COURT FILE NO.: 17-63042 DATE: 2018-07-30
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Alexandra Miziolek, Applicant A N D : Elizabeth Miziolek and Lynda Miziolek, Respondents
BEFORE: The Honourable Mr. Justice A.J. Goodman
COUNSEL: B. Wiseman, for the Applicant S. Turk, for the Respondent Elizabeth Miziolek
HEARD: Submissions in writing
COSTS ENDORSEMENT
[1] In my endorsement dated May 11, 2018, I denied the applicant’s application to appoint Section 3 counsel in respect of Lynda Miziolek (“Lynda”), pursuant to the Substitute Decisions Act, 1992, SO 1992, c. 30. Towards the conclusion of the proceedings, I opined that in addressing the entire application, it appeared that success was somewhat divided. However, after hearing briefly from counsel, I invited the parties to provide their respective costs submissions. I have received and reviewed those materials.
[2] In respect of the discrete Section 3 counsel issue, the respondent, Elizabeth Miziolek (“Elizabeth”) seeks costs of $21,357.00 on a partial and substantial indemnity basis, inclusive of disbursements and HST.
[3] The applicant, Alexandra Miziolek (“Alexandra”) submits that, given the divided success of the application, it is an appropriate situation that there be no order as to costs and such a determination be reserved to the applications judge. In the alternative, if costs are to be awarded to the respondent, it ought to be offset by a commensurate amount to reflect the success enjoyed by the applicant in respect of other segments of the application.
Background
[4] In this application, Alexandra sought, amongst other matters, a declaration that Lynda is a person who is incapable of managing property and who is incapable of personal care; an order appointing her as guardian of property and personal care for Lynda; a declaration that the powers of attorney purportedly granted by Lynda are invalid; an order compelling the respondent Elizabeth to pass her accounts as attorney for property for Lynda; and if necessary, an order that the respondent, Lynda, be assessed as to her ability to manage her personal care.
[5] In February 2018, over four months after the application was first issued and after two prior consent orders, the applicant sought, for the first time, the appointment of Section 3 counsel for Lynda. The matter was heard on March 15, 2018 by way of a contested adjournment, and on April 11, 2018 on a full record. In the interim, on March 23, 2018, Dr. Joel Sadavoy provided his detailed report, which was forwarded to counsel.
Positions of the Parties
[6] Elizabeth submits that Dr. Sadavoy’s report stated what Alexandra already knew, or should have already known; her mother, Lynda, was incapable of instructing Section 3 counsel or providing any insight into her wishes at this point in time. Indeed, the applicant's Notice of Application declares that Lynda was incapable.
[7] On March 29, 2018, offers to settle contained in a detailed letter were forwarded to applicant’s counsel.
[8] Elizabeth submits that the request for an order directing the appointment of Section 3 counsel was ill-conceived for the reasons as argued on April 11, 2018, and which is further evidenced by the reality that said relief was not in the Notice of Application. The applicant knew from the outset, and certainly should have known once the Sadavoy Report was received, that Section 3 counsel would "not only be ineffective at this stage of the proceedings, but would be a waste of resources and expense" and would "not assist in advancing the litigation" between her and Elizabeth "to its eventual resolution." Alexandra’s alternative costs position that somehow the earlier orders should be dealt with at this time is disingenuous in view of the order of the court.
[9] Elizabeth submits that the hourly rates and costs sought are both fair and reasonable. She is seeking costs as set out in the costs outline which is in part on both a partial indemnity scale and substantial indemnity scale as a result of the March 29, 2018 offer. In addition, the respondent, Elizabeth, is seeking $1,000.00 plus HST for the preparation of the costs submissions.
[10] Elizabeth explains that the 10 hours associated with the partial indemnity scale costs pertains essentially to the need to prepare and submit a record for the March 15 attendance and for court attendance on that date, in order to seek and obtain the adjournment, which should have been on consent, or unopposed. The 20 hours of time which is sought on a substantial indemnity basis pertains to; the preparation of a further record for the April 11, 2018 hearing; the receipt and review of counsel's unscheduled factum and book of authorities, (which did not contain many of the numerous cases relied upon in the factum); the preparation of an unscheduled responding factum, and the actual arguing of the motion.
