Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: PETER DONALD SEDGE, Plaintiff
AND:
TORONTO POLICE SERVICES BOARD, TERRENCE WRAY, DENNIS DOYLE, STEPHEN GIBBONS, STEPHEN MCGRAN, TONY REMY, JEFFREY MACDUFF, MICHAEL RAMSAY, JASON MCINTYRE, RODERICK MACLEAN, LESLEY ZIMMER, BRYAN SMITH, DARRYL LINQUIST, MICHAEL PRESS, NEIL THORNTON, PAUL SCUDDS, JOHN MORIERA, DIMITRO TIANOS, RON CLIFFORD, OLIVER FEBBO, TED LIOMANS, MARK TATARYN, BRANDON TATARYN, JAMES CRANTON, DAVID CRANTON, JOHN DOE, JOHN DOE2, JOHN DOE3, JOHN DOE4 and JOHN DOE5, Defendants
BEFORE: Cavanagh J.
COUNSEL: Arkadi Bouchelev, for the Plaintiff
Douglas O. Smith, for the Defendants Toronto Police Services Board, Terrence Wray, Dennis Doyle, Stephen Gibbons, Stephen McGran, Tony Remy, Jeffrey MacDuff, Michael Ramsay, Jason McIntyre, Roderick Maclean, Lesley Zimmer, Bryan Smith, Darryl Linquist, Michael Press, Neil Thornton, Paul Scudds, John Moriera, Dimitro Tianos, Ron Clifford, Ted Liomans and Oliver Febbo
HEARD: October 12, 2017
ENDORSEMENT
1The plaintiff brings this motion for an assessment of the plaintiff’s legal fees and disbursements in this action. The claims in the action, other than relating to costs, were settled at a private mediation on July 7, 2016.
2Under the terms of the Provisional Minutes of Settlement dated July 7, 2016 (the “Minutes of Settlement”) (which became final through approval by the claims review group of the City of Toronto) the defendants agreed to pay to the plaintiff the aggregate amount of $175,000 for all claims for damages, inclusive of interest, to be funded through (i) payment of $130,000 by the Police Defendants (the Toronto Police Services Board and individually named police officers); and (ii) payment of $45,000 by the defendants James Cranton, David Cranton, Mark Tataryn and Brandon Tataryn (the “Cranton Defendants”).
3The Minutes of Settlement provide in paragraph 2:
The Plaintiff’s costs (fees and disbursements) are to be assessed by a Judge and are to be paid by the Toronto Police Defendants.
4The parties have been unable to resolve the amount of costs to be paid by the Police Services Board and 20 different officers as defendants (the “Police Defendants”) pursuant to paragraph 2 of the Minutes of Settlement.
5The following questions arise on this motion:
a. Are the Minutes of Settlement to be construed such that (i) the costs are to be “assessed” as if they were an assessment of the bills of the plaintiff’s lawyer as between a solicitor and his own client, or (ii) the cost are to be “assessed”, or fixed, as costs of and incidental to a proceeding between the parties to the action pursuant to section 131 (1) of the Courts of Justice Act according to the general principles set out in rule 57.01 of the Rules of Civil Procedure?
b. In what amount should the plaintiff’s costs be fixed?
I address each of these questions, in turn.
How should the Minutes of Settlement be interpreted?
6Although the Summary in the plaintiff’s Costs Outline, on the first page, shows a claim for costs based upon “Fees (as detailed below) - partial indemnity”, at the hearing of this motion counsel for the plaintiff submitted that his client was seeking reimbursement of all amounts that he was charged by his lawyer for services rendered in relation to this litigation, subject only to reduction as if the legal bills were being assessed under the Solicitors Act.
7The Toronto Police Services Board (“Police Services Board”) submits that all of the plaintiff’s claims were settled, with the exception of costs, and that it is clear that paragraph 2 of the Minutes of Settlement refers to costs of the action to be paid by the Police Defendants to the plaintiff. The Police Services Board submits that I should fix the amount of costs to be paid as costs to be paid to the plaintiff at the conclusion of the action, on a partial indemnity scale.
8I agree with the submission of the Police Services Board. It is clear that the parties settled the claims made in the action, with the exception of costs, and that they agreed to have the amount of costs of the action payable to the plaintiff “assessed”, or fixed by a judge of this court. If the intention was that this exercise should be conducted as if it were an assessment under the Solicitors Act of the bills sent by the plaintiff’s lawyer to the plaintiff, clear language to this effect would have to have been included in the Minutes of Settlement, and there is no such language.
