COURT FILE NO.: CV-21-00660791
DATE: 20220609
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Deidra Murphy and Kim Moseley, Applicants
AND:
Kim Borden Penney, Bernice Carnegie, Brooke Chambers, Nicolle Viera and Black Women for Change Foundation, Respondents
BEFORE: Carole J. Brown J.
COUNSEL: Kayla Theeuwen and Max Skrow, for the Applicants
George (Knia) Singh, for the Respondents
HEARD: May 24, 2022
COSTS ENDORSEMENT
[1] The applicants, Deirdra Murphy and Kim Moseley, seek their costs of this application in which they were wholly successful. The facts of the application are set forth in the endorsement.
[2] Costs generally follow the event. Costs are intended to compensate the successful party or parties to the litigation, in whole or in part, for legal expenses incurred in a proceeding. In general, costs are awarded on a partial indemnity basis, which is the basis on which the applicants seek payment of their costs.
[3] Pursuant to the Courts of Justice Act and the Rules of Civil Procedure, this Court has wide discretion in awarding costs: Courts of Justice Act, RSO 1990, c. C. 43, s.131; Rules of Civil Procedure, RRO 1990, Reg.194, R. 57.01.
[4] Costs must be fair, reasonable and within the expectation of the parties: Boucher v Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634, 71 O.R. (3d) 291 (Ont. C.A.).
[5] In exercising my discretion to fix costs, the factors set forth at Rule 57.01 may be considered in addition to the result in the proceeding and any offer to settle or to contribute made in writing. As regards the factors set forth at Rule 57.01, I make the following comments:
i. Importance: The matter was of significant importance to the applicants. The not-for-profit organization entitled Black Women for Change Foundation (“BWFC”), was founded by them and the respondent, Kim Borden Penney (“Penney”) in the summer of 2020 to support and elevate black professional women and to eradicate rivalry among black women. It was of significant importance to them to regain control of BWFC, and is the reason for their retaining counsel and commencing this application.
ii. Complexity: The issues themselves were not complex.
iii. Experience of Counsel: For the Applicant, three counsel worked on this matter, the senior counsel with 27 years of experience, and the others with seven and two years respectively. Their time was allocated reasonably, and delegated where appropriate, depending on the tasks to be undertaken, based on the bill of costs. I find that the work was allocated appropriately, without apparent duplication and, in the circumstances, was reasonable.
iv. Conduct of the parties that tended to shorten or lengthen unnecessarily the duration of the proceeding: In February 2021, the respondent, Penney, purported to declare herself to be president of the non-share capital Corporation, and to install a new Board of Directors, comprised of friends and family members, replacing the applicants, who served on the Board, without adhering to the corporate governance legislation. She also locked the applicants out of the BWFC website and other BWFC accounts, refusing to provide access to or return the BWFC property to the Corporation, as set forth in said endorsement. The applicants discovered the breaches of the Corporations Act and demanded that all be restored. This was not done.
The respondents and their counsel delayed in responding to communications from applicant’s counsel, including suggestions that negotiations be held, given that this was a non-profit organization, requests for responses to communication, requests for responses to settlement offers, and when it appeared that the delays would continue, requests for dates for attendance at Civil Practice Court. Because of the inordinate delays, the applicants’ issued the application.
Only after issuance of the application did the respondent, Ms. Penney, begin to reverse some of her improper conduct. Approximately two months after issuance of the application, Penney took steps to correct her improper removal of the applicants as directors of BWFC, which she had done in contravention of the Corporations Act.
Further, as I found in the endorsement released February 17, 2022, the respondent did not provide any adequate defence to her actions. The evidence adduced did not support any of her contentions or allegations. She adduced no evidence to support her contention that the non-profit organization was affiliated with her own PhD study, that she fully paid for software, nor any evidence to establish that any of the BWFC accounts, website or software belongs to Penney rather than to BWFC. Indeed, based on all of the evidence adduced, I found that the respondent improperly blocked access to BWFC accounts to the applicants and took property which is rightfully the property of BWFC.
v. Whether any step in the proceeding was improper, vexatious or unnecessary: The respondent, in her costs submissions, pleads that her lawyer was very busy and matters were, as a result, delayed. It is clear that matters were unjustifiably delayed. From all of the correspondence in the application, it appears that her lawyer had a busy criminal practice and placed that above all of his other work. It further appeared that his expertise was in criminal law, and not civil law. Had the Respondents’ lawyer been that busy, or had his specialty been mainly confined to criminal defence, he should have advised her to retain another counsel. The applicants should not be penalized with costs due to the respondent lawyer’s inability to respond within a reasonable time to applicants’ counsel’s communications.
The respondent, further pleads that she is a PhD student and does not have the funds to pay costs. I have reviewed all of the materials filed in the proceedings. Matters were unduly delayed in these proceedings, again due to the respondents and the respondents’ counsel’s failure to respond to correspondence, settlement offers, proposals for meetings to negotiate settlement in a reasonable time. These failures on the part of the respondent caused costs to be further incurred, as the applicants had to resort to court proceedings to resolve the disputes.
vi. Expectations and proportionality: I am of the view, having reviewed the bill of costs of the Applicants, that the amounts sought are generally fair and reasonable. It is difficult to consider whether the costs were within the expectations of the opposing party as she did not submit her bill of costs. However, the Respondents were warned on several occasions that their failure to respond to the Applicants promptly and to move matters along could result in costs to them.
vii. Offers to settle: The court has discretion to consider any offer to settle when exercising its discretion with respect to costs. Based on all of the material provided, the parties agreed to a resolution meeting between the lawyers, and applicants counsel proposed times for a meeting. However, Respondents’ counsel never confirmed the proposed time. On May 31, the parties agreed to a Zoom meeting for June 1. However, Respondents’ counsel failed to appear on Zoom. On June 29, Applicants’ counsel forwarded Applicants’ Offer to settle to Respondents in writing, which if it had been accepted would have been substantially the same is the final Endorsement and Order in this matter. The Respondents did not accept the Offer. On December 21, the Applicants were told that the Respondents were not prepared to make any offer to settle. While the Respondent made one offer on the eve of the hearing of the application, the Respondents refused to turn over the BWFC website and accounts and refused to pay costs. The Applicants made one last attempt to settle the costs on March 14, which the Respondents refused to accept.
[6] The respondents state that they are unable to pay costs, as Ms. Penney is a graduate student and does not have sufficient funds to pay costs. Unfortunately, Ms. Penney took the actions that she did contrary to the Corporations Act, and continued to insist throughout the proceedings that the BWFC property, accounts, website and logo were hers and were property of her PhD thesis. Her counsel did not assist in attempting to resolve the dispute, and proffered the justification that he was too busy with his criminal practice to attend to this matter.
[7] The respondent, Ms. Penney, further pleads that she is a PhD student and does not have the funds to pay costs. I have reviewed all of the materials filed in the proceedings. Matters were unduly delayed in these proceedings, again due to the respondents and the respondents’ counsel’s failure to respond to correspondence, settlement offers, proposals for meetings to negotiate settlement in a reasonable time. These failures on the part of the respondents caused costs to be further incurred, as the applicants had to resort to court proceedings to resolve the disputes.
[8] The applicants should not be burdened with the costs of the application which they were required to bring. There is nothing that would cause me to depart from the general rule that costs follow the cause and are meant to reimburse the successful party, in part or in whole for their litigation costs. Considering all of the foregoing, I award the applicants their costs in the amount of $45,000 all-inclusive.
C.J. Brown J.
Date: June 9, 2022