Court File and Parties
COURT FILE NO.: CV-16-4669-00 DATE: 20180809
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 2386240 ONTARIO INC., O/A AL-OMDA LOUNGE, HABIBI LOUNGE, FUSION LOUNGE, SAIMA ROGINA INC., O/A EL FISHAWY, 84921231 CANADA INC., O/A MAZAJ LOUNGE and SHISALICIOUS CAFÉ
Applicants
v.
THE CITY OF MISSISSAUGA and THE REGIONAL MUNICIPALITY OF PEEL
Respondents
BEFORE: Daley, RSJ.
COUNSEL: R.P. Zigler, for the Applicants B.H. Kussner and S.R. Rouleau, for the Respondent
C O S T S E N D O R S E M E N T
[1] The applicants sought to quash certain provisions of a by-law prohibiting the smoking of water pipes in business establishments such as those operated by the applicants.
[2] For the reasons set out in my decision of June 5, 2018, the application was dismissed (2386240 Ontario Inc. v. The City of Mississauga, 2018 ONSC 3162).
[3] The respondent The Regional Municipality of Peel (the "Region") seeks costs from the applicants on a substantial indemnity basis in the sum of $142,525.87 or alternately costs on a partial indemnity basis in the sum of $96,580.99.
[4] The applicants submit no costs should be awarded and that this court should follow the court's decision in the City of Toronto Case, where Goldstein, J. made no costs award.
[5] I reject this submission.
[6] This application to the court was not one of the first impression. The legal issues at stake on this application were essentially the same as those considered by Goldstein, J. and the Court of Appeal in the City of Toronto Case. The applicants endeavored to distinguish this case from the legal issues considered in the City of Toronto Case, however for the reasons expressed they failed to do so. The applicants knew full well the risks attendant with this application, given the decisions in the City of Toronto Case and having failed in the application they cannot now submit that there should be no costs consequences.
[7] Having fully succeeded in defending this application, I see no basis upon which the court could deny the respondent its reasonable costs.
[8] The respondent seeks costs on a substantial indemnity basis for several reasons including that the applicants endeavored to re-argue matters already settled by the Court of Appeal in the City of Toronto Case. Further, it was submitted that one of the applicants opened up another water pipe lounge during the period that the subject application was pending and while the Region agreed not to enforce the subject by-law.
[9] While there is some modest merit to these submissions, I have concluded that the applicants' conduct was not so egregious or reprehensible as to warrant an elevated level of costs: Davies v. Clarington (Municipality), 2009 ONCA 722 at paras. 37 – 40.
[10] The overarching requirement that the costs awarded be reasonable in the circumstances is to be determined by examining of the following principles:
(a) the discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1); (b) consideration of the experience of counsel, the rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness, as applied to the factual matrix of the particular case and the quantum should reflect an amount that the court considers to be fair and reasonable, rather than an exact measure of the actual costs to the successful litigant; (c) the reasonable expectation of the unsuccessful party is one of the factors to be considered in determining the amount that is fair and reasonable; (d) the court should seek to avoid inconsistency with comparable awards in other cases; and (e) the court should seek to balance the indemnity principle with the fundamental principles of access to justice: Davies, at paras. 51-52.
[11] The applicants take issue with the amount of costs claimed on behalf of the respondent and raised several issues regarding those costs. It is urged that as many of the issues involved in the present application were dealt with in the City of Toronto Case it was not necessary for counsel for the respondent to spend the time that was devoted to this application in the circumstances. That is quite an extraordinary submission, given that counsel for the applicants apparent purpose on the application was to distinguish the decision in the City of Toronto Case from the facts and legal issues involved in the present case. Counsel for the respondent was required to deal with all of the issues raised by the applicants and their counsel in order to properly defend the application and fully represent their client's interest.
[12] Furthermore, the applicants and their counsel raised the stakes in this application significantly by advancing very serious allegations, which were groundless, including bad faith and ulterior motives on the part of the Region's representatives. Again, counsel for the respondent was entitled and required to fully defend the Region with respect to these most serious allegations by marshaling the necessary evidence and law to properly respond to the applicants' claims. Having made these most serious allegations, it is not open to the applicants to now assert that too much time was spent by counsel for the respondent.
[13] With respect to the applicants' reasonable expectations as to what costs they might be exposed to, if unsuccessful on the application, counsel for the applicants indicates that on a solicitor and client basis his fees totaled $37,074.50 for the time spent by him on this application, including all preparation and attendance at the hearing of the application. He submits that this level of costs, even on a solicitor and client basis is more in keeping with what the applicants could reasonably have expected to pay if unsuccessful.
[14] There is absolutely no symmetry as between the costs incurred in commencing an application like this and the costs that are necessarily incurred in defending such an application. As noted, not only did the applicants raise the legal validity of the subject by law but also put in issue the integrity of various representatives of the Region and by implication the integrity of the respondent itself, as represented by a body elected by and accountable to the citizens of the Region.
[15] Counsel for the applicants takes issue with the involvement of junior counsel on behalf of the respondent both prior to and on the attendance at the hearing of the application. Based on review of the respondent's Costs Outline, the junior counsel for the respondent was actively involved in several stages of this application including significant time devoted to the drafting of affidavit material and the preparation of the Responding Application Record, cross examinations of the deponent's, drafting of the respondent's factum, as well as attendance at the hearing on January 17, 18 and 23, 2018. It is certainly in the interest of the respondent and any party found liable for the respondent's legal costs incurred that certain aspects of this litigation be delegated to a more junior lawyer at a significantly lower billing rate.
[16] While there are many professional and strategic benefits to having more than one lawyer managing litigation like this, it is an approach which may drive legal fees higher and while this approach may be entirely appropriate as between a law firm and its own client, the party who adopts this approach to litigation cannot reasonably expect that the greater costs arising from this approach will be borne by the unsuccessful party: Real Group v. Core Precision Inc., 2011 ONSC 5444.
[17] Junior counsel's attendance on the application days would certainly have provided assistance to senior counsel, however I am not satisfied that his attendance was necessary for the proper presentation of the respondent's case. On a partial indemnity basis junior counsel's fees for attendance on the application were in the sum of approximately $10,000. In my view, that sum should be deducted from the partial indemnity costs otherwise properly payable to the respondent.
[18] Counsel for the applicants in essence re-argued the features of the application including the economic impact on the applicants as a result of the conclusion that the by-law was valid. While any economic impact felt by the applicants is unfortunate, it is only an incidental result of the by-law and not a circumstance that should properly be taken into account in determining the respondent's entitlement to fair and reasonable costs.
[19] Other than for the reduction of time and fees incurred by the respondent's junior counsel, having considered the submissions of both counsel I see no basis upon which to reasonably interfere with or modify the costs claimed by the respondent.
[20] In the result, the partial indemnity costs as claimed by the respondent at $96,580.99 shall be reduced by the sum of $10,000, for the reasons expressed, and the applicants shall therefore pay to the respondent forthwith the net sum of $86,580.99.
Daley, RSJ.