BARRIE COURT FILE NO.: 13-0647
DATE: 20180516
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DONNA O’LAUGHLIN
Plaintiff/Defendant by Counterclaim
– and –
TIMOTHY JOHN BYERS, 1566997 ONTARIO INC. and KELLY ANN JAMIESON
Defendants/Plaintiffs by Counterclaim, (Timothy John Byers and 1566997 Ontario Inc.)
Peter C. Card, for the Plaintiff/Defendant by Counterclaim
Robert M. Isles, for the Defendants/Plaintiffs by Counterclaim, (Timothy John Byers and 1566997 Ontario Inc.)
HEARD: March 12, 2018
REASONS FOR DECISION ON COSTS
DiTOMASO J.
BACKGROUND
[1] The plaintiff, Donna O’Laughlin (Ms. O’Laughlin) brought a motion for summary judgment to dismiss the counterclaim of the defendants, Timothy John Byers (Mr. Byers) and 1566997 Ontario Inc. (156), with costs in this action and costs of the interpleader application contained in Barrie Superior Court File # 11-1111 against Mr. Byers and Kelly Ann Jamieson (Ms. Jamieson) on a substantial indemnity basis.
[2] Ms. O’Laughlin also sought the following declarations:
(a) That she was the registered owner of 156; and,
(b) That Mr. Byers is the beneficial owner of 156, upon condition that he take responsibility in the preparation, deliver and payment of monies owing, arising from any and all returns required to be file with the Canada Revenue Agency and with respect to Harmonized Sales Tax (HST) owing by 156.
[3] For written reasons delivered, dated January 29, 2018, Ms. O’Laughlin was granted summary judgment as follows:
(a) The counterclaim of Mr. Byers and 156 was dismissed;
(b) It was declared that Ms. O’Laughlin was the registered and nominal owner of 156; and,
(c) It was declared that Mr. Byers was the beneficial owner of 156 and was responsible for the payment of 156’s unpaid taxes owing to the Revenue Canada Agency, including any unpaid HST owing by 156 from July 3, 2009 to January 29, 2018.
[4] As for the matter of costs, counsel agreed that costs of the motion would be determined by way of written submissions.
[5] As for the costs of the interpleader, counsel for Ms. O’Laughlin was to provide notification of how he intended to proceed regarding those costs when he delivered his written costs submissions on this motion for summary judgment.
[6] I had ordered that the parties may be subject to further directions on costs regarding the interpleader application.
POSITION OF THE PARTIES
Position of Ms. O’Laughlin
[7] Ms. O’Laughlin seeks costs of the motion and costs of the interpleader application. While I have received written submissions in respect of costs relating to the motion, I have not received submissions in respect of the costs of the interpleader application. I will provide further direction in this regard.
[8] As for the costs of the motion, Ms. O’Laughlin seeks costs on a substantial indemnity scale. She points to the conduct of the opposing parties that tended to lengthen unnecessarily the duration of the proceeding. She submits that the collateral attacks made upon her and her counsel by the personal defendants and their counsel were of a harassing nature and purely tactical, which in the end unnecessarily increased Ms. O’Laughlin’s legal fees.
[9] Ms. O’Laughlin also submits that the defendants denied or refused to admit that the first mortgage existing against her own property was not in fact paid off by her (presumably by the extra funds that Mr. Byers said she had taken from him).
[10] Ms. O’Laughlin also advances a claim for costs against Ms. Jamieson and against the defendants’ counsel, Mr. Isles, personally.
[11] Ms. O’Laughlin claims costs in the amount of $23,147.35, all inclusive.
Position of Mr. Byers and 156
[12] Mr. Byers and 156 seek an order dismissing Ms. O’Laughlin’s request for costs, or in the alternative, that she be awarded $1,000 in costs. Further, it is submitted that Ms. Jamieson seeks an order dismissing Ms. O’Laughlin’s request for costs or, in the alternative, for an order that Ms. O’Laughlin be awarded $100 in costs. As for Mr. Isles, it is submitted that Ms. O’Laughlin’s request for costs against him personally, be dismissed or, in the alternative, an order that she be awarded $25 in costs. There was a further submission that the costs order of Justice Eberhard, dated February 21, 2017 ought to be considered where it was ordered that Ms. O’Laughlin pay costs in the amount of $2,500 in the cause to the defendants.