What amount of costs should be paid to the plaintiff?
9The plaintiff does not submit that there was any conduct on the part of the defendants that would justify an award of costs on a substantial indemnity scale. Therefore, I will fix the amount of costs to be paid to the plaintiff on a partial indemnity scale.
10The plaintiff submits that the amount of costs to be paid on a partial indemnity scale should be fixed at $266,509.90 comprised of (i) fees of $191,780, (ii) disbursements of $49,798.50, and (iii) HST on fees of $24,931.40.
11The Police Services Board submits that the plaintiff is only entitled to a modest award of costs in an amount that is proportionate to the amount recovered. The Police Services Board submits that the amount to be fixed for costs should not exceed $45,635.17 comprised of fees of $22,500, disbursements of $20,210.17 and HST on fees of $2,295.
12This action arises out of the arrest on May 29, 2008 by the Toronto Police Service and subsequent prosecution of the plaintiff on firearms - related charges. The plaintiff sued for damages for, among other things, malicious prosecution, conspiracy, false arrest, breach of the Charter, and negligent investigation. The plaintiff included the Police Services Board and 20 different officers as defendants.
13The plaintiff provided affidavit evidence of the circumstances that gave rise to his action and of the steps that were taken to prosecute his action. The Police Services Board also provided affidavit evidence of the circumstances that gave rise to the action through the affidavit of a partner in the law firm that acted as counsel to the Police Services Board and the Police Defendants.
14At the time of his arrest, the plaintiff resided in an apartment then owned by the Cranton Defendants. On May 28, 2008 the defendant James Cranton permitted the defendants Mark Tataryn and Brandon Tataryn, who were interested in purchasing the apartment building, to enter the plaintiff’s apartment. Shortly after this inspection, Brandon Tataryn contacted the Toronto Police to report that he had discovered a large “weapons cache”. At approximately 12:30 AM on May 29, 2008, the plaintiff was awoken by a knock on the door of his apartment. As he opened the door, he was confronted by men with weapons who were police officers. He was ordered to leave his apartment and escorted to a police cruiser and taken to the police station where he was held until the following day. The plaintiff was questioned by police officers and then charged with unlawful storage of firearms and possession of unregistered firearms. The investigation that was undertaken disclosed that the plaintiff had registered and documented his collection of guns and that they were not improperly stored. All of the charges against the plaintiff were withdrawn in March 2010.
15The plaintiff then started this civil action.
16In Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), 2004 CarswellOnt 2521, the Court of Appeal, at para. 26, provided guidance with respect to the exercise of fixing costs through the application of the factors in rule 57.01(1) of the Rules of Civil Procedure:
Subrule (1) lists a broad range of factors that the court may consider in exercising its discretion to award costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The express language of rule 57.01 (3) makes it clear that the fixing of costs is not simply a mechanical exercise. In particular, the rule makes clear that the fixing of costs does not begin and end with a calculation of hours times rates. The introduction of a costs grid was not meant to produce that result, but rather to signal that this is one factor in the assessment process, together with the other factors in rule 57.01. Overall, 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.
17In Davies v. Clarington (Municipality), 2009 ONCA 722, Epstein J.A. wrote at para. 52:
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.
18Rule 1.04(1.1) of the Rules of Civil Procedure states:
In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
19In Marcus v. Cochrane, 2014 CarswellOnt 6910 (C.A.), at para. 15, Goudge J.A. emphasized the importance of the application of the principle of proportionality in making a costs award:
… The comparison of what this dispute was about and what was spent on it is stark and difficult to justify. While undoubtedly Mr. Marks, as counsel asserting the claim, must bear the greater responsibility, the principle of proportionality which is fundamental to any sound costs award cries out for application by both counsel. With the assistance and indeed the direction of the trial judge if need be, counsel simply must cut the cloth to fit. The health of the justice system depends on it. Trial costs cannot serve as an incentive to look away from this important challenge.
20In this case, the amount of the plaintiff’s claim was settled at $175,000. Counsel for the plaintiff submits that the settlement amount should not be taken to represent the true value of the plaintiff’s claim, and that many factors can affect the amount that a plaintiff is willing to accept on a settlement. While this is so, there has not been, and there will not be, an adjudication of the amount of the plaintiff’s claim. I regard the amount of the settlement to be an important factor in applying the principle of proportionality in the exercise of fixing costs of this action: See Mullin v. Legace, 2015 ONSC 4267, at para. 13.