[11] In response, Alexandra submits that the guardianship application was commenced in circumstances in which Elizabeth isolated Lynda from herself and her siblings, refused to advise them where their mother was for some five months (and until after the commencement of the application), that she had been moved to a nursing home (and then, which nursing home), and lack of information generally regarding their mother’s care, circumstances, and affairs. Two prior orders had been made to grant Alexandra and her brothers access to their mother, both on consent, but with significant opposition from Elizabeth, such that Alexandra had been put to approximately $15,000.00 in costs simply to obtain limited access and basic information about her mother.
[12] Alexandra submits that by the time of this third return of the application, additional issues had arisen. Alexandra had repeatedly requested responding materials, certain disclosure and some form of accounting. Issues arose as to access/visitation, and it was clear the matter would proceed litigiously such that Lynda’s assessment was necessary.
[13] Alexandra says that only upon returning the application for the third return did Elizabeth finally commit to providing responding materials, consent to disclosure and to provide an accounting, and to Lynda’s assessment. The March 15 attendance yielded all or most of the relief for which Alexandra was successful – responding materials, disclosure, an accounting, and further access.
[14] Alexandra submits that to order costs against her in these circumstances and in the face of Elizabeth’s breach of her duties and obligations would be akin to rewarding Elizabeth’s actions and/or ignoring the context of this application.
[15] Alexandra also says that the quantum of costs claimed by Elizabeth were and are not within Alexandra’s reasonable expectations in relation to simply seeking to have a lawyer appointed for her mother. The quantum of costs would cause Alexandra an undue hardship, particularly given her own costs incurred (approximately $40,000 to date). Considering the divided success of the parties, Alexandra’s position is that costs should be reserved to the application judge who ultimately hears and determines this application.
[16] In the alternative, Alexandra argues that it is difficult to determine what portions of Elizabeth’s costs relate specifically to the disclosure, accounting and responding materials, such that the balance of costs (if not all of the costs) should be reserved to the judge hearing the ultimate issues.
[17] Finally, Alexandra says that part of Elizabeth’s costs claimed include $5,582.20 for Dr. Sadavoy’s report. An assessment was necessary for the application; and typically such assessments are provided by a certified capacity assessor rostered with the Ministry of the Attorney General, at a cost typically in the range of $500.00 - $1,000.00.
[18] While the applicant does not dispute the conclusion of incapacity as opined by Dr. Sadavoy, Alexandra’s position was and remains that the expense incurred was excessive. These costs related to the Section 3 counsel issue should neither be borne by her mother or herself in light of the context of this application and that the ultimate issues have yet to be determined.
Analysis
General Principles
[19] As a general principle, costs are in the absolute discretion of the court. The fixing of costs is not simply a mechanical exercise. The overall 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.”
[20] The Court of Appeal, in Boucher v. Public Accountants Council for the Province of Ontario, 2004 ONCA 14579, (2004) 71 O.R. (3d) 291, articulated the principles that govern costs assessments. In that case, Armstrong J.A. noted that Rule 57.01(3) of the Rules of Civil Procedure provides: “When the court awards costs, it shall fix them in accordance with subrule (1) and the tariffs.” He continued: “…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.”
[21] Elizabeth was entirely successful with respect to the issue revolving around the necessity of appointing Section 3 counsel. As mentioned, the Section 3 counsel issue was neither contemplated nor included in the applicant’s original application filed with the Court.
Factors to be Considered in Fixing Costs
[22] Rule 57.01(1) of the Rules of Civil Procedure contains what amounts to a non-exhaustive checklist of factors that should guide the court in its reasoning when awarding costs in the exercise of its discretion under section 131 of the Courts of Justice Act. Rule 57.01(1) provides, in part:
In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider…
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(c) the complexity of the proceeding;
(d) the importance of the issue;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was
(i) improper, vexatious or unnecessary, or
(i) any other matter relevant to the question of costs.
[23] The amount of costs on a motion varies widely depending on the circumstances. The court must, first and foremost, be fair and reasonable when exercising its discretion to award costs. Proportionality is of fundamental import.
[24] I must disagree with the applicant that this is an appropriate situation that there be no order as to costs, and that the parties await the determination by the applications judge. While it is arguable that the applicant obtained relief in respect of other portions of the application, either on consent or by direction from the Court, the Section 3 counsel issue was not addressed in relief being sought in the original application. It only arose during the course of these proceedings.