[13] Similarly, Mr. Byers and 156 make adverse comments regarding the conduct of counsel for Ms. O’Laughlin, just as Ms. O’Laughlin made adverse comments about counsel for Mr. Byers, 156 and Ms. Jamieson.
ANALYSIS
Entitlement
[14] The award of costs is discretionary. The jurisdiction of this court to deal with costs is found at s. 131(1) of the Courts of Justice Act, R.S.O. 1990 C.43.
[15] In exercising its discretion under s. 131 of the Courts of Justice Act, to award costs, the court may also consider those factors set out in rule 57.01(1) of the Rules of Civil, R.R.O. 1990, Reg. 194.
[16] I have reviewed all of the written submissions delivered by counsel.
[17] Regarding entitlement, Ms. O’Laughlin was entirely successful on her summary judgment motion. I have previously stated the relief that she sought and the order that she successfully obtained.
[18] Given her complete success on the summary judgment motion, costs follow the event. Ms. O’Laughlin is entitled to her costs on the summary judgment motion to dismiss the counterclaim of Mr. Byers and 156. The issue is whether Ms. O’Laughlin is entitled to costs on a partial indemnity scale or costs on a substantial indemnity scale against Mr. Byers and 156.
[19] I am not prepared, nor do I find it necessary, to engage in an analysis of the charges and counter-charges regarding the conduct or misconduct of the parties and/or their counsel in respect of this matter. The written submissions that I have reviewed reflect the same acrimony between the parties and counsel that has saturated these proceedings from the very beginning.
[20] Rather, I focus my attention on the factors pursuant to rule 57.01(1) of the Rules.
[21] I find that the conduct of Mr. Byers and 156 is particularly egregious so as to attract an award of substantial indemnity costs. Such conduct deserves the condemnation of this Court.
[22] In this regard, I reference rule 57.01(1)(e) and find that the conduct of these opposing parties tended to unnecessarily lengthen the duration of the proceeding. I particularly note the quantity of responding material which was incorporated by reference. Mr. Byers and 156 left it to Ms. O’Laughlin and her lawyer to sift through all of the paperwork submitted in all of the proceedings (not just the summary judgment motion to dismiss the counterclaim) simply by incorporating same by reference. (See Affidavit of Timothy John Byers, sworn September 8, 2016, paras. 2 and 3)
[23] I also noted in my Reasons for Decision at paras. 51 and 52, that at least four-fifths of the remaining 111 paragraphs of Mr. Byers’ affidavit contained irrelevant material. At para. 52, I found that only a small portion of the paragraphs in Mr. Byers’ affidavit were relevant to the issues raised in the counterclaim. I found the remaining paragraphs were merely a repetition of historical material that the defendants delivered in Ms. O’Laughlin’s first motion for summary judgment. This approach undertaken by Mr. Byers and 156 had the effect of raising and re-litigating issues that had already been determined on Ms. O’Laughlin’s previous summary judgment motion. This approach was intended and had the effect of increasing significantly the time and expense required to deal with the repetitious and irrelevant submissions made by Mr. Byers and 156.
[24] I also note that on February 21, 2017, the parties agreed in writing and ordered by the court that the examination of the plaintiff by defence counsel was to take place on March 29, 2017. On March 28, 2017, defence counsel advised he was not going to examine Ms. O’Laughlin, which resulted in wasting preparation time for Ms. O’Laughlin and her counsel.
[25] Further, on February 21, 2017, it was also agreed by the parties in writing and ordered by the court that the examination of Ms. Jamieson would take place on March 15, 2017. When Ms. Jamieson and her counsel attended for that examination, they refused to answer questions as to the meaning and purpose of a certain form filed by Ms. Jamieson with the Companies’ Branch, raising for the first time that the document was improperly in the possession of Ms. O’Laughlin.
[26] I further refer to rule 57.01(1)(g) where Mr. Byers and 156 denied or refused to admit something which ought to have been admitted. They refused to admit that the first mortgage existing against Ms. O’Laughlin’s own property was not in fact paid off by her (presumably by the extra funds Mr. Byers said she had taken from him).
