Fatahi-Ghandehari v. Wilson, 2022 ONSC 5675

COURT FILE NO.: FS-15-83320-0000

DATE: 2022 10 07

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sara Fatahi-Ghandehari, Applicant

Stewart Wilson, Respondent and Plaintiff in CV-22-678972

Law Society of Ontario, Defendant in CV-22-678972

BEFORE: LEMAY J

COUNSEL: Shahzad Siddiqui (Agent), for the Applicant

Stewart Wilson, Self-Represented assisted by Samir Chhina

Ian McKellar, for the Law Society of Ontario

HEARD: In writing

COSTS ENDORSEMENT

1In August of this year, I released an endorsement that addressed two issues. First, I denied leave to the Respondent, Mr. Stewart Wilson, to bring a motion to set aside the undefended trial decision from May of 2021. Mr. Wilson wanted to bring that motion because he was claiming that Ms. Fatahi-Ghandehari had engaged in fraud in, inter alia, the evidence she had placed before me on the undefended trial.

2I also allowed the Law Society’s request to transfer Mr. Wilson’s action against the Law Society from Toronto to Brampton on the basis that the allegations in the Law Society action clearly and directly engaged many of the same issues in the actions that I am case-managing. Mr. Wilson opposed this request.

3I am now required to fix the costs for these proceedings.

Positions of the Parties

4Ms. Fatahi-Ghandehari seeks full indemnity costs in the sum of $14,399.41. She seeks these costs on the grounds that the conduct of Mr. Wilson was unreasonable. Further, she seeks a costs award against Mr. Robson, Mr. Wilson’s sometime counsel, on a personal basis. The personal award of costs is sought, in part, on the basis that “Mr. Robson has been given ample opportunity to guide his client to act reasonably and bring forth meritorious arguments.” Counsel also argues that allowing a costs award against Mr. Robson will provide Ms. Fatahi-Ghandehari with another avenue for collecting the costs she seeks.

5The Law Society seeks full indemnity costs in the sum of $3,987.77 inclusive of HST and disbursements on the motion to transfer. They seek these costs on the basis that Mr. Wilson’s decision to commence the action in Toronto was an improper attempt to open up another front in this already complicated litigation. Counsel also argues that the costs that they are seeking are reasonable given the complexity of the matter.

6Mr. Wilson’s counsel, Mr. Paul Robson, is currently suspended by the Law Society. As a result, the submissions on costs were signed by Mr. Wilson but were submitted to the Court by Samir Chhina, a lawyer who is acting as agent for Mr. Wilson but who is not on the record. They argue that I should not award any costs against Mr. Wilson because there was no formal motion brought. As a result, there is no basis for costs to be awarded.

Analysis and Decision

7Based on the submissions of the parties, the questions I need to answer are as follows:

a) Does the fact that there were no motion records preclude an award of costs against Mr. Wilson?

b) Should costs be awarded against Mr. Robson personally?

c) Should costs be awarded on a full indemnity basis? If so, for which part of these issues?

d) What is the proper quantum of costs in this case?

8I will deal with each issue in turn.

Does No Motion Records Mean No Costs?

9Mr. Wilson’s argument on this point fails for three reasons. First, costs are generally awarded to the successful party for a “proceeding” or a “step in a proceeding” rather than just for a “motion” or a “trial”. See Rule 57.01, Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

10Second, case management is designed to streamline the proceedings. However, when the parties have a dispute in the course of the case management process it requires adjudication and, under our civil system, costs are a part of the dispute resolution process. A party opens themselves up to costs awards where they raise an issue or dispute another party’s position on an issue requiring time and effort to be expended, and not just when they bring or oppose a formal motion.

11Finally, even if costs were limited to motions and trials, the Court can still consider a motion brought by one party or the other even if there is no formal motion record before the Court. All that the lack of a formal motion record means is that the quantum of costs spent by each party should be smaller because less work was required in order to place the dispute before the Courts.

12I should also briefly deal with the assertion that Mr. Wilson was, prior to receiving my decision, not even aware that costs could be awarded against him. I reject that submission. There have been previous instances in this litigation where I have awarded costs even when there has been no formal motion. For example, on the issue of the marriage contract there was no formal motion. However, costs were awarded for that part of the proceeding.

13For these reasons, Mr. Wilson’s argument on this point is without merit.

Should Costs Be Awarded Against Mr. Robson personally?

14I am of the view that costs should not be awarded against Mr. Robson personally for two reasons.

