COURT FILE NO.: CV-88/96 DATE: 2023/01/03

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Dino Lepre, Plaintiff – and – Marie Jean Hynds and Laurie Ann Hynds, Defendants

Counsel: P. Capone, for the Plaintiff No One appearing for the Defendant, Marie Jean Hynds, (deceased) S. Nash, for the Defendant, Laurie Ann Hynds

HEARD: IN WRITING

REASONS FOR DECISION: COSTS AND OTHER AMOUNTS PAYABLE

Justice L. SHEARD

Overview

[1] This action concerns the ownership of remote property consisting of two lots, Lot 28 and 29, totaling approximately 174 acres in the District of Nipissing (the “Property”). The litigation began in 1996 and was settled in 1999 by the three joint owners, the plaintiff and two named defendants. The settlement was embodied in the Order of Lofchik J., dated August 3, 1999 (the “Lofchik Order”). Among other things, the settlement contemplated the sale of the Property.

[2] In reasons for decision dated November 1, 2022 (the “Reasons”) [1], the outstanding issues were determined, subject to a decision on costs. The Reasons contained a chronology of events. To the extent required to understand this decision, I rely upon the facts as set out in the Reasons.

[3] The parties were encouraged to resolve costs failing which they could make written submissions. Costs were not agreed, and this decision follows the receipt of the parties’ costs submissions. The plaintiff, (“Mr. Lepre”), was also invited to include a calculation of property taxes and pre-judgment interest on the taxes he claimed were owing to him.

Background

[4] Despite the settlement and the Lofchik Order, the Property did not get sold. In the years that followed the settlement, the parties had some communication over what to do with the Property. No one, however, took steps to enforce or vary the Lofchik Order.

[5] Between 2007 and 2018, Mr. Lepre, and the defendant co-owners, mother and daughter, Marie Jean Hynds (“MJH”) and Laurie Ann Hynds (“Ms. Hynds”), did not communicate. In 2018, MJH, died. As surviving joint tenants, Ms. Hynds and Mr. Lepre became the equal joint owners of the Property.

[6] In 2018, through her then lawyer, Ms. Hynds offered to sell her one-half interest in the Property to Mr. Lepre. They could not agree on price. Also in 2018, Mr. Lepre disclosed that he had built a house on the Property, in which he was then living. He suggested that an appraiser be retained to provide an opinion of the fair market value of the Property, excluding the value of any improvements he had made. That approach was not acceptable to Ms. Hynds.

[7] In early 2019, Ms. Hynds brought a contempt motion against Mr. Lepre for his failure to comply with the Lofchik Order (the “Contempt Motion”). Mr. Lepre brought his own motion for the partition and/or sale of the Property. The Contempt Motion was dismissed, and Mr. Lepre’s motion was allowed to proceed as a partition application under the Partition Act, R.S.O. 1990 c. P.4 (the “Partition Application”).

[8] Between the hearing of the Contempt Motion, on February 20, 2019, and the hearing of the Partition Application, on August 22, 2022, counsel for the parties attended before me to address procedural and other issues.

[9] Ultimately, on consent, the Property was severed into its two lots. Mr. Lepre retained the larger lot, on which he had built a home, and agreed to compensate Ms. Hynds for receiving more than his one-half share of the Property.

[10] The parties could not reach a final agreement on outstanding issues. On August 22, 2022, the Partition Application was heard to determine:

1. The per-acre value of the Property to be used to calculate the amount owed by Mr. Lepre for the 13 acres of land transferred to him from Ms. Hynds’ share of the Property;
2. The amount, if any, that Ms. Hynds was to reimburse Mr. Lepre for the severance costs he paid to sever the two lots on the Property; the taxes he paid on the Property; and pre-judgment interest (“pji”) on the taxes paid; and
3. Costs.

The Law

[11] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, (the “CJA”) gives the court the discretion to determine by whom and to what extent costs are to be paid.

[12] In civil litigation, costs usually follow the event.

[13] Costs are discretionary and, in the exercise of that discretion, the court is to consider the factors set out in r. 57.01:

57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

• (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;
• (0.b) 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;
• (a) the amount claimed and the amount recovered in the proceeding;
• (b) the apportionment of liability;
• (c) the complexity of the proceeding;
• (d) the importance of the issues;
• (e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
• (f) whether any step in the proceeding was,
  • (i) improper, vexatious or unnecessary, or
  • (ii) taken through negligence, mistake or excessive caution;
• (g) a party’s denial of or refusal to admit anything that should have been admitted;
• (h) whether it is appropriate to award any costs or more than one set of costs where a party,
  • (i) commenced separate proceedings for claims that should have been made in one proceeding, or
  • (ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
• (i) any other matter relevant to the question of costs.

