Henneberry v. Compton, 2014 NSSC 412

SUPREME COURT OF NOVA SCOTIA Citation: Henneberry v. Compton, 2014 NSSC 412 Date: 20141120 Docket: Hfx. No. 411747 Registry: Halifax Between: Joyce Theresa Henneberry and Robert Patrick Henneberry Applicants -and- Tyler Robert Compton and Fiona Catherine Andrew Respondents Library Sheet Judge: The Honourable Justice Robert W. Wright Last Written Submissions: October 31, 2014 Written Decision: November 20, 2014 Subject: party and party costs - substantial non-monetary issue involved - lump sum awards - entitlement and quantum

Summary: The respondents were largely successful in opposing a claim for adverse possession of an area of land within their rear boundary line which they shared with the applicants. The limited success achieved by the applicants was to extinguish the respondents
title through the doctrine of adverse possession, to the area of encroachment by part of their driveway leading to a wharf. The respondents
first settlement offer (six months before trial) was similar to the trial outcome and their second settlement offer (three days before trial) was more favourable to the applicants than the trial outcome. Issues:

(1) Entitlement to costs; and

(2) Method of assessment and quantum of costs.

Held:

(1) The respondents were entitled to recover party and party costs of the proceeding given their substantial success in the outcome, the adverse findings of credibility made against the applicants, and the favourable settlement offers which they made along the way.

(2) The Court declined to use Tariff A in its costs analysis because of the difficulty in determining a meaningful
amount involved
where only a non-monetary issue was involved. The Court specifically rejected using an arbitrary rule of thumb based on the number of days of trial, an approach which ought to be used only as a last resort. The Court also rejected the applicants
suggested approach of determining the
amount involved
by applying the percentage of the respondents
land area claimed by adverse possession to the municipal assessed value of their residential property.

Rather, the preferred approach was to order a lump sum costs award in keeping with the basic principle that it should afford substantial contribution to the successful party
s reasonable fees and expenses without amounting to a complete indemnity. The Court was able to follow this approach where counsel for the respondents had provided full particulars of the actual legal fees and disbursements incurred.

In the result, the respondents were awarded a lump sum costs award of $20,000 which represented a recovery of approximately 57% of the legal fees incurred (which would have been higher but for the minimal success achieved by the applicants). In addition, the respondents were awarded taxable disbursements in the amount of $4,945. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THE COVER SHEET. SUPREME COURT OF Nova Scotia Citation: Henneberry v.

Compton , 2014 NSSC 412 Date: 20141120 Docket: Hfx No. 411747 Registry: Halifax Between: Joyce Theresa Henneberry and Robert Patrick Henneberry Applicants v. Tyler Robert Compton and Fiona Catherine Andrew Respondents Costs Decision Judge: The Honourable Justice Robert Wright Last Written Submissions: Written Decision: October 31, 2014 November 20, 2014

Counsel: Marc Dunning for the Applicants Alex Embree for the Respondents Wright, J . [ 1 ] Following a four day trial, the Court released its decision on August 29, 2014 (reported as 2014 NSSC 298 ) in which the respondents were found to be largely successful in opposing a claim for adverse possession of a quadrilateral shaped strip of land inside their rear boundary line which bordered the residential property of the applicants. [ 2 ] The applicants achieved minimal success in their claim by extinguishing, through the doctrine of adverse possession, the respondents’ title to a long narrow triangular shaped piece of land within the larger area claimed.

This triangle has a southern base of approximately 7 feet along the shoreline running westerly from the true boundary line which was determined by a survey to reach its southern end near the centre of the applicants’ driveway. This triangle of land is depicted on Appendix “A” attached to the trial decision. [ 3 ] Essentially, the applicants’ limited success was in extinguishing the title of the respondents to the area of encroachment by part of their driveway.

At the very outset, the respondents acknowledged (in their Notice of Contest) that the applicants had a prescriptive right of use of the encroaching part of their driveway which use would remain unfettered and without any interference from the respondents.

The majority of the trial evidence was taken up with the broader area claimed by the applicants in relation to the row of trees to the west of the driveway, the strip of lawn area in between, the berm area to the south of that, and the expanding area near the shoreline immediately west of the driveway where lobster traps had historically been stored by the applicants.

It is apparent that it was these other areas that largely drove this litigation, in respect of which the applicants were completely unsuccessful. [ 4 ] It is regrettable that this case was litigated to the end when one considers the settlement offers that were made along the way. [ 5 ] The first significant offer of settlement was made by the respondents on May 2, 2013 (six months before trial). At that time, the respondents proposed a new common boundary line that would run the length of their property from point U on the survey plan to the north west corner of the applicants’ wharf.

