Groh v. Steele, 2017 ONSC 4925

Citation: Groh v. Steele, 2017 ONSC 4925

COURT FILE NO.: CV-16-0781-00

DATE: 2017 08 22

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ERNEST GROH – and – DORIS STEELE and JOAN F. WOLFE also known as KITTY WOLFE and GABRIELLE GROHOTOLSKI

BEFORE: LEMAY J

COUNSEL: D. Loucks, Counsel for the Applicant P.D Stern, Counsel for Doris Steele and Joan F. Wolfe D. Elliott, Counsel for Gabrielle Grohotolski

COSTS ENDORSEMENT

1The parties are involved in a number of proceedings. The proceeding before me was an application by Ernest Groh to have a capacity assessment performed on his mother, as well as for various orders made with respect to his mother’s Attorneys for Property.

2I dismissed Mr. Groh’s motion by way of a decision dated June 12th, 2017 (reported at 2017 ONSC 3625). It is now time to fix the costs for this proceeding.

The Positions of the Parties

3The Respondent, Ms. Gabriella Grohotolski, is seeking substantial indemnity costs in the amount of $76,182.78 inclusive of HST and disbursements on the following bases:

a. Ms. Grohotolski was successful in resisting this application and is entitled to her costs.

b. She made an offer under Rule 57.01, and did better on the motion than her offer.

c. Many of the steps taken by Mr. Groh were unnecessary and designed to achieve tactical advantages in the litigation.

d. The issues were serious and imposed a great deal of stress on Ms. Grohotolski.

e. The issues that the Application raised were complex, and required significant time to address.

4The Respondent Attorneys, Ms. Wolfe and Ms. Steele, also seek their costs on a substantial indemnity basis, in the sum of $39,681.51, inclusive of HST and disbursements. They advance this position for the following reasons:

a. They served an offer under Rule 49, and obtained a better result at the hearing of the motion.

b. The factual and legal issues in this application were quite complex, especially given that Mr. Groh made misleading statements.

c. Mr. Groh unnecessarily delayed the proceedings.

5Mr. Groh acknowledges that some costs should be payable. However, he argues that the costs should be limited to a total award between $20,000.00 and $25,000.00 including HST and disbursements for both parties. Mr. Groh advances this position on the following grounds:

a. The Respondents took improper steps in the proceedings.

b. The proceeding itself was not particularly complex.

c. The Respondents all spent excessive amounts of time on the file and, in particular, Ms. Grohotolski should not be compensated for the presence of two lawyers in Court, particularly when one of them was an Affiant.

d. The Respondents’ Offers to Settle did not contain any concessions, except as to costs. They were made with a view to obtaining a large costs award and ending other litigation if this Application was dismissed.

The Relevant Principles

6The Respondents all claim that the principles in Rule 49 apply to this case, as there are offers to settle that have been made. Based on the case-law filed by Ms. Grohotolski’s counsel, I am not persuaded that Rule 49 applies to this case to provide substantial indemnity costs to the Defendants for two reasons.

7First, there is the clear wording of Rule 49.10(2), which states:

Defendant’s Offer

(2) Where an offer to settle,

(a) is made by a defendant at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the plaintiff,

and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise. R.R.O. 1990, Reg. 194, r. 49.10 (2); O. Reg. 284/01, s. 11 (2).

8It is clear from the wording of the Rule that, where the Plaintiff obtains a judgment that is as favourable or less favourable than the offer to settle, the Defendant is entitled to partial indemnity costs. There is nothing in the Rule that would support an award of substantial indemnity costs when the Plaintiff obtains nothing.

9Second, there is the case law on this issue, which supports the observation that I have made in the previous paragraph. In that regard, I have considered Davies v. Clarington (Municipality) ((2009) 2009 ONCA 722, 312 D.L.R. (4th) 278 (Ont. C.A.)), which was provided to me by Ms. Grohotolski’s counsel. This decision makes reference to the Court of Appeal decisions in S & A Strasser Ltd. v. Richmond Hill (Town) ((1990) 1990 CanLII 6856 (ON CA), 1 O.R. (3d) 243) and Scapalitti v. A. Potvin Construction ((1999) 1999 CanLII 1473 (ON CA), 44 O.R. (3d) 737).

10In Davies, supra, the Court went on to observe that the other decisions all concluded that “as the Plaintiff’s claim had failed, rule 49.10 had no application.” (see paragraph 38). In my view, the case-law also supports the conclusion that Rule 49 does not apply in this case.

