COURT FILE NO.: 12-37462
DATE: 2020-03-23
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Marino Rakovac, 1255717 Ontario Ltd., 1255707 Ontario Ltd. and 1290976 Ontario Ltd.
Plaintiffs
- and -
The Corporation of the City of Hamilton
Defendant
COUNSEL:
- Cliff Lloyd, for the Plaintiffs
- Grant Brailsford, for the Defendant
HEARD: In Writing
COSTS DECISION
THE HONOURABLE JUSTICE L. C. SHEARD
Overview
[1] On February 20, 2020 I dismissed the plaintiffs’ motion to set aside the Registrar’s dismissal of the plaintiffs’ action. The factual background and my explanation for dismissing the plaintiffs’ motion can be found in my Reasons for Decision and are not repeated here. However, the following findings are relevant to my decision on costs: 1) the plaintiffs failed to explain why they did not prosecute their action; 2) taken as a whole, the plaintiffs’ evidence called into question the legitimacy of much of the plaintiffs’ claims; and 3) the plaintiffs failed to establish that the deadline [to set their action down for trial] was missed through inadvertence.
[2] In the Reasons for Decision, the parties were invited to provide written submissions on costs in the event they were unable to agree on costs. This decision follows my receipt and consideration of the parties’ written costs submissions.
Position of the Defendant
[3] The defendant submits that as the successful party it is entitled to costs of the motion and the action. The defendant seeks its partial indemnity costs of $22,908.11. That figure is made up of legal fees of $17,066.99, disbursements of $3,205.67 and HST of $2,635.45.
[4] In the defendant’s costs submissions, the City acknowledges that it estimated the time spent by in-house counsel and law clerks based on a review of its file.
[5] The defendant relies on Ontario (Attorney General) v. Rothmans Inc., 2013 ONCA 353, 115 O.R. (3d) 561 (at paras. 134-136) in which the Court held that where counsel are salaried employees of the employer litigant, it was proper for the court to exercise its discretion by fixing costs as though they were the costs of independent outside counsel. On that basis the hourly rates used by the City are based on the estimated hourly rates that would be charged by an independent outside lawyer.
[6] The defendant’s Costs Outline documents time spent preparing pleadings and affidavits of documents, as well as time spent preparing for and attending at examinations for discovery. Excerpts from the examinations for discovery were referred to on the motion and there is no dispute that the examinations did take place.
[7] The Costs Outline also records a total of 24 hours spent by three in-house counsel on communications with the plaintiffs’ counsel and on internal communications with City departments. The evidence before me on the motion was consistent with there having been meetings with plaintiffs’ counsel and with the need for meetings with City staff.
[8] The largest block of time recorded in the Costs Outline relates to time spent by Maria Orgera, an in-house law clerk, to receive and review 14 banker’s boxes from various City departments and to draft and compile a 7-volume affidavit of documents. Included in the materials before me on the motion was reference to motions for further and better affidavits of documents, and the Order of Lococo J. requiring the parties to do so. The time spent by Ms. Orgera on this task is consistent with the evidence of the City that it complied with the order of Lococo J.
[9] The Costs Outline records a total of 13.6 hours spent by Grant Brailsford, in-house counsel, related to the plaintiffs’ motion to set aside the dismissal order, excluding the fees claimed by him and Ms. Orgera to prepare the defendant’s cost submissions ($236.43, before HST).
Position of the Plaintiffs
[10] The plaintiffs “challenge the possible accuracy” of the amounts claimed by the defendant for time spent by its lawyers and law clerks. In particular, the plaintiffs take issue with the hours claimed because they were based on estimates without proof of the actual time spent.
[11] At paragraph 4 of the plaintiffs’ cost submissions, they assert that the defendant “owes the court true and accurate cost figures” and “should also not mislead the court regarding the accuracy of cost figures which it admits are just an estimate”. The plaintiffs go on to submit that “[s]uch behaviour is absolutely unfair to the Plaintiff (sic) and is nothing short of an abuse of process”.
[12] Despite the foregoing submissions, the plaintiffs rely on Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26 which states, in part, “that the fixing of costs does not begin and end with the calculation of hours, times and rates” and that the court’s objective “is to fix an amount that is fair and reasonable for the unsuccessful party to pay”.
