CITATION: Leduc v. Pharand, 2017 ONSC 7316
COURT FILE NO.: A-12995-16
DATE: 2017-12-18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RENE LEDUC AND JULIE LEDUC
Applicants
– and –
RICHARD A. PHARAND
Respondent
John Bruggeman, for the Applicants
For self
HEARD: Written Submissions
rasaiah j.
COSTS DECISION
OVERVIEW
[1] Following my decision dated November 6, 2017, the parties were unable to resolve the issue of costs.
[2] The respondent seeks costs on a full indemnity basis in the amount of $29,795.00 plus disbursements and HST for a total of $37,420.53.
[3] The applicants submit that there should be no order for costs.
[4] Each accuses the other of conduct that unnecessarily complicated and lengthened what ought to have been a simple proceeding.
[5] The applicants also take issue with the amount of costs being claimed.
LAW
[6] The fixing of costs is discretionary under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the result of the proceeding; any written offer to settle; indemnity for the successful party; counsel experience; counsel rates; hours spent by counsel on the matter; amount the unsuccessfully party could reasonably be expend to pay; the amount at issue; apportionment of liability; the complexity; the importance of the issues; conduct of the party that shortened or lengthened unnecessarily the proceeding; whether the step was improper, vexatious, unnecessary, taken through negligence, mistake or excessive caution; refusals to deny or admit anything that should have been admitted; and any other matter relevant to the question of costs.
[7] Unless the court is satisfied that a different order would be more just, on the hearing of a contested motion, the court shall fix the costs and order them to be paid within 30 days: rule 57.03.
[8] Where a motion is abandoned or is deemed to have been abandoned, a responding party on whom the notice of motion was served is entitled to the costs of the motion forthwith, unless the court orders otherwise: rule 37.09(3).
[9] The consequence of the applicant failing to accept an offer from the respondent where the judgment is as favourable as or more favourable than the terms of the offer, is that the respondent may be awarded partial indemnity costs to the date of the offer and substantial indemnity costs thereafter: S & A Strasser Ltd. v. Richmond Hill (Town of) (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243 (C.A.).
[10] In Fong v. Chan, 1999 2052 (ON CA), 1999 CarswellOnt 3955, [1999] O.J. No. 4600, 128 O.A.C. 2, 181 D.L.R. (4th) 614, 46 O.R. (3d) 330, 93 A.C.W.S. (3d) 222, Sharpe J. wrote:
21 It is apparent from this review of the case law that the preponderance of modern authority supports the contention that both self-represented lawyers and self-represented lay litigants may be awarded costs and that such costs may include allowances for counsel fees. Since the Chorley decision in 1884, it seems not to have been doubted that self-represented solicitors could recover costs for solicitor's fees. The respondents did not take issue with that proposition on this appeal. Johnson v. Ryckman, supra stands for the proposition that a self-represented solicitor could not recover anything for counsel fee, but as I have already noted, it was acknowledged in that case that there seemed to be no rationale for the rule. I am not persuaded by the respondent's submission that this 1903 case, which rests on such a shaky foundation, should continue to govern us today. Johnson v. Ryckman has been superceded by more recent cases that have quite properly ignored the untenable distinction between solicitor's fees and counsel fees. I can see no reason for maintaining the distinction between solicitor's fees and counsel fees that was already outmoded almost one hundred years ago. The legislature's decision to allow parties to recover costs in relation to the work of salaried employees provides added impetus to reject the view that self-represented solicitors should be precluded from recovering costs. Two provincial appellate courts have held that lay litigants may recover costs, including counsel fees. The clear trend of both the common law and the statutory law is to allow for recovery of costs by self-represented litigants.
22 Quite apart from authority and as a matter of principle, it seems to me to be difficult to justify a categorical rule denying recovery of costs by self-represented litigants. As noted in the Fellowes McNeil, supra and in Skidmore , supra, modern cost rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behaviour by litigants. It seems to me that all three purposes are fostered by allowing the trial judge a discretion to award costs to self-represented litigants.
23 Since the Chorley case over one hundred years ago, it had been accepted that self-represented lawyers are entitled to indemnity on the "time is money" or opportunity cost rationale. It is difficult to see why the opportunity cost rationale should not be more generally applicable to self-represented litigants. The self-represented lawyer possesses legal skills, but lacks professional detachment when acting in his or her own cause. If the law is prepared to compensate lawyers for this loss of time when devoting their efforts to their own cause, I fail to see any basis for denying the same entitlement to self-represented lay litigants who are able to demonstrate the same loss.
24 A rule precluding recovery of costs, in whole or in part, by self-represented litigants would deprive the court of a potentially useful tool to encourage settlements and to discourage or sanction inappropriate behaviour. For example, an opposite party should not be able to ignore the reasonable settlement offer of a self-represented litigant with impunity from the usual costs consequences. Nor, in my view, is it desirable to immunize such a party from costs awards designed to sanction inappropriate behaviour simply because the other party is a self-represented litigant.
