Court File and Parties

Court File Nos.: CV-19-077 (Belleville) CV-23-136 (Belleville) CV-13-284 (Belleville) CV-23-371 (Belleville) BK-19-02561274-0033 (Ottawa)

Date: 2024-05-28 Superior Court of Justice - Ontario

Re: Glenn Bogue et al. And: Andrew Clifford Miracle et al.

Before: Mr. Justice Graeme Mew

Counsel: Greg Roberts, for Glenn Bogue Ian J. Collins, for Andrew Clifford Miracle Jeff Larry, for Swartz Levitsky Feldman (as court appointed receiver of Andrew Clifford Maracle) Jason R. Allingham, for R.A. (Rod) Gram Ken Page, for Schwartz Levitsky Feldman Inc. (as Trustee in Bankruptcy for Andrew Clifford Maracle III)

Heard: In Writing, at Belleville

Endorsement on Costs

[1] This endorsement deals with the costs arising from five motions, an application and cross-application, and a motion that was served but never filed.

The Motions and Application

[2] In reasons for decision released on 4 April 2024 (reported as Bogue v. Miracle, 2024 ONSC 1964), I made the following dispositions:

Motions/Application brought by Andrew Clifford Miracle

• Application for a vexatious litigant order against Glenn Bogue – dismissed.
• Motion for security for costs – dismissed.
• Motion in bankruptcy proceeding (Court File No. BK-19-02561274-0033) that the levy amount otherwise payable under section 147 of the Bankruptcy and Insolvency Act, should remain in trust pending a further motion – dismissed, without prejudice to him seeking similar relief in the future.

Motions brought by Glenn Bogue

• Motion for a declaration of a solicitors’ lien and/or a charging order – solicitors’ lien granted (subject to such other orders as may be made concerning the application of the Indian Act to the funds held by the Trustee and/or the receiver); charging order denied.
• Motion in Court File No. CV-23-136 for summary judgment – granted (judgment for $2,858,500).

Motion brought by Rod Gram

• Motion for summary judgment – dismissed (with directions pursuant to Rule 20.05).

Motion Brought by Glenn Bogue and Rod Gram

• Motion for summary judgment dismissing Mr. Miracle’s counterclaim in Court File No. CV-23-136 – granted.

[3] In addition to the motions that were filed and heard by the court, there was a motion which Mr. Miracle, through counsel, had advised at a case conference would be brought concerning the ongoing effect, if any, of a Receivership Order made by Kershman J. on 11 October 2019 in Court File No. CV-19-077.

[4] On 27 November 2023, Mr. Miracle had served a notice of motion, a motion record, and a factum seeking, among other things, a declaration that the Receivership Order was “unenforceable and a nullity”. At a case conference on 5 December 2023, I directed that all motions would be heard in Belleville from 14-16 February 2024 (in person) and that, by agreement, at the hearing of the motions any issues involving the responsibilities of the receiver and the trustee in bankruptcy should be addressed first. The Receiver served his factum on 26 January 2024. However, on 1 February 2024, counsel for Mr. Miracle advised the Receiver, for the first time, that the “motion was never filed”.

[5] In response to the motion material delivered by Mr. Miracle, and in anticipation that the motion would, in fact, be heard, counsel for the Receiver filed material with the court, attended the first day of three days of hearings, and now claims costs associated with having done so.

[6] It is just as well that counsel for the Receiver did attend. Despite the absence of a filed motion on receivership issues being before the court, in oral submissions on 14 February, counsel for Mr. Miracle not only sought to assert that the Receivership Order was unenforceable, but also made new arguments related to the application of sections 89 and 90 of the Indian Act, R.S.C., 1985, c. I-5 to the bankruptcy proceedings and the Receivership Order. Those issues have now been put over for determination by the court in conjunction with other issues related to the bankruptcy proceedings.

[7] For costs purposes, I will deem Mr. Miracle’s aborted motion regarding the continuing effect (if any) of the 2019 Receivership Order as an abandoned motion, the consequences of which are provided for in Rule 37.09(3) of the Rules of Civil Procedure.

Context

[8] Judges hearing cases often ask themselves “what is really going on here?” In the present case, Messrs. Bogue and Gram say they assisted Mr. Miracle with the prosecution of claims which eventually yielded him an arbitration award in his favour in the amount of $11,486,238, as well as control of a business which is ongoing and believed (by Messrs. Gram and Bogue) to be highly profitable. The litigation between the parties began after Mr. Miracle failed to pay Mr. Gram or Mr. Bogue for the services they say they rendered.

