Ontario Superior Court of Justice

CITATION: Aganeh v Aganeh, 2017 ONSC 7562

COURT FILE NO.: 01-0929/10

DATE: 20171218

B E T W E E N:

UBAH AGANEH
Applicant

-and-

TIMORO HUSSEIN AGANEH
Respondent

BEFORE: F.L. Myers J.

COUNSEL:
Richard Watson, counsel for the Ubah Aganeh
Richard Macklin, counsel for the Falconers LLP

HEARD: December 14, 2017

ENDORSEMENT

[1] Ubah Aganeh seeks costs against her former counsel Falconers LLP personally in respect of an appearance on January 12, 2017.

Background

[2] In 2009 Kulmiye Hussein Aganeh died while in provincial custody. Falconers LLP acted for the Aganeh family in advancing a civil claim and a human rights complaint in respect of the untimely death of their family member.

[3] The respondent Timoro Aganeh became the estate trustee of her late brother’s estate. Therefore, she formally represented the family’s interests in the legal proceedings. Ubah Aganeh, a sister to both Timoro and Kulmiye, was also part of the family’s efforts to seek compensation and justice.

[4] The family and the estate all retained Falconers LLP to act for them. In the civil proceedings brought by Falconers LLP for the estate, Ubah Aganeh is a co-plaintiff seeking damages under the Family Law Act.

[5] In mid-2016 a rift developed between Ubah Aganeh on the one hand, and Timoro Aganeh and their mother, on the other. Ubah Aganeh disagreed with Timoro and their mother who wished to accept a settlement proposal that had been negotiated by Falconers LLP.

[6] In order to prevent the acceptance of the settlement, Ubah Aganeh left Falconers LLP and brought these proceedings in the Estates Division for the return of Timoro Aganeh’s Certificate of Appointment as Estate Trustee. Ubah Aganeh sought to seek to replace her sister as the estate trustee of the estate of Kulmiye Hussein Aganeh so as to prevent the estate from entering into the settlement proposed by Falconers LLP.

[7] Falconers LLP responded and commenced acting for Timoro Aganeh in this proceeding - defending her from Ubah Aganeh’s effort to unseat her.

[8] Ubah Aganeh was initially represented by experienced estates counsel. She delivered an affidavit that, among other things, objected to Falconers LLP continuing to act for Timoro Aganeh and the estate against Ubah Aganeh despite the fact that she was their former client in the civil litigation. In the affidavit, Ubah Aganeh argued that the court should not give weight to an affidavit that had been filed on behalf of Timoro Aganeh because of the conflict of interest of her counsel Falconers LLP. There was no suggestion in that affidavit that Ubah Aganeh was trying to remove Falconers LLP from the record as counsel to Timoro Aganeh.

[9] Ubah Aganeh then began representing herself. At a hearing in December 2016, she complained about Falconers LLP continuing to act against her. Ubah Aganeh had not brought a motion to remove Falconers LLP. The presiding judge scheduled the application for January 12, 2016 peremptory on Ubah Aganeh and endorsed that in light of the length of time that matters had been outstanding, only the main issue of the request for the return of Timoro Aganeh’s Certificate of Appointment as Estate Trustee was to be dealt with on January 12, 2017.

[10] The matter came on before me on January 12, 2017. On reading the material I became concerned with the appearance of Falconers LLP before the court in opposition to its former client. Ubah Aganeh was represented by new counsel on January 12, 2017. He advised that Ubah Aganeh did not consent to Falconers LLP acting against her interest.

[11] It was apparent to me that the underlying issue or reason why Ubah Aganeh was moving to replace her sister as estate trustee was to try to oppose the settlements being proposed in the civil action and human rights complaint. Falconers LLP had acted for Ubah Aganeh jointly with her other family members in respect of those proceedings. By acting for Timoro Aganeh to protect her office as estate trustee, in my view, Falconers LLP was acting against the interests of its former client Ubah Aganeh in respect of the very matter or a related matter to the one in which it had acted jointly for them all. In effect, the lawyers were helping Timoro Aganeh and the family force on Ubah Aganeh the settlement of litigation in which they acted for Ubah Aganeh jointly with the others.

[12] It was plain and obvious to me that Falconers LLP had ethical duties to refrain from acting against its former client Ubah Aganeh in respect of the same or related matter. I found the appearance by Falconers LLP on January 12, 2017 shocking. I was not prepared to hear counsel make submissions against the interests of its former client. Accordingly the matter had to be adjourned.

[13] Counsel for Ubah Aganeh sought costs of the adjournment thrown away and asked for them to be paid personally by Falconers LLP under Rule 57.07.

[14] Costs “thrown away” is an expression that means costs wasted by an unnecessary step in a legal proceeding. While Ubah Aganeh’s counsel had prepared heavily for the hearing, if the application to replace Timoro Aganeh as estate trustee had come back on for hearing shortly, that preparation time would not have been wasted. With perhaps just reading over his notes, the preparation time would have remained useful. All that should have been wasted or thrown away by the adjournment was the time spent in court for no useful purpose and then the few minutes of preparation for the next hearing that was necessitated by the adjournment.

