2016 NLCA 56, 2016 NLCA 56

IN THE MATTER OF a proceeding in the Supreme Court of Newfoundland and Labrador, Trial Division (Family) styled: AND IN THE MATTER OF an Order made in the aforementioned proceeding against Keri-Lynn Power, a non-party on November 14, 2013 Victoria Yetman (appellant) v. Gary Yetman (respondent) (13/89) Indexed As: Power (Re): Yetman v. Yetman 2016 NLCA 56 1 C.A.N.L.R. 152 Court of Appeal of Newfoundland and Labrador Green C.J.N.L., Welsh and Harrington JJ.A. October 19, 2016

Summary: The appeal arose out of family law litigation and was brought by the solicitor who represented Mr. Yetman until she was dismissed. As a result of unusual circumstances, the trial judge ordered the solicitor to personally pay the costs in the amount of $750 to the opposing party. The solicitor requested that the Court hear issues of property division together with issues of custody and access. At first this was agreed to, but the Court registry subsequently notified the solicitor that this request could not be accommodated. Opposing counsel brought a motion for costs. Mr. Yetman changed solicitors.

The solicitor therefore did not appear at the hearing for costs where Mr. Yetman’s new counsel requested that she be given the opportunity to be heard and if not, that costs be ordered against her personally. It was so ordered. Held: Appeal allowed. Welsh J.A. (Green C.J.N.L. and Harrington J.A. concurring): An order for costs against a solicitor personally, pursuant to Rule 55.14 is unusual. To divert from this general principle, a judge must be satisfied that there is sufficient reason to impose special costs as authorized under the rule.

Use of the language, “improperly”, “unnecessarily”, “without reasonable cause”, “neglect or other default” must be read together and construed in the context of all the circumstances. The impugned conduct must be considered in context.

In this case, the relevant circumstances included facts such as: a hearing had proceeded in any event on the scheduled date, albeit on different issues; opposing counsel had already provided a response; and the notification from the registry reversing the earlier approval was received just two days before the hearing; both counsel proceeded on the basis that the custody and access issues were unsettled at the time and that the hearing would provide an opportunity to have those issues considered. Neither identified the procedural issue.

This was a situation in which both counsel and the Court registry all had a hand in the resulting procedural irregularities and difficulties. The appropriate course of action for the solicitor would have been to appear at the costs hearing or to advise the Court in writing why she would not be appearing. In all the circumstances, in light of the above facts, it cannot be said that that failure was sufficient to engage rule 55.14 with the resulting order for costs against the solicitor personally.

Moreover, when the solicitor attempted to file an application with the Court to have the costs order set aside, it was returned to her with an unsigned note informing her the matter should be before the Court of Appeal. As the Court has previously warned, no potential litigant is to be refused consideration, at the filing counter, of any claim however novel or infelicitously expressed.

While the application was styled as a request to “set aside” the decision on costs, a review of the information supporting the application clearly raises the question of whether the solicitor was seeking the wrong remedy, and, indeed, whether she should have requested a reconsideration of the decision. Thus, the solicitor’s application should have been filed in the registry and referred to the appropriate judge for consideration. The appeal was allowed.

Cases cited: Pilgrim v. Pilgrim, 2008 NLTD 162, 280 Nfld. & P.E.I.R. 81 Bambrick v. Bambrick (1999), (NL SC), 184 Nfld. & P.E.I.R. 205 (Nfld. U.F.C.) S.M. v. C.M., 2011 NLCA 57, 313 Nfld. & P.E.I.R. 353 Clancey v. Clarke Transport Canada Inc. (1998), (NL CA), 163 Nfld. & P.E.I.R. 188 (Nfld. C.A.) Pennecon Energy Ltd. v. Metal World Inc., 2014 NLCA 10, 346 Nfld. & P.E.I.R. 302 Counsel: No appearance, for the appellant; No appearance, for the respondent; Sarah Clarke, for Keri-Lynn Power, a non-party. This appeal was heard on September 14, 2016 before Green C.J.N.L., Welsh and Harrington JJ.A.

The following judgment was delivered on October 19, 2016 by Welsh J.A. for the Court. ______________________________________________________________ Welsh J.A.: [1] This appeal arises from litigation between Victoria and Gary Yetman regarding the division of matrimonial property and custodyof and access to their children as a result of marriage breakdown. The appeal is brought by a solicitor, Keri-Lynn Power, whorepresented Gary Yetman until she was dismissed. As a result of an unusual set of circumstances, an applications judge made an order requiring Ms.

