COURT FILE NO.: CV-18-597479

DATE: 20190605

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Anthea Koon, Applicant

AND:

Lawyers Professional Indemnity Company, Respondent

BEFORE: Nishikawa J.

COUNSEL: Anthea Koon, in person

Lucas Lung, Respondent

HEARD: May 29, 2019

ENDORSEMENT

[1] The Applicant, Anthea Koon, appeals the orders of Master Sugunasiri dated January 18, 2019 and March 8, 2019, in which she granted the Respondent’s motion to strike certain paragraphs of the Applicant’s notice of motion and costs on a substantial indemnity basis.

[2] For the reasons that follow, I dismiss the Applicant’s appeal.

Background

[3] This proceeding has a lengthy and convoluted history that is summarized in Master Sugunasiri’s Reasons for Decision dated January 17, 2019. The endorsement of D.A. Wilson J. dated March 25, 2019 further details certain appearances in Civil Practice Court. I will refer to the history of this proceeding only as it pertains to this appeal.

[4] In brief, Ms. Koon, who is a lawyer, brought an application for judicial review of an arbitral award. In her endorsement dated May 18, 2016, Matheson J. dismissed the application for judicial review. Ms. Koon then brought a motion under r. 59.06 to vary or set aside the decision, which was dismissed by Matheson J. on November 22, 2016 (“Justice Matheson’s Decision”).

[5] The Respondent’s lawyer, Jameel Madhany, was unable to obtain Ms. Koon’s approval of the form and content of the orders for the dismissals of the application for judicial review and the r. 59.06 motion. He requested a case conference to settle the form of the order or, alternatively, that Matheson J. sign the orders. In an endorsement dated December 21, 2017, Matheson J. determined that, “given the history of the case and the straightforward nature of the orders” neither a case conference nor an attendance before the Registrar was necessary. Matheson J. signed the orders.

[6] In August 2018, Ms. Koon served a second notice of motion to vary or set aside Justice Matheson’s Decision under r. 59.06, alleging that the order was obtained by fraud. Ms. Koon also sought costs against Mr. Madhany personally. Mr. Madhany advised Ms. Koon that another lawyer at Lerners LLP (“Lerners”), Lucas Lung would be assuming carriage of the file. Ms. Koon then served an amended notice of motion adding a claim for costs against Mr. Lung personally (the “Second Notice of Motion”).

[7] The Respondent, Lawyers’ Professional Indemnity Company (“LawPRO”), brought a motion to strike various paragraphs of the Second Notice of Motion on the basis that they were scandalous, frivolous, vexatious and/or an abuse of process. Specifically, LawPRO sought to strike: (i) the claim for costs against LawPRO’s current counsel; (ii) allegations of professional misconduct and other wrongdoing by LawPRO’s counsel; and (iii) allegations relating to attempts by LawPRO to collect an unpaid insurance deductible and claim history surcharges through a referral to the Law Society for licence suspension.

[8] In her Reasons for Decision dated January 17, 2019 (Koon v. Lawyers Professional Indemnity Company, 2019 ONSC 389, the “Merits Decision”), Master Sugunasiri struck the claim for costs against Mr. Lung, as well as certain paragraphs of the Second Notice of Motion on the basis that they had nothing to do with Ms. Koon’s motion to set aside and because they contained bald allegations of professional misconduct against LawPRO’s counsel that were irrelevant to the Applicant’s motion.

[9] The Merits Decision included an order for costs against Ms. Koon for $4,500. Master Sugunasiri amended her decision the following day, to allow written costs submissions from both parties (the “Amendment”). On March 8, 2019, after receiving the costs submissions, Master Sugunasiri issued a Costs Decision, ordering that Ms. Koon pay LawPRO $6,800 in costs on a substantial indemnity basis (Koon v. Lawyers Professional Indemnity Company, 2019 ONSC 1552, the “Costs Decision”).

Analysis

The Appeal of the Merits Decision is Out of Time

[10] Pursuant to r. 62.01(2), an appeal of an interlocutory order of a Master must be commenced “within seven days after the making of the order appealed from.” Ms. Koon did not commence her appeal until March 15, 2019, almost two months after the Merits Decision was rendered. Her appeal of the Merits Decision is thus out of time.

[11] Ms. Koon submits that she was under the impression that Master Sugunasiri would be varying the Merits Decision because she had first made a costs order and then amended her reasons to permit submissions on costs. She states that at no time did she understand that Master Sugunasiri would be making two separate orders.