[27] I find a simple title search would have shown that Ms. O’Laughlin’s first mortgage still existed. A simple review of documentation previously sent to counsel for Mr. Byers and 156 would have revealed that the MBNA credit card was assigned and not paid off. This was already proven by Ms. O’Laughlin in her previous motion for summary judgment. (See my Reasons for Decision, dated January 29, 2018 at paras. 71 to 78 inclusive).
[28] My Reasons for Decision, dated January 29, 2018, is also replete with findings of the lack of evidence to substantiate the counterclaim. In essence, the counterclaim was without merit and served only to stand in the way of Ms. O’Laughlin’s legitimate claims in this litigation.
[29] For these reasons, Ms. O’Laughlin is entitled to her costs on a substantial indemnity scale as against Mr. Byers and 156.
Quantum
[30] Counsel for Ms. O’Laughlin has provided a costs outline on a substantial indemnity basis claiming costs in the amount of $23,147.35.
[31] I have considered the hourly rate of counsel for Ms. O’Laughlin. Given the years of his experience, I do not find that the hourly rate is unreasonable. I also find that the time spent in respect of this matter was entirely justified, given the motion for summary judgment to dismiss the counterclaim.
[32] In this regard, I am guided by the overarching principles of fairness, reasonableness and proportionality. (See Davies v. Clarington (Municipality), 2009 ONCA 722 at paras. 51 and 52.)
[33] Upon consideration of all of the circumstances and the factors set out in rule 57.01(1) of the Rules, I award substantial indemnity costs to Ms. O’Laughlin as against Mr. Byers and 156, jointly and severally, in the amount of $23, 147.35.
[34] I am satisfied that the written submissions delivered by counsel on behalf of Ms. O’Laughlin document with full particulars the costs claimed and the costs ordered.
Costs Claimed Against Ms. Jamieson
[35] Counsel for Ms. O’Laughlin submits that Mr. Byers is judgment proof and that 156 has no assets. Costs are sought against Ms. Jamieson.
[36] In respect of Ms. O’Laughlin’s previous summary judgment motion, claims against Ms. Jamieson were dismissed without costs. It is also important to note that Ms. Jamieson is not a plaintiff by counterclaim.
[37] Counsel for Ms. O’Laughlin submits that Ms. Jamieson is effectively a plaintiff by counterclaim, notwithstanding that the counterclaim had not been commenced in her name. Further, it is submitted that Ms. Jamieson is, in effect, a “straw person”. As such, it is submitted that a plan was concocted between herself, Mr. Byers and 156 to address Mr. Byers’ “concerns” about Mr. Byers’ personal liability to the tax or governmental authorities.
[38] The “straw person” argument was raised for the first time in the costs proceedings.
[39] Although I am certain that Ms. Jamieson and Mr. Byers are collaborators and allied in interest, I am not satisfied that Ms. Jamieson is a “straw person”. In any event, I am not satisfied that her conduct should attract any order as to costs.
[40] Accordingly, I reject Ms. O’Laughlin’s submissions that Ms. Jamieson ought to be ordered to pay costs, even though she is a non-party.
Costs Claimed Against Counsel for Mr. Byers and 156
[41] Ms. O’Laughlin claims costs against Mr. Isles to be paid by him personally. She submits that he should be responsible to reimburse her for costs in the range of $2,500. It is submitted that Mr. Isles wasted Ms. O’Laughlin’s time in having to prepare and serve and make oral submissions to disprove once again the allegations of Mr. Byers and 156 that she paid off her existing first mortgage on her MBNA credit card debt. There were also allegations that Mr. Isles participated in harassing behaviour.
[42] I have found that the allegations regarding Ms. O’Laughlin paying off her first mortgage and her MBNA credit card debt was re-litigated on this summary judgment motion. At paragraph 78 of my Reasons I found,
I accept the submission of Ms. O’Laughlin that one of her frustrations in this case was that counsel for Mr. Byers and 156 in these proceedings was the lawyer who acted for her in undertaking the related refinancings. That counsel would have known from his own file that his clients’ allegation in this regard could not be correct. Nevertheless, the allegation was repeated with the result that this allegation was wrong and totally without merit not only once but also twice. I reject this claim. I find there is no genuine issue requiring a trial regarding this claim.
[43] After the written submissions were received, I directed counsel to attend before me in court.