Power personally to pay alump sum of $750 in costs to Victoria Yetman. Ms. Power appeals that order, leave to appeal having been granted. [2] While Gary and Victoria Yetman had notice of the appeal, both advised that they would not be participating or making written ororal submissions. Both were aware of the potential that the appeal may result in adverse consequences for them, particularly since Ms.Power requested costs of the appeal against Victoria Yetman. BACKGROUND [3] The Yetmans were scheduled to appear on October 11, 2013 for a hearing regarding matrimonial assets. On October 3rd or 4th,Ms.

Power contacted the family court registry to ask that custody and access issues be heard at the same time. The registry approved this plan. However, on October 9th, Ms. Power was notified by telephone from the registry that an error had been made and that the issues regarding custody and access could not be heard on October 11th because leave to proceed with that issue had not been obtained. Ms.Power did not advise counsel for Victoria Yetman that the hearing would be limited to the matrimonial property issues. Ms.

Power submits that it never occurred to her that she needed to advise counsel for Victoria Yetman because, by October 9th, she had alreadyreceived Victoria Yetman’s response, so the work was already done and the hearing was proceeding in any event on the other issues. [4] At the October 11th hearing, counsel for Victoria Yetman requested costs when he found out that the custody and access issues would not be heard on that day.

The applications judge set that request aside until November 14th, the day set for the parties’ nexthearing, in the event counsel still wished to pursue it. [5] After the October 11th hearing, Gary Yetman dismissed Ms. Power as his counsel and retained new counsel. [6] On November 8th, Randy Wellon, counsel for Victoria Yetman delivered a notice to Ms. Power’s office that he intended to seekcosts against her under rules 55.14(2)(

b) and (

c) of the Rules of the Supreme Court, 1986, and that he would be providing an affidavit. On November 12th, an unsworn affidavit was delivered to Ms. Power. [7] Ms. Power did not respond and did not appear at the November 14th hearing for several reasons. She was no longer counsel forGary Yetman, the copy of Mr. Wellon’s affidavit that was delivered to her was incomplete because it was not witnessed or dated, noapplication was attached, the affidavit was not served on her within the time required by the rules, and she had insufficient time to

prepare a response. [8] I note here that the affidavit that was filed with the Court appeared to be properly sworn as it included the signature of a witnessand was dated November 12, 2013. It is of some concern that the copy of Mr. Wellon’s affidavit that Ms. Power received was signed byMr. Wellon, but was not witnessed. To be valid, an affidavit must be signed in the presence of the person taking the deposition. SinceMr. Wellon did not attend the hearing in this Court, there is no explanation as to why a properly executed affidavit was not delivered toMs.

Power. [9] At the November 14th hearing, counsel for Victoria Yetman requested costs relating to the custody and access issues that had not been heard on October 11th. New counsel for Gary Yetman suggested that Ms. Power, who was not present, should be given theopportunity to be heard. However, in the alternative, she asked that, if costs were awarded, the award should be made against Ms. Powerpersonally. [10] On the basis of the information before her on November 14th, including Mr.

Wellon’s apparently properly executed affidavit, theapplications judge ordered: [Victoria Yetman] is awarded lump sum costs in the amount of $750.00 arising from the disposition of an access/custody applicationfiled by [Gary Yetman] on October 4, 2013, and that these costs shall be paid personally by the former solicitor for [Gary Yetmen], Keri-Lynn Power. ANALYSIS Ordering Costs Against the Solicitor Personally [11] In ordering the costs at issue in this appeal, the applications judge relied on rule 55.14:

(1) Where any thing is done or an omission is made, improperly or unnecessarily, by or on behalf of a party, the Court may order (

a) that any cost arising from the act or omission not be allowed to the party; (

b) the party to pay the costs of any other party occasioned by the act or omission; or (

c) a taxing officer to inquire into the act or omission with power to order or disallow any costs as provided in rule 55.14(1)(

a) and rule55.14(1)(b).

(2) Where in a proceeding, costs are incurred improperly, or without reasonable cause, or arise because of undue delay, neglect or otherdefault, the Court may, when the solicitor whom it considers to be responsible, whether personally or through a servant or agent, isbefore the Court or has notice, make an order (

a) disallowing the costs as between the solicitor and the solicitor's client; (

b) directing the solicitor to repay to his or her client costs which the client has been ordered to pay to any other party; (

c) directing the solicitor personally to indemnify any other party against costs payable by the party; or (

d) directing a taxing officer to inquire into the act or omission, with power to order or disallow any costs as provided in rule 55.14(2)(a)to rule 55.14(2)(c). (Emphasis added.) [12] An order for costs under rule 55.14 and, particularly, an order against a solicitor personally is unusual. In general, costs followthe cause and are ordered against the party. To divert from this general principle, a judge must be satisfied that there is sufficient reasonto impose special costs as authorized under the rule.

