Court File and Parties

COURT FILE NO.: CV-15-541260 DATE: 20200914 ONTARIO SUPERIOR COURT OF JUSTICE -

B E T W E E N: Fasken Martineau DuMoulin LLP, Respondent/Lawyers – and – Behdad Hosseini et al., Appellants/Clients

BEFORE: F.L. Myers J.

COUNSEL: Z.M. Kaslik, for the Appellants/Clients Anastasia Reklitis, for the Respondent/Lawyers

READ: September 14, 2020

Endorsement

[1] This motion in writing was scheduled to be heard during the week of August 17, 2020. Through no fault of the parties, it was not brought forward to a judge until today.

[2] The Assessment Officer decided the merits of the assessment in a decision dated April 11, 2019. The Client Behad Hosseini objected under Rule 58. By Certificate dated September 11, 2019 the Assessment Officer confirmed her assessment. The Assessment Officer granted the Lawyers their full unpaid fees as billed in the amount of 15,882.04 all-in.

[3] The Assessment Officer called for written costs submissions. The costs were resolved by Certificate dated October 15, 2020.

[4] The Assessment Officer granted the Lawyers their costs of $39,000 on a full indemnity basis. In granting costs of more than double the amount of fees in issue in the assessment itself, the Assessment Officer wrote:

An award of significant costs is wholly warranted and justified in this case. The Respondent’s allegations were groundless and the Applicant should not have to pay a penny toward the costs of obtaining justice in litigation that it had no choice to pursue.

[5] She also made note of the fact that the Lawyers had offered to accept $8,000 to settle the assessment and they had actually accepted a counter-offer made by the Clients to pay $5,000. But the Clients then failed to pay leaving the Lawyers no choice but to proceed with the assessment.

[6] The Clients purported to appeal by Notice of Appeal dated October 23, 2019. They did not object to the costs decision under Rule 58. Neither did they obtain leave to appeal under s. 133 (b) of the Courts of Justice Act, RSO 1990, c C.43.

[7] Faskens moves to quash the appeal. It argues that the Clients did not appeal the first certificate and they cannot appeal the costs certificate without leave.

[8] The Clients argue that they appealed the final Certificate and the Rules only contemplate one certificate. On that basis they say that they have properly appealed both certificates by waiting for the costs certificate.

[9] The Rules do not contemplate multiple judgments or orders in the same proceeding, yet the Court of Appeal has long ago resolved this issue in the context of serial judgments at trial. In Byers v. Pentex Print Master, 2003 42272 (ON CA), the Court of Appeal held:

[14] In considering the second situation, where a costs judgment is rendered more than 30 days after the rendering or release of the merits judgment and a notice of appeal from the merits judgment has been served and the appellant intends to appeal from the costs judgment, the procedure described in the previous paragraph is inapplicable, and a different procedure applies. Given that the right to appeal the costs judgment to the Court of Appeal with the leave of that court is given by s. 133(b) of the CJA, under rule 61.03.1(1) the appellant is required to move in writing for leave to appeal. Where leave is granted, the notice of appeal must be delivered within seven days after the [page655] granting of leave: rule 61.03.1(16). The result is that the appellant then has two appeals -- one from the merits judgment and the other from the costs judgment. This, in my view, produces an unsatisfactory situation and could involve expense to litigants and duplication in effort on the part of this court.

[15] Because many costs judgments will not be rendered until more than 30 days after the rendering of the merits judgment, in my view there is a better procedure available to the appellant under rule 61.08(1) that will enable the appellant to avoid this cumbersome procedure. Rule 61.08(1) permits an appellant to amend a notice of appeal without leave before an appeal is perfected. Where an appellant intends to appeal from the costs judgment in addition to the merits judgment, the notice of appeal should be amended to join the costs appeal with the merits appeal, thus enabling the procedure set out in rule 61.03.1(17) to apply. This would permit the panel of this court hearing the merits appeal to determine the request for leave to appeal from the costs judgment, and, if leave is granted, to hear that appeal.

[16] On the basis of this analysis, the CJA and the Rules of Civil Procedure clearly contemplate that a costs judgment, when the subject of a separate or collateral proceeding as in this case, is a separate determination rather than a part of the main merits proceeding. As such, it is a separate appealable judgment governed by its own procedure. Similarly, a merits judgment, whether rendered by a judge or granted by a judge in accordance with a jury's verdict, is a separate appealable judgment, even though the costs consequences of the case remain to be decided by the trial judge.

[17] As I will explain, this analysis finds support in the case law, which underscores that litigants are best served by a rule which accords with the traditional understanding that a decision on the merits is final for the purpose of appeal when it is rendered, notwithstanding the pendency of the determination of the costs attributable to the case. It follows that the plaintiffs' notice of appeal from the merits judgment was not served within 30 days of the jury's verdict as required by rule 61.04(1). Subsequently, I will consider whether leave should be granted to extend the time for service of the notice of appeal to the date of its service.

[10] Appeals from the assessment of costs are governed by a different rule – Rule 62.01 (b). Rule 62 incorporates only portions of Rule 61. It does not incorporate either Rule 61.08 (1) - that allows amendment of a notice of appeal - or Rule 61.03.1 (17) that allows a motion for leave to appeal from a costs order to be joined with the appeal from the merits order. Arguably therefore, the work-around implemented by the Court of Appeal does not apply in an appeal from a certificate of assessment in this court. But I would note lightly arrive at a decision requiring two separate appeals in each case where the costs of an assessment are not decided until after the expiry of the applicable seven-day appeal period.

[11] The Clients have brought a cross-motion seeking leave to extend the time for their Notice of Appeal. A lawyer’s affidavit is submitted for the fact that the Clients had the intention to appeal throughout. The timing of the filing of objections and the ultimate Notice of Appeal make this an apparent inference in any event.

[12] In their Reply Factum, Faskens has purported to reserve its rights on this separate cross-motion. They ask me to quash the appeal without considering an extension of time.

[13] Prior to the pandemic, Archibald J. had ordered the motion to quash to be heard with the appeal itself. In my Triage Endorsement I agreed with Archibald J. that the two proceedings ought to be heard together for efficiency and affordability. I convened a case conference for scheduling the appeal. The judge at the case conference recites that the Clients accepted that this motion could proceed in writing.

[14] Despite the parties’ apparent agreement, I will not determine if I should quash the appeal independent of the motion to extend time. If time is extended, then the issue arises as to whether the Clients even need leave to appeal costs. That will depend on whether they challenge costs independent of the outcome of the main appeal on the merits or just as a consequence of the outcome of the main appeal. If they still need leave to appeal but they did not seek or obtain it, then they may find themselves out of luck at the hearing.

[15] Moreover, an assessment of the issues for an extension of time include an assessment of the merits of the appeal. Efficiency suggests that that be performed only once as well. This shows the problem with disaggregating related proceedings.

[16] The motions (plural) are adjourned to the hearing of the appeal on the schedule previously ordered. Costs reserved to the judge who hears the appeal.

F.L. Myers J.

Date: September 14, 2020