[25] Alexandra also submits that there are no known cases which order costs as against a party simply seeking to have a lawyer appointed for an incapable person whose rights, interests and autonomy are at issue in the litigation. An award of costs in these circumstances would be setting precedent and could well have a “chilling effect” whereby the concerned family and friends of incapable people refrain from raising such issues with the court.
[26] With respect, I do not arrive at the same conclusion. While Alexandra is concerned about the “chilling effect” of a costs award, it should have no impact on reasonable litigation. From the outset, the parties conceded that Lynda was incapable. It should have been obvious to Alexandra from what she knew or ought to have known about her mother’s state and it certainly should have been clear to her that the request for Section 3 counsel relief was ill-conceived with the presentation of Dr. Sadavoy’s detailed and comprehensive report. Given the nature of Dr. Sadavoy’s unchallenged opinion, in the circumstances of this case, I do not find that an award of costs will have a precedential impact on the majority of cases pertaining to the appointment of Section 3 counsel.
[27] The applicant refers to Elizabeth’s affidavit sworn March 9, 2018, wherein she stated that she had arranged Lynda’s assessment with Dr. Sadavoy and that “depending on what Dr. Sadavoy may have to say about the [appointment of Section 3 counsel], she may be opposing the said appointment.” Alexandra submits that as of March 15, 2018, Elizabeth’s position on the appointment of Section 3 counsel was not even solidified. Accordingly, no costs prior to March 15, 2018 ought to be considered.
[28] I do not place the same interpretation on the aforementioned statement in Elizabeth’s affidavit. I agree with the respondent in that the evidence needed to launch a response to the Section 3 counsel request was in the “hands,” so to speak, of Dr. Sadavoy. Depending on his expert opinion she was either going to contest the request, or not oppose it, but her position rested on what Dr. Sadavoy would have to say. Clearly, Elizabeth was awaiting the results of Dr. Sadavoy’s report before finalizing her position.
[29] While the application dealt with several issues, I agree with the respondent that the Section 3 counsel issue “took on a life of its own.” It is a well-settled principle that the successful party should have its costs and there is no good reason in the present circumstances to depart from this legal principle.
[30] Awards of substantial indemnity costs are the exception, not the rule. Having reviewed the letters exchanged between counsel, in particular the one dated March 29, 2018, I am satisfied that the respondent has engaged the provisions of Rule 49 of the Rules of Civil Procedure. I find that this is an appropriate case for the awarding of costs on a partial and substantial indemnity basis.
Bill of Costs
[31] It is widely accepted that the appropriate quantum of costs is not determined by multiplying hours by rates. Rather, “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.”
[32] There must be practical and reasonable limits to the amounts awarded for costs and those amounts should bear some reasonable connection to the amount that should reasonably have been contemplated. I note that it is not necessary for me to have to go through the hours, or disbursements, line by line, in order to determine what the appropriate costs are. Nor is the court to second-guess the amount of time claimed unless it is clearly excessive or overreaching. I must consider what is reasonable in the circumstances, and all the relevant factors. However, when appropriate and necessary, a court ought to analyze the Bill of Costs in order to satisfy itself as to the reasonableness of the fees and expenses submitted for consideration.
[33] I have taken into account those comments and each of the subparagraphs of Rule 57.01 of the Rules of Civil Procedure along with a review of the defendant’s Bill of Costs. In my view:
(a) The hourly rates claimed are reasonable. (b) This motion was argued over the course of one day with an additional contested adjournment and additional preparation was required to deal with the issue; (c) The issue was not overly complex; but the jurisprudence is not settled; (d) The motion was important to the parties but do not have significant wide ranging implications.
[34] Respondent’s counsel is highly competent with many years of experience. The respective rates are, for the most part, reasonable, as are the hours expended on this file. Having said that, Alexandra’s costs outline does appear at minimum to suggest that she incurred costs in the partial indemnity amount of over $10,800.00, inclusive of HST, without any amount listed for disbursements. It seems that the applicant’s costs align very much with Elizabeth’s costs and meet within the “reasonable expectations” criteria.
[35] However, I do not have adequate substantiation or clarification for the claim of $1,400.00 in “estimated counsel fees for appearance” as outlined in respondent’s counsel’s bill of costs. I have deducted that amount accordingly.
