Two new costs decisions are, we think, worthy of note.
Sun-Times Media Group Inc. v. Conrad Black
At a time when Mr. Black probably has other things on his mind, Justice Colin Campbell had the task of fixing costs of a half-day motion in which Black had enjoyed at least partial success. What made this case a bit out of the ordinary was the amount claimed by Black’s lawyers as costs of the motion: $243,314 on a substantial indemnity basis or $178,308.81 on a partial indemnity basis.
Counsel for the plaintiff Sun-Times submitted that Black should receive either no costs or that those costs be limited to $15,000.
Campbell J. was obviously more than a little exasperated at the amounts in issue:
I find it astounding that our cost regime could give rise to a “reasonable” expectation on the part of two sides in a motion that took less than half a day to argue, which would differ by over a quarter of a million dollars.
…
If our system is to respond in a formulaic way such that a half-day motion can result in a cost award of $243,314, then there is little doubt that the critics who claim that the civil justice system fails to meet the needs of the vast majority of citizens are correct.
His Honour had a number of criticisms of the Black costs tab:
- the breakdown of time was not specific as to who did what, as no dockets were provided with the submissions;
- a claim was made for expert’s fees of $32,433.63. No preliminary authorization had been obtained for the introduction of expert evidence on a motion. In this case, the “so-called expert evidence, which should have no place on a motion of this type”, was neither necessary or helpful, said the judge. The disbursement was disallowed;
- His Honour was very critical of a claim for $9,616.96 for photocopies: “In this day and age, cases can be provided by CD with the actual references relied on either quoted in the factum or included in a short compendium. When one considers the alternatives, a profit centre photocopy rate of $0.25 a page or more that gives rise to a claim of nearly $10,000.00 must be considered excessive.”;
- a claim for a disbursement of $3,004,53 for online legal research was also found to be excessive, particularly since the students doing the research were being charged out at $150 per hour.
Although Justice Campbell acknowledged the importance of the motion to Mr. Black (apparently, the concern was that he not be subjected to cross-examination at this time), His Honour said that importance to one side should not mean automatic recovery of all fees incurred. In the result, he awarded $65,000 for all fees, disbursements and GST, on a partial indemnity basis.
McDonald v. Standard Life Assurance Company
In this case, Justice Joseph W. Quinn, on his own initiative, had convened a hearing as to whether counsel for the plaintiff ought to be personally liable for the costs of two motions. One motion had been brought by each side in this litigation concerning long term disability benefits. The plaintiff had asked that the statement of defence of Standard Life be struck out for its failure to provide “a summary of the facts of the surveillance” on the plaintiff. The defendant had moved to set aside a certificate of non-attendance and for an order that the plaintiff be examined before the discovery of the Sun Life representative. The plaintiff had lost both motions.
Justice Quinn found the plaintiff’s solicitor personally liable for costs, fixed at $4,500.
(LTD insurers are on quite a roll. Less than a month before this decision, Standard Life Assurance had obtained a ruling in another case, requiring a solicitor to pay costs personally. Our summary can be viewed here.)
In this case, the plaintiff’s solicitor had demanded disclosure of surveillance prior to the examinations for discovery, a position which Quinn J. said was “unsupported by the Rules of Civil Procedure”. The plaintiff’s solicitor insisted to counsel for Sun Life, that she would not permit the plaintiff to be examined first unless she had been provided with a summary of the defendant’s surveillance.
Justice Quinn noted in his reasons, that the Rules only permit a plaintiff to serve a notice of examination on the defendant after the plaintiff has served a sworn affidavit of documents. Here, counsel for the plaintiff had served an unsworn affidavit but Justice Quinn said that “an unsworn affidavit of documents ranks no higher than a letter” and renders a notice of examinations served by that party a nullity. His Honour also observed that Rule 31.04(3) allows the party who first serves a sworn affidavit of documents to complete his or her examination of an opposing party before being examined, unless the court orders otherwise.
Quinn J. was very critical of the plaintiff’s solicitor for having “misapprehended the law”. It was this error, in his view, that had led to these motions having to be argued at all. He went on to say that a distinction had to be drawn between issues having little merit and issues having no merit: “litigating an issue that is doomed to failure has nothing to do with the fearless representation of a client”.
Having determined that it was appropriate to order that the plaintiff’s solicitor pay the defendant’s costs, Justice Quinn turned to the appropriate scale. Interestingly, he considered these to be his alternatives:
There are four scales of costs: (1) partial indemnity; (2) substantial indemnity; (3) full indemnity; and, (4) one of the above with a premium. Ms. Scaccia, counsel for the defendant, does not seek full-indemnity costs or a premium. The term “substantial indemnity,” by its ordinary meaning, implies that costs awarded to a party on that scale are less than what the party would be obliged to pay his or her own solicitor.
(Although Power J. did say, in Ward v. Manulife, that a court still has discretion to award costs premiums, despite the Supreme Court of Canada’s ruling in Walker v. Ritchie, this is the first post-Walker case that we have seen in which a court has said that premiums are available for all scales of costs. In fact, until now, we haven’t seen any case except Ward, that has been decided since Walker, in which a court has said that costs premiums are still available.)
Since Sun Life had not asked for a premium, Justice Quinn did not have to address this issue. He reluctantly concluded that arguing a point that has no merit is not a basis for an award of substantial indemnity costs. Hence, he was limited to awarding costs on a partial indemnity basis. These he fixed at $4,500 plus GST and $526.83 for disbursements.