That end point created a long narrow triangle of land, the base of which extended 5 feet westerly from point P (the end point of the true boundary line) located near the centre of the applicants’ driveway. These terms would have provided the applicants with ownership of all of their driveway except for the periphery of a small curved area near its midpoint along the boundary line and a small flared area where it meets the wharf, neither of which exceptions affected the use of the driveway. In addition, the respondents offered to provide the applicants with an easement for servicing the cribbing of their wharf.

Under the terms of this offer, the respondents would retain ownership and control over the row of spruce trees and the berm as well. [ 6 ] That offer was rejected by the applicants who, on September 20, 2013 made a counter offer. Under its terms, the common boundary line, rather than running straight to the shoreline, would contain two small jogs such that it would essentially run through the middle of the row of spruce trees and intersect the eastern part of the berm before meeting the shoreline some 17 feet westerly from point P.

This greater land area would have given the applicants the lawn area between the trees and the driveway, a small portion of the berm and an area for storage of lobster traps near the shoreline west of the driveway. That offer was rejected by the respondents. [ 7 ] No more settlement discussions were held until three days before the trial began. At that time, the respondents improved their earlier offer of settlement by extending the proposed boundary line slightly further west so that it met the shoreline at the visible end of a timber and rock retaining wall as shown on the McInnis survey plan.

Significantly, this offer of settlement was more favourable to the applicants than the outcome of the trial decision. It is also included proposed terms for reciprocal service easements. [ 8 ] Later the same day, the applicants conveyed a counter offer which would have accepted the same end point of the boundary line on the shoreline but would have allowed the applicants ownership of the lawn area between the row of trees and the driveway and some narrow extension of that area east of the berm.

By the terms of that offer, the applicants also sought the right to cut the tops from the row of spruce trees within certain limits. This was not acceptable to the respondents and so it was that the trial proceeded. [ 9 ] When one compares the drawings exchanged and the new boundary line to be drawn as proposed by the respective parties, it is readily illustrated how very close the parties came to reaching a settlement agreement.

The only difference between them was the ownership of a very small strip of lawn area on the east side of the row of trees and a continuing narrow wedge of land between the end of the row of trees and the berm area. There was also the difference, of course, about the applicants’ desire to have the right to cut 10 feet off the tree tops (at their cost) which was unsatisfactory to the respondents.

Despite the urging of the court before and at the outset of the trial to resolve the matter, considering the relative cost of the litigation to follow, the parties were unable to bridge the narrow differences remaining between them. Measured against the outcome of the trial, the applicants ought to have settled the case on the terms offered by the respondents. [ 10 ] With that outcome, counsel for the parties have been unable to reach agreement on the subject of costs.

Indeed, in their written submissions, they have taken very different approaches both as to entitlement and quantum of the costs that should be awarded.

[ 11 ] In essence, counsel for the respondents proposes a lump sum costs award in keeping with the approach taken by the Nova Scotia Court of Appeal in Armoyan v. Armoyan 2013 NSCA 136 (after his comparison of tariff costs with actual legal expenses and with the pivotal use of the respondents’ formal offer of settlement on May 2, 2013 to set percentages of recovery). Following that approach, counsel for the respondents seeks a lump sum costs award of $33,934.34 which is broken down into components of $27,099.55 in party and party costs and a further $6,834.79 for disbursements (which are inclusive of HST).

The amount sought overall represents an 80% recovery of the total legal expenses incurred by the respondents which were billed in the aggregate amount of $42,174.29. [ 12 ] Counsel for the applicants also treats the May 2, 2013 offer of settlement by the respondents as a focal point (the terms of which are acknowledged to be similar with the trial outcome) but under a very different approach. It is proposed that the applicants should have their party and party costs up to the date of that offer and that the respondents should have their costs thereafter.

Using the applicable tariff and the proposed “amount involved” (of which more will be said later), it is proposed that the applicants should pay the respondents costs and disbursements in the amount of $13,362 and that conversely, the respondents should pay the applicants costs and disbursements in the amount of $5,529.

This approach would create a net costs award (including disbursements) in favour of the respondents in the amount of $7,833 (a difference of $26,101 from the amount sought by the respondents). [ 13 ] As I have summarized on previous occasions, the following principles can be extracted from the relevant provisions of Civil Procedure Rule 77: (

a) An award of costs is in the discretion of the trial judge who may make any order about costs as the court is satisfied will do justice between the parties; (

b) Costs of a proceeding follow the result, unless a judge orders otherwise; (

c) Party and party costs must be fixed in accordance with tariffs of costs and fees incorporated into Rule 77, unless a judge orders otherwise; (

d) A judge who fixes costs may add an amount to, or subtract an amount from, Tariff costs; (

e) A judge may award lump sum costs instead of Tariff costs; (

f) An award of party and party costs includes necessary and reasonable disbursements pertaining to the subject of the award. [ 14 ] The difficulty with the utilization of Tariff A in a case such as this is that the claim is a completely non-monetary one.

