COURT FILE NO.: CV-19-00618043-00CP
DATE: 20201105
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: KABIR SINGH, Plaintiff
AND:
RBC INSURANCE AGENCY LTD. and AVIVA GENERAL INSURANCE COMPANY, Defendants
BEFORE: Justice Glustein
COUNSEL: Andrew Monkhouse, for the plaintiff
Jeremy Devereux and Ted Brook, for the defendant RBC Insurance Agency Ltd.
Paul J. Martin and Pavel Sergeyev, for the defendant Aviva General Insurance Company
COSTS ENDORSEMENT
Overview
[1] By Reasons for Decision dated September 9, 2020 (Reasons), I ordered that (i) Monkhouse Law be removed as counsel in either the Class Action or the Individual Action[^1] and (ii) the Individual Action be stayed until determination of certification by this court.
[2] Counsel requested the opportunity to make written costs submissions and I agreed that such a process was appropriate. RBC IA delivered its costs submissions on October 7, 2020. Singh delivered responding costs submissions on October 23, 2020. RBC IA delivered reply costs submissions on October 30, 2020.
[3] RBC IA seeks partial indemnity costs of $20,000 plus disbursements and HST. Singh submits that (i) no costs should be ordered; or (ii) in the alternative, RBC should only obtain a “nominal” award of $5,000, or at most $12,746.40[^2] being the costs set out in Singh’s costs outline. For the reasons that follow, I fix costs at $16,050, plus disbursements and HST, payable by Singh to RBC IA within 30 days of this order.
Analysis
Overview of the parties’ costs submissions
[4] RBC IA submits that the amount of $20,000 for partial indemnity legal fees is reasonable given the importance of the motion and the complexity of the issues. RBC IA further submits that it was required to address certain additional issues raised by Singh in the lengthy affidavits filed by him for this motion, as well as Singh’s reliance on the doctrines of standing and estoppel to submit that RBC IA could not seek the conflict or stay relief.
[5] Singh submits that (i) RBC IA “was only partially successful on key issues”; (ii) “[t]here was little practical outcome of the motion” for RBC IA; (iii) there was “[d]uplication and disproportionate work between scheduling motion and main motion”; (iv) there was “[d]uplication of work between counsel”; (v) Singh should not be “punished” for failed arguments; and (vi) RBC IA’s proposed costs are not within the reasonable expectations of the parties based on the Singh cost outline.
[6] I review these submissions below.
Review of RBC IA’s submissions
[7] I agree with RBC IA’s submission that this motion was important. It raised complex issues, which required thorough research and written submissions. The factums were lengthy and detailed, and oral arguments lasted most of a day.
[8] The conflict issues addressed the right of a proposed class to unconflicted legal representation, and required the court to determine the standing of class action defendants to raise that issue. The stay issues addressed the risk of inconsistent findings and other risks that arise when an individual action involves issues that overlap with a class action, and the balancing of the right of an individual to pursue an individual action against those risks.
[9] I also agree with RBC IA that other important issues were raised as a result of Singh’s reliance on the defences of estoppel and standing. These issues were also complex and required RBC IA to conduct a thorough review of the evidence and applicable law.
[10] Finally, the lengthy responding affidavits filed on the motion required detailed review by RBC IA.
[11] All of these issues were addressed in the Reasons. The court was required to:
(i) address the general principles governing the role of counsel to zealously represent the interests of their clients, and the conflict that can arise if counsel is unable to do so,
(ii) consider the class action case law that has addressed whether a law firm is in conflict because of its proposed representation of a plaintiff as representative plaintiff and its role as counsel for the same or different plaintiff in a related individual action, and
(iii) address the other defences raised by Singh.
[12] For the above reasons, I agree with RBC IA’s position that an unsuccessful party would reasonably expect to pay significant costs on the motion.
