Court File and Parties
COURT FILE NO.: CV-20-00635387 DATE: 20240605 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JOHN DARRAGH MAYNARD ELLIOTT Applicant – and – ATKINSON LAW PROFESSIONAL CORPORATION Respondent
Counsel: James McReynolds, for the Applicant Sanjin Kovacevic, for the Respondent
Heard: June 5, 2024
Before: Papageorgiou J.
Costs Endorsement
Overview
[1] The parties have settled the Applicant’s Application to assess the Respondent’s legal account.
[2] The only issue before me is the costs of that Application.
Decision
[3] For the reasons that follow I award the Applicant $4,000 in partial indemnity costs.
Issues
[4] The issues are:
- Issue 1: Did the Respondent accept an Offer to Settle by the Applicant such that no costs are payable in accordance with such offer?
- Issue 2: If not, what costs are fair and reasonable and within the reasonable contemplation of the Respondent?
Analysis
Issue 1: Did the Respondent accept an Offer to Settle by the Applicant such that no costs are payable in accordance with such offer?
[5] The Applicant retained the Respondent in connection with several matters, which retainer ended in or around May 2019.
[6] The accounts in dispute are dated January 31, 2018, and April 30, 2019, and the full amount of such accounts is $107,000.
[7] The Applicant did not deliver a request to assess these accounts within 30 days which then necessitated this Application or the Respondent’s consent. The Respondent would not consent.
[8] The Applicant prepared its Application Record and served it in or around January or February 2020.
[9] Then, the Applicant delivered an Offer to Settle dated February 19, 2020, whereby the Applicant would pay $100 in exchange for the Respondent consenting to the Order for assessment of the accounts. Specifically, it stated:
The Applicant offers to settle the Application on the following terms:
- The Applicant shall pay the Respondent the sum of $100.
- The Respondent shall consent to the issuance of an Order for assessment, permitting the Applicant to assess the accounts delivered to him by the Respondent on or around January 31, 2018, and April 30, 2019.
This offer to settle is open is available for acceptance until 1 minute after the commencement of the hearing of the Application in this proceeding, unless otherwise revoked.
[10] There were difficulties obtaining a date for the hearing and then COVID intervened.
[11] Then, in 2023, the parties scheduled this Application for June 4, 2024.
[12] On May 24, 2024, the Respondent consented to the Application.
[13] Then, on June 3, 2024, the Respondent purported to accept the February 19, 2020 Offer to Settle.
[14] Notably the Applicant had not delivered any Notice of Withdrawal of the Offer to Settle which r. 49.014(1) of the Rules of Civil Procedure prescribes as the manner in which an Offer to Settle may be withdrawn. Notably, the Offer to Settle specifically stated that it was open for settlement until one minute after the hearing commenced unless otherwise revoked.
[15] The Respondent argues it need not pay costs because it accepted the February 19, 2020 Offer to Settle. Neither party provided any caselaw on whether a party could accept an offer to settle after it has already consented to the relief requested.
[16] I have concerns about the Respondent’s delay in dealing with this matter and I also consider it acted unreasonably by requiring the Applicant to bring an Application, which is made abundantly clear by the fact that it consented four years after the Notice of Application was issued. However, in my view, the Respondent implicitly accepted the Offer to Settle by consenting to the Application when it did, on May 24, 2024, even if it did not specifically say this.
[17] In any event, it was also open to the Respondent to accept the Offer to Settle unless it had been withdrawn or revoked, which it did on June 3, 2024.
[18] Rule 49.07 provides that an offer to settle may be accepted “at any time before it is withdrawn, or the court disposes of the claim in which it is made.” It had not been revoked as of the time when it was accepted.
[19] Rule 49.04(4) similarly provides that an offer that has not been accepted expires “when the court disposes of the claim in respect of which the offer was made.” The Offer to Settle had also not expired pursuant to r. 49.04(4) when it was accepted.
[20] In this case, the Notice of Application, which is the claim in this case, includes a claim for an Order for an Assessment as well as costs of the Application. Thus, to dispose of the Application, a court would have had to address both the claim for the assessment and the claim for costs, which was not completed at the time the Respondent accepted the Offer to Settle. The entire Application was disposed of only today when the parties argued costs.