[44] They did so on March 12, 2018. At that time, counsel for Ms. O’Laughlin confirmed that his client continued to assert her claim for a portion of costs payable by Mr. Isles.
[45] Mr. Isles was given the opportunity to obtain counsel, which he had considered. He advised the court that he did not wish to do so and that all of his submissions on this point were contained in his written submissions.
[46] In his written submissions, Mr. Isles asserted that he represented Ms. O’Laughlin in respect of a very modest number of real estate transactions and on her unsuccessful appeal of the denial of her application for a motor vehicle dealer’s licence. He went on to say that none of these files placed him in a situation of conflict when representing Mr. Byers and 156 in these proceedings. Mr. Isles submitted that there was never any motion brought by Ms. O’Laughlin at any time to seek an order preventing him from representing them. Mr. Isles also submitted that he did not cause costs to be incurred without cause or to be wasted by undue delay, negligence or other default.
[47] While I am critical of Mr. Isles’ conduct in respect of Ms. O’Laughlin’s first mortgage and MBNA credit card debt, I am not satisfied that he ought to reimburse Ms. O’Laughlin in the range of $2,500 in this regard.
[48] In order to award costs against Mr. Isles personally, I would require that this issue be pursued further and on better evidence. Frankly, doing so would only incur more needless time and expense. I find that we are well into the no-man’s land of non-recoverable costs.
[49] I find that no costs are payable by Mr. Isles to Ms. O’Laughlin.
[50] I decline to consider the conduct of either counsel in respect of alleged harassing collateral attacks. To engage in such an analysis would be pointless and unnecessary.
Costs Order of Justice Eberhard
[51] I make no comment in respect of the order of Justice Eberhard, dated February 21, 2017.
Costs of the Interpleader Proceedings
[52] At para. 125 of my Reasons, I held,
Ms. O’Laughlin’s motion was amended to include her costs of the interpleader application contained in Superior Court File # 11-1111. If those costs cannot be agreed upon, Mr. Card shall advise the court whether he wishes to proceed by way of written submissions to determine those costs or whether a costs hearing regarding costs of the interpleader ought to be scheduled through the trial coordinator’s office. Mr. Card is to provide notification of how he intends to proceed regarding the costs of the interpleader when he delivers his written costs submissions on this motion for summary judgment. The parties may be subject to further directions on costs regarding the interpleader.
[53] In his written submissions, counsel for Ms. O’Laughlin repeated that she should be awarded her costs of the interpleader application under Court File # 11-1111, as the whole reason for the litigation in those proceedings were found to be without merit.
[54] Notwithstanding Ms. O’Laughlin continuing to assert that she was entitled to costs of the interpleader application, there were no written submissions made by Ms. O’Laughlin in that regard. Neither was there any advice to the court as to how she wished to proceed on this issue. Mr. Byers and 156 submit that Ms. O’Laughlin has abandoned any claim for costs in respect of the interpleader application.
[55] I do not know if this matter was not addressed by counsel for Ms. O’Laughlin by way of oversight or whether, indeed, this claim has been abandoned.
[56] Nevertheless, this matter needs to be addressed.
[57] Mr. Card is to advise within the next seven (7) days whether he wishes to proceed by way of written submissions to determine the costs of the interpleader application. If he wishes to proceed in respect of this claim, then Ms. O’Laughlin shall serve and file within the next fourteen (14) days from the date of these Reasons, a concise statement of costs not exceeding two (2) pages in length, together with a costs outline, draft bill of costs and brief of authorities. Within ten (10) days thereafter, Mr. Byers and 156, shall serve and file their same materials. Any submissions in reply shall be served and filed within the next seven (7) days thereafter. All written costs submissions in respect of the interpleader application are to be delivered to my judicial assistant at Barrie.
[58] Counsel are expected to adhere to these strict time guidelines. The court is not interested in receiving copies of emails back and forth between counsel, as it has received in the past. This particular chapter in these proceedings between the parties must be brought to an end sooner rather than later.
DISPOSITION
[59] For these reasons, it is hereby ordered that Timothy John Byers and 1566997 Ontario Inc. jointly and severally, shall pay the sum of $23,147.35, all inclusive for costs on a substantial indemnity scale, to Donna O’Laughlin within the next thirty (30) days.
DiTomaso J.
Released: May 16, 2018