21The plaintiff’s costs outline has broken down the amounts claimed for fees into several categories. The amounts claimed for fees charged by lead counsel for each category, calculated using his full hourly rate of $300, are:
a. Meetings and correspondence with Client, Counsel and Court $43,710
b. Expert Witnesses $4,080
c. Pleadings $26,310
d. Affidavits of Documents $4,725
e. Examinations for Discovery $86,550
f. Review of transcripts and preparation of Undertakings Charts $35,325
g. Motions $27,885
h. Appeal of part of Master’s order $43,485
i. Conferences, Teleconferences, and case Management $6,555
j. Mediation $8,985
k. Total Fees for lead counsel $282,015
22The plaintiff’s Costs Outline also includes amounts for fees for an articling student for correspondence, discoveries, preparation of materials for a case conference, and preparation of memoranda in the total amount of $5,655.
23The amount claimed for fees on a partial indemnity scale, using a partial indemnity rate of $200 per hour, is $191,780.
24I regard the approach taken by the plaintiff to this litigation to be one that did not sufficiently take into consideration the need to “cut the cloth to fit” and ensure that the costs of the litigation are not disproportionate to the value of the claim.
25The amount claimed for fees based on the number of hours spent in meetings between the plaintiff and his counsel and other communications between plaintiff’s counsel and his client (more than 80 hours), even before meetings to prepare for his examination for discovery, is more than is fair and reasonable for the Police Defendants to pay, particularly given the factual nature of the claim.
26The amount claimed for fees for the time spent reviewing documents, conducting legal research, and drafting the 87 paragraphs of the statement of claim following such document review and research (more than 85 hours) is also more than is fair and reasonable for the Police Defendants to pay in this action.
27As well, the amount of time spent in preparation for and in the conduct of examinations for discovery far exceeded what is reasonable and proportionate for this claim. The plaintiff decided to name as defendants, in addition to the Police Services Board, many individual police officers for whose conduct the Police Services Board would likely have been held to be vicariously liable if the plaintiff had been successful at a trial. The plaintiff’s counsel insisted on examining 17 of the Toronto Police Services officers and spent almost 100 hours conducting such examinations and additional time for preparation that exceeded 170 hours.
28The amount claimed for fees based upon the amount of time spent on these many examinations for discovery far exceeds the amount that is fair and reasonable for the Police Defendants to pay as partial indemnity costs for the plaintiff to obtain discovery evidence from the defendants. The plaintiff may have decided that separate examinations of all of these officers should be conducted in order for the plaintiff to obtain discovery evidence to support his action, but it would be unfair and unreasonable to require the Police Defendants to pay costs that result from the plaintiff’s decision.
29Although the plaintiff had named 20 police officers as defendants, he bought a motion to add 6 additional police officers as defendants. This motion was dismissed, the plaintiff appealed the dismissal to the Divisional Court, and the appeal was dismissed. Costs were awarded to the Police Defendants and paid by the plaintiff. The plaintiff, nevertheless, seeks costs of his unsuccessful motion and appeal. The request for the defendants to bear these costs is an example of what I regard as an unreasonable and disproportionate approach taken by the plaintiff to the amount of costs claimed in this action.
30Motions were brought before the Master on March 15, 2016 by each of the plaintiff and the Police Defendants to compel answers to discovery questions and to produce documents. The moving party or parties on each motion were generally successful. In respect of costs, the Master wrote that she could be spoken to, but no submissions were made and there was no order as to costs. In my view, the plaintiff should be able to include reasonable costs of his successful motion to compel answers to discovery questions as part of the costs to be fixed for the action. The fact that the Police Defendants chose not to seek an award of costs does not change my view.
31The plaintiff’s counsel spent approximately 110 hours reviewing transcripts and documents, and preparing tables of unanswered undertakings. I regard the fee claimed based upon this amount of time to be more than the Police Defendants should reasonably be expected to pay.
32The parties agree that I should proceed to fix the costs to be paid under the Minutes of Settlement. In so doing, I apply the factors in rule 57.01(1) and the principles expressed in Boucher. My objective is to fix an amount that is fair and reasonable for the Police Defendants to pay in this action.
