162, 2010 CarswellOnt 5535, at para. 12; Straume v. Battarbee Estate, 2001 CarswellOnt 6225, at paras. 2-3; Middleton, at para. 5. This is because the purpose of such an award of costs is to “indemnify a party for the wasted time for trial preparation arising from the adjournment” : Pittiglio, at para. 6; Legacy Leather International Inc. v. Ward, 2007 2357 (ON SC), 2007 2357 (ONSC), at para. 9. Such an award is not to punish the party seeking the adjournment, but to indemnify the other party for the wasted time for trial preparation arising from the adjournment: Incandescent Revolution Manufacturing Co. v. Gerling Global General Insurance Co.,1989 3385 (AB QB), at para. 12; Pittiglio at para. 6, citing Kalkanis v. Kalkanis, 2014 ONSC 205, at para. 3.
12 The court must determine what costs have actually been wasted. This is not an easy task: some witnesses will require little further preparation while some will require much: Straume, at para. 4. It has been described as an “intuitive”, rather than a scientific, process: Pittiglio, at para. 17.
13 An award of costs thrown away can be revisited at the end of the trial to determine if further costs should be awarded: Straume, at para. 37; Middleton at para. 23; Laudon v. Roberts & Sullivan, 2007 10906 (On SC), at para. 20.
[12] The Applicants rely on the decision of Graziano v. Ciccone, 2017 ONSC 362 where the Court referred to Caldwell but modified the second category as follows:
The second category is where the trial is adjourned because of court scheduling problems or I would add, unforeseen events such an illness of a party, lawyer or witness or an emergency such as a personal emergency, health issue or death in a family. In these circumstances, no costs are awarded because no party bears responsibility for the adjournment…
[13] In my view, the decision in Graziano confuses the second and third category and should not be followed. Costs thrown away are still awarded against the party applying for the adjournment, notwithstanding lack of fault and these are generally payable on a full recovery basis.
Conclusion
[14] I am satisfied that the Respondents have provided a sufficiently detailed breakdown of the actual statement of services that they have provided to their clients. Their application of a 33% discount is appropriate. I would reduce their claim for costs submissions to $1,000.00
[15] The Respondents were also defending claims for allegations of bad faith, high-handed conduct, and breach of fiduciary duty. They submitted three substantial affidavits with over 200 exhibits. The volumes of productions date back to the inception of the property development in issue and include the business and communications of past committees and the records of those committees as well as all communications between the committee and its legal advisors.
[16] Given the volumes of material, a significant amount of preparation will have to be repeated. Moreover, the Applicants’ criticisms of the Respondents materials are significantly undermined by their own failure to provide their hourly rates and/or details of their time incurred.
[17] I take no issue with the Respondents having a second lawyer to assist in the preparation for the hearing and to attend at the hearing, given the extensive volumes of material that needed to be reviewed and consulted. I concede there is always an element of duplication. It must be remembered that even if unsuccessful regarding their interpretation of the contractual issue, the Applicants are entitled to argue the other relief sought.
[18] For these reasons, I conclude that it is appropriate in the exercise of my discretion to award the Respondents their costs thrown away in the amount of $23,500.00 inclusive of HST This amount is proportionate to the amounts claimed by the Intervener who had to devote much less time in preparation of the hearing. The Applicants shall be further responsible to pay the costs of the Intervener which I fix in the amount of $2,260.00,
Mr. Justice Robert N. Beaudoin
Date: August 2, 2017
CITATION: Furr v. Duhamel, 2017 ONSC 4623
COURT FILE NO.: 14-62967
DATE: 20170802
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: STEVEN FURR AND KATHLEEN LUNDGREN, Applicants
-and-
MICHEL DUHAMEL, EMMY VERDUN AND JACK HUGHES, Respondents
BEFORE: Mr. Justice Robert N. Beaudoin
COUNSEL: Scott McLean, for the Applicants
Eric Appotive, for the Respondents
Bruce Simpson for the Intervener
costs ENDORSEMENT
Beaudoin J.
Released: August 2, 2017