11The Court can award solicitor-client (substantial indemnity) costs under Rule 57. However, solicitor-client costs are only awarded in rare and exceptional cases where the conduct of a party is worthy of sanction by the Court. I see no basis for an award of solicitor-client (or substantial indemnity) costs in the facts before me.

12The other factors under Rule 57.01 also apply in this case. In my view, the most relevant of those factors are as follows:

a. 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.

b. The complexity of the proceeding.

c. The importance of the issues

d. The conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding.

13I will analyze each of those factors in the section that follows.

Analysis

Expectation of the Parties

14The total costs sought by the various Respondents in this case are approximately $115,000.00 inclusive of disbursements and HST. In my view, the Applicant would not have had any expectation of paying this much for what was ultimately a one-day hearing if he lost the motion.

15I reach this conclusion for a number of reasons:

a. Although the motion involved consideration of a number of transactions and issues, there was only a modest documentary record.

b. The time spent by all counsel appears to have been repetitive. In particular, I note that the charges for both Ms. Mamay and Mr. Elliott to attend court were unnecessary. This was not a case that required two counsel to be in Court.

c. The total time spent in Court on this matter was less than a full Court day.

d. The total time spent in examinations was less than two full days.

e. The legal issues involve straightforward legal tests applied from the statutory wording in the Substitute Decisions Act. While these matters can be factually complex, there was no significant dispute over the legal principles.

16To put this in perspective, if I accept Ms. Grohotolski’s accounts as being reasonable, I would be required to accept that Ms. Mamay spent four full weeks on this file, and Mr. Elliott spent most of a week on the file. Given the nature of the issues, the amount of time spent in Court, the straightforward nature of the legal issues and the volume of materials filed, I am of the view that this amount of time is excessive and not proportional to the issues before me.

17In this respect, I also note the amount of time that the Attorneys’ counsel spent on this case. He spent approximately 85 hours on this case in addition to the two half day attendances before me. Although I acknowledge that Mr. Stern took the lead on at least one of the cross-examinations, the Attorneys filed no affidavits, only a factum. Again, this would require me to accept that the preparation of a factum and attendance at approximately two days of examinations took two weeks. For the reasons set out above, I am of the view that this an excessive amount of time that is not proportional to the issues before me.

18I hasten to add that I do not doubt that counsel actually spent this amount of time. I only conclude that it was not within the reasonable expectations of the losing party that this motion would cost as much as it did, or that the winning parties counsel would spend as much time as they did on it.

19I also note that there were some extra costs as a result of the fact that this motion had to be adjourned in December of 2016, and the Respondents should be entitled to recover those costs.

Complexity and Importance of the Issues

20As set out above, I am of the view that these issues were relatively straightforward from a legal perspective. I am also of the view that they were relatively straightforward from a factual perspective.

21However, I note that there were some factual disputes that were unnecessary. For example, as I noted in my decision, there was no justification for Mr. Groh to deny that he had cohabited with Ms. Steele for a period of some years.

22I also acknowledge that the issues were important to all of the parties. Ms. Grohotolski was rightly concerned about the attempt by her son to remove decision making authority from her. Ernest Groh was attempting, in his mind, to protect his mother from Attorneys that he thought were not acting in his mother’s interests.

23While the issues were important, I have also noted that they were both factually and legally straightforward. These factors support a generally lower level of costs in the circumstances of this case.

Conduct of the Parties

24There were delays in having this case heard, three examinations of Ms. Grohotolski, as well as last-minute Affidavits that were filed. All of these different events caused an increase in the cost of this case. On the facts before me, I am not prepared to assign responsibility to any one party for all of these delays.

25I should address one issue in particular. Ms. Grohotolski’s counsel argued that the Applicant brought a strategic motion to remove Ms. Grohotolski’s counsel and that this is a factor I should consider in awarding costs. I reject that assertion. Costs of $8,500.00 were already awarded to Ms. Grohotolski for the failed motion to remove her counsel from the record. As a result, the Court has already addressed any concerns it had with Mr. Groh’s decision to bring this motion through that award of costs.

26When all of the circumstances of this factor are considered, the costs ordered should be enhanced slightly to take account of the fact that additional time had to be spent on this case. There is no basis, however, to punish one party or the other for the actions that they took in litigating this case.

Conclusion

27When all of these factors are considered, I am of the view that the Respondent Gabriella Grohotolski will be awarded costs in the sum of $25,000.00 inclusive of HST and disbursements. The Respondent Attorneys will be awarded costs in the sum of $10,000.00 inclusive of HST and disbursements. These costs are due and payable within thirty (30) days of the release of this endorsement.