[21] But this does not end the inquiry in respect of costs. Rule 49.07(5) specifically states that:
(5) Where an accepted offer to settle does not provide for the disposition of costs, the plaintiff is entitled, [Emphasis added]
(b) where the offer was made by the plaintiff, to the plaintiff’s costs assessed to the date that the notice of acceptance was served.
[22] In this case I conclude that the Offer to Settle did not provide for the disposition of costs. Even though the Offer to Settle provided that the Applicant would pay $100 to the Respondent, this is not identified to be in respect of costs. As noted by Paul Perell & John W. Morden in The Law of Civil Procedure in Ontario 4th ed (Toronto: LexisNexis Canada Inc., 2020) at p. 1094 “We define ‘costs’ to mean a sum of money that a litigant is obliged to pay his or her opponent on account of the opponent’s expenses associated with the proceedings.” An offer to settle that is silent in this regard, and simply notes a payment to one party does not address the issue of costs.
[23] This is also supported by the wording of r. 49.07(5) above that references the offer “[providing] for the disposition of costs.” This contemplates a specific reference to costs of the proceeding in the Offer to Settle which are missing from the Offer to Settle at issue.
[24] Thus, the Applicant is entitled to its costs in accordance with r. 49.07(5) and the issue is what amount should be ordered pursuant to this provision.
Issue 2: What costs are fair and reasonable and within the reasonable contemplation of the Respondent?
[25] Pursuant to s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, costs are in the discretion of the court. Rule 57 of the Rules sets out the factors which courts should have regard to when awarding costs. The overall objective is “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”: Zesta Engineering Ltd. v. Cloutier (2002), 21 C.C.E.L. (3d) 161 (Ont. C.A.), at para. 4; Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), at para. 26; Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52; and G.C. v. Ontario (Attorney General), 2014 ONSC 1191, at para. 5.
[26] The Respondent raised a number of arguments as to why I should order no costs, all of which I reject:
- I disagree that the Applicant should be disentitled to costs because he missed the deadline to seek an assessment of costs, which then necessitated the bringing of the Application. The Solicitors Act provides that a party is entitled to obtain an order from the Registrar within 30 days of an account automatically for an assessment. Afterwards, between 30 days and a year, the decision as to whether or not an assessment should be granted is within the discretion of the court. Thereafter, the party must show special circumstances. In this case, there was no necessity to show special circumstances because the Applicant sought to assess the account within six months. In Price v. Sonsini, [2002] O.J. No. 2607, at para 19, the Court of Appeal noted that there is a positive obligation on counsel to cooperate with the assessment of its account.
- The Respondent has also referenced the merits of the ultimate assessment and other moneys which the Respondent owes it which are not relevant to the costs of this Application.
[27] In terms of quantum, the Applicant claims $8,388.05 which is partly partial indemnity and partly substantial indemnity on the basis that it beat its Offer to Settle and was successful in accordance with r. 49.10. However, this provision is not applicable because the Applicant did not beat its offer; the Respondent accepted its Offer, as I have said, before it was withdrawn, or the court determined this Application.
[28] The Bill of Costs does not set out what the costs were up until the Offer was accepted, but I accept that most of the costs claimed would have been incurred before the Offer was accepted, since that only occurred on June 3 which was two days before the hearing.
[29] I agree that the Respondent’s conduct in refusing to agree to this was unreasonable as I have said and its refusal to consent at an early stage resulted in wasted time.
[30] However, I view the costs claim as excessive and disproportionate to the matters at issue; such costs could not be in the reasonable contemplation of the Respondent. As the Applicant noted, this was not a complex matter. The Affidavit in support of the Application is only three pages long.
[31] The Respondent’s Bill of Costs shows that it expended $2,142 in actual billed fees, but I note that it did not prepare any Responding Record or factum on the merits, and this must largely be in respect of the materials to argue costs. I would also view these costs as excessive.
[32] In all the circumstances, taking into account the factors in r. 57, in the exercise of my discretion I find that the Applicant is entitled to $4,000 in costs on a partial indemnity basis, and that this amount is fair and reasonable and within the reasonable contemplation of the Respondent.
[33] I order that this amount is not payable immediately but will be set off against any amount that the Applicant is ordered to pay the Respondent when the assessment is completed. If it is determined that the Applicant does not have to pay anything, then the Respondent shall pay this amount 30 days after the assessment is determined. If it is determined that it is the Respondent who must pay something in the assessment, then similarly the $4,000 shall be paid 30 days after the assessment is determined.
Papageorgiou J. Released: June 5, 2024