33In my view, a fair and reasonable amount for fees to be paid by the Police Defendants on a partial indemnity scale $45,000. This amount reflects my conclusion that in fixing the fee to be paid by the Police Defendants, a substantial reduction of time claimed for meetings and communications between the plaintiff and his counsel, review of documents, pleadings, examinations for discovery, and review of transcripts is warranted. Less substantial reductions of time for other activities described in the plaintiff’s Costs Outline is warranted. The amounts claimed for the unsuccessful motion to add additional defendants and the appeal should be disallowed.
34The fee that I conclude is fair and reasonable for the Police Defendants to pay notionally reflects 225 hours of time for the plaintiff’s lead counsel, based upon an hourly rate of $200. This fee takes into account the submissions made by plaintiff’s counsel that the value of the claim should not necessarily be measured by the settlement amount, and his submissions concerning the value to the plaintiff’s case of following the approach that was taken to the discovery process by examining many police officers. The amounts claimed for student time are reflected in the amount fixed for fees.
35The fee that I fix, including HST, is $50,850.
36The plaintiff seeks recovery of disbursements in the amount of $49,798.50. The largest items are those for examination fees ($8,693.42) and for discovery transcripts ($23,210.17) The Police Defendants also dispute a disbursement for a payment to Freemanlaw of $1,412.50 because there is no information to show that the consultation was necessary. The Police Defendants dispute that disbursements in connection with the unsuccessful motion to add additional defendants and the appeal should be allowed.
37The following disbursements claimed by the plaintiff are those that it would not be fair and reasonable for the Police Defendants to pay:
a. Court filing fees of $127, $259, $127, and $127 in respect of filing fees for the plaintiff’s unsuccessful motion to add additional defendants and the appeal.
b. Photocopying charges of $807.05 and $1,709.22 in respect of the motion and appeal.
c. Process server charges of $418.11 and $158.20 for the motion and appeal.
d. Charges for transcript fees for transcripts of the examinations of the Police Defendants with the exception of charges for the transcripts of Terrence Wray (the officer in charge), Stephen McGran (the affiant for the information to obtain a search warrant), and Michael Ramsay (the officer who interviewed the landlord assisted with the search). This amounts to a reduction of $16,919.01.
e. Charges for the examination for discovery fees for the Police Defendants other than Terrence Wray, Stephen McGran and Michael Ramsay. The reduction is $4,191.74.
f. Payment to Freemanlaw – Barristers for $1,412.50.
38The total reduction for disallowed disbursements is $26,255.83.
39I therefore fix disbursements at the amount claimed ($49,798.50) less the disallowed disbursements ($26,255.83), a net amount of $23,542.67.
Procedure for Determination of Costs to be paid after a Settlement
40In my view, the procedure that the parties followed in this case to resolve their disagreement concerning costs to be paid under a contract, the Minutes of Settlement, which resulted from a mediated settlement of the claims made in this action, should not be encouraged.
41Rule 57.01(7) provides that the court shall devise and adopt the simplest, least expensive and most expeditious process for fixing costs. The fact that the parties may have contractually agreed in a settlement agreement that a plaintiff’s costs are to be assessed by a judge does not mean that, because of this contractual provision, a judge should act as an assessment officer or as an arbitrator to determine the amount of costs to be paid under the settlement agreement.
42Although I agreed to fix costs of the action on this motion, as requested by the parties, I do not consider the procedure that the parties followed of moving before a judge to have the costs assessed to represent the proper procedure for determination of the costs to be paid by the unsuccessful party to the successful party of an action that has otherwise been settled.
43Where the parties settle a civil action with the assistance of a private mediator, as occurred in this case, they should make every effort to settle the costs to be paid and, if they are unable to do so, they should make arrangements with the mediator for him or her to decide the amount to be paid for such costs. The mediator would have knowledge of the factual and legal issues of the case and would be best equipped to make this determination. Alternatively, the parties should request an order for assessment of such costs by an assessment officer under rule 58 of the Rules of Civil Procedure. This is the procedure that was followed in Mullin v. Legace where costs were assessed by an assessment officer after a settlement.
44In my view, only in exceptional circumstances should a superior court judge be asked to assess or fix the costs of an action, with which the judge has otherwise had no involvement, on a motion supported by affidavit evidence addressing the rule 57.01(1) factors, brought after a settlement of all other claims.
Disposition
45For the foregoing reasons, I fix costs of this action to be paid by the Police Defendants to plaintiff pursuant to the terms of the Minutes of Settlement in the amount of $74,392.67 inclusive of fees, disbursements and HST.
46If there are any issues with respect to the costs of this motion, I may be spoken to.
Cavanagh J.
Date: October 20, 2017