[14] In 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.), Perell J. reformulated the purposes of the modern costs rules, at para. 10, as follows:

1. to indemnify successful litigants for the costs of litigation, although not necessarily completely;
2. to facilitate access to justice, including access for impecunious litigants;
3. to discourage frivolous claims and defences;
4. to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and
5. to encourage settlements.

[15] Overall, the objective is to fix an amount that is fair and reasonable, having regard for, among other things, the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.) at paras. 26 and 38.

[16] A costs award should reflect what the court views as a fair and reasonable contribution by the unsuccessful party to the successful party rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier, 2002 CarswellOnt 4020, 118 A.C.W.S. (3d) 341 (C.A.), at para. 4: Fehr et al. v. Sun Life Assurance Company of Canada, 2021 ONSC 8368, at para. 83.

Costs of The Contempt Motion

[17] As noted above, in response to the Contempt Motion, Mr. Lepre brought his own motion for an order that the Property be partitioned and/or sold, and after accounting to Mr. Lepre for the monies he had spent on the Property, the net proceeds divided between him and Ms. Hynds.

[18] Mr. Lepre had improved the Property by constructing a drivable entrance onto Lot 28, on which he built a home. In addition, from and after 1995, Mr. Lepre paid all the property taxes on the Property.

[19] The Contempt Motion was heard by me on February 20, 2019. Mr. Lepre’s (then) partition motion was not argued, pending a determination of the Contempt Motion. At the hearing, the parties agreed that if a contempt order was not granted, Mr. Lepre’s motion could be treated as if it had been an application for the partition and/or sale of the Property, without satisfying the formal statutory requirements.

[20] For reasons set out in my endorsement of March 14, 2019 (the “Endorsement”), the Contempt Motion was dismissed as was Ms. Hynds’ alternate request for an order that the Property be sold under her sole supervision and control.

[21] Costs of the Contempt Motion were reserved.

Positions of the Parties

[22] Mr. Lepre seeks his costs of the Contempt Motion in the amount of $14,461.36, comprised of his partial indemnity fees of $10,116, plus HST on that amount of $1,315.08, $2,000, inclusive of HST, for a counsel fee on February 20, 2019, and disbursements of $930.16, plus HST of $100.12.

[23] In her submissions, Ms. Hynds concedes that Mr. Lepre was largely successful on the Contempt Motion. She does not dispute his entitlement to costs but submits that the costs claimed are unreasonably high. Ms. Hynds submits that a reasonable amount to be awarded would be $9,550.70, inclusive of HST, the amount set out in Ms. Hynds’ counsel’s Costs Outline (Exhibit “A” to Ms. Hynds’ costs submissions).

Analysis

[24] When fixing costs, the court must consider the r. 57 factors and the applicable jurisprudence.

[25] Mr. Lepre was entirely successful in resisting the Contempt Motion and I find that he is entitled to his costs.

[26] In Ms. Hynds’ submissions respecting quantum, she made no submissions relating to the disbursements claimed by Mr. Lepre. His disbursements total $1,051.08 for such things as filing fees, service, and $197.75 paid to a surveyor for a letter of opinion.

[27] In my view, the disbursements claimed by Mr. Lepre are fair and reasonable.

[28] The fees claimed by Mr. Lepre, however, exceed an amount that is fair and reasonable. For example, Mr. Lepre claims a counsel fee of $2,000 for the two-hour hearing on February 20, 2019, yet Mr. Capone’s hourly rate is shown at $550.00. Using the partial indemnity rate of $300.00 as set out in Mr. Lepre’s Costs Outlines, a reasonable amount to award for a two-hour hearing would be $600.00 plus HST.

Disposition: Costs of the Contempt Motion

[29] I have considered the parties’ submissions, the relevant factors, and the overriding principle that costs should be fixed in an amount that is fair and reasonable. In the exercise of my discretion, I fix Mr. Lepre’s costs of the Contempt Motion at $13,000.00, inclusive of disbursements, and HST.

Costs of The Partition Application

Positions of the Parties

[30] Mr. Lepre seeks his partial indemnity costs of the Partition Application in the amount of $15,135.86 plus an additional $1,000 plus HST, for a total of $16,265.86.