25 I would add that nothing in these reasons is meant to suggest that a self-represented litigant has an automatic right to recover costs. The matter remains fully within the discretion of the trial judge, and as Ellen Macdonald J. observed in Fellows, McNeil v. Kansa, supra, there are undoubtedly cases where it is inappropriate for a lawyer to appear in person, and there will be cases where the self-represented litigant's conduct of the proceedings is inappropriate. The trial judge maintains a discretion to make the appropriate costs award, including denial of costs.
26 I would also add that self-represented litigants, be they legally trained or not, are not entitled to costs calculated on the same basis as those of the litigant who retains counsel. As the Chorley case, supra, recognized, all litigants suffer a loss of time through their involvement in the legal process. The self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case. Costs should only be awarded to those lay litigants who can demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation, and that as a result, they incurred an opportunity cost by foregoing remunerative activity. As the early Chancery rule recognized, a self-represented lay litigant should receive only a "moderate" or" reasonable" allowance for the loss of time devoted to preparing and presenting the case. This excludes routine awards on a per diem basis to litigants who would ordinarily be in attendance at court in any event. The trial judge is particularly well-placed to assess the appropriate allowance, if any, for a self-represented litigant, and accordingly, the trial judge should either fix the costs when making such an award or provide clear guidelines to the Assessment Officer as to the manner in which the costs are to be assessed.
ANALYSIS
[11] The matter was commenced as a result of a hearing under the Solicitors’ Act. Regional Hearings Officer Girard determined on May 20, 2015 that there were special circumstances under the Act that had to be resolved by a judge of the Superior Court, as a result of issues raised by the applicants at the hearings.
[12] The applicants brought an application to determine whether the retainer agreement entered into between the applicants and the respondent allowed the respondent to charge the costs incurred for services rendered by Jan D. Weir (“Weir”). The applicants made statements regarding misrepresentation of expertise before the assessment officer. In their application materials they made reference to misrepresentation of expertise by the respondent. These references continued in affidavits filed in support of motions filed in the proceeding. These references became a true source of contention.
[13] The respondent, a lawyer, was initially represented by Mr. Longstreet. Mr. Longstreet withdrew and the respondent represented himself.
[14] I am satisfied that I ought to exercise my discretion to order some costs in this case but not on a full indemnity basis and not for all costs requested for the reasons that follow.
[15] The respondent was the successful party on the application and all of the motions argued before me.
[16] The amount at issue related to the application was small; $6,102.00 was the amount paid to Weir. The amount in issue on the motions was at minimum $20,000 per the submissions made (which was being sought by the applicants). In addition, there were requests for findings of contempt and breach, and fines, in the discretion of the court.
[17] I accept that the application in question was important to the applicants. I accept that the inclusion of solicitor-client privileged materials in the filings on this application was a serious matter, and important to the applicants in respect of the motions.
[18] I accept that the applicant’s motion for civil contempt was a serious matter and very important to the respondent.
[19] I agree that what should have been a simple matter “snow-balled”. But even so, in my view, there was nothing complex about the issues raised by the motions despite there being voluminous material.
[20] There was no need for this case to have taken the direction that it took. However, I am not of the view that the respondent should be deprived of costs as requested because of how this matter went down the road it did.
[21] I am not of the view that the applicants have accurately or fairly stated the entire state of affairs in this proceeding, and/or acknowledged their part in its ballooning.
[22] Further, the respondent states that his filings, resulting in the motions were directly related to the applicants’ refusal to withdraw allegations of professional negligence and incompetence made against the respondent in the materials. He felt required to file materials to defend against such allegations of professional negligence and incompetence. Mr. Longstreet had made reasonable suggestions in correspondence to the applicants to address their concerns regarding solicitor and client privilege, including to seal the entire file and to file fresh affidavits. The respondent was prepared to consent to seal the file long before DelFrate J.’s order.
[23] The applicants suggest that Mr. Longstreet was unprepared on June 10, 2016 in the context of costs. I find this submission to be unfair. The date, by Gordon J.’s endorsement, was to be a “speak to” date and an affidavit had been prepared, but was not filed, for reasons set out in my decision. The respondent had no notice of any argument that was going to be made regarding filings and/or the formulation of the question to be determined on the application.
[24] As for the suggestion that Mr. Longstreet did not understand the relief that was being sought, having myself read the transcripts of the hearings before the assessment officer, and having reviewed the application materials, in my respectful view, it was not abundantly clear as to what the applicants were alleging at the return date of June 10, 2016 (and reading the assessment hearing transcript would not have taken away all confusion). The assessment officer adjourned after the applicants suggested misrepresentation; this seemed to be the prevalent issue. The transcript does not clearly set forth that the referral to the court on special circumstances solely related to the question ultimately set by Hennessy J. on June 10, 2016. The ultimate question was only one of the issues raised by the applicants before the assessment officer.