Review of Singh’s submissions
(i) Success on the motion
[13] Singh submits that RBC IA “was only partially successful on key issues” because:
(i) RBC IA did not pursue the relief in its notice of motion that Monkhouse Law be removed as counsel in both the Individual Action and the Class Action, and, instead only sought that Monkhouse Law be removed as counsel in either of the actions. Consequently, Singh submits that he was required to respond to the “direct attack on the class action”;
(ii) The court did not accept RBC IA’s submission at the hearing that Singh was required to obtain independent legal advice as to whether Monkhouse Law should continue to represent Singh in the Class Action or in the Individual Action; and
(iii) The court did not grant RBC IA’s request that the Individual Action be stayed until final resolution of certification, which would have been onerous on Singh. Rather, the court ordered that the stay extend only to the date of the certification decision, without prejudice to RBC IA’s right to seek a further order.
[14] I do not find that the relief sought of removing Monkhouse Law in both the Individual Action and the Class Action is a basis to award reduced (or no) costs. While the notice of motion sought such relief, RBC IA consistently took the position in a lengthy case conference addressing the scheduling of the motion that it was only seeking to remove Monkhouse Law as counsel in either the Class Action or the Individual Action.
[15] Monkhouse Law did not accept the position of RBC IA at the case conference that removal of counsel in either of the actions was required. If it had done so, the motion would likely not have been necessary.
[16] RBC IA’s position was also made clear in the opening paragraph of its factum, as well as in paragraph 2 and in the description of the issues at paragraph 18 of the factum. The inadvertent reference to “both” in the last paragraph of RBC IA’s factum was an obvious oversight which cannot have raised any confusion given the case conference and other references in the factum.
[17] Consequently, Monkhouse Law had the opportunity well before the motion to accept such a position and remove itself as counsel in the Individual Action. Instead, it opposed the motion and sought to remain as counsel in both the Individual Action and the Class Action, requiring RBC IA to incur costs.
[18] RBC IA did ask the court to consider whether Singh should be required to obtain independent legal advice to determine whether to have Monkhouse Law continue to represent him in the Class Action or in the Individual Action. However, no such relief was sought in the notice of motion. It was only an issue raised for the court’s consideration and added nothing to the costs of the motion.
[19] RBC IA was successful in obtaining the stay of the Individual Action, which Singh opposed. While the court granted the stay only “until determination of certification by this court” rather than until all appeals had been resolved, the court’s order was without prejudice to RBC IA’s right to seek a further stay. RBC IA was successful on this issue, and the issue of the modification to the requested stay was minimal and resulted in no additional costs.
[20] Consequently, I find that RBC IA was successful on the motion, and I make no reduction to costs based on the “partial success” submission of Singh.
(ii) Practical outcome of the motion
[21] Singh submits that “[t]here was little practical outcome of the motion” for RBC IA because the only result was that “Mr. Singh has to get a new counsel for his individual action” but RBC IA “has not eliminated, or reduced, either action which maintains all legal rights”. I do not agree.
[22] The stay motion was of significant importance to RBC IA. If Monkhouse Law had remained as plaintiffs’ counsel for both the Individual Action and the Class Action, it would have been resulted in litigation which was rife with conflict, making it much more difficult to resolve either of the two claims.
[23] As a result of the motion, RBC IA can now deal with unconflicted counsel in each action. That is an important “practical” outcome.[^3]
(iii) Duplication of work between the scheduling motion and main motion
[24] Singh submits that the scheduling motion raised many of the arguments put forward in the conflict and stay motion and that those costs ought not to be duplicated, particularly as Singh paid costs to RBC IA on the scheduling motion.
[25] The case law relied upon for the conflict and stay motion did incorporate some of the case law relied upon at the scheduling hearing, as set out in my reasons for the scheduling motion at 2020 ONSC 3907. Consequently, there was some duplication in the relevant case law for the conflict and stay motion.
[26] However, I note that the complex policy issues and factual analysis of the conflict and stay case law were not before the court on the scheduling motion, which only considered those cases from a scheduling perspective, with no comments on the merits.
(iv) Duplication of work between counsel
[27] The costs outline does reflect that both RBC IA counsel were involved in the preparation of all aspects of the hearing. However, it cannot be said that because two counsel work on the steps related to a matter, there must be duplication of work between counsel.
[28] Instead, a division of labour in preparing for a motion can serve to reduce costs, with more junior counsel and law clerks doing certain tasks at a lower hourly rate.
[29] Consequently, based on the RBC IA costs outline, there is no means to determine whether there was duplication of work between counsel.
