Mitchinson v. Marshall Kirewskie, Barristers and Solicitors

Ontario Reports Ontario Superior Court of Justice R.B. Reid J. December 11, 2018 143 O.R. (3d) 716 | 2018 ONSC 7419

Case Summary

Civil procedure — Costs — Self-represented parties — Costs not awarded to self-represented lawyer who adduced no evidence that he had to decline remunerative activity to work on case.

The applicant applied for an order under rule 57.07(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 that the costs awarded against him in an unsuccessful action should be paid by his lawyer personally. The application was dismissed. The court then considered the issue of the costs of the application.

Held, the respondent should not be awarded costs.

The respondent was self-represented. Costs should only be awarded to self-represented parties where the party can demonstrate that they devoted time and effort to do the work that would ordinarily be done by a lawyer retained to conduct the litigation and that, as a result, they incurred an opportunity cost by foregoing remunerative activity. The respondent failed to adduce evidence that he had to decline remunerative activity to work on this case.

• Charendoff v. McLennan, [2012] O.J. No. 6218, 2012 ONSC 7241 (S.C.J.)
• Fong v. Chan (1999), 46 O.R. (3d) 330, [1999] O.J. No. 4600, 181 D.L.R. (4th) 614, 128 O.A.C. 2, 93 A.C.W.S. (3d) 222 (C.A.), consd

Other Cases Referred To

• Giglio v. Peters, [2014] O.J. No. 23, 2014 ONSC 2, 50 C.P.C. (7th) 253, 237 A.C.W.S. (3d) 327 (S.C.J.)
• Mustang Investigations v. Ironside (2010), 103 O.R. (3d) 633, [2010] O.J. No. 3184, 2010 ONSC 3444, 98 C.P.C. (6th) 105, 267 O.A.C. 302, 321 D.L.R. (4th) 357, 192 A.C.W.S. (3d) 397 (Div. Ct.)

Statutes Referred To

• Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131 [as am.]

Rules and Regulations Referred To

• Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 57.07, (1)

Ruling on Costs

Applicant, self-represented. Respondent, self-represented.

R.B. REID J. : —

Background

[1] The applicant was the plaintiff in a civil action against his trade union and six of its officers. The respondent law firm, through one of its principals, Paul Marshall, acted as counsel for the applicant in that action.

[2] The action was administratively dismissed. The applicant changed counsel. The motion to set aside the dismissal of the action was unsuccessful. A costs order was made against the applicant in favour of the defendants.

[3] The full and final payment of costs was made by the applicant in the amount of $31,958.91.

[4] The applicant sought an order pursuant to rule 57.07(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 that the costs for which the applicant was made responsible should be reimbursed to him by the respondent based on the submission that the respondent's mishandling of the case was the reason for the dismissal and the adverse costs award.

[5] By decision dated September 25, 2018, I dismissed the motion, holding that mistakes, negligence or errors in judgment are not typically sufficient to justify the costs award available under rule 57.07 and that the conduct of the respondent did not meet the high threshold required to warrant such an order.

[6] An order has already been made that the account for legal fees and disbursements rendered by the respondent to the applicant should be assessed by an assessment officer who has both jurisdiction and expertise to deal with such matters.

[7] The parties were not able to resolve the issue of costs consensually and therefore have made written costs submissions.

Positions of the Parties

[8] The respondent seeks a costs award based on success, and also relies on discretionary factors including complexity and the importance of the result. The importance was both financial and by way of professional reputation. As well, the respondent relies on an offer to settle to support an award of substantial indemnity costs.

[9] The respondent submits that the proceedings were unduly protracted by the applicant. The motion was originally part of a request for assessment of costs against the respondent and two other law firms. The applicant previously questioned the details of the retainer (which might have affected the jurisdiction of an assessment officer) and then sought a re-hearing of that matter based on a challenge as to whether the retainer was a contingency fee agreement. Only when those matters were resolved did this motion proceed.

[10] Although self-represented, the respondent incurred significant costs to defend himself in the motion. The respondent asserts that work on the case resulted in a loss of opportunity to do paid legal work on other files. In any event, the aspersions cast by the applicant on the respondent's professional conduct, and which did not result in a successful motion, justify a costs award in the respondent's favour.

[11] In its bill of costs, the respondent claims $19,108.30 on a substantial indemnity basis and, in the alternative, $14,331.23 on a partial indemnity basis. Both those amounts are inclusive of HST. A higher amount was shown in the written submission ($28,447.75), but was not consistent with the bill of costs, so I have ignored it. In addition, the respondent claims disbursements of $1,381.91.

[12] The applicant proposes that no or minimal costs be awarded. He submits that the costs claim was excessive as to time spent, and that the claimed hourly rate is inappropriately high. As well, the applicant notes that the respondent's bill of costs does not comply with the format of the form 57B Costs Outline including the lack of a lawyer's certificate.