Use of the language, “improperly”, “unnecessarily”, “without reasonable cause”,“neglect or other default” must be read together and construed in the context of all the circumstances. [13] Applying rule 55.14(2) in the family law context in Pilgrim v. Pilgrim, 2008 NLTD 162, 280 Nfld. & P.E.I.R. 81, Butler J.awarded costs on the basis of undue delay. In that case, in September 2006, the applicant had asserted that the respondent’s counsel wasin a conflict of interest and should be removed as counsel.

The issue did not resurface until September 2008, causing Butler J. to remark: [22] … [T]he Applicant seeks this relief [removal of the respondent’s counsel] extremely late in the litigation history, two years after itwas first raised and 14 months after a Settlement Conference was held.

In fact, in some cases, significant delay has been held as a reasonto deny the removal of counsel. … [23] While I would not be prepared to go so far as to conclude that the Applicant’s sole purpose on the Application was to gain atactical advantage in the significantly drawn out matrimonial litigation, the Applicant has to accept some responsibility for the currentstate of affairs [requiring the respondent to obtain new counsel]. [Bold in the original.] [14] In the result, Butler J. ordered the applicant to pay the respondent’s costs on all proceedings between September 2006 and 2008.

The judge reasoned: [28] …This will give the Respondent time to engage new counsel and will also provide her with some compensation towards legal feesthat will now undoubtedly be duplicated. [15] In Bambrick v. Bambrick (1999), (NL SC), 184 Nfld. & P.E.I.R. 205 (Nfld. U.F.C.), Cook J. rejected an

application for solicitor and client costs under rule 55.14. The judge explained: [65] It must first be determined whether Mr. Bambrick did or did not do something improperly or unnecessarily and, if he did, whether court discretion should be exercised to award costs on a solicitor and client basis as requested by counsel for Ms. Bambrick. The judge concluded that the receipt of some of the financial information the day before the hearing did not detrimentally affect the respondent’s ability to present a proper case.

In the circumstances, the judge concluded that it would not be appropriate to exercise his discretion under rule 55.14. [ 16 ] In the appeal now before this Court, the question is whether the judge erred in the exercise of her discretion under rule 55.14 to order a lump sum in costs to be paid by Ms. Power personally. At the November 14, 2013 hearing before the applications judge, when the issue of a costs award was discussed, the following exchanges occurred: [New counsel for Gary Yetman] : I’m at a disadvantage because I feel like anything I say I’m making an argument for [Ms. Power] when she’s not my client.

I don’t have any instructions from her and the only thing I can say is, you know, if something is done I do feel in fairness that she should have an opportunity to be heard. The Court : Well, [Ms. Power] was provided, she was told the last time we were here in court that I would be dealing with the costs issue today. [New counsel for Gary Yetman] : Yeah, and my only … The Court : And Mr. Wellon did file an affidavit … [New counsel for Gary Yetman] : Yeah, yeah. The Court : And he has said and I’m assuming that you served it or sent it to Ms. Power. Mr.

Wellon : We did with a further invitation to provide her own explanation. [ 17 ] This is followed by a discussion regarding the error made by the Court registry in initially telling Ms. Power she could proceed with the child custody and access issues at the hearing on October 11 th : The Court : … [I]t’s a busy court, we have staff, they’re looking at interim applications. People don’t always go through the file to see if a Note to Court is back. They give a date. It was given in error, maybe Ms. Power should have known, maybe you [Mr. Wellon] should have known, but by Wednesday for sure [Ms.

Power] did know that the matter [of child custody and access] wasn’t going ahead, so I do find inappropriate behavior at that time and I think there should be some cost consequences . Now I am looking at … there are really two rules here, 55.14(1) and 55.14(2). … Yeah, well [subsection (1)] I think is also relevant, where anything is done or an omission made improperly, unnecessarily by or on behalf of [a party], the court may order any cost arising, may be paid, a party to pay.

