Court File and Parties

COURT FILE NO.: 16-58391 (Hamilton) DATE: 20190107 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Wilfred Davey and Bill Monture, Plaintiffs AND: Hazel Hill, Brian Doolittle, Aaron Detler, Haudenosaunee Development Institute, 2438543 Ontario Inc., Ogwawihsta Dedwahsnye Inc., Elvera Garlow, Defendants

BEFORE: The Honourable Mr. Justice R.A. Lococo

COUNSEL: Jeffrey A. Kaufman, for the Plaintiffs David Shiller, for the Defendants

HEARD: By written submissions received October 3 to 18, 2018

Endorsement – costs

I. Introduction

[1] Wilfred Davey and Bill Monture are the plaintiffs in a putative class action. They allege the misuse of funds intended for development projects on Aboriginal land.

[2] As set out in Reasons for Decision dated September 26, 2017 (reported at 2018 ONSC 5274), I granted the plaintiffs’ contested motion to amend the statement of claim. The costs of the motion were left to be determined based on written submissions.

[3] As the successful parties on the motion, the plaintiffs seek partial indemnity costs against the defendants. The plaintiffs’ costs outline sets out partial indemnity costs of $28,318.85, calculated as follows:

Fees $20,978.40 HST on fees 2,727.19 Estimated appearance fee 3,600.00 Disbursements 915.10 HST on disbursements 98.16 $28,318.85

[4] The defendants do not dispute that the plaintiffs should be awarded partial indemnity costs but challenge the amount claimed. The defendants say that the amount awarded should be $5,236.10, including disbursements of $915.50.

[5] For the reasons that follow, I have decided to fix the plaintiffs’ partial indemnity costs at $15,500, including disbursements, payable by the defendants within 30 days.

[6] The defendants’ costs submissions raise the following issues: (a) HST; (b) estimated appearance fee; (c) excessive time/hourly rates; and (d) costs thrown away. I will deal with each of these issues in turn below.

II. HST

[7] The defendants challenge the plaintiffs’ claim for HST, citing the plaintiffs’ exempt status. The plaintiffs do not dispute the defendants’ position. They have indicated that they will take the necessary steps to claim the exemption. Accordingly, the plaintiffs’ costs award will not include any amount for HST.

III. Estimated appearance fee

[8] The plaintiffs’ costs outline includes $3,600 for “estimated lawyer’s fee for appearance”. The “hours spent” section of the costs outline also includes charges for actual hours spent for “preparation and attendance at hearing of motion on May 25, 2018”, as well as “preparation of costs submissions”.

[9] On the face of the plaintiffs’ costs outline, it appears that counsel’s appearance at the motion has already been accounted for in the “hours spent” section. Therefore, I agree with defendants’ counsel that the $3,600 estimated appearance fee should be eliminated.

IV. Excessive time/hourly rates

[10] The defendants challenge as excessive the time spent and hourly rate for plaintiffs’ counsel and the assisting articling student. Among other things, the defendants disputes (i) the amount of time spent preparing the motion record, (ii) any charges for “communication with court, client and counsel”, (iii) the amount of time claimed for legal research and preparing the factum, and (iv) the attendance of both senior counsel and the student at the motion hearing. The defendants also challenge the charging of hourly rates in excess of those set out in the 2005 Information for the Profession issued by the Costs Subcommittee of the Civil Rules Committee. Taking those matters into account, the defendants say that the amount awarded for fees should be reduced from $20,978.40 to $11,671.00 (before taking into account costs thrown away).

[11] When considering the defendants’ submissions relating to time spent, I am mindful of the summary nature of the judge’s function in fixing costs, as contrasted with the role of an assessment officer on a full costs assessment. As Feldman J. noted in Tri-S Investments Ltd. v. Vong, 1992 CarswellOnt 6612 (Gen. Div.), at p. 2:

The purpose of the [judge’s] summary analysis is for the trial or motions judge, familiar with the nature of the proceeding as well as with its substantive and procedural complexity, to ensure that the magnitude of the claimed costs is in keeping with what is warranted in the circumstances. I do not view it to be the court's function when fixing costs to second-guess successful counsel on the amount of time that should or could have been spent to achieve the same result, unless the time spent is so grossly excessive as to be obvious overkill.

[12] The plaintiffs also dispute the defendants’ position that costs cannot be recovered for “communications with court, client and counsel”. I agree with the plaintiffs on this point. In Shibish v. Honda of Canada Inc., 2011 ONSC 2989, at para. 39, the court recognized that it is appropriate to take matters of that nature into account when awarding costs.

[13] As well, as indicated in case law that the plaintiffs cited, I am not bound to apply the maximum hourly costs rates set out in the 2005 Information for the Profession. In Inter-Leasing, Inc. v. Ontario (Minister of Revenue), 2014 ONCA 683, at para. 5, the Court of Appeal characterized those costs rates as being out of date (see also Construction Distribution & Supply Co. v. King Packaged Materials Co., 2016 ONSC 7397, at para. 11).

[14] Taking into account the foregoing principles, I consider the time spent and hourly rates set out in the plaintiffs’ costs outline to be generally reasonable. As noted by plaintiffs’ counsel, the hearing of the motion took a full day, with written reply submissions. The issues to be determined were moderately complex. Based on previous case law, it is not necessary or appropriate for me to engage in a further detailed analysis of those charges.

[15] In any case, as noted by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), at para. 26, when fixing costs, the calculation of hours and time rates is only one factor to be taken into account. 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.”

[16] In all the circumstances (but before taking into account the defendants’ submissions on costs thrown away), I would fix the plaintiffs’ partial indemnity costs at $16,000, including disbursements.

V. Costs thrown away

[17] The defendants seek a reduction in the amount of costs awarded to the plaintiffs to take into account the defendants’ costs thrown away as a result of the plaintiffs’ amendment to the statement of claim.

[18] In particular, some of the defendants have filed a statement of defence. The defendants seek a $1,050 credit for legal costs incurred for the preparation of the existing statement of defence.

[19] The defendants have also filed material responding to the plaintiffs’ certification motion. The certification motion has been in abeyance as a result of the plaintiffs’ motion to amend the statement of claim. The defendants seek a $6,300 credit for legal costs incurred for the preparation of the certification factum.

[20] The plaintiffs argue that the costs award in their favour should not be reduced by defendants’ costs incurred for the existing statement of defence and certification factum. Among other things, the plaintiffs say that those documents can be substantially used going forward since the new (or recast) causes of action in the amended statement of claim arose from facts already pleaded in the original statement of claim. The plaintiffs also argue that consideration of costs relating to the certification factum in the context of the current motion would presume the defendants’ success on the certification motion.

[21] When leave is obtained to amend a statement of claim, I agree that it may be appropriate (depending on the circumstances) for the defendants to receive credit for costs thrown away as a result of the amendment. In this case, however, I am prepared to reduce the plaintiffs’ costs award only to a modest extent.

[22] Because of the amended statement of claim, a new statement of defence will be required. As a result, the costs incurred for the original statement of claim have been partially (but not completely) thrown away. I am therefore prepared to reduce the amount of the plaintiff’s costs award by $500. However, in the context of this motion, I am unable to determine whether (or by how much) costs have been thrown away to prepare the defendants’ certification factum. In my view, costs relating to the certification material (including the factum) should be dealt with at a later stage, whether in the context of the certification motion or otherwise.

VI. Conclusion

[23] For the foregoing reasons, the plaintiffs’ costs of the motion are fixed at $15,500, including disbursements, payable by the defendants within 30 days.

The Honourable Mr. Justice R.A. Lococo Date: January 7, 2019