Laamanen v. Cleary, 2017 NSSC 153

SUPREME COURT OF Nova Scotia Citation: Laamanen v. Cleary , 2017 NSSC 153 Date: 20170531 Docket: Hfx No. 447470 Registry: Halifax Between: Neil Carl Laamanen, Crystalle Lynne Laamanen Applicants v. Roy Francis Cleary, Gertrude Thelma Cleary, Suzanne Cleary Respondents COSTS DECISION Judge: The Honourable Justice Ann E. Smith Heard: January 3, 4, 5; 9, 2017, in Halifax, Nova Scotia { 2017 NSSC 55 issued March 8, 2017} Final Written Submissions: May 8 and 9, 2017 Counsel: Alex Embree, for the Applicants Jonathan Hooper, for the Defendants By the Court: INTRODUCTION [ 1 ] This decision addresses costs.

Following a four-day hearing, I released a decision on March 8, 2019 ( 2017 NSSC 55 ). I determined that the Applicants were successful against the Respondents in a right of way dispute that had been brought by a Notice of Application on January 16, 2016. The Respondents filed a Notice of Contest and a Notice of Respondents’ Claim on February 12, 2016. The Applicants filed a Notice of Contest to Respondents’ Claim on February 22, 2016. [ 2 ] I granted the relief sought by the Applicants, with the exception of their claim for general damages and the injunctive relief they sought.

I dismissed the Respondents' claims in their entirety. [ 3 ] I awarded costs to the Applicants. The parties have been unable to agree on costs. I have received and reviewed their