Johnson v. Cline, 2017 ONSC 5144
CITATION: Johnson v. Cline, 2017 ONSC 5144
COURT FILE NO.: C-650-13
DATE: 2017-08-30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PATRICK ROBERT CLINE, ANNE CLINE and JEFFREY MICHAEL PATRICK CLINE
Plaintiffs
- and -
SUSAN ELIZABETH DRUMMOND
Defendant
AND BETWEEN:
SUSAN ELIZABETH (DRUMMOND) JOHNSON and CHRISTOPHER ST. CLAIR JOHNSON
Plaintiffs by Counterclaim
- and –
PATRICK ROBERT CLINE, ANNE CLINE and JEFFREY MICHAEL PATRICK CLINE
Defendants by Counterclaim
Counsel:
J. Postnikoff, Counsel for the Plaintiffs / Defendants by Counterclaim
L. Protopapas, Counsel for the Defendant / Plaintiffs by Counterclaim
BEFORE: THE HONOURABLE MR. JUSTICE C.S. GLITHERO
RULING ON COSTS
[1] Following a 7 day trial, I awarded Mrs. Johnson $15,000 for nuisance and $3,000 for mental distress, as against Jeffrey Michael Patrick Cline. I awarded Mr. Johnson the sum of $15,000 for nuisance and $1,500 for mental distress, again as against Jeffrey Michael Patrick Cline. I further granted a restraining order as against Mr. Cline as requested by the Johnsons.
[2] I dismissed all claims by Mr. Cline against the Johnsons.
[3] Mr. Protopapas, counsel for both Mr. and Mrs. Johnson, submits that costs should be awarded to them in the amount of $75,972.99, inclusive of fees, disbursements and HST. This claim is based on $51,205 for fees on a substantial indemnity basis, plus $9,595 on a partial indemnity basis, for a total for fees of $60,800, plus HST in the amount of $7,904, for a total in respect of fees of $68,704. To that he adds disbursements in the amount of $7,127.89 plus applicable HST in the amount of $141.10 for a total of $7,268.99. The total amounts to the claim of $ 75,972.99.
[4] Mr. Postnikoff submits on behalf of his client that the Johnsons should be awarded costs in the range of between $25,000 - $40,000, on a partial indemnity scale, inclusive of fees, disbursements and HST.
[5] On May 1, 2017, an offer to settle pursuant to Rule 49 was made on behalf of the Johnsons to Mr. Cline. The offer was to settle their claims for general, aggravated and punitive damages for $35,000, plus $2,260 in general damages, being the legal fees they paid to defend Mr. Cline’s private complaint. The offer also provided that Mr. Cline would pay the Johnsons’ costs on a partial indemnity basis, from the date of issuance of the statement of claim up to the date of the offer, and thereafter on a substantial indemnity basis. The offer also provided that Mr. Cline’s claims would be dismissed without costs.
[6] Mr. Cline did not respond to this offer, nor did he himself make any offers to settle.
[7] The Johnsons’ offer to settle was silent as to the question of interest. Their counterclaim, which was dated May 23, 2013, included a claim for prejudgment and post-judgment interest in accordance with the Courts of Justice Act. I see no reason why they should not be entitled to it. The applicable prejudgment interest rate appears to be 1.3%. This would result in total prejudgment interest from the date of this claim to the date of the offer to settle in the amount of $1,766.69, and results in a total award to the Johnsons in the amount of $34,500 plus $1,766.69, or $36,266.69.
[8] This same situation arose in F.M. Hunt Construction Co. v. Van Jaarsveld, 2017 ONSC 8189. There it was held at para. 19 that the appropriate calculation upon which to determine the consequences of a Rule 49 offer was to include the principal amount recovered, plus the prejudgment interest on that amount up to the date of the offer to settle. I agree that to be the sensible approach in this case. I also take into account that the plaintiffs did succeed in obtaining the restraining order sought by them.
