COURT FILE NO.: CV-20-3581 (Milton)
DATE: 2021207
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Linda Palichuk
Applicant
- and -
Nina Palichuk, Susan Palichuk and Public Guardian and Trustee
Respondents
AND BETWEEN:
Nina Palichuk
Applicant
- and -
Linda Palichuk, Susan Palichuk and BMO Nesbitt Burns
Respondents
J. Figliomeni, for Linda Palichuk
E. Upenieks and J. Waxman, for Susan Palichuk
M.J. Sweatman, for Nina Palichuk
Heard: In writing
Justice R. Chown
Costs Endorsement
[1] As I did in my reasons for decision, for ease of reference, I will again use the parties' first names and will use the word “respondents” to mean “Nina and Susan.”
[2] Linda’s costs submissions argue that she brought her application out of a genuine concern for Nina’s physical safety, financial security, and psychological well-being. I accept that this is true. However, once Dr. Shulman’s reports were served, it should have been apparent to Linda that Nina would be found to be capable. The police records were a further indicator of Nina’s capacity.
[3] I consider this case to be a tragedy. The parties’ ultimate goals were not seriously misaligned. It is truly unfortunate that the parties’ relationships deteriorated and that an amicable resolution could not be achieved.
[4] With that said, I see no valid reason to depart from the normal rule that costs should follow the event. The respondents were entirely successful.
[5] The outcome was less favourable for Linda than an August 11, 2021 offer that she made. The outcome was more favourable for the respondents than the offer they made, but they made this offer only two days before the hearing.
[6] The offers that were exchanged were relatively close. Under Linda’s offer, she would have effectively consented to the main relief claimed in the BMO application and that application would be dismissed without costs. The guardianship application would proceed to trial. Under the respondents’ joint offer, the BMO application would be allowed with costs of $20,000, and the guardianship application would proceed to trial on the issue of undue influence only.
[7] As rule 49.10 is not in play with these offers, they do not play a significant role in the costs analysis.
[8] I have considered the factors listed under rule 57.01. In this case, the factor that should be given the most prominence is 57.01(0.b), being “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.”
[9] Linda ought to have been aware from the outset that if she was not successful, she faced liability for two sets of costs – Nina’s and Susan’s. She also faced potential liability for expert fees for the capacity assessments.
[10] According to Mr. Figliomeni’s costs outline dated August 21, 2021, Linda’s actual costs including preparation for, but not attendance at the hearing, were $46,954.75 plus HST plus disbursements. Linda’s application materials were detailed. Although she did not prevail, it cannot be said that her materials were lower in quality and therefore involved less effort.
[11] I appreciate that the hourly rates of each counsel were different. Mr. Figliomeni’s hourly rate was lower than Ms. Sweatman’s or Mr. Upenieks’, and this is understandable given the years of experience of each counsel. I also appreciate that the work required by each counsel was different. Mr. Figliomeni had to appear at the March 16, 2021 hearing and at that point other counsel had not been retained, but that hearing was brief. Ms. Sweatman had to retain and instruct Dr. Shulman, and the logistics of meeting with Nina and of explaining things to her may have involved additional work.
[12] However, in broad strokes, from the perspective of the unsuccessful party considering the amount of costs she “could reasonably expect to pay,” it should have been apparent to Linda that if she was not successful, she faced liability for two sets of partial indemnity costs of over $32,000 plus disbursements. I calculate this figure based on 60% of $46,954.75 plus HST.
[13] The other factor that deserves prominent consideration in the costs analysis of this case is 57.01(0.a), “the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer.”
[14] The parties all took this litigation with due seriousness and devoted substantial resources to it.
[15] Susan clams $44,484.88 all-inclusive in costs on a partial indemnity scale. This includes $36,363 in partial indemnity fees (calculated at 60% of actual fees), plus HST and disbursements. Susan suggests rounding this down to $44,000.
[16] I see little to criticize in Susan’s bill of costs. The fees charged and the times spent appear reasonable. I note that the fees claimed by Susan are very similar to Linda’s fees, especially when it is noted that Susan’s claimed fees include the full day attendance at the hearing on August 18, 2021, which Linda’s costs outline does not include.