[30] The court must consider the total costs sought, and determine whether they fall within the range of what an unsuccessful party would reasonably expect to pay.
(v) “Punishment” for “failed” arguments
[31] I disagree with Singh’s submission that RBC IA seeks to “punish” Singh for “failed” arguments.
[32] Rather, RBC IA is entitled to costs for having to address additional arguments raised by Singh. In the present case, Singh delivered two lengthy affidavits that increased the time required by RBC IA to prepare for the motion.
[33] Singh also relied on an estoppel defence which required RBC IA to conduct further research and review the evidentiary record to assist the court in concluding that (i) there was no unequivocal representation in the Letter; (ii) even if there was such a representation, it was limited in time; and (iii) in any event, there was no evidence of reliance by Singh to his detriment on any purported representation.
[34] It is appropriate for the court to assess costs based on the issues raised at the hearing. It is not a “punishment” for a “failed” argument.
(vi) Reasonableness of costs based on Singh’s costs outline
[35] In his costs outline, Singh asserts that his counsel worked a total of 34 hours, at a partial indemnity rate of $330 per hour, for total partial indemnity fees of $11,200. Those fees included the preparation of affidavits, as well as preparation of Singh’s factum, attendance at court, and costs outline and submissions.
[36] Singh submits that the proposed costs of RBC IA are not reasonable, since the combined time of RBC IA’s counsel was more than 70 hours for all steps in the motion. The partial indemnity rate for senior RBC IA counsel (who billed 42.5 hours) was $420 per hour while the partial indemnity rate for RBC IA junior counsel (who billed 28.4 hours) was $222 per hour.
[37] It is not sufficient for an unsuccessful party to establish unreasonableness of costs simply based on its own costs outline. The court must assess what an unsuccessful party would reasonably expect to pay.
[38] I now address that issue.
Costs determination in the present case
[39] Based on the above, I now set out my costs determination in this matter.
[40] Given the importance and complexity of the issues before the court, an unsuccessful party would expect to pay significant costs for the motion.
[41] I make no reduction to the proposed costs based on Singh’s submissions as to partial success, practical outcome of the motion, duplication of work between counsel, or alleged punishment for failed arguments.
[42] However, I do agree that a slight reduction is appropriate to reflect the duplication of research involved in both the scheduling and conflict/stay motions.
[43] Further, I make some deduction to the costs sought given that RBC IA incurred more than twice the hours certified by Singh’s counsel for the motion. However, I note that it was reasonable for RBC IA to incur significant hours for the motion, given its importance and the additional issues raised by the voluminous affidavits and the estoppel argument. I also accept that the seniority of counsel for RBC IA justifies the higher partial indemnity rate charged.
[44] I note that the average hourly rate between senior and junior counsel for RBC IA ($321 per hour) is almost identical to the $330 per hour partial indemnity rate of Singh’s counsel.
[45] For the reasons that I discuss above, I find that an unsuccessful party would reasonably expect that counsel would incur 50 hours for preparation of the motion, attendance at court, and preparation of costs submissions. I divide that time equally between both RBC IA counsel, at an average hourly rate of $321 per hour, for total partial indemnity fees of $16,050, a reduction of approximately 20% from the partial indemnity fees sought by RBC IA.
[46] Consequently, I order that Singh pay $16,050 to RBC IA for partial indemnity fees, plus disbursements and applicable HST as set out in the costs outline of RBC IA, all within 30 days of this order. The present motion was a contested interlocutory matter that should be governed by the general principle that an unsuccessful party should pay costs within 30 days of the order.
GLUSTEIN J.
Date: 20201105
COURT FILE NO.: CV-19-00618043-00CP
DATE: 20201105
ONTARIO
SUPERIOR COURT OF JUSTICE
KABIR SINGH
Plaintiff
AND:
RBC INSURANCE AGENCY LTD. and AVIVA GENERAL INSURANCE COMPANY
Defendants
COSTS ENDORSEMENT
Glustein J.
Released: November 5, 2020
[^1]: All defined terms are as set out in the Reasons. [^2]: (including HST and disbursements) [^3]: Given my conclusion that there is an important “practical outcome” of the motion, I do not address RBC IA’s alternative submission that the court should not consider the “practical outcome” of a motion in assessing costs.