[9] Mr. Miracle has deployed a number of reasons for his failure to pay Messrs. Gram and Bogue, including challenging the validity of the fee agreements that he had with them, and the value of the work that they did for him. Ultimately, though, his bottom line is that they cannot collect any fees or compensation they might otherwise be entitled to – whether directly through the Receivership Order, or by enforcement of a solicitors’ lien, or in bankruptcy proceedings in which Mr. Miracle is entitled to payment of a dividend – because Mr. Miracle is a status Indian and his assets are located (or deemed to be located) on a reserve, and thus “not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour, or at the instance of” non-status Indians such as Mr. Bogue and Mr. Gram: section 89(1) of the Indian Act.

[10] As long ago as October 2019, Kershman J. held that the fee agreement between Mr. Bogue and Mr. Miracle was valid, despite it not fully complying with the requirements of the Solicitors Act and the regulations made thereunder concerning contingency fee agreements. Yet Mr. Miracle has continued to resist paying and has repeatedly disavowed his acknowledgment, in an assignment agreement made between him and Mr. Collins, that he in fact owes Mr. Bogue $2,871,000.

Discussion - Costs

[11] At the close of three days of oral hearings, counsel were invited to provide bills of costs and brief submissions on the costs they would seek or expect to pay depending on the outcome of the motions and application.

[12] Mr. Miracle’s application to have Mr. Bogue declared a vexatious litigant and his motion for security for costs were without merit. Even if his vexatious litigant application had succeeded, it was obvious that leave would have been granted to Mr. Bogue to proceed under s. 140(3) of the Courts of Justice Act, because his motions for judgment and a solicitors’ lien were clearly meritorious. He unsuccessfully raised against Mr. Bogue’s summary judgment motion arguments which had already failed before Kershman J., effectively inviting me to allow him to re-litigate them. And his counterclaim against Messrs. Bogue and Gram was equally devoid of merit and unsupported by any probative evidence.

[13] It has been submitted that Mr. Miracle’s application and motions were brought to delay the litigation against him, drive up costs and thereby to thwart Messrs. Gram and Bogue’s access to justice. Certainly this litigation has rumbled along for far too long already.

[14] Indeed, according to Mr. Bogue, the only question is whether he is entitled to partial or substantial indemnity costs. He refers to a recent decision of the Court of Appeal, D.L. v. E.C., 2023 ONCA 494, in which Roberts J.A. wrote, at para. 19:

As the application judge rightly noted, costs on the elevated scale of substantial indemnity costs may only be warranted where a claimant’s success surpasses an offer to settle (inapplicable here) or a party engages in egregious conduct: Iannarella v. Corbett, 2015 ONCA 110, 124 O.R. (3d) 523, at para. 139; 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42, 135 O.R. (3d) 681, at para. 53. Such egregious conduct includes “misconduct by a party or its counsel, or where the proceedings are clearly vexatious, frivolous, or an abuse of process”: Lewis v. Lewis, 2017 ONCA 690, 49 E.T.R. (4th) 175, at para. 17. The application judge concluded that such costs were warranted because he determined that E.C. and her mother had “engaged in behaviour worthy of sanction” by advancing “a false narrative”.

[15] Mr. Miracle’s litigation tactics and the positions he has taken may well be offensive to notions of fair dealing. I described his counterclaim as “mischievous at best”. But he does not have a monopoly on unnecessary motions or other procedural misbehaviour, as evidenced by the dubious commencement of one of the subject actions (by Messrs. Gram and Bogue) in a court centre unconnected with the parties or their disputes and a subsequent attempt at default proceedings against Mr. Miracle. Nor is it appropriate to sanction Mr. Miracle for relying on a legal protection which he claims to be entitled to as a status Indian, the full extent of which has yet to be determined.

[16] While there are elements of the way in which Mr. Miracle has conducted himself in this litigation which could form the basis for an elevated award of costs, looking at the overall litigation landscape between the parties, I am not persuaded that there has been misconduct or vexatiousness sufficient to attract substantial indemnity costs.

Glenn Bogue

[17] Mr. Bogue’s motion for summary judgment and his motion for a solicitors’ lien were successful. His unsuccessful motion for a charging order raised a legal issue that was arguable, had not been extensively considered in previous cases, and was barely addressed by Mr. Miracle.

Vexatious Litigant Application

[18] On the vexatious litigant application, Mr. Bogue’s claim for costs on a partial indemnity basis is for $17,387.93, inclusive of fees, disbursements and HST. The fees claimed – $15,172.50 – represent 70% of Mr. Bogue’s full indemnity fees. Such an approach is inconsistent with the ordinary rule of thumb confirmed in 790668 Ontario Inc. v. D’Andrea Management Inc., 2015 ONCA 557, at para. 23, that partial indemnity costs should be about one-third less than substantial indemnity costs (which, in turn, are typically 90 per cent of full indemnity, or actual fees billed: see, for example, DBDC Spadina Ltd. v. Walton, 2016 ONSC 7011, at para. 3).

