Case Name:

Labourview Co-operative Homes Inc. v. Chatham-Kent

 (Municipality)

Between

Labourview Co-operative Homes Inc. and Krista Burk,

Applicants, and

The Corporation of the Municipality of Chatham-Kent

and Horwath Orenstein Inc., in its capacity as

Receiver and Manager of Labourview Co-operative Homes

Inc., Respondents

[2008] O.J. No. 4644

Court File No. 135/07

 Ontario Superior Court of Justice

 Divisional Court - Toronto, Ontario

J.R.R. Jennings and J.H. Brockenshire JJ.

Heard: By written submissions.

 Judgment: November 14, 2008.

(13 paras.)

Counsel:

Raj Anand and Paul D. Guy, for the Applicants.

Raymond G. Colautti, for the Respondents.

DECISION ON COSTS

1 J.R.R. JENNINGS and J.H. BROCKENSHIRE JJ.:-- We have considered lengthy submissions presented by both sides re costs for this one day hearing before the court, as well as the books of documents, letters, decisions, etc., each some two inches thick provided to us. We are aware of the extensive, and sometimes testy correspondence between counsel, directed to the court, which held up any decision by us on the matter. We are also aware that the decision of this court carried a provision at the end that "brief submissions in writing" re costs, were to be made within 30 days. While we understand the delay, we do not understand why books of material, each two inches or so thick, were filed. The submissions alone, of the applicant are 26 pages, of the respondent 34 pages, and the reply is 16 pages.

2     As counsel should be aware, in the interval Mr. Justice Dennis Lane, the president of this panel, retired. Pursuant to the Courts of Justice Act s. 123(3) we are dealing with the matter on behalf of the court.

3     We appreciate that while the issues in this judicial review application were argued in a day, the issues arose in the context of new legislation, with no judicial precedent thereunder, and in the context of complicated and conflicting oral evidence, captured in numerous affidavits and lengthy cross-examinations, and also involved numerous documents, some parts of which were relevant, resulting in a seven volume application record with many volumes of respondent materials. All of this, we understand took a great deal of time and considerable disbursements to gather. We appreciate that the day spent before us was in some ways more like the submissions of counsel at the end of a two or three week long trial then to an argument over divergent interpretations of a statute or regulation.

4     The issue of costs is before us pursuant to s. 131 of the Courts of Justice Act and Rule 57. We are not to engage in a line by line review of bills of costs, as commonly happens under an assessment of costs per Rule 58. As was stated in Larcade v. Ontario (Ministry of Community and Social Services) (2006), 35 C.P.C. (6th) 55, 211 O.A.C. 247 (S.C.J. Div. Ct.) "in fixing costs the overriding principle is fairness and reasonableness."

5     Counsel for Chatham-Kent complains at some length that the real applicant in this case was the Co-operative Housing Federation of Canada Inc.. It is not surprising to us that the Federation would be involved in assisting the applicants, and be most interested in the result. In reply, the applicants cite and rely on Re Lavigne v. Ontario Public Service Employees Union et al. (No. 2), 60 O.R. (2d) 486 (H.C. 1987) where at page 34, second paragraph, the court accepted that in Charter litigation, of necessity, individuals must seek assistance from third party organizations to assert his or her rights. We accept that reasoning and do not see the support of the Federation as something that would limit the applicants in their claim for costs.

6     However, it is clear to us that this application was initially brought before the Commercial Court, with the respondents submitting from the start that the application was properly one for judicial review of decisions by the responding municipality, rather than a review of the appointment or activities of the receiver. Despite repeated indications that the jurisdiction of the Commercial Court would be objected to, the matter proceeded before it, the jurisdictional argument was made, and the applicants lost.

7     The breakdowns provided by the applicant for its costs show $36,278.50 being charged specifically for preparing a factum and a compendium for the commercial list hearings, and a further $11,000 for preparation for and argument of the commercial list application. Those amounts in our view must be disallowed.

8     Further, we see that Mr. Anand and Mr. Guy were charging the client reduced rates of $400 and $180 per hour respectively from 2006 through 2008. However each of them increased the amount claimed on a partial indemnity rate through the three years, Mr. Anand from $315 through $325 to $360 and Mr. Guy from $145 through $160 to $180. We appreciate that there is case law indicating that a "partial indemnity rate" so long as it is below the actual rate charged the client, can still be acceptable. However, in our view, when counsel agree to work at a reduced rate throughout a case, the partial indemnity rate should stay the same throughout the case. We fail to see how in fairness, when the client is paying the same rates year after year, the amounts claimed against the losing party can rise year after year. This offends the principle of indemnity. Here, we conclude that the rate increases, which also applied to some support staff, even after deducting out the rate increases built into the claims re the Commercial Court application, which we disallowed, would still be some $6,000, which we deduct from the amount claimed.

9     Responding counsel list a number of alleged unnecessary procedures and delays. Applicants' counsel make similar allegations, and speak of having to "ferret out" the information which ultimately led to success before our court. We take it that there were problems on both sides in getting this matter ready for court. What strikes us is that Mr. Anand and Mr. Guy docketed some 580 hours of preparation before this matter got to any court. Assuming 40 hour weeks, that would mean 14 1/2 weeks of very expensive lawyer time, which in our view is simply too much to reasonably expect the other side to pay.

10     On the other hand, we see that the respondents' counsel had a bill of costs of $104,644.53 up to the time of preparation for the hearing before us.

11     We are mindful that the dispute here was between a municipality, funded by taxes from its ratepayers and grants from the province, and a Co-op providing housing, funded by geared-to-income rents and grants and subsidies provided by the province or direct from the municipality, over the interpretation of, and the appropriate procedures under, the statutory scheme governing both. As such, the issue of fairness and reasonableness perhaps extends past the named parties to the taxpayers actually paying the bills.

12     For the reasons aforesaid, we conclude that the fees claimed of $175,206 should be reduced by $60,000 to $115,206 plus GST of $6,912.36, totaling $122,118.36. The quantum of disbursements was not objected to, and although we wonder about a charge for $18,556.66 for photocopies and binding, we nevertheless allow the disbursements as claimed at $28,947.46, totaling $151,065.82.

13     We appreciate the respondent has claimed $32,666.76 as costs re the Commercial Court proceedings. Fixing that claim was not before us and properly would be dealt with by the Commercial Court.

J.H. BROCKENSHIRE J.

 J.R.R. JENNINGS J.

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