Gruggen v. Cole, 2025 ONSC 154
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Patrick Daniel Gruggen and Matthew Scott McCready, Applicants
AND:
David Aaron Edward Cole and Sheri Marie Cole, Respondents
BEFORE: Justice J. Howie
COUNSEL: J. Van Bakel, Counsel for the Applicants
D. Kirwin, Counsel for the Respondents
HEARD: In Writing
ENDORSEMENT ON COSTS OF AN APPLICATION
Summary
1On September 16, 2024, the court made a final order on an application. The court found that the applicants have the right to construct and use a dock at the end of a right-of-way that runs through the Respondents’ property. The applicant was successful.
2The applicants submit that they are entitled costs of $58,068.58 on the following basis:
a. partial indemnity costs from the time they retained a lawyer to April 26, 2023; and
b. substantial indemnity costs after April 26, 2023.
3The Respondents argue:
a. that the applicants were the authors of their own misfortune by purchasing property in which the particulars of the right-of-way was not determined;
b. the matter was not particularly complex or lengthy;
c. generally speaking, the costs sought are excessive; and
d. all of this could have been avoided had the applicants provided a sketch of the proposed dock.
Analysis
4I disagree that the applicants were the authors of their own misfortune. In reality, this argument goes to the merits of the application. The fact is that they were successful and that they were required to bring this application in order to build a dock.
5In terms of complexity, I agree that productions were not voluminous. I agree that the hearing lasted for one day and that the cross examinations took another day. There does not appear to have been any motions. That being said, the dispute was unique and required the court to go back many years.
1. Partial Indemnity Portion (opening of matter to April 26, 2023)
6The applicant seeks fees of $13,552.50, disbursements of $515.38 and HST, totaling $15,829.70. In support of this, the applicant attaches a costs outline. The costs outline, however, is difficult to interpret because there is no segregation between the fees incurred prior to April 26, 2023 and after April 26, 2023.
7The notice of application was issued on July 8, 2022. By April 2023, the application records were prepared and reviewed, which would involve the preliminary research, the drafting of the application and affidavits.
8Cross examinations were not completed until October 2023.
9Generally speaking, partial indemnity costs are ordered in the range of 60% of counsel’s charged rate; the court should also consider the factors set out in Rule 57.01(1): Shannon v. Hrabovsky, 2024 ONCA 188, para. 6.
10In reviewing Rule 57.01(1), I note the following factors:
a. the hourly rate charged are reasonable;
b. an informed, unsuccessful party could reasonably be expected to pay this amount;
c. this was a surprisingly complex proceeding. The issues were unique and the factual matrix was intricate;
d. all parties took the position that the issues were important. That is especially made clear when the offers to settle, set out below, are reviewed. The respondents were of the view that the dollar value of this dispute was between $285,000 and $355,000 (see below).
11The Respondents have not provided their own bill of costs. Accordingly, I have nothing to compare the bill of costs to, other than the factors set out above.
2. Substantial Indemnity Portion (after April 23, 2023)
12The applicants seek $40,238.88 for costs incurred after April 26, 2023, consisting of fees of $34,855.20, disbursements of $852.51 and HST of $4531.17. The fees are 80% of the actual fees.
13The applicants made numerous offers to settle:
a. April 27, 2023, which included the following terms:
a. any dock installed by the applicants would be temporary and removed each winter;
b. any dock would be 10 feet in width, not to exceed 200 ft.², and would meet the standards of the conservation authority;
c. a willingness to make a contribution towards the Respondents’ legal costs upon review of the Respondents’ legal fees to date;
b. May 5, 2023, which included the following terms:
a. option 1:
i. any dock installed by the applicants would be temporary and removed each winter;
ii. any dock would be 8 feet in width and meet the standards of the conservation authority;
iii. if the applicants sell their property within 10 years, the right to construct the dock will expire;
iv. a contribution of $30,000 to the costs of the Respondents
b. option 2: conditional on regulatory approval:
i. the applicants shall purchase the right-of-way lands for $75,000;
ii. no order as to costs.
c. December 22, 2023, which included the following terms:
a. all previous offers were withdrawn;
b. a declaration would issue that the right-of-way permitted the applicants to construct a dock;
c. the applicants paid to the Respondents costs of $5000; and
d. the offer remained open to the commencement of the application.
14The Respondents made the following offer:
a. May 6, 2023, which included the following terms:
a. option 1:
i. the applicants would be permitted to construct an 8 foot temporary dock to be removed each winter, and would meet the standards of the conservation authority;
ii. the terms are not transferable to any successor;
iii. the applicants would pay a license fee each year, over 20 years, escalating from $10,000 per year to $25,000 per year, totaling $350,000;
iv. the applicants would pay costs of $30,000
b. option 2, conditional on regulatory approval:
i. the applicants shall purchase the right-of-way lands for $285,000;
ii. the applicants will pay costs of $30,000.
15I make the following comments with regard to the offers to settle:
a. the request by the Respondents for a payment of $285,000-$350,000 is excessive, bordering gratuitous. Rather than a compromise offer to settle, it is an invitation to litigate;
b. the applicant’s offers contained elements of compromise. The requested deck was proposed to be temporary. The deck was to be no greater than 8 feet wide. The applicant was prepared to contribute costs;
c. by any measure, the applicant’s offers were equal to or less then the remedy ordered. This brings into effect Rule 49.10(1) which provides, presumptively, that the applicant is entitled to partial indemnity costs to the date of the offer and substantial indemnity costs thereafter.
16Regarding the offers to settle, the respondents state that the applicant’s failure to provide a sketch of the proposed dock was fatal to the negotiations. In that regard, my attention was drawn to emails between counsel dated August 10 and August 11, 2023.
17I have reviewed these emails carefully. I do not agree with the respondents’ characterization. It appears that counsel for the applicants delivered proposed settlement documents. Counsel for the respondents, as expected, requested amendments. I note that Mr. Van Bakel (counsel for the applicants) specifically stated:
“We have included your former appendix A as the diagram as the location of the dock (schedule B), and an approved design of the dock as per your clients (sic) application to the Grey Sauble [Conservation Authority] with a minor variation of the width of the top portion of the dock to comply with the 10” width.”
18Secondly, if the only issue was the delivery of a sketch, I would have anticipated an acceptance of the applicants’ offer, simply with the condition of the delivery of a sketch acceptable to the respondents.
19In other words, it is far from clear, from the record provided, that the lack of a sketch was the only impediment to settlement.
20Lastly, counsel for the Respondents is criticized by the applicant for failure to respond to “time sensitive” correspondence, resulting in “numerous adjournments”. Counsel is also criticized for failing to provide draft minutes of settlement when it was believed a settlement in principle was reached. With respect, I do not know the cause of the delays; it could be that the Respondents were stubborn - I have no way of knowing.
21With regard to the fact that cross examinations were postponed due to the very late delivery of supplemental responding materials by the Respondents, this is hardly an unusual occurrence and may be part of the ebb and flow of litigation process.
22In short, I would not enhance any cost order based on the alleged conduct of counsel for the Respondents.
23Likewise, I do not find the amount requested outside the reasonable expectation of the parties. Again, I do not have a corresponding bill of costs from the Respondents. Likewise, the Respondents state that the rates of counsel are at the “high end of the range” without providing the corresponding hourly rate.
Order
24For these reasons, the respondents shall pay to the applicants costs in the amount of $53,792 [fees], plus disbursements of $1368, and HST on both fees and disbursements.
25The applicants shall provide a draft order, approved as to form and content.
Justice J. Howie
Date: January 8, 2025