[15] In adjourning the matters for scheduling of both the return of the application and the argument of costs, I made the point that the costs thrown away were modest in quantum. I invited the parties to consider settling them.

[16] Ubah Aganeh retained her third lawyer to act on the adjourned application and costs. He delivered material seeking costs of over $17,000 for Ubah Aganeh. She sought costs of the preparation of her initial affidavit that raised the conflict issue in relation to a competing affidavit, the full preparation time of her former counsel for the January 12, 2017 hearing, and the costs of the costs motion itself.

[17] Ubah Aganeh and Timoro Aganeh then settled their issues and made common cause in respect of their approach to their brother’s estate litigation. On consent, I signed an order appointing Ubah Aganeh as co-estate trustee with Timoro Aganeh. That disposed of the application on the merits. All that remained therefore was the issue of costs thrown away from the January 12, 2017 adjournment and whether the costs would be ordered payable by Falconers LLP under Rule 57.07.

[18] Efforts to schedule the costs hearing became bogged down. Ubah Aganeh, with the support of Timoro Aganeh, made complaints in court about the conduct of Falconers LLP as counsel in the underlying litigation and with respect to Mr. Macklin’s involvement in this costs process as counsel for Falconers LLP. During this time, Ubah Aganeh was again representing herself. Efforts to have her bring forward any other proceedings that she and Timoro Aganeh may have been contemplating in respect of their complaints against Falconers LLP and to schedule the costs motion stalled. After an unproductive scheduling case conference on May 23, 2017, I ordered Ubah Aganeh to pay costs to Falconers LLP of $500.

[19] Ubah Aganeh then retained her current counsel. She moved to have me recuse myself from this proceeding. I dismissed that motion on September 27, 2017 as reported at 2017 ONSC 5733.

[20] By endorsement dated October 24, 2017, reported at 2017 ONSC 6386, I ordered costs of the recusal motion payable by Ubah Aganeh to Falconers LLP as follows:

Therefore, Ms. Aganeh shall pay costs of $3,165 to Falconers LLP within 60 days. Should Ms. Aganeh obtain a costs award against Falconers LLP within that time, she will be entitled to setoff any costs due to her against the costs ordered against her in this decision.

[21] As this hearing has now been held within the 60 day period, Ubah Aganeh will be entitled to exercise the setoff right referred to in my October 24, 2017 endorsement above.

Rule 57.07 Arguments

(i) Liability

[22] Mr. Watson argues that the misconduct of Falconers LLP on January 12, 2017 and in acting against Ubah Aganeh leading up to that hearing was serious. I agree. It was unseemly for Falconers LLP to appear in court against its former client in the same or a related matter. Moreover, when making submissions about the issue on January 12, 2017, counsel from the firm seemed to see no conflict in doing so. In my view, the appearance by Falconers LLP violated counsel’s duty of loyalty. Hearing counsel argue in court on January 12 to try to justify acting against Ubah Aganeh because they were felt they were not acting adverse to her interests without recognizing the affront to the former client’s rights and dignity was indeed shocking.

[23] Mr. Watson expressed concern that the firm has never admitted its error. Rather, in his submission, its material seeks to downplay its wrongdoing, vilify Ubah Aganeh, and seek a mere slap on the wrist.

[24] Mr. Watson argues further that by acting against Ubah Aganeh, Falconers LLP poisoned the proceedings resulting in much unnecessary legal work and cost for Ubah Aganeh’s counsel.

[25] For an order for costs personally against counsel under Rule 57.07, the court engages in a two-part analysis. First, the court looks to the rule to determine if counsel’s misconduct caused costs to be incurred unnecessarily. Misconduct cannot be just an error in judgment that technically fits within the rule. There must be a marked and unacceptable departure from the standard of reasonable conduct of a lawyer before the first part of the test is satisfied. Then, the court approaches a second inquiry and considers whether the case is one in which costs should be awarded against counsel using extreme caution to ensure that the case is a proper one for counsel to be held liable personally. Spirou v. Chant, 2013 ONSC 1330 at para. 24.

[26] Mr. Macklin for Falconers LLP submits that the firm made an error in judgment. It prompted admitted its error in its sworn evidence and has been trying for many months to have this motion heard so as to face its responsibilities. Without in any way challenging the decision finding that it had acted improperly, the firm points to what it says are mitigating factors. First, it notes that Ubah Aganeh’s first counsel, who drafted her affidavit, did not seek to remove the firm from the record. Moreover, during the first hearing in December, 2016, the court precluded Ubah Aganeh from bringing a motion for that purpose on January 12, 2017. Mr. Macklin argues that the firm can be excused for not realizing that it was facing removal on January 12, 2017.

[27] Both of the facts relied upon are true. But, in my view, neither gave leave to counsel to fail to understand and apply its ethical obligations.

[28] I do agree with Mr. Macklin that, in her affidavit filed in this costs proceeding, counsel immediately and overtly recognized her error. Moreover, the firm has resolutely tried to have this matter heard. The delays and costs of this costs proceeding have not been of the lawyers’ making.