[19] Had Mr. Miracle succeeded on the motion, he would have sought partial indemnity costs of $22,802.75 inclusive of HST.

[20] The substantial indemnity fees claimed by Mr. Bogue amount to $19,507.50, which is 90% of actual fees incurred. I would fix his costs based on partial indemnity fees of $13,005 (namely two thirds of substantial indemnity costs). When HST of $1,690.65 and disbursements are factored in, total costs, on a partial indemnity scale, amount to $14,938.65. I accept that amount as reasonable, and clearly consistent with Mr. Miracle’s reasonable expectations.

Charging Order and Solicitors’ Lien Motion

[21] On the motion for a charging order and/or a solicitors’ lien, Mr. Bogue was only partially successful. However, as noted in my reasons, charging orders and solicitors’ liens have been described as “two sides of the same coin”, overlapping significantly in purpose and effect. I would therefore allow Mr. Bogue the costs of the motion.

[22] Mr. Bogue’s claim for costs is based on substantial indemnity fees of $60,277.50 which, once HST and disbursements are factored in, would amount to a total claim of $68,452.58, or $53,316.23 on a partial indemnity basis. Mr. Miracle would have claimed the same amounts if he had been successful.

[23] Adjusting the partial indemnity calculation to conform with the ordinary rule of thumb, I fix the costs of the lien/charging order motion, payable by Mr. Miracle to Mr. Bogue, at $45,748.05 ($40,185 fees plus HST of $5,224.05 plus disbursements of $339.00).

Summary Judgment

[24] Mr. Bogue is entitled to costs of the summary judgment motion, including the costs of the action in which that motion was brought (Court File No. CV-23-136). On a partial indemnity scale (adjusted) fees are $21,240, HST is $2,761.20 and disbursements are $339.00, for a total of $24,340.20.

Rod Gram

[25] Mr. Gram (along with Mr. Bogue) was successful in obtaining summary judgment dismissing Mr. Miracle’s counterclaim. The record did not, however, support summary judgment on his claim against Mr. Miracle. His action for damages can, nevertheless, proceed to trial.

[26] That said, Mr. Gram was able to establish the existence of an initial written agreement with Mr. Miracle (something that Mr. Miracle denied until the hearing in February 2024). And Mr. Miracle’s assignment agreement with Mr. Collins acknowledged some indebtedness to Mr. Gram (albeit not the full amount of Mr. Gram’s claim).

[27] In the circumstances, counsel for Mr. Miracle and Mr. Gram are in agreement that costs issues as between them arising from Mr. Gram’s summary judgment motion should be reserved to the judge determining the outstanding issues between those parties.

The Trustee

[28] The Trustee in Bankruptcy does not seek costs. However, Mr. Miracle seeks “punitive costs” against the Trustee for breaching his fiduciary duty.

[29] Given that the only issue which I addressed as between the Trustee and Mr. Miracle was to dismiss Mr. Miracle’s motion directing payment out to him of a bankruptcy dividend by the Trustee in Bankruptcy of Andrew Clifford Maracle III, without prejudice to him bringing a fresh motion at an appropriate time, no order for costs against the Trustee can be justified at the present time.

The Receiver

[30] The Receiver is entitled to costs of the abandoned motion concerning the ongoing effect, if any, of a Receivership Order. The partial indemnity costs claimed are $19,482.33.

[31] Mr. Miracle’s response to the Receiver’s claim for costs is to argue that the Receivership Order should not have been made in the first place. In other words, having abandoned the motion which he served on the Receiver, Mr. Miracle now attempts to argue the merits of the motion in relation to costs arising from its abandonment.

[32] In the absence of any engagement by Mr. Miracle on the reasonableness of the costs claimed by the Receiver, I fix the costs payable by Mr. Miracle to Swartz Levitsky Feldman (as court appointed receiver of Andrew Clifford Maracle) in the amount of $19,482.33.

Disposition

[33] The costs payable by Mr. Miracle to Mr. Bogue are:

a. Vexatious litigant application $14,938.65 b. Charging order/solicitors’ lien $45,748.05 c. Summary judgment $24,340.20

TOTAL: $85,026.90

[34] The costs payable by Mr. Miracle to Swartz Levitsky Feldman (as court appointed receiver of Andrew Clifford Maracle) are $19,482.33.

[35] There are no orders for costs payable to, or payable by, the Trustee in Bankruptcy.

[36] On consent, costs issues as between Mr. Gram and Mr. Miracle arising from Mr. Gram’s summary judgment motion will be reserved to the judge determining the outstanding issues between those parties.

Mew J. Date: 28 May 2024