[17] The disbursements claimed by Susan appear to be generally in order. Any items I would have reduced or deducted (e.g., photocopying and Westlaw) are less than the rounding down proposed by Susan.
[18] Nina claims costs for the BMO application on a substantial indemnity scale on the basis that “Nina should never have had to bring it let alone have to argue it.” The Court of Appeal has held that “elevated costs are warranted in only two circumstances. First, where there is an offer to settle under rule 49.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which has no application in this case. Second, on a clear finding of reprehensible conduct on the part of the party against which the cost award is being made”: Toronto Star Newspapers Ltd. v. Fraleigh, 2011 ONCA 555, at para. 34; Davies v. Clarington (Municipality), 2009 ONCA 722, at para. 31. Substantial indemnity costs are not justified here.
[19] Nina has submitted separate bills of costs for the guardianship application and the BMO application. These bills of costs suggest fees of $81,907.50 plus HST and disbursements for the guardianship application and $54,125.00 plus HST and disbursements for the BMO application. It is not explicitly stated but based on the hourly rates, it appears that these are the full indemnity fees claimed. The total is $136,032.50 plus HST and disbursements. I note that this is more than double Susan’s actual fees and close to three times Linda’s actual fees. I do expect that on behalf of Nina more work was required than for Linda or Susan. However, the discrepancy should not be so vast.
[20] Nina’s two bills of costs use near duplicate wording to group the work into categories. It is not made fully clear in the accompanying written submissions, but I trust that Nina’s two bills of costs do not both claim duplicate or overlapping amounts for the same work done on each application. However, given the discrepancies in the amounts claimed for costs, it does not appear to me that Nina’s claim for costs is fair. The work done by associates is not delineated. Nina’s costs submissions state that the various work was done by the appropriate level of timekeeper, but this is not apparent from the submitted materials. No dockets have been provided. On the available evidence, I cannot conclude that Nina’s claim for an amount so much higher than the other parties is justified.
[21] Claims are made for time spent by a 2009 lawyer at $500 per hour and for a first-year lawyer at $250 per hour. Ms. Sweatman (1992) claims an hourly rate of $625. This is higher than Mr. Upenieks (1983) at $550. The rates charged to Nina appear high.
[22] Considering the evidence submitted and balancing the elements of rule 57.01, I would fix Nina’s costs for fees at $40,000 plus HST on a partial indemnity basis.
[23] For Nina’s disbursements, I disallow the photocopying claims which total almost $2,000. The tariff allows parties to claim for photocopies used in court but everything I saw was electronic. It may be that paper copies were produced but this is not made clear. I would also disallow the claim for “Research” at $1,550 as this is not explained. If it is for online database charges, absent a specific charge applicable to this matter I would consider that overhead. I would allow the process server fees which total $913.06. I would allow the claimed filing fees of $758.
[24] Dr. Shulman submitted three accounts. The accounts for preparation of his first and second reports were for roughly $2,200 and $2,460, including HST, respectively. His account for preparation for and attendance at cross examination was for roughly $4,580, including HST. His hourly rate is $450, which appears reasonable. His claimed time appears reasonable. I would allow the disbursements for Dr. Shulman’s reports in their entirety, for a total of $9,234.35.
Disposition
[25] Linda shall pay the costs of these applications to the respondents which I fix as follows.
[26] For Nina:
Fees
40,000.00
HST on fees
5,200.00
Process server fees
913.06
HST on process server fees
118.70
Court filing fees
758.00
Dr. Shulman’s fees, inclusive of HST
9,234.35
All inclusive total
$56,224.11
[27] For Susan: $44,000 all inclusive.
[28] Linda asks that if more than a modest award of costs made against her, that they be payable over an extended period of 180 days. I do not have significant evidence as to Linda’s financial circumstances but from what I do have, and bearing in mind all the circumstances, I think this is reasonable. I will order that the costs be paid in three equal instalments, with one third paid forthwith, one third paid within 90 days, and the remaining one third paid within 180 days.
Chown J.
Released: December 7, 2021