So [subsection] (2) deals more with the issue of the solicitor absorbing the cost and it does suggest that if a costs award is made against a client the solicitor may be directed to repay the client [the] cost. … So I just wanted to raise it with you to say that I have considered that and I have looked at that section. Now you know, Mr. Wellon, you’ve given sort of an estimate in terms of your costs, your time. … I don’t need anything further.

I am going to make a lump sum award and it will not be for the full amount you claimed because as I said, I’m dealing with what I consider to be the omission to notify you, come Wednesday [that the matter would not be heard] so I’m going to order $750 costs . I am going to ask that you communicate that with Ms. Power …. I am basing this on the fact that the solicitor was before the court, did have notice that the matter would be dealt with today, and I am taking you at your word that you have provided the material that you relied upon in the court to Ms. Power. Mr. Wellon : I specifically sent a letter to Ms.

Power and told her that pursuant to the provisions of Rule 55 I would be asking that costs be assessed against her because the rule does require notice, and I didn’t know that she would be here although I expected she would. (Emphasis added.) [ 18 ] In ordering costs against Ms. Power personally, the applications judge relied solely on Ms. Power’s failure to advise Mr. Wellon that the issues regarding child access and custody would not be heard on October 11 th with the matrimonial property issues. The judge did not explain how Ms.

Power’s conduct could be construed as falling within the language used in rule 55.14. The judge called Ms. Power’s conduct “inappropriate”. By contrast, the rule uses language that would describe more serious types of conduct; that is, acting “improperly”, “unnecessarily”, “without reasonable cause”, or by “neglect or other default”. [ 19 ] The impugned conduct must be considered in context. In this case, the relevant circumstances include such facts as: a hearing had proceeded in any event on October 11 th , albeit on different issues; Mr.

Wellon had already provided a response on the additional issues that he expected to be heard on October 11 th ; and the notification from the registry reversing the earlier approval was received just

two days before the hearing. In addition, the applications judge noted that, while “maybe Ms. Power should have known” that she needed to obtain leave to have the custody and access issues heard on October 11th, “maybe you [Mr. Wellon] should have known” aswell, the inference being that Mr. Wellon also had access to the rules and knew that Ms. Power had not obtained the necessary leave. Both counsel proceeded on the basis that the custody and access issues were unsettled at the time and that the October 11th hearingwould provide an opportunity to have those issues considered.

Neither identified the procedural issue. [20] Further, while the applications judge relied on the apparently valid affidavit, Mr. Wellon’s representation that the materials hadbeen properly served, in fact, was not completely accurate given, for example, the unsworn affidavit that Ms. Power had received lessthan two days before the hearing. [21] This was a situation in which Ms. Power, Mr. Wellon and the Court registry all had a hand in the resulting procedural irregularities and difficulties. However, the parties were not prejudiced on October 11th. Clearly, the appropriate course of action for Ms.

Power would have been to appear at the hearing on November 14th or, at least, to advise the Court in writing why she would not beappearing. [22] That said, the applications judge based her order on Ms. Power’s failure to advise Mr. Wellon that the custody and access issues would not be heard on October 11th. In all the circumstances, in light of the above facts, it cannot be said that that failure was sufficientto engage rule 55.14 with the resulting order for costs against Ms.

Power personally. [23] The conclusion follows that the applications judge erred in the exercise of her discretion in making the order for costs against Ms.Power. [24] I note in passing that, while unnecessary for purposes of determining this appeal, I do not accept Ms. Power’s submission that the Court should not have proceeded to hear the costs issue on November 14th for the reason that an application had not been made regarding that issue. The applications judge indicated at the October 11th hearing that she would hear the costs issue on November 14th should Mr. Wellon decide to proceed with it.

I would characterize the judge’s comment as granting leave to Mr. Wellon, therebyobviating the need for a separate application. A Case for Appeal or Reconsideration [25] Ms. Power became aware of the order made against her on November 20, 2013. On November 29th, she attempted to file anapplication with the Court that had made the order. In the application, she outlined her reasons for seeking to have the costs order “setaside”. A copy of the covering letter attached to the application was returned to Ms. Power with the following handwritten notation: This was a final order for costs on this application.

This should be in COA [Court of Appeal]. The notation was neither signed nor initialed. Without that information, it is not possible to be certain that the notation was made by, oron the instructions of, the applications judge. [26] In the absence of that information, I would reiterate the caution expressed in S.M. v.

C.M., 2011 NLCA 57, 313 Nfld. & P.E.I.R.353, regarding limitations on the authority of a registry or other administrative officer of the court: [13] Accordingly, it is not up to an administrative official to decide, in the absence of a prior judicial directive (not merely theexpression of an informal opinion), whether to allow a potential litigant the opportunity to seek adjudication of a matter that on its faceappears to have been submitted in good faith.