[9] However, the Johnsons’ offer to settle also called for payment of $2,260 in special damages which were not awarded. The result is the offer to settle was for $37,260 and the amount recovered, including prejudgment interest, was $36,266.69. The result at trial fell almost $1,000 short of the amount for which the Johnsons offered to settle.
[10] The only grounds on which costs can be awarded on a substantial indemnity scale is by operation of Rule 49.10, or as a result of a clear finding of reprehensible conduct: Davies v. Clarington (Municipality), 2009 ONCA 722 at paragraph 40. In this case, Rule 49.10 has not been satisfied. Nor, in my view does the conduct of Mr. Cline, while reprehensible in some respects, amount to such clear conduct as to justify an award of costs on a substantial indemnity scale.
[11] Pursuant to s.131(1) of the Courts of Justice Act, costs are in the discretion of the court.
[12] Rule 57 provides a number of factors which may be considered by the court in the exercise of its discretion with respect to costs, in addition to any offers to settle.
[13] The first such factor is that of indemnity, which includes the experience of counsel, the rates charged, and the hours spent. Here, the bill of costs of the Johnsons contains an hourly rate of $350 applied to all docketed items. It also refers to this as the “normal hourly rate” of their counsel. That, I take it, is the amount he charges his clients. Substantial indemnity is not full indemnity. An appropriate hourly rate on a substantial indemnity basis would, in my opinion, be in the range of $300 per hour.
[14] Rule 1.03 defines “substantial indemnity costs” as meaning an amount that is 1.5 times what would otherwise be awarded in accordance with s.131 of the Courts of Justice Act and Rule 57.01(1), which in practice refers to partial indemnity costs. On this basis, the appropriate rate on the partial indemnity scale would be $200 per hour.
[15] The bill of costs details 201 hours spent on the part of the action which proceeded to trial. I do not doubt that Mr. Protopapas spent the amount of time claimed. Nevertheless it seems somewhat high, as it amounts to the equivalent of approximately 5 weeks (at 40 hours per week) spent on a trial lasting 7 days. I acknowledge that good advocacy requires good preparation. I also take into account the hourly rate charged by Mr. Protopapas, which in my view is quite reasonable for a counsel with 32 years at the bar.
[16] Another factor enumerated in Rule 57.01 refers to the amount of costs that an unsuccessful party could reasonably expect to pay. As pointed out in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), costs are not to be fixed on a purely mathematical basis of hours spent times hourly rate. Rather, the objective is to fix an amount that is fair and reasonable: see paras. 24 and 26.
[17] These principles have been repeated many times, an example of which is found in Davies v. Clarington (Municipality) 2009 ONCA 722, where at para. 52 the court held that “As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.”
[18] In this regard, I would think it likely that many people would think it unusual that the costs of an action would exceed the damages awarded at trial. On the other hand, an unsuccessful party has to reasonably expect to pay the costs of the action as he or she caused to accumulate, in large part by his or her handling of the litigation.
[19] Another factor relates to the importance of the issues. On a general level, one may suggest that neighbourhood disputes do not occupy the upper echelons of importance in terms of matters which come to court. On the other hand, if the actions of a neighbour meaningfully impair and prevent the level of enjoyment of your home property to which you are reasonably entitled, it is an important issue to you. The Johnsons thought it was an important issue to them. Mr. Cline thought the same issues were important to him, although viewed through a different mirror.
[20] Rule 57.01 also refers to the conduct of a party that tends to unnecessarily lengthen the proceedings. In my opinion, Mr. Cline’s position throughout this litigation lengthened the proceedings substantially. Regard may be had to my reasons for judgment. The persistence in complaints about trespass when it turns out the property line was in the Johnsons’ favour, persistence in unfounded claims about the web cam/sun catcher, the driveway monitoring alert system and the failure to concede these issues, when the result became obvious, extended these proceedings. This conduct also falls to be considered under the heading of whether there was a refusal to admit anything that should have been admitted or a denial of anything that should have been admitted.