Although it is provided in the tariffs under Rule 77 that where there is a substantial non-monetary issue involved, the “amount involved” is to be determined having regard to the complexity of the proceeding and the importance of the issues, those guidelines are of little practical assistance in assessing costs following the adjudication of a boundary line dispute. [ 15 ] Counsel for the respondents, in the first step of his analysis in drawing a comparison between tariff costs and actual legal expenses, submits that the Court should adopt the rule of thumb recently used by this court in MacCormick v.

Dewar , 2011 NSSC 10 in determining the “amount involved” in a boundary dispute case. There, the court adopted a formula whereby the “amount involved” was fixed by multiplying the sum of $20,000 by the number of trial days (following the approach taken earlier in a couple of family law cases). It is accordingly submitted that the “amount involved” here should be fixed at $80,000 in looking at Tariff A. [ 16 ] In my view, that kind of arbitrary approach should only be considered as a last resort.

Indeed, it effectively was a last resort in MacCormick because counsel for the successful party had not provided the court with any evidence or other detail of the actual legal fees incurred. That information is obviously necessary as a benchmark in pursuit of the costs objective of awarding a substantial but incomplete indemnity . [ 17 ] I find support for this view in the Nova Scotia Court of Appeal decision in Veniot v. Veniot Estate , 1998 NSCA 164 , a case involving a constructive or resulting trust.

In that decision, Justice Pugsley writing for the court disagreed with the use of such a rule of thumb by the trial judge and expressed the view that such an arbitrary classification in most cases would be of little relevance. [ 18 ] A similar view was expressed by Justice Murphy in MGL Consulting & Investments Ltd., v. Perks Coffee Ltd. , 2010 NSSC 426 .

Although that decision was in the context of cross Applications in Chambers, Justice Murphy expressed the view that “to arbitrarily assign a dollar amount to a non-monetary claim based upon an artificial rule of thumb relationship between an amount involved and hearing time in order to access a scale is an exercise of last resort which should be avoided if possible”. [ 19 ] In light of the foregoing, I decline to adopt any formula or rule of thumb for the determination of the “amount involved” in this case that would lead to the application or consideration of Tariff A. [ 20 ] Counsel for the applicants, on the other hand, takes a different approach in this determination.

It is argued that the “amount involved” should be determined by multiplying the percentage of the respondents’ land area claimed by adverse possession to the municipal assessed value of the respondents’ residential property (citing the land dispute decision in Creighton v. Nova Scotia (Attorney General) , 2011 NSSC 437 ). [ 21 ] In my view, this is a completely artificial and irrelevant method for the determination of the “amount involved” under Tariff A in assessing costs in a boundary dispute case. Such an approach is entirely without merit.

[ 22 ] What the court must always bear in mind in making a costs award is that it should afford substantial contribution towards the successful party’s reasonable fees and expenses in presenting or defending the proceeding, without amounting to a complete indemnity.

It is because of that principle that judges have discretion under Civil Procedure Rule 77 to add an amount to, or subtract from, tariff costs or to make an award of lump sum costs instead of tariff costs. [ 23 ] In exercising my discretion in the present case, I have considered the principles set out in the two leading costs decisions of the Nova Scotia Court of Appeal in Williamson v. Williams , 1998 NSCA 195 and Armoyan . I recently had occasion to review these two cases in Andrews et al., v.

Keybase et al. , 2014 NSSC 287 which, for convenience, is reproduced in part here as follows: [24] In Williamson , Justice Freeman writing for the Court adopted the underlying principle by which costs ought to be measured as one requiring a “substantial contribution” towards the party’s reasonable expenses in presenting or defending the proceeding, without amounting to a complete indemnity. Reasonably interpreted, a “substantial contribution” was taken to mean more than 50 and less than 100 percent of a lawyer’s reasonable bill for the services provided.

Justice Freeman went on to say that “A range for party and party costs between two-thirds and three-quarters of solicitor-client costs, objectively determined, might have seemed reasonable”. . . . [29] The Williamson case was recently followed by the Nova Scotia Court of Appeal in Armoyan , even though it applied the former tariffs from the 1989 costs regime. Justice Fichaud, in the latter case, affirmed the basic principle that a costs award should afford substantial contribution to the party’s reasonable fees and expenses.