[29] In all, while the firm has behaved very responsibly after January 12, 2017, that does not make up for the fact that costs were incurred due to its misconduct on January 12, 2017. In my view both pillars of the test under Rule 57.07 are readily met in this case. Counsel felt that the settlement was in the family’s best interest and was willing to help Timoro Aganeh and her mother force it on Ubah Aganeh in her own supposed best interest. Counsel completely ignored their duty to their former client. They were paternalistic and disrespectful to her dignity and autonomy. She was allowed to disagree, rightly or wrongly, and she was not required to face her former counsel. Counsel was duty bound to support Ubah Aganeh’s best interests as she saw them. Counsel was required to withdraw if they could not support Ubah Aganeh and her sister at the same time. Falconers LLP choosing sides and appearing in court against a former client in the same or a related matter was offensive to Ubah Aganeh and to the administration of justice.

(ii) Quantum

[30] Mr. Macklin argues that only the costs thrown away by the adjournment on January 12, 2017 are in issue. Moreover, the costs of a wasted trip to court have already been quantified in this action when I ordered Ubah Aganeh to pay costs of $500 to the firm for compelling Mr. Macklin to attend a wasted hearing on May 23, 2017.

[31] I do not agree that costs assessed against a successful commercial business are necessarily the same quantum as those assessed against a personal litigant who is not as well equipped financially. I do agree however, as I have made clear several times in this proceeding to date, only the costs thrown away by the adjournment are before me.

[32] The only costs that I ordered on January 12, 2017 were the costs thrown away that day. Counsel’s prep time on the merits and the time to draft Ubah Aganeh’s affidavit were not thrown away. They remained as part of the application that was to be heard after Timoro Aganeh appointed new counsel to represent her. When Ubah Aganeh and Timoro Aganeh settled the application for the return of Timoro Aganeh’s Certificate of Appointment as Estate Trustee, they resolved the proceeding in which all other costs were incurred. The consent order implementing the settlement that appointed Ubah Aganeh as co-estate trustee did not reserve any other costs claim by Ubah Aganeh against Timoro Aganeh or Falconers LLP. Simply put, apart from the reservation of costs thrown away on January 12, 2017, there is no outstanding order for costs to be assessed or determined.

[33] Mr. Watson argues that the law firm’s wrongdoing should not be trivialized by a small costs award. An award of costs personally against a lawyer or law firm is never a trivial matter. It involves very public findings by the court that the lawyer or firm has behaved in an inappropriate manner below the standard expected of a reasonable officer of the court. However, costs awards are not punitive damages or a fine at large. In a motion under Rule 57.07, it is not appropriate for the court to create a quantum that does more than compensate for the actual costs ordered.

[34] Ubah Aganeh’s prior counsel delivered a costs outline. It did not specify the time that counsel spent in court on January 12, 2017. While travel time and waiting time are not tariff items, in my view, allowing costs of three hours’ time for counsel that day is reasonable and appropriate. Counsel’s full rate is $400 per hour. On that basis, the costs thrown away are $1,200 plus HST of $156 for a total of $1,356.

[35] Accordingly, Falconers LLP is ordered to pay Ubah Aganeh the sum of $1,356 for her full indemnity costs thrown away of the hearing on January 12, 2017.

Costs of this Rule 57.07 Costs Process

[36] Mr. Watson seeks costs of $1,500 for this costs process. Mr. Macklin argues that Falconers LLP incurred over $5,000 in costs due to the many mis-steps made by Ubah Aganeh in this process including making unsupported allegations of wrongdoing against Mr. Macklin and further allegations against Falconers LLP.

[37] In my view, it was apparent throughout this process that costs would be very small. I said as much, expressly, in formal endorsements, several times. Claiming $17,000 for costs other than the costs thrown away January 12, 2017 was not reasonable. Far more costs were incurred on both sides than were every realistically in issue. This matter could have and should have been dealt with summarily, at low cost, last March had it been dealt with proportionately. Despite the court’s endorsements explaining to Ubah Aganeh that the costs issue was very contained, she was intent upon trying to make the process into something more – even to the point of this argument in which Mr. Watson again tried to expand the law firm’s liability beyond the scope of the order on January 12, 2017.

[38] While I do not view it as appropriate to order Ms. Aganeh to pay further costs in light of her ultimate success, I do not view it as fair or reasonable to require Falconers LLP to pay any further amounts to her. The firm has had to incur far more than it ought reasonably to have had to incur in costs of this process as a result of Ubah Aganeh’s conduct of the process.

[39] I exercise my discretion to decline to order any costs of the Rule 57.07 costs process.

Outcome

[40] Therefore, Falconers LLP is liable to pay costs of $1,356 all-inclusive to Ubah Aganeh. This amount will be recognized as a setoff against Ms. Aganeh’s costs liability of $3,165 from October 24, 2017. After applying the setoff, Ubah Aganeh is required to pay the net sum of $1,809 in costs to Falconers LLP on or before December 23, 2017 (60 days from October 24, 2017).

F.L. Myers J.

Date: December 18, 2017