Court File and Parties

COURT FILE NO.: CV-20-84198 DATE: 2023/10/24 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Royal Bank of Canada, Plaintiff (Defendant to the Counterclaim) AND: Wendy Palma and the Estate of Brian Cormier, Deceased, Defendants (Plaintiff to the Counterclaim)

BEFORE: Somji J

COUNSEL: Jeffrey Kukla, Counsel, for the Plaintiff (Defendant to the Counterclaim) Alexander Heath - former counsel for Ms. Palma Ms. Palma, Self-Represented

HEARD: In Writing

Costs Endorsement

[1] On March 31, 2023, I issued a judgment against Ms. Palma on two motions. I ordered that one, Mr. Heath be removed as counsel of record for Ms. Palma, and two, that Ms. Palma comply with the timetable requested by Royal Bank of Canada (“RBC”).

[2] Ms. Palma was ordered to pay substantial indemnity costs with respect to RBC’s motion. Mr. Heath also sought costs for his motion. He was requested to provide costs submission which he did on April 11, 2023. Mr. Heath seeks substantial indemnity costs. Ms. Palma was afforded an opportunity to respond by April 21, 2023, and Mr. Heath a Reply by April 28, 2023. Ms. Palma failed to submit a response.

[3] Unfortunately, follow-up on Mr. Heath’s costs application was overlooked. Recently, on October 2, 2023, Mr. Heath reached out to the court to obtain a decision on his costs application.

[4] Mr. Heath is entitled to his costs as the successful party on the motion. The only issue to be decided is what is a fair and reasonable costs award?

[5] Courts have broad discretion to determine whom costs should be paid and the quantum: s. 131(1) Ontario Courts of Justice Act, R.S.O. 1990, c. C.43, as am.

[6] In exercising their discretion, judges may consider the factors set out in Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and governing jurisprudence. These factors include the following: the experience of counsel and rates charged, the amount an unsuccessful party could reasonably expect to pay, amounts claimed, and amount recovered, apportionment of liability, importance of issues, complexity of the proceedings, and the conduct of the parties.

Conduct of the parties

[7] As a general rule, costs on a partial indemnity scale should follow the event and should only be departed from for very good reasons such as misconduct of the party, miscarriage in procedure, or oppressive or vexatious conduct: 1318706 Ontario Ltd. v. Niagara (Regional Municipality) (2005), 75 O.R. (3d) 405 (C.A.) at para 51; 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 at paras. 10-14.

[8] Mr. Heath argues that Ms. Palma’s conduct warrants substantial indemnity costs. When Ms. Palma did not pay fees for over a year, he made every effort to terminate his retainer with her voluntarily, but she refused. In February 2022, Ms. Palma e-mailed Mr. Heath stating:

I understand that you want to be released from the file. From my understanding you are required to file a motion in front of a judge in Ottawa with me present to be released from the file. I do not want to voluntarily release you as I am unable to hire a new lawyer" and "If you want out .... then you must do what you need to do."

[9] Ms. Palma’s response left Mr. Heath with little choice but to commence a motion to be removed as counsel of record. Ms. Palma did not have a viable defence for refusing Mr. Heath’s release except that she did not want to incur more funds to hire another lawyer. Consequently, there was little, if any, merit to this motion.

[10] Ms. Palma indicated at the hearing that she preferred to have a lawyer present for the RBC motion and that she was suffering health issues. RBC’s action against Ms. Palma and the Estate of her former spouse Brian Cormier to recover a debt started in April 2018. Ms. Palma did not have an explanation at the motion hearing for her delays in scheduling discovery or complying with requests for forms/documentation requested by RBC which was the reason RBC requested a timetable. I find Ms. Palma’s conduct in refusing Mr. Heath’s removal as counsel of record appears to be part of a continued pattern of delay and constitutes unreasonable conduct warranting an elevated costs award over and above partial indemnity.

[11] Mr. Heath was Ms. Palma’s third counsel. Ms. Palma would have known that if Mr. Heath proceeded on the motion to have himself removed as counsel and was successful, she would reasonably be expected to pay some costs on the motion.

Complexity of the file, Work Performed and Rates

[12] The application to be removed as counsel of record was not complex.

[13] Mr. Heath provided a costs outline indicating that he spent 8.85 and his clerk spent 3.36 hours. The work performed included preparing the application and affidavits, corresponding with the court and client, attending the hearing, and preparing the costs submission. Mr. Heath is a 2016 call and charged $265/hour for himself and $135/hour for his clerk. The total costs with disbursements was $3,389.49. I find the hours completed were commensurate with the work performed and the rates charged.

Ability to pay

[14] Ms. Palma suggested at the motion hearing that she has continued financial challenges. However, she did not file a costs submission to challenge the quantum of costs on grounds of ability to pay. Therefore, I have accorded limited weight to this factor.

Conclusion and Order

[15] Ultimately, in determining quantum, the overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances rather than the amount of actual costs incurred by the successful party: Rule 57.01 (1) (0.b); see also Boucher v. Public Accountants Council for the Province of Ontario, (2004), 71 O.R. (3d) 291 (C.A.) at paras 37-38; Deonath v. Iqbal, 2017 ONSC 3672 at paras. 20-21.

[16] Considering the relevant factors including Mr. Heath’s success on the motion, Ms. Palma’s unreasonable conduct, the low complexity of the motion, the importance of the issues, the time and rates charged to prepare for the motion, and the absence of evidence or submission on inability to pay, I find that an elevated costs award consisting of fees, HST, and disbursements in the fixed amount of $2400 is fair and reasonable in the circumstances.

Somji J. Date: October 24, 2023