[25] The July 12, 2016 letter filed sets out a position on solicitor-client privilege that I did not decide, but I do note it clearly demonstrates an effort on Mr. Longstreet's part to get the applicants to advise him what they wanted out of the assessment to understand what they were litigating.
[26] As for the respondent’s actions, in filing solicitor and client material, I say this not in respect of the law on that point, but on a point of procedure, that there may have been a better way to have proceeded on that front that could have reduced the ballooning.
[27] There are a number of other submissions made by the applicants that criticize Mr. Longstreet that I have already addressed in my decision that I will not repeat but rely on in terms of his actions related to orders made.
[28] Further, the fact of the matter is that the applicants chose to represent themselves but they have not been without assistance. They had avenues they could have taken to address any issue they state they were having (in terms of not knowing what to do or otherwise), including access to per diem services from their counsel, which it is quite evident they had on more than one occasion over the course of this proceeding. Unfortunately, they also turned down suggestions to seal the file and re-file materials long before DelFrate J.’s order was made.
[29] After reading Mr. Longstreet’s correspondence which is referred to in my decision, I found that his suggestions, especially the one to seal the whole file and re-file fresh affidavits to have been a reasonable solution. Had it been accepted, this application had the potential to run more smoothly.
[30] As to the applicants’ suggestion of being in an unfortunate position not to file an objection per Hennessy J.’s October 7, 2016 order, I find that the letter the applicants sent to her dated November 25, 2016, demonstrates otherwise, wherein they set out quite clearly their position. There was no follow up thereafter for some time.
[31] As to Mr. Longstreet’s representation, it is understandable why Mr. Longstreet withdrew his services. It is understandable that he would not argue a matter that included motions for breach and contempt that were centered on allegedly failed action required on his part.
[32] Mr. Longstreet has 46 years’ experience as a lawyer. Richard A. Pharand, Q.C. has 48 years’ experience as a lawyer. I do not have difficulty with the rates, namely $400 and $450 respectively, based on the years of experience, and am proceeding on the basis that these represent the full hourly rate charged by each counsel. An appropriate partial indemnity rate range is $240 to $290.
[33] The respondent’s offer of June 2, 2016 is generally worded “the applicants’ claim shall be dismissed as against the respondent, without costs”. The application was not technically dismissed because it involved a question to be answered, however, the applicants’ claim was not successful. The cover letter outlines the view of the respondent, namely that the claims would not be successful and why, which is the basis behind the offer. However, I noted that at the time this offer was made, only the application was before the court. As such, it does not pertain or apply to the subsequent motions.
[34] There were no offers to settle filed for my consideration with respect to the specific motions.
[35] The applicants made no offers to settle the application and/or the motions that I was made aware of.
[36] I am not satisfied the amounts claimed relating to LawPRO are costs claimable on the application and/or motions.
[37] On the attendance before Hennessy J. June 10, 2016, the question was narrowed and relief as requested by the applicants were granted despite opposition, yet the respondent for unexplained reasons seeks full costs related to same in the cost outline which, in my view, would not have been ordered or in such circumstances.
[38] I also noted from the cost outline that the respondent is seeking full costs for two motions he brought that were actually abandoned by him; his motion for October 7, 2016, and the motion to adjourn the hearing returnable at the date of hearing.
[39] I find the amounts charged for the letters, based on some of the letters that I have seen, being simple in nature, to be excessive or at best of a substantial indemnity based rate.
[40] I find the amounts for the factums and books of authorities to be a bit excessive given the issues.
[41] The amounts claimed to prepare the cost outline, I find excessive having regard for what was filed and what is claimed.
[42] Given the voluminous materials filed, I have no issue with the amount claimed for photocopies.
CONCLUSION
[43] Balancing and considering all of the above, I do not find that full costs are in order. I hereby find costs in the amount of $15,000.00, inclusive of fees, disbursements and H.S.T. to be fair and reasonable in all of the circumstances, that the applicants could expect to pay in respect of the application and the motions, based on all of the circumstances outlined in my analysis.
[44] On the issue of the date by which the costs should be paid, I received no evidence or submissions setting out any circumstances to justify taking payment outside of the provisions of the rule.
ORDER:
- The applicants shall pay costs to the respondent in the amount of $15,000.00, inclusive of fees, disbursements and H.S.T., payable within 30 days of today’s date.
Rasaiah J.
Released: December 18, 2017
CITATION: Leduc v. Pharand, 2017 ONSC 7316
COURT FILE NO.: A-12995-16
DATE: 2017-12-18
ONTARIO
SUPERIOR COURT OF JUSTICE
RENE LEDUC AND JULIE LEDUC
– and –
RICHARD A. PHARAND
DECISION ON COSTS
Rasaiah J.
Released: December 18, 2017