[12] There was no reason for Ms. Koon to believe that the Merits Decision would be varied on the merits. It is not unusual for the court to issue a decision on the merits of a matter and a subsequent decision on costs after costs submissions are received. The Merits Decision and the Amendment make clear that the only outstanding issue was costs. While Ms. Koon subsequently sent numerous emails to Master Sugunasiri’s assistant questioning the Master’s decision and seeking further explanations, her inquiries did not change the fact that a decision had been rendered on the merits of the motion.

[13] Ms. Koon did not bring a motion for an extension of time to appeal the Merits Decision. Ms. Koon relies on a paragraph in her Notice of Appeal seeking an “Order abridging time for filing and service of this Appeal.” While such a provision may permit an extension of time for a procedural step, such as the filing of a document, including this request in a Notice of Appeal is not sufficient to extend an appeal period. In order to obtain an extension of the time to appeal, a motion must be brought and the appellant must demonstrate that they have met the applicable test.

[14] In any event, even if Ms. Koon had brought a motion for an extension of time, she would not be able to meet the test. At an appearance before Kimmel J. in Civil Practice Court on February 25, 2019, Ms. Koon, without mentioning an intention to appeal, sought relief from a provision in the Merits Decision requiring that she deliver a Fresh as Amended Notice of Motion within two days of obtaining a hearing date for her motion. This is inconsistent with a bona fide intention to appeal throughout the period of the delay. It also belies her position that she believed that Master Sugunasiri would be varying the Merits Decision.

The Merits Decision

[15] Master Sugunasiri’s decision to strike certain paragraphs of the Notice of Motion are findings of mixed fact and law. This Court will only overturn such findings if the Master made a palpable and overriding error.

[16] Since I have found that Ms. Koon’s appeal of the Merits Decision is out of time, it is not necessary for me to determine the merits of her appeal. Nonetheless, even if she were granted an extension of time to appeal, I would find that she has failed to demonstrate that Master Sugunasiri has committed a palpable and overriding error.

Costs Claims Against Counsel

[17] Master Sugunasiri committed no palpable or overriding error in striking the claim for costs against Mr. Lung personally. The evidence clearly demonstrated that Mr. Lung was not involved in the matter until August 2018. Therefore, there could be no costs order against him in relation to the conduct of the Application.

[18] Ms. Koon denies that she was seeking costs against Mr. Lung personally. She states that it ought to have been clear that she was seeking costs against Lerners. While she argues that this should have been clear from the language of the Second Notice of Motion, her use of the term “lawyer for the Respondent” does not consistently refer to Lerners. For example, paragraph 23 of the Second Notice of Motion states: “Lucas E. Lung, being the lawyer of the Respondent…”

[19] Master Sugunasiri also correctly concluded that there could be no claim for costs of the second r. 59.06 motion against either lawyer before the motion was heard. Such costs are to compensate parties for costs unreasonably incurred when a lawyer’s conduct “has caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default…” By definition, there is no basis for such costs before the motion is heard and it is not appropriate to assert them at the beginning of a proceeding: Carleton v. Beaverton Hotel (2009), 2009 92124 (ON SCDC), 96 O.R. (3d) 391 (Div. Ct.) at paras. 18-19.

[20] Accordingly, Master Sugunasiri committed no palpable and overriding error in striking the reference to “the lawyer for the Respondent” and “the motion” in paragraph (m) of the Second Notice of Motion.

Allegations of Misconduct

[21] Master Sugunasiri correctly identified the principles to be applied in determining whether certain paragraphs of the Second Notice of Motion should be struck as scandalous, frivolous, vexatious or an abuse of process under r. 25.11.

[22] Master Sugunasiri committed no palpable and overriding error in striking paragraphs 15 and 20-24 of the Second Notice of Motion. All of the allegations contained in those paragraphs related to matters that occurred after Justice Matheson’s Decision and the signing of the orders, and could thus not be relevant to whether Justice Matheson’s Decision should be set aside or varied under r. 59.06.

[23] Moreover, the paragraphs that were struck by Master Sugunasiri contained bald, unparticularized allegations of professional misconduct and conflict of interest against LawPRO’s counsel. Since they were not relevant to the r. 59.06 motion, they served no purpose other than to inflame or prejudice the Respondent. George v. Harris, 2000 CarswellOnt 1714 at paras. 19-20, 22 (S.C.J.).

[24] Ms. Koon submits that Master Sugunasiri erred in finding that the impugned paragraphs were not relevant to her motion because the Master referred to Justice Matheson’s Decision as having been made in 2016, as opposed to 2017, when the orders were signed. This argument has no basis. As noted above, Matheson J. made her decision on the merits of the first r. 59.06 motion on November 22, 2016. Because of difficulties in obtaining Ms. Koon’s approval of the form and content, the order was not settled until December 21, 2017. There was no “cyberspace hearing,” as Ms. Koon alleges. The orders were merely signed after Ms. Koon’s approval could not be obtained, and were based on, and entirely consistent with, Justice Matheson’s Decision.