He also affirmed that generally speaking, the “substantial contribution” should exceed 50% of the appropriate base sum, but should not approach the full indemnity of a solicitor and client costs award.

He further noted that the percentage should vary, in a principled manner, according to the circumstances of the case and that a principled calculation of a lump sum should turn on the objective criteria that are accepted by the Civil Procedure Rules or case law. [ 24 ] In both of these cases, the propriety of a lump sum award was tested by comparing the proposed tariff costs with the actual legal fees and expenses to be charged to the client. Justice Freeman in Williamson added the observation that even if evidence of the exact legal fees to be charged were before the Court, this would not be determinative.

Rather, an exercise of judicial discretion to assess objectively what was a reasonable amount would still be necessary. The guidelines for such an assessment are now set out in Civil Procedure Rule 77.13 which need not be repeated here. [ 25 ] It follows from what I have said that counsel making costs submissions after the favourable adjudication of a non-monetary claim such as a boundary line dispute where the tariffs are difficult to apply, are well advised to provide the Court with full details of the actual legal expenses to be charged to the client.

That is the optimal approach in seeking a lump sum costs award instead of tariff costs. [ 26 ] Counsel for the respondents has done just that in the present case. He has provided full details and supporting documentation with respect to his legal accounts for fees and disbursements sent to the respondents and paid by them. The aggregate legal fees charged (inclusive of HST) were $35,339 which were billed at a substantially discounted hourly rate. In addition, disbursements were billed in the total amount of $6,834 (including HST) for a grand billing total of $42,174.29.

As noted in paragraph 11 of this decision, the respondents seek a total lump sum costs award of $33,934.34 which would represent an overall recovery of about 80% of the total legal expenses incurred. [ 27 ] Although counsel for the applicants has questioned some of the individual time entries, overall I find the legal fees billed to the respondents to be a reasonable amount (with the exception of entries for $270 plus HST which did not strictly pertain to this case). [ 28 ] As for disbursements, the items claimed in the total amount of $5,979.71 plus HST, where applicable, do not all qualify as taxable disbursements against an unsuccessful party (even though they may be properly chargeable to the client).

In the present case, recovery of photocopy costs should be reduced from 30 cents per page to 10 cents per page which makes for a reduction of approximately $1,100 plus HST. Neither will the Court allow recovery for research as a taxable disbursement (for which there are here 18 entries), nor for binding combs, USB key or courthouse parking.

I share the view expressed by Justice Murphy in MGL Consulting (at para. 15) that document preparation, reproduction and processing, although necessary to advance claims, should not generate law firm profits which successful counsel can recover from opposing parties. [ 29 ] These disallowed items add up to the rounded figure of $1,675 which reduces the taxable disbursements claim to the rounded figure of $4,300 plus HST. [ 30 ] As noted earlier, it is a well-known rule that costs of a proceeding follow the result, unless a judge orders otherwise.

Here, it is the respondents who were predominantly successful in defending the claim for adverse possession brought against them. I conclude that the minimal success achieved by the applicants, coupled with the many adverse findings made against them in the trial decision, does not entitle them to any measure of costs, especially in light of the settlement offers above recited that were made to them. I also specifically reject their claim for recovery of the cost of the survey plan from their retention of Mr. MacInnis.

Accordingly, I find that the respondents alone are entitled to an award of party and party costs in the circumstances of this case. [ 31 ] As for quantum, I refer once again to the basic principle that a costs award should afford substantial contribution to the successful party’s reasonable fees and expenses without amounting to a complete indemnity.

Bearing that principle in mind, and the manner in which it was applied in the Williamson and Armoyan cases, I conclude that the respondents should receive a party and party costs award of $20,000, measured against the rounded sum of $35,000 for legal fees incurred in relation to this litigation (including HST) which represents a recovery in that respect of approximately 57%.

In addition, the respondents will also be entitled to their taxable disbursements earlier reviewed in a rounded sum of $4,300 plus HST. [ 32 ] These components make a total award for costs and disbursements to be paid by the applicants in the amount of $24,945. I would add that the level of recovery here awarded in favour of the respondents has been tempered by the recognition of the minor degree of success achieved by the applicants.

[ 33 ] As a footnote, I would further add that in coming to this decision, I have completely disregarded an affidavit deposed to by the respondent Fiona Andrew on October 15, 2014. This post-trial affidavit described an unpleasant encounter between Ms. Andrew and the applicant Robert Henneberry and one of his friends on June 17, 2014. That affidavit is irrelevant to the determination of costs and has therefore not been taken into account. [ 34 ] The respondents will have judgment against the applicants for a costs award in the total amount of $24,945. J.