To countenance otherwise, would be to allow a non-judicial determination of a good faithclaim without allowing the party submitting the claim to be heard, even on preliminary issues such as jurisdiction, standing andjusticiability. [27] A similar point was made by this Court in Clancey v. Clarke Transport Canada Inc. (1998), (NL CA), 163Nfld. & P.E.I.R. 188: [35] … One must start with the general proposition, based on the procedural notion of universal access to the court, that no potentiallitigant is to be refused consideration, at the filing counter, of any claim however novel or infelicitously expressed.

Failure to complywith the rules of pleading or failure to assert a cause of action known to the law or the prosecution of a matter for purposes that areimproper or otherwise an abuse of process may subsequently lead to the matter being stayed or struck out, but in principle such claimscan be filed. … [28] As applied to this appeal, Ms. Power’s application should have been filed in the registry and referred to the appropriate judge forconsideration. [29] Further, assuming the notation on the letter was made by a judge, I would refer again to the S.M. v.

C.M. decision: [14] At the very least a potential litigant is entitled to be heard by a judicial officer even if the claim is novel or unusual. While thisdoes not mean that in all cases, “being heard” necessarily requires an oral hearing, it does, at the least, if the court is disposed to reject aclaim, require that the party submitting the claim be notified of the specific concern of the court and be given an opportunity to makesubmissions, either orally or in writing, on those matters of concern.

It also requires a reasoned decision (however terse), entered as partof the record of the court, from which a proper appeal can be taken if the party whose claim is rejected believes error has been made. [30] There is no indication that the applications judge who made the order addressed the question of whether it was open to her toreconsider the order and whether she should do so, or whether she sought further information or submissions from counsel.

While theapplication was styled as a request to “set aside” the decision on costs, a review of the information supporting the application clearlyraises the question of whether counsel was simply seeking the wrong remedy, and, indeed, whether she should have requested a

reconsideration of the decision. In the circumstances, it would have been appropriate for the judge to clarify this point with counsel, giving her the opportunity to amend her application, and perhaps avoid the need for an appeal. [ 31 ] This was a situation in which reconsideration of the decision may have been appropriate given the facts that led to Ms. Power’s failure to attend Court on November 14 th . The relevant judicial authority is summarized in Pennecon Energy Ltd. v.

Metal World Inc. , 2014 NLCA 10 , 346 Nfld. & P.E.I.R. 302 , at paragraphs 11 to 19 . [ 32 ] The purpose of including this comment in this appeal is not to suggest that parties should regularly seek reconsideration of decisions. The general rule is that decisions are final and can only be altered on appeal. The circumstances in which reconsideration may apply are limited, as discussed in Pennecon .

However, in an appropriate situation, where supported by the facts and the law, consideration should be given to the option of requesting a reconsideration which may be a more proportionate and cost effective procedure than an appeal. Costs of the Appeal [ 33 ] Ms. Power has been successful in having the costs order made against her set aside. The general rule is that she would receive her costs of the appeal. She points out that Victoria Yetman did nothing to reduce costs of the appeal since, for example, she refused Ms. Power’s request to have the leave application and appeal heard together.

This would have resulted in one less court appearance. [ 34 ] Further, Victoria Yetman’s counsel pursued the costs issue in the Trial Division after the judge deferred the issue to another day to give Ms. Yetman the opportunity to consider whether, in the circumstances, it was appropriate to pursue the issue. As discussed above, Ms. Yetman was not prejudiced by the judge’s determination that the custody and access issues would not be considered on October 11 th , and, rather than the intentional fault of Ms.

Power, there was a confluence of circumstances that led to that procedural result. [ 35 ] Victoria Yetman was given notice of the appeal and was aware of the potential that the appeal may result in adverse costs consequences for her. She chose not to participate in any way in the appeal. [ 36 ] In the result, I would order that Ms. Power should have her costs of the appeal as against Victoria Yetman.

SUMMARY AND DISPOSITION [ 37 ] In

summary, the applications judge erred in the exercise of her discretion when she ordered Ms. Power personally to pay costs of $750 to Victoria Yetman. [ 38 ] Accordingly, I would allow the appeal, set aside the costs order against Ms. Power made by the applications judge, and order that Ms. Power shall have her costs of the appeal under column 3 of the Scale of Costs as against Victoria Yetman. Appeal allowed.