[25] At the hearing, it became apparent that Master Sugunasiri struck paragraph 17 of the Second Notice of Motion (Merits Decision, at para. 17) but then stated that paragraphs 14 and 16-19 were not struck (Merits Decision, at para. 18). LawPRO argues that paragraph 17 was inadvertently included when Master Sugunasiri stated that paragraphs 16-19 were not to be struck.

[26] Paragraph 17 of the Second Notice of Motion states: “The Respondent handled the Applicant’s claim negligently, relying on false and misleading representations from the Respondent’s external counsels, and refused to correct their own errors, causing the need to bring this motion.” This does not, strictly speaking, relate to licence suspension issues that arose after Justice Matheson’s Decision. Since it refers to the handling of Ms. Koon’s claim, it strikes me more consistent with the allegations that Master Sugunasiri did not strike, as opposed to those that she did. It was likely a typographical error that resulted in paragraph 17 being included in the paragraphs to be struck, and I find that Master Sugunasiri did not intend to strike it.

The Costs Decision

[27] Under s. 133 of the Courts of Justice Act, R.S.O. 1990, c. C.43, leave is required to appeal a costs order, unless a costs order is set aside as a result of a successful appeal. Ms. Koon has not brought a motion for leave to appeal the Costs Decision. In any event, leave to appeal costs will only be granted where there are “strong grounds” upon which to find that the lower court erred in exercising its discretion: House v. Baird, 2017 ONCA 885 at paras. 86-87. Ms. Koon has not identified any such strong grounds here that would justify granting leave to appeal the Costs Decision, nor are there any.

[28] Even if leave to appeal the Costs Decision were to be granted, the fixing of costs is highly discretionary and is afforded significant deference. Master Sugunasiri did not err in ordering costs on a substantial indemnity basis. Costs on a higher scale may be imposed where a party has made bald allegations of dishonesty and deceit that go to the heart of a person’s integrity: Re Manning, 2006 35631 at para. 8; Catalyst v. Moyse, 2016 ONSC 6285 at para. 3. The amount of $6,800 is not excessive and does not justify appellate intervention.

Conclusion

[29] Based on the foregoing, I dismiss Ms. Koon’s appeal of the Merits Decision and the Costs Decision. For clarity, paragraph 17 of the Second Notice of Motion is not struck.

[30] At the hearing, Mr. Lung requested a process for settling the order of this court, as this has been an issue in this proceeding. Mr. Lung suggested that each party submit a draft order and this court could sign the appropriate order. Ms. Koon agreed to this process.

[31] As such, each party shall submit a form of draft order to me, with a copy to the opposing party, by sending a hard copy to my attention at Judges’ Administration, no later than June 14, 2019.

Costs

[32] Mr. Lung seeks costs on a substantial indemnity basis in the amount of $7,174.90. The Respondent’s costs on a partial indemnity basis are $4,906.43. Both amounts include HST and disbursements.

[33] At the hearing, Mr. Lung sought leave to admit a supplementary record on the issue of costs. The record included Ms. Koon’s latest notice of motion and her affidavit on the r. 59.06 motion. While Ms. Koon would be familiar with this material, I refused leave to file the supplementary material on the basis that any issues regarding the conduct of the r. 59.06 motion are more appropriately raised when costs submissions are made on that motion.

[34] Pursuant to the Courts of Justice Act, s. 131(1), the Court has broad discretion when determining the issue of costs. The overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). Rule 57.01(1) of the Rules sets out the factors to be considered by the Court when determining the issue of costs.

[35] I have considered these factors, as well as the principle of proportionality in r. 1.01(1.1) of the Rules, while keeping in mind that the Court should seek to balance the indemnity principle with the fundamental objective of access to justice. Ms. Koon failed to seek an extension of time to appeal the Merits Decision and leave to appeal the Costs Decision. The Respondent had little choice but to respond to the merits of both. Ms. Koon served her material late and has insisted on personal service, giving Respondent’s counsel little time to prepare their factum. The hearing date was scheduled despite the objection of Respondent’s counsel. This appeal was frivolous and without merit. Before me, Ms. Koon sought to reargue a number of other matters before me that did not relate to the appeal. While such conduct is to be discouraged, I do not find that Ms. Koon engaged in egregious conduct or conduct worthy of sanction warranting an award of substantial indemnity costs.

[36] Costs are ordered in the amount of $4,906.43 on a partial indemnity basis.

Nishikawa J.

Date: June 5, 2019