[13] The applicant submits that since the respondent was self-represented, evidence of lost "opportunity cost" was a requirement, but was not provided.

[14] In the event that a costs award is made in favour of the respondent, the applicant requests a deferral of payment until the conclusion of the assessment of his account which will be done by an assessment officer in due course.

Analysis

[15] The court's discretion to award costs flows from s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[16] I first consider the matter without regard to the fact that the respondent was self-represented.

[17] Factors to be considered in the exercising of discretion are enumerated in rule 57.01. Success is a presumptive factor and in this case the respondent was entirely successful. In the normal course, an award of costs would be appropriate in favour of the respondent, payable by the applicant. I will not review other discretionary factors, given the conclusion I reach below on the opportunity cost issue.

[18] The offer to settle made by the respondent and the corresponding offer made by the applicant are irrelevant to my decision on costs. Both offers were made after the rule 57.07 motion decision and propose to resolve costs by including resolution of the account assessment issue which is yet to be determined.

[19] As to the format of the bill of costs, there is no requirement that it coincide with the form 57B Costs Outline including the lawyer's certificate. The two are different documents and I find no fault with the format used by the respondent.

[20] The key question for decision is the impact of the respondent's self-represented status on entitlement to costs.

[21] In the Ontario Court of Appeal decision of Fong v. Chan (1999), 46 O.R. (3d) 330, [1999] O.J. No. 4600 (C.A.), at para. 26, the court determined that self-represented parties, be they lawyers or lay litigants, should be on the same footing. They should not recover costs for the time and effort that any litigant would have devoted to the case. This is because all litigants suffer a loss of time through their involvement in the legal process. Costs should only be awarded when the litigant can demonstrate that they devoted time and effort to do the work that would ordinarily be done by a lawyer retained to conduct the litigation and that as a result, they incurred an opportunity cost by foregoing remunerative activity.

[22] The necessity of proving an opportunity cost was confirmed by the Divisional Court in Mustang Investigations v. Ironside (2010), 103 O.R. (3d) 633, [2010] O.J. No. 3184, 2010 ONSC 3444 (Div. Ct.). Referring to Fong, the court held, at para. 23:

First, to receive costs a lay litigant must demonstrate that he or she devoted time and effort to do the work ordinarily done by a lawyer and that as a result he or she incurred an opportunity cost by foregoing remunerative activity. Second, if an opportunity cost is proved, a self-represented litigant should only receive a moderate or reasonable allowance for the loss of time devoted to preparing and presenting the case.

[23] The importance of proving an opportunity cost was emphasized when, at para. 27, the court held:

. . . I'm unable to find that the language in Fong permits an award to be made without the self-represented litigant demonstrating that, as a result of the lawyer-like work put in on the file, remunerative activity was foregone. Simply stated, no proof of opportunity cost, no nominal costs available.

[24] More recently, in Charendoff v. McLennan, [2012] O.J. No. 6218, 2012 ONSC 7241 (S.C.J.), MacDonnell J. considered a costs claim by the successful defendant who was a self-represented lawyer. He endorsed the Fong and Mustang Investigations decisions. Despite the fact that the self-represented lawyer obviously did work ordinarily performed by a lawyer retained to conduct the litigation, the lack of proof of opportunity cost was fatal to the costs claim.

[25] I note that in the case before me, the applicant raised the opportunity cost issue and in fact referred specifically to the Charendorff and Fong cases. The respondent, in reply, made the general assertion that there was a lost opportunity to do remunerative legal work on other files but without any proof. In any event, because of the allegations in the motion, the respondent submits that other considerations should apply.

[26] The respondent relies on a decision of this court in Giglio v. Peters, [2014] O.J. No. 23, 2014 ONSC 2 (S.C.J.). In that case, the parties were represented by counsel. Unsubstantiated allegations of professional misconduct were made in support of the rule 57.07 motion. The court considered that the plaintiff had adopted a shotgun approach to his allegations against the defendant lawyer, many of which were extremely serious. Because the parties were represented by counsel, the court engaged in a normal costs analysis.

[27] I conclude that the reasoning in Giglio is not applicable in this case to answer the special issues relating to the respondent as a self-represented lawyer. I do not consider that the nature of the allegations made by the applicant were of such a character and weight that they should trump the opportunity cost issue.

[28] There is an absence of evidence about actual opportunity cost incurred and no reason for me to infer that the respondent had to decline other remunerative activity in order to work on this case. The respondent had an opportunity to provide that evidence in filing the reply costs submissions, particularly when the issue was squarely raised by the applicant, but did not do so.

[29] As a result, I decline to make an order of costs in favour of the respondent except as to disbursements in the amount of $1,381.91, which are payable by the applicant to the respondent within 30 days.

Order accordingly.

End of Document