[13] At paragraph 6 of their costs submissions, the plaintiffs submit that in determining what is fair and reasonable the court should consider that:
a. the plaintiffs’ claim was not adjudicated on its merits despite the fact that the plaintiffs “truly wished to see the matter moved to trial”;
b. the action was administratively dismissed due to an error by the plaintiffs’ lawyer, Ronald Folkes “who failed to set a date for trial in time due to a personal illness”;
c. the plaintiffs have “already been subject to undue costs as a result of the extensive delays imposed by the city”;
d. the City is funded by taxpayers and “can afford to defend against legitimate legal matters whenever they arise”; and
e. the “effect on the administration of justice will only be to curb the ability of Plaintiffs to legitimately sue the city through fear of a significant costs judgment”.
[14] The plaintiffs rely on Vincent v. Ottawa (City), 2007 CanLII 38129 (Ont. S.C.) in which the successful city was denied costs by reason of the City’s conduct toward the plaintiff which the court found to be “unacceptable”. On appeal, the City was similarly criticized for having failed for 13 years to implement a settlement reached with the plaintiff.
Analysis
[15] The general principles applicable to party and party costs are well settled. With respect to fixing costs, the starting point is s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 as amended, which provides that, subject to the provisions of an Act or rules of court, costs are in the discretion of the court, which may determine by whom and to what extent the costs shall be paid.
[16] Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out factors to be considered by the court when exercising its discretion to fix costs. Rule 57.01 articulates certain general principles, specifically the principle of indemnity and the affirmative obligation to consider 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.
[17] As set out in Boucher, the overall objective is to fix an amount that is fair and reasonable, having regard for, among other things, the expectations of the parties concerning the quantum of costs.
Hours Spent and Hourly Rates Charged
[18] The plaintiffs do not assert that the fees claimed in the defendant’s Costs Outline are excessive or inaccurate, merely that the time was estimated. Therefore, I must decide whether the defendant has provided a proper evidentiary foundation to support their estimates of the time spent.
[19] For the reasons set out below, I conclude that the defendant has put forward a sufficient factual foundation to establish the fees that it seeks to recover.
[20] There was evidence before me on the motion respecting:
i) examinations for discovery;
ii) efforts taken by the defendant to comply with the Order of Lococo J. to provide a further and better affidavit of documents; and
iii) negotiations and communications between the defendant’s in-house counsel and the City and with counsel for the plaintiffs;
[21] I do not accept the plaintiffs’ submissions that by estimating the time spent on the various and usual steps in this litigation, the defendant is misleading the court. I find that evidence which was before me on the motion is corroborative of the time the defendant has allocated to those and related litigation tasks in its Costs Outline.
[22] I also note that the plaintiffs chose not to provide the court with their own time records or with any evidence that might contradict or conflict with the defendant’s estimates.
[23] Having found there to be an evidentiary basis to support the defendant’s estimate of the time spent by its counsel and law clerks, I next considered whether the time spent was reasonable and concluded that it was.
[24] In finding the time spent to be reasonable, in addition to the other r. 57.01 factors, I took into account the nature and amount of the plaintiffs’ claim; the fact that the defendant is a city, rather than an individual, and the age of the events on which the plaintiffs’ claims are premised, which added to the scope of inquiries required to identify relevant documents and witnesses; and the duration of the litigation.
[25] I accept the defendant’s submissions that the time set out in its Costs Outline is a “conservative” estimate of the time actually spent.
[26] The plaintiffs have not taken issue with the hourly rates used by the defendant. I find that it was appropriate to assign senior in-house counsel to the claim, given the amount claimed by the plaintiffs, and that the rates used are reasonable and fair and in keeping with the usual hourly rates that would be charged by outside independent counsel with that seniority.
[27] I have considered, and reject, the arguments put forth by the plaintiffs, set out at paragraph 6 of their costs submissions and referenced at paragraph 13, above. The plaintiffs’ arguments conflict with the facts as I found them, are based on allegations not in evidence, and/or the arguments run contrary to the principles that apply to the fixing of costs.
[28] The plaintiffs are land developers and have been represented by counsel throughout this litigation. It is reasonable to assume, which I do, that the plaintiffs are relatively sophisticated and well-informed about their lawsuit and its associated legal fees.
Disposition
[29] For the reasons set out above, I conclude that the costs sought by the defendant are fair and reasonable, having regard for, among other things, the expectations of the parties concerning the quantum of costs and the court’s obligation to consider 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.
[30] I fix the costs payable by the plaintiffs to the defendant at $22,908.11, all inclusive, payable forthwith.
Dated: March 23, 2020
L. Sheard J.
COURT FILE NO.: 12-37462 DATE: 2020-03-23
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Marino Rakovac, 1255717 Ontario Ltd., 1255707 Ontario Ltd. and 1290976 Ontario Ltd.
Plaintiffs
- and –
The Corporation of the City of Hamilton
Defendant
COSTS DECISION
Released: March 23, 2020