[21] In my opinion, Mr. Cline’s actions throughout are relevant to the question of costs. He made it clear in his diary that he was going to do everything he could to make everyone he disagreed with pay the price. While in my opinion that conduct is not so clearly reprehensible as to justify an award of costs on a substantial indemnity basis, but is a factor to be included in a consideration of what is fair and reasonable in the circumstances of this case: see Schwark Estate v. Cutting, 2010 ONCA 299.
[22] Pursuant to Rule 49.13, I am permitted to take into account an offer to settle despite the effect of the preceding portions of Rule 49. Here, the Johnsons’ offer to settle was virtually the same as the amount recovered at trial, but not quite. It was a meaningful attempt to settle the litigation. This litigation ought to have been settled. A 7 day trial was simply not viable considering the damage awards which were realistically in play. It was in the interests of both parties that the matter be settled. The Johnsons made a realistic offer. Mr. Cline made none, nor did he even respond to the offer advanced by the Johnsons.
[23] While it is submitted on behalf of Mr. Cline it is appropriate to take a global approach to the assessment of costs, rather than a line by line analysis of the bill of costs, counsel for Mr. Cline does the latter in circumstances favourable to him.
[24] He points out that some time was spent at trial on a motion to admit the evidence of one Glen Brown as similar fact evidence, which motion failed. The amount of time spent on this was negligible.
[25] It is also submitted, on Mr. Cline’s behalf, that time was spent on the Johnsons’ unsuccessful claims for aggravated and punitive damages, and for damages for malicious prosecution. He cites as example, the time spent on the evidence of David Foulds. That witness was called by Mr. Cline.
[26] With respect to disbursements, objection is taken on Mr. Cline’s behalf with respect to service on Deborah Bourne as she was not called as a witness, and to the costs of service on a similar fact witness who was not permitted to testify. Those two items total $200.48, inclusive of HST.
[27] Mr. Cline also objects to the costs of transcripts of examinations of Patrick Cline and of Mr. Johnson by counsel for Patrick and Anne Cline, as they only dealt with the adverse possession claims which were settled. They total $2,248.70, inclusive of HST, and ought to be deducted.
[28] Counsel for Mr. Cline relies on the Ontario Court of Appeal decision in Rooney (Litigation Guardian of) v. Graham, 2001 24064 (ON CA), [2001] O.J. No. 1055. There it was held that where an offer to settle contains a provision for solicitor and client costs from the date the offer was made, that costs clause forms part of the offer and has to be included in a consideration as to whether Rule 49.10 has been met. Here I have previously determined that the requirements of Rule 49.10 have not been met in any event.
[29] In my assessment, considering all of the factors to which I have referred, a fair and reasonable amount for fees would be $37,500, plus HST in the amount of $4,875, for a total of $42,375. For disbursements, I am of the view that the amount claimed, inclusive of HST, of $7,268.99 ought to be reduced by the amount of $2,449.18, as discussed in paragraphs 26 and 27.
[30] For these reasons, I fix costs payable by Mr. Cline to the Johnsons in the amount of $47,194.81, inclusive of fees, disbursements and HST.
C.S. Glithero J.
Date: August 30, 2017
CITATION: Johnson v. Cline, 2017 ONSC 5144
COURT FILE NO.: C-650-13
DATE: 2017-08-30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PATRICK ROBERT CLINE, ANNE CLINE and JEFFREY MICHAEL PATRICK CLINE
Plaintiffs
– and –
SUSAN ELIZABETH DRUMMOND
Respondent
AND BETWEEN:
SUSAN ELIZABETH (DRUMMOND) JOHNSON and CHRISTOPHER ST. CLAIR JOHNSON
Plaintiffs by Counterclaim
- and -
PATRICK ROBERT CLINE, ANNE CLINE and JEFFREY MICHAEL PATRICK CLINE
Defendants by Counterclaim
Ruling on Costs
C.S. Glithero J.
Released: August 30, 2017