Court File and Parties

Court File No: CV-22-60672
Date: March 11, 2025
Court: Superior Court of Justice - Ontario

Applicant/Solicitor: Sullivan Mahoney LLP
Respondent/Client: Grace McDonald

Before: Robert B. Reid
Applicant Counsel: J.P. Maloney
Respondent Counsel: K. Wise

Decision on Costs of Motion

Introduction

[1] Grace McDonald is a former client of the law firm of Sullivan Mahoney LLP and a resident of the township of Wainfleet, Ontario.

[2] She sought an order setting aside the Report and Certificate of Assessment made by assessment officer David Black dated August 31, 2023, including his order as to costs. The accounts assessed totalled about $6,500 with costs of about $1,850 for a total of approximately $8,350.

[3] Sullivan Mahoney LLP (“SM”) requested that the motion be dismissed.

[4] The motion was dismissed by my decision of February 14, 2025.

[5] The parties were encouraged to resolve the issue of costs of the motion between themselves. They were unable to do so, and provided their written submissions and, in the case of SM, a bill of costs by March 7, 2025, according to the timetable established in my decision.

[6] Ms. McDonald was represented by counsel at the motion hearing but was self-represented in her written submissions on costs.

[7] SM seeks an award of costs of the motion in the amount of $5,655.65 inclusive of HST. Ms. McDonald submits that the costs claimed should be reduced substantially or denied completely.

Applicable Law

[8] The court’s discretion to award costs is established by s. 130 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The factors to be considered by the court in exercising its discretion are set out in r. 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“the Rules”).

[9] In addition to the presumptive factor of success, and as applicable to this case, r. 57.01 requires the court to consider the principle of indemnity, the amount of costs that an unsuccessful party could reasonably expect to pay, the amount claimed and amount recovered, the complexity of the proceeding, the importance of the issues, and the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding.

[10] In general, courts have established that the purposes behind awards of costs are to indemnify successful litigants for the cost of litigation, encourage settlement, and discourage and sanction inappropriate behaviour by litigants.

Analysis

[11] SM was successful in its opposition to the motion; therefore, prima facie it should be entitled to an award of costs in some amount.

[12] The amount at stake was not great but SM had no alternative but to dispute the requested relief. The matter was made more complex by Ms. McDonald in that she raised a number of issues, to which answers were required. The allegation of solicitor’s negligence in particular called for a detailed response by SM, since it addressed the competence of the solicitor.

[13] The hourly rates charged by SM at a partial indemnity rate were $260 for a lawyer in his 18th year of call and $71.50 for a law student. Neither of those rates are unreasonable assuming an assessment of costs by a represented party.

[14] The time expended in preparing the responding record, additional responding affidavit, factum and book of authorities was 10 ½ hours for the lawyer and 10 hours for a law student. Those hours are substantial but do correspond with the extent of the issues raised in the responding materials and factum which included: (a) the exclusion of a bill paid over 12 months prior to the requisition for assessment, (b) a lack of procedural fairness in denying permission to file documents after the prescribed deadline, (c) shifting the burden of proof from the solicitor as to the propriety of his work, (d) solicitor’s negligence, (e) misapprehension of evidence, (f) procedural irregularities, and (g) assessing costs using a solicitor’s hourly rate. In the circumstances, it is not appropriate to second-guess the time that SM devoted to the matter. It was well aware of the amount at stake and cannot be presumed to have incurred unnecessary hours when the only potential for compensation was through the hope of a partial indemnity costs award.

[15] The key dispute raised by Ms. McDonald in challenging the costs claimed by SM on this motion is its entitlement to a conventional costs award based on lawyers’ hourly rates notwithstanding that it was appearing as a self-represented litigant.

[16] SM submits that the lawyer involved deprived his partners and himself of income that would otherwise have been available had he been able to serve other clients. This is pursuant to the principal identified (for example) in the decision of the Ontario Court of Appeal in Fong v. Chan et al., 46 O.R. (3d) 330 (C.A.), at para. 26. However, no evidence was provided to the court, for example by way of affidavits, supporting the submission that costs for lost opportunity were incurred.

[17] Similarly, in Benarroch v. Fred Tayar & Associates P.C., 2019 ONCA 228 at para. 33, the Ontario Court of Appeal held that a self-represented lawyer may be entitled to a discretionary award of costs despite his or her self-represented status:

[A]s explained in Fong, a trial or application judge retains the discretion to award or not to award costs. Where the judge determines that an award is warranted and, based on the record, the judge is satisfied that lost opportunity costs have been suffered because the self-represented party has forgone remunerative activity, the judge is either to assess and fix “moderate” or “reasonable” costs, or to provide clear guidelines to an assessment officer as to the manner in which costs are to be assessed.

[18] Any entitlement is to the extent that time was spent in preparation and attendance that would otherwise have been done by a retained lawyer, as distinct from time that would have been spent by a represented litigant. Contrary to that proposition, SM seeks to charge all the time spent in this matter as hours in lieu of otherwise remunerative work.

[19] As to reasonable expectations of the unsuccessful party, I note that similar submissions were made when the matter was before the assessment officer in the hearing that led to Ms. McDonald’s appeal to this court on the motion. The assessment officer reduced the amount claimed by SM despite a relevant r.49 offer to settle and awarded partial indemnity costs of $2,525.34 plus HST and disbursements.

[20] Ultimately, the award of costs is a matter of discretion. In the circumstances of this case, I am satisfied that there should be a costs award made in favour of SM in order to give effect to the principles applicable to the exercise of such discretion: to indemnify successful litigants for the cost of litigation, encourage settlement, and discourage and sanction inappropriate behaviour by litigants. Any amount should be proportionate to the amount at stake in the appeal and should reflect a reasonable expectation on the part of the unsuccessful party. Ms. McDonald has had that experience in the assessment proceeding and there is no reason for her to have expected a different treatment of costs in the event she was unsuccessful on her appeal to this court.

[21] In the absence of evidence of lost opportunity cost, it is not appropriate to make an award of costs on the basis requested by SM. However, SM was successful, and it reasonably responded to the number of issues raised by Ms. McDonald. I conclude that modest and reasonable costs incurred for time that would otherwise have been required if SM had been represented, even in the absence of evidence of lost opportunity cost, is $2,500 inclusive of HST and disbursements.

[22] Therefore, there will be an award of costs in the amount of $2,500 payable by Ms. McDonald to SM.

Robert B. Reid
Date: March 11, 2025