[31] Mr. Lepre submitted two Costs Outlines:

1. Partial indemnity costs to November 20, 2020 of $7,166.40, relating to judicial conference calls, preparation of affidavits, and Reply to Request to Admit; and
2. Partial indemnity costs between November 24, 2020 and August 22, 2022 largely relating to preparation for and attendance at the August 22, 2022 hearing, including $2,000 counsel fee.

[32] A request for an additional $1,130 is found in Mr. Lepre’s costs submissions and relates to the time spent to calculate the property taxes and pji, based on the direction in the Reasons.

[33] Ms. Hynds submits that there was mixed success on the Partition Application and no costs should be awarded.

[34] Included in Ms. Hynds’ costs submissions is her Costs Outline for the period November 24, 2020 to August 22, 2022. Her full indemnity costs are shown as $13,280.33 and $8,579.33 on a partial indemnity basis.

Analysis: Costs of the Partition Application

[35] Many issues were resolved prior to the hearing of the Partition Application.

[36] Counsel were invited to schedule telephone conferences with me to discuss procedural and other issues that arose on the Partition Application. Judicial direction and orders were made. As a result, many of the issues were addressed and resolved prior to the August 22, 2022 hearing, often on consent.

[37] After the consent order of November 24, 2020, there remained just three issues to be decided at the August 22, 2022 hearing of the Partition Application:

1. What amounts should Ms. Hynds pay to Mr. Lepre to reimburse him for property taxes he had paid since 1995, including interest on those payments?
2. What amount should Ms. Hynds reimburse Mr. Lepre for the expenses he has incurred to complete the severance of the two lots on the Property? and
3. What amount should Mr. Lepre pay to Ms. Hynds for the 13 additional acres of land conveyed to him following the severance of the Property?

i. Property taxes

[38] At the hearing, Mr. Lepre sought reimbursement from Ms. Hynds of 50% of the $42,574.47 he had paid in property taxes on the Property. Ms. Hynds raised a number of defences to that request and submitted that her share of the taxes should be fixed at $2,953.30.

[39] I determined how the property taxes ought to be shared. [2] Using the percentages set out directed in the Reasons, Mr. Lepre was to calculate the amount owing for property taxes and pji on the taxes. Counsel for Mr. Lepre advised that his client and Ms. Hynds agreed that the amount owing to Mr. Lepre was $12,005.55, as set out in a memorandum prepared by Mr. Lepre’s counsel, dated November 3, 2022 [3]. I accept those submissions and award that amount to Mr. Lepre.

ii. What amount should Ms. Hynds reimburse Mr. Lepre for the severance application?

[40] Ms. Hynds opposed paying any portion of the severance costs incurred by Mr. Lepre. As set out in the Reasons, Ms. Hynds was ordered to reimburse Mr. Lepre $3,125, representing 50% of the severance costs he incurred.

iii. Per acre payment owing by Mr. Lepre for the 13 acres received from Ms. Hynds.

[41] Each party obtained appraisals of the Property. Applying the per acre value to the 13 acres, the total difference between the two appraisals was $1,166. There was no “principled basis” to prefer one over the other, so the difference between the two valuations was split and used to calculate the per-acre value: Reasons, at para. 53.

Rule 57 Factors

Result in the proceeding

[42] There was mixed success on the property taxes issue and on the valuation of the 13 acres. Mr. Lepre was entirely successful in obtaining contribution to the severance costs.

Offers to Settle

[43] In his costs submissions, Mr. Lepre identifies the efforts he made to resolve his dispute with the co-owners: In October 12, 2006, Mr Lepre offered to buy out his co-owners’ interest based on an opinion of value. The co-owners refused to sell to Mr. Lepre, asserting that the opinion was not an appraisal, and that the value was too low. Despite taking that position, the co-owners did nothing to enforce a sale or to obtain their own valuation.

[44] In April 2018, after the death of MJH, Ms. Hynds proposed a settlement whereby the Property would be appraised and, if the appraised value was acceptable to her, she would sell her one-half interest to Mr. Lepre at the appraised value; he was to be solely responsible for all property taxes and encumbrances.

[45] Mr. Lepre did not agree to that proposal: he had built a house on the Property and did not wish its value to be included on an appraisal. Also, he had paid all the property taxes since 1995. Through his lawyer’s letter dated June 12, 2018, Mr Lepre offered to buy Ms. Hynds’ interest for $20,000. In the alternative, Mr. Lepre proposed to retain an appraiser to value the Property as it stands and the “hypothetical value given no improvements”.