[36] Turning to the issue of disbursements, it seems that much of the discussion rested on the results of Dr. Sadavoy’s opinion. The expense incurred was related to a determination of Lynda’s capacity and to the issue of whether there was merit or utility for the application to appoint and instruct counsel; and, based on the relevant legal principles, whether Section 3 counsel was warranted in the factual circumstances of this case.
[37] Dr. Sadavoy’s report was instrumental in assisting the Court and the parties on the issue of Section 3 counsel. That said, with regards to the recovery of disbursements related to Dr. Sadavoy’s report, in my view, this expense ought to fall to Lynda’s estate.
[38] Indeed, I accept that the issue of Section 3 counsel was for Lynda’s benefit. Arguably, the law is not entirely settled on the issue. Routinely, Section 3 counsel appears to be in play where the dispute is the capacity of the individual. Here, both parties have agreed from the outset that Lynda was incapable.
[39] As pointed out by the applicant, I am mindful of my colleague’s decision in Ziskos v. Miksche, 2007 ONSC 46711, [2007] O.J. No. 4276 (S.C.). Spies J. recognized that costs consequences may actually discourage family and friends of vulnerable people to apply for guardianship. Early in her decision, she observed that the incapable person was a vulnerable person owing to her incapacity and, to the extent that the parties acted reasonably in bringing the issues before the court, they should be able to expect that the court would order that at least her estate be used to pay their reasonable legal fees. Later in her decision, she stated:
Ontario’s statutory scheme to protect adults made vulnerable through incapacity is grounded in and dependent upon, the involvement of supportive friends and relatives. Those friends and relatives cannot be expected to retain counsel and where necessary bring issues to the court if they must necessarily cover the attending legal costs. As friends of [the incapable person, the applicants] exposed themselves to significant legal costs. There is absolutely no basis upon which I should impose such a cost sanction against [the applicants] unless I conclude that they conducted the case in an unreasonable manner that led to unnecessary costs.
[40] Spies J. noted that the applicants should expect that the court would order that the incapable person pay their reasonable legal fees from the estate. Clearly, the message is being sent not to thwart parties acting reasonably in bringing such issues to the court.
[41] In this case, it was clear to me that Dr. Sadavoy opined that the appointment of counsel would be a significant disutility given Lynda’s mental health and her psychological framework. According to Dr. Sadavoy, Lynda could not instruct counsel, and more importantly, would likely be negatively impacted by such an interaction with counsel. In the circumstances of this case, once the report was received by the parties, it ought to have been obvious to the applicant that, (notwithstanding some of the commentary in the jurisprudence), the reasonableness of urging the appointment of Section 3 counsel for Lynda was questionable.
[42] That being said, prior to receiving Dr. Sadavoy’s report, the applicant raised some legitimate concerns about her mother’s voice in this matter. Bearing in mind the instructive comments in the jurisprudence including those of Spies J. in Ziskos, in my view, the applicant should not be over-burdened with the disbursement expense in calling into question the matter of Section 3 counsel. Therefore, if the respondent desires to recover the disbursement costs of Dr. Sadavoy’s report, she can avail herself from the proceeds of Lynda’s estate.
Conclusion
[43] The costs award should be fair, proportionate and tailored to the circumstances of the case.
[44] I note that some of the other issues contained in the original Application Record have been resolved through consent of the parties or with directions of the Court principally in favour of the applicant. However, in the context of this discreet application, the matter of appointing Section 3 counsel became an additional issue warranting further litigation and expense.
[45] The respondent was entirely successful in my dismissal of the applicant’s request to appoint Section 3 counsel for Lynda.
[46] As the litigation is moving along to a hearing date to hear the merits of the entire application, and given my previous comments herein, I have considered an award of costs in this context. Therefore, in the exercise of my discretion under Rule 57.01 of the Rules of Civil Procedure and the relevant authorities, it is ordered that the applicant pay costs in favour of the respondent on a partial and substantial indemnity basis fixed at $11,500.00 plus applicable HST, in any event of the cause.
[47] Should the respondent seek her disbursement costs related to Dr. Sadavoy’s report, such expense shall be reimbursed from Lynda’s estate.
[48] The parties are at liberty to argue costs for the balance of this application depending on the ultimate results achieved before the application judge hearing the substantive matter.