15First, I acknowledge that the Rules permit costs to be awarded against counsel personally (see Rule 57.07 of the Rules of Civil Procedure). The test for when costs will be awarded personally against counsel is set out in Galganov v. Russell (Township) 2012 ONCA 410, 350 D.L.R. (4th) 679. The first step is to determine whether the conduct of counsel falls within Rule 57.07. That requires an inquiry into whether counsel has “caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default.” In this case, it is certainly possible to argue that Mr. Robson’s conduct falls within the ambit of Rule 57.01.

16However, before awarding costs against Mr. Robson personally, Rule 57.07(2) requires that he be given a reasonable opportunity to make submissions to the Court. That opportunity would unduly delay the fixing of costs in this stage of the proceeding. Given the Court resources that this matter has already consumed, I am of the view that an inquiry into whether Mr. Robson should pay costs personally is, at this stage, not necessary. I am not precluding that remedy permanently in this case. At this point, however, I am not prepared to permit the inquiries necessary to award costs personally against Mr. Robson.

17In addition, the Supreme Court has directed that judges must be extremely cautious when fixing costs against counsel personally. Young v. Young 1993 CanLII 34 [1993] 4 S.C.R. 3. In explaining how that principle should be applied, the Court of Appeal in Galganov stated:

The second step is to consider, as a matter of discretion and applying the extreme caution principle enunciated in Young, whether, in the circumstances, the imposition of costs against the lawyer personally is warranted. The “extreme caution” principle, as stated in Young, means that “these awards must only be made sparingly, with care and discretion, only in clear cases, and not simply because the conduct of a lawyer may appear to fall within the circumstances described in [r]ule 57.07(1)”.

18In this case, Ms. Fatahi-Ghandehari seeks costs against Mr. Robson personally for two reasons. Neither of them support an award of costs against Mr. Robson personally. First, there is the claim that Mr. Robson has not gotten his client to act reasonably, in spite of many opportunities to do so. The fact that a client is not acting reasonably is not, without more, a ground that supports an award of costs against that client’s lawyer.

19Second, Ms. Fatahi-Ghandehari seeks costs against Mr. Robson personally because it would provide her with another route to enforce her costs claims against Mr. Wilson. This argument is completely devoid of merit. The fact that a party may have problems enforcing a costs award against another party does not mean that the party seeking costs should be able to claim them from the other party’s lawyer. Adopting that approach to costs orders would routinely result in lawyers being obliged to pay their clients’ costs if they lost. It is hard to think of any other steps that this Court could take that would interfere with access to justice as much as adopting the approach advocated by Ms. Fatahi-Ghandehari would.

Should Costs be Awarded on a Higher Scale?

20Costs are only awarded on a substantial or full indemnity basis where there is an offer to settle or where there is reprehensible or outrageous conduct. Davies v. Clarington (Municipality) et. al. 2009 ONCA 722, (2009) 100 O.R. (3d) 66. In this case, no relevant offers to settle were identified. As a result, if costs are going to be awarded on a higher scale then it would be on the basis of reprehensible conduct on the part of Mr. Wilson.

21The principles that apply in determining whether a party has engaged in reprehensible conduct in numerous cases. For example, in Mortimer v. Cameron 1994 CanLII 10998 (ONCA), 17 O.R. (3d) 1, Robins J.A. set out the restricted circumstances in which higher costs would be awarded as follows:

An award of costs on the solicitor-and-client scale, it has been said, is ordered only in rare and exceptional cases to mark the court's disapproval of the conduct of a party in the litigation. The principle guiding the decision to award solicitor-and-client costs has been enunciated thus:

[S]olicitor-and-client costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings, which makes such costs desirable as a form of chastisement.

22The question therefore is whether Mr. Wilson engaged in conduct that was worthy of sanction. I start with the motion to set aside the undefended trial. I found that the position of Mr. Wilson that the decision in the undefended trial should be set aside was an abuse of process.

23In McBride Metal Fabricating Corp. v. H & W. Sales Co. 2002 CanLII 41899 (ONCA) 59 O.R. (3d) 97, where Abela J.A. (as she then was) stated:

Apart from the operation of rule 49.10 (introduced to promote settlement offers), only conduct of a reprehensible nature has been held to give rise to an award of solicitor and client costs. In the cases in which they were awarded there were specific acts or a series of acts that clearly indicated an abuse of process, thus warranting costs as a form of chastisement.