[46] Represented by counsel, Ms. Hynds rejected both proposals. She would agree only to the immediate sale of the Property, failing which, she would commence court proceedings to enforce the Lofchik Order.

[47] On August 2, 2018, through his counsel, Mr. Lepre advised that he intended to proceed with a partition application. Ms. Hynds confirmed her intention to pursue a court order allowing her to sell the Property.

[48] The rest, as they say, is history.

[49] By email of March 22, 2022, counsel for Ms. Hynds conveyed his client’s proposed approach to resolve the outstanding issues but made it clear that his email was “not an offer that can be accepted” and that “agreed upon minutes of settlement” would be required.

[50] In this email exchange of March 22, 2022, Ms. Hynds suggested a resolution whereby: 1) she would accept Mr. Lepre’s valuation of $9,750 for the 13 acres; 2) she would pay Mr. Lepre $1,400 toward the property taxes, but nothing toward the severance costs; and 3) each party would bear their own costs.

[51] That proposal was not acceptable to Mr. Lepre, who requested a hearing.

[52] The result achieved by Mr. Lepre following the hearing is better than that contained in Ms. Hynds’ informal settlement proposal of March 2022. He achieved the result he had sought throughout, to retain the Property or, at least, his one-half of it, without having to share the value of the improvements he made to the Property with the co-owners. Mr. Lepre sought and obtained an order for reimbursement from the co-owner of her share of the property taxes and severance costs.

[53] Moreover, while, on paper at least, the value of Ms. Hynds’ interest in the Property exceeds the $20,000 offered by Mr. Lepre in July 2018 [4], Mr. Lepre’s alternative proposal (referenced above, at para. 45) is very close to the terms of the consent order made on November 24, 2020, in which the issue of costs was reserved.

[54] I conclude that pursuant to r. 57.01(1) Mr. Lepre’s alternative proposal should be taken into account when determining costs.

Principle of Indemnity, amount claimed, and complexity of issues

[55] Mr. Lepre’s partial indemnity fees on the Partition Application are close to double those of Ms. Hynds. The difference may be explained, in part, by the relative seniority and hourly rate of Mr. Lepre’s lawyer as compared to Ms. Hynds’ counsel, who is a more junior lawyer.

[56] Weighing against the granting of a cost award to Mr. Lepre on the Partition Application is the fact that considerable consensus was reached between the parties prior to the hearing, and the mixed success achieved by Mr. Lepre on the outstanding issues. Also, the three issues left to be decided by the court involved relatively modest amounts.

[57] Weighing in favour of a costs award to Mr. Lepre is his settlement proposal made in 2018, which so closely matched the outcome on the main issue: the severance of the Property and a valuation based on an unimproved lot.

[58] Overall, I find that the balance weighs in favour of an award of some costs to Mr. Lepre for the Partition Application.

Disposition: Costs of Partition Application

[59] For the reasons set out and in the exercise of my discretion, I conclude that a fair and reasonable contribution to be made by Ms. Hynds to Mr. Lepre for the costs of the Partition Application to be $8,000.00, inclusive of taxes and disbursements.

Orders Made

[60] I order that:

1. The following amounts are payable by Ms. Hynds to Mr. Lepre:
   • (a) for the costs of the Contempt Motion, the sum of $13,000, inclusive of fees, disbursements and taxes;
   • (b) for the costs of the Partition Application, the sum of $8,000, inclusive of fees, disbursements and taxes; and
   • (c) for her share of the property taxes on the Property, the sum of $12,005.55 inclusive of pji to the date of the release of this decision.
2. The amount of $9,917, owing by Mr. Lepre to Ms. Hynds for the 13 acres transferred to him from Ms. Hynds’ 50% share of the Property, is to be credited against the amounts payable by Ms. Hynds to Mr. Lepre pursuant both to this Decision and the Endorsement.
3. Post-judgment interest on the net amount payable by Ms. Hynds to Mr. Lepre (i.e. after the credit of $9,917) shall run from the date of the release of this decision.

Justice L. Sheard Date: January 3, 2023

Footnotes

[1] A more complete summary of the facts is set out in the Reasons, reported at 2022 ONSC 6174.

[2] Reasons, at paras. 33 to 36.

[3] This Memorandum reached me on December 22, 2022.

[4] As per para. 53 of the Reasons, the per acre value was $762.85. Using that rate, Ms. Hynds’ one-half interest in the 174-acre Property is valued at $66,367.95 (87 x $762.85).