Court File and Parties

COURT FILE NO.: CV-7236-17 DATE: 2024-10-02 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jeannette Cayer, Plaintiff AND: Arseneau Poulson, Defendant

BEFORE: The Honourable Madam Justice S.K. Stothart

COUNSEL: Tijana Potkonjak, Counsel, for the Plaintiff Lauren Rakowski, Counsel, for the Defendant

Endorsement on Costs

[1] On August 12, 2024, I released my reasons dismissing the plaintiff’s request for an order extending time for service of her statement of claim and an order extending the time for trial.

[2] At the end of my decision, I invited the parties to provide written submissions on the issue of costs if they could not come to an agreement. The parties have been unable to agree, and I have now received their submissions with respect to costs.

Position of the Parties

[3] The defendant seeks its costs on a partial indemnity basis in the amount of $14,447.05, inclusive of HST and disbursements. The defendant submits that as the successful party the amount claimed is fair and reasonable, taking into account the reasonable expectations of the parties, the enumerated factors found in r. 57.01(10) of the Rules of Civil Procedure and the principles set out in Boucher v. Public Accountants Council for the Province of Ontario.

[4] The plaintiff submits that no costs should be payable to the defendant. She submits that she is of modest means and was unjustly caught in a long fight to access justice which was frustrated by the negligence of the defendant and the negligence of her subsequent lawyer, Andrew Kerr. The plaintiff submits that she should not be punished for having been wronged by two officers of the court and for making good faith efforts to revive her claim against the defendant.

Legal Principles to be Applied

[5] The award of costs is governed by s. 131 of the Courts of Justice Act, R.S.O. 1990 c.43 and by r. 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Ultimately the decision to award costs lies within the discretion of the judge having regard to the particular factors in each case.

[6] The general rule is that costs follow the event. While a successful party does not have an entitlement to costs, it does have a reasonable expectation that they will be awarded, absent special circumstances. Bell Canada v. Olympia & York Developments Ltd., 1994 ONCA 239 at para. 23; Pryzk v. Hamilton Retirement Group Ltd. (the Court at Rishdale), 2021 ONCA 267 at para.12.

[7] It is also the general rule that where costs are warranted, they are awarded on a partial indemnity basis. In exceptional circumstances costs may be awarded on a higher scale, however those circumstances usually involve circumstances where one party has behaved in an abusive manner, brought proceedings devoid of merit, or unnecessarily run up the costs of the litigation. George v. Landels, 2012 ONSC 6608 at para. 5.

[8] Justice Perell summarized the purpose that costs serve in Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont.S.C.J.) as follows at para. 10:

Modern costs rules are designed to advance five purposes in the administration of justice: (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.

[9] In exercising its discretion, the court is ultimately guided by the overriding principles of fairness and reasonableness. In assessing what is fair and reasonable, the court takes a contextual approach, applying the principles and factors discussed above, and sets a figure that is fair and reasonable in all the circumstances. George v. Landels, supra, at para. 6.

[10] In exercising its discretion with respect to costs, the court is guided by the factors set out in r. 57.01(1) of the Rules which state as follows:

In exercising its discretion under s. 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 proceedings;

(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 way of a different lawyer;

(h.1) whether a party unreasonably objected to proceedings by telephone conference or video conference under rule 1.08; and

(i) any other matter relevant to the question of costs.

Analysis

[11] Fixing costs is not a “mechanical” exercise. A consideration of experience, rates charged, and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the facts of the case. The goal is to balance compensation of the successful party with the goal of fostering access to justice: Boucher v. Public Accountants Council (Ontario), at para. 26.

[12] It is reasonable for the defendant, as the successful party, to expect that it will receive its partial indemnity costs related to the motion. I do not find that any factors exist that would warrant costs on a higher scale.

[13] No issue is taken by the plaintiff with respect to the reasonableness of the fees charged and disbursements incurred by the defendant. The motion itself was fairly straightforward. However, it was somewhat complicated by the extreme passage of time and the impact that had on the ability to locate relevant materials for the motion. In the end, most of that work was completed by the defendant.

[14] The plaintiff asks this court to consider (a) her modest means and the hardship that a costs order would have; and (b) that she has been wronged by the defendant and by another lawyer in their prior representation of her.

[15] Pursuant to subrule 57.01(1)(i) a court may consider any other matter relevant to the question of costs. This may include impecuniosity.

[16] In general, impecuniosity does not and should not eliminate a party’s obligation to pay costs. The rational for this is that the rules should be applied consistently and litigants without means should not be able to ignore the rules of the court with impunity: Lee v. Chang, 2024 ONSC 2982 at para. 70.

[17] While impecuniosity and hardship should not eliminate or reduce a party’s liability for costs, it is one of the factors that the court may consider in exercising its discretion under s. 313 of the Courts of Justice Act in determining a reasonable amount of costs: Kolosov v. Lowe’s Companies Inc., 2016 ONSC 4799, upheld 2018 ONCA 973.

[18] A party asking the court to consider impecuniosity in the assessment of costs must adduce evidence that establishes impecuniosity. A court is unable to consider a bald statement by a party that they will suffer hardship, without actual evidence: Lee v. Chang, at para. 76.

[19] In this case the only evidence of impecuniosity on the part of the plaintiff is her assertion that all of the lawyers that she has retained have been on a contingency fee basis. I have received no other evidence about her financial circumstances or how a costs award would result in a hardship to her.

[20] Further, the plaintiff was represented by counsel in this motion. It is reasonable to assume that the plaintiff would have been advised of the risks associated with being the unsuccessful party on the motion.

[21] The plaintiff submits that no costs should be awarded, or costs should be substantially reduced, because the defendant and Mr. Kerr were negligent in representing her. The plaintiff submits that this motion would have been unnecessary had Mr. Kerr served the defendant with the statement of claim.

[22] In my view, these factors are not relevant to issue of costs in this case. First, there has been no finding of negligence on the part of the defendant. The plaintiff’s submission assumes that she would have been successful in her claim against the defendant. Second, as set out in my reasons for dismissing the motion, I do not know the circumstances surrounding the plaintiff’s retainer with Mr. Kerr or what instructions she provided to him. If Mr. Kerr was negligent in his representation, the plaintiff has recourse as against him.

Conclusion

[23] Having considered all of the circumstances in this case, I find that it just and appropriate that the plaintiff pay costs to the defendant. The defendant was wholly successful on the motion, and I see no reason to depart from the general principle that a successful party should receive their costs on a partial indemnity basis. I am not satisfied that costs should be dispensed with or substantially reduced on the basis of hardship.

[24] While I am sympathetic to the position the plaintiff finds herself in, any issue related to the alleged negligence of Andrew Kerr and his failure to serve the statement of claim should be addressed in separate proceedings.

[25] When I consider the circumstances of this case, as well as the bill of costs provided, I find a fair and reasonable amount of costs to be $14,000.

[26] For these reasons, I award costs to the defendant on a partial indemnity basis in the sum of $14,000 payable forthwith.

The Honourable Madam Justice S.K. Stothart Date: October 2, 2024