24In this case, I explicitly found that Mr. Wilson was engaged in an abuse of process by trying to set aside the undefended trial decision. That is grounds for an award of costs on a higher scale. The arguments that were advanced by Mr. Wilson were designed to complicate and delay the enforcement of the undefended trial decision. Further, the Court of Appeal has noted that Mr. Wilson has made a procedural morass of this case. 2018 ONCA 728 at para. 10. That observation was made years ago and has even more force now.

25In short, Mr Wilson’s conduct in terms of the delays and the abuse of the Court’s process must be sanctioned by this Court. As a result, costs on a substantial indemnity basis are awarded against Mr. Wilson for the Rule 59 portion of this proceeding.

26This brings me to the Law Society proceeding. In paragraph 69 of my May 26th, 2021 decision (2021 ONSC 3708), I stated:

69For clarity, and as I have already mentioned, no party involved in this litigation (including Ms. Elizabeth Wilson) may bring a motion before any other judge to set aside the interim preservation order that I have made. Further, all parties are reminded that no proceeding in respect of the issues in this litigation may be brought before any other judge of this Court.

27Counsel for Mr. Wilson brought this proceeding against the Law Society in Toronto. As I set out in my decision on the merits (2022 ONSC 4799), the Law Society action clearly relates to the merits of the cases that I am case managing.

28Counsel for Mr. Wilson asserted that this action was being brought in Toronto because it was related to a series of other proceedings that Mr. Wilson’s counsel had brought against the Law Society. There was no merit to that argument. The Law Society action was clearly caught by my directions in this case as it focused primarily on the events of this case. It could be argued that the failure to follow my directions on its own justifies an award of costs on the higher scale.

29The failure to follow my directions must be considered in the context of this case as a whole. As both the Court of Appeal and I have noted, Mr. Wilson has made a procedural morass of this case. In my view, bringing the Law Society action in Toronto was designed to complicate this matter and possibly obtain inconsistent factual findings from the Court. A pattern of deliberately complicating this matter that has existed for years requires sanctions.

30As a result, costs on a substantial indemnity are awarded against Mr. Wilson for both the Rule 59 issue and the transfer issue.

What Should the Quantum of Costs Be?

31This brings me to the criteria for the assessment of costs under Rule 57.01. Of those criteria, the most important of those are the complexity of the proceeding, the conduct of any party that tended to shorten or to lengthen unnecessarily the proceeding and whether any step was improper, vexatious or unnecessary.

32The two issues that I had to deal with at this stage of the proceeding were moderately complex, especially the Rule 59 portion of the issues. These issues were made more complex because Mr. Wilson was taking steps that were, at a minimum, improper. They were arguably vexatious. As a result, the applicable factors under Rule 57 support a higher quantum of costs. With that in mind, I now turn to the bills of costs submitted by each of the successful parties.

33The bill of costs submitted by the Law Society is entirely reasonable. As counsel correctly notes, the procedural history of this case is complicated and the drafting of materials would have taken time. The rates charged by counsel are all reasonable and the time spent is amply supported by the issues before the Court. As a result, Mr. Wilson is required to pay the Law Society’s costs in the sum of $3,987.77 inclusive of HST and disbursements.

34The costs sought by Ms. Fatahi-Ghandehari are substantially more as she was required to deal with two issues rather than one. While Mr. Wilson’s argument on Rule 59.06 was devoid of merit, it was still a complicated argument that required a detailed review of the pleadings, the documents that were filed by the parties and the law. The costs that are sought by Ms. Fatahi-Ghandehari are also entirely reasonable with one small exception.

35The one exception is the amount of time that was spent on the Law Society’s request to move the action against them from Toronto to Brampton. In my view it would have been appropriate to have the Law Society perform the bulk of the work on this issue. As a result, I view that charge of 10 hours for this time as excessive and would reduce the total costs awarded to Ms. Fatahi-Ghandehari to $12,500.00 inclusive of disbursements and HST.

Conclusion

36For the foregoing reasons, I order as follows:

a) Mr. Wilson is to pay the Law Society of Ontario costs in the sum of $3,987.77 inclusive of HST and disbursements within thirty (30) days of today’s date.

b) Mr. Wilson is to pay Ms. Fatahi-Ghandehari costs in the sum of $12,500.00 inclusive of HST and disbursements again within thirty (30) days of today’s date.

c) Mr. Wilson’s approval of the form and content of my order on costs is dispensed with.