Court File and Parties

CITATION: Hibbert v. McGoogan, 2017 ONSC 4985

COURT FILE NO.: CV-12-468156

DATE: 20170822

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: GARFIELD ANTHONY HIBBERT, Plaintiff

AND: CARLIN McGOOGAN, Defendant

COUNSEL: Vivek David, for the Plaintiff Michael Kestenberg, for the Defendant

BEFORE: P. J. Monahan, J.

HEARD: August 22, 2017

COSTS ENDORSEMENT

[1] On July 12, 2017 I granted summary judgment dismissing an action for negligence brought by Garfield Hibbert (“Hibbert”) against his former solicitor, Carlin McGoogan (“McGoogan”). Hibbert had retained McGoogan as counsel in a number of proceedings and alleged that McGoogan had been negligent in the conduct of these retainers. I dismissed Hibbert’s action on the basis that he had failed to prove that McGoogan was negligent.

[2] With respect to costs, counsel for McGoogan submits that a costs award of slightly more than $47,000, inclusive of disbursements and HST, is appropriate, for a variety of reasons. Amongst the costs submissions of counsel for McGoogan were the following:

(i) Hibbert claimed the amount of $130,000 plus interest, plus costs, and was entirely unsuccessful;

(ii) McGoogan had represented Hibbert in various actions, and the documentation was voluminous. Further, Hibbert failed to properly articulate the position being taken against McGoogan and it was difficult to understand in which actions, and on what basis he was alleging that McGoogan had been negligent. It was not until the motion for summary judgment that Hibbert outlined the three specific actions which were the subject matter of his claim. As a result, much time was spent reviewing all the documentation and reviewing the various court files in the underlying actions in order to understand the issues and determine that status of the various matters;

(iii) the allegations of negligence made by Hibbert were serious in nature; and

(iv) Hibbert’s conduct resulted in unnecessarily lengthening the duration of the proceeding, in that he failed to prosecute the matter in a timely manner and retained several lawyers over the course of a five year period.

[3] Counsel for McGoogan further argued that costs should be awarded based on fees calculated on an hourly rate of $350, which is the actual rate paid by LawPRO, the defendant’s insurer, in defending the claim. Counsel suggested that senior counsel were involved at preferred rates negotiated by LawPRO, and that an hourly rate of $350 per hour is similar to the partial indemnity rate for counsel of similar seniority. Because of these ‘discounted rates’, the costs outline of the defendant made no distinction between costs awarded on a partial indemnity as opposed to a substantial or full indemnity basis.

[4] Counsel for Hibbert did not make any submissions on costs.

[5] In my view, the submissions by McGoogan’s counsel set out in numbered paragraphs (i) through (iv) above are all relevant to the proper determination of costs in accordance with Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Further, I find the amount of time spent by counsel for McGoogan over the five years of this proceeding to be reasonable in the circumstances.

[6] However I do not agree that it would be appropriate to award partial indemnity costs based on the actual rates charged by McGoogan’s counsel, even assuming the hourly rates negotiated by LawPRO are lower than what would normally be paid to senior counsel. The Court of Appeal in 790668 Ontario Inc. v. D’Andrea Management Inc., 2015 ONCA 557 (“668 Ontario”), at paragraphs 22-23, has made it plain that it is an error in principle to award partial indemnity costs that amount to substantial or full indemnity. In 668 Ontario, the motions judge had awarded partial indemnity costs based on a party’s actual costs, due to the fact that LawPRO’s hourly rates were approximately two-thirds of those charged by lawyers practicing in the area with comparable experience. The Court of Appeal reduced the costs award on the basis that the negotiation of preferred hourly rates with counsel does not, in itself, provide a basis to depart from the ordinary rule of thumb that partial indemnity costs should be about one-third less than substantial indemnity costs.

[7] To be sure, as Faieta J. noted in Hyeon Joo Kim Lee v. Fahime Rezai, 2015 ONSC 3140, a mechanical application of the same percentage discount in every cast where costs are awarded on a partial indemnity scale would not be appropriate. Courts must exercise their discretion on a case by case basis in order to achieve a result that is fair and reasonable for the unsuccessful party to pay in a particular proceeding. That said, a costs award on a partial indemnity basis should not have the practical effect of eliminating the distinction in the Rules between partial indemnity, substantial indemnity and full indemnity.

[8] Counsel for McGoogan acknowledges that costs in this matter should be awarded on a partial indemnity scale. On this assumption, there is nothing in the record that would justify an award of costs on a basis that would, in substance, amount to substantial or full indemnity.

[9] Taking into account the various considerations outlined above, and in light of the circumstances of this case, I would fix costs payable by Hibbert to McGoogan at $35,000, inclusive of disbursements and HST, to be paid within 30 days.

P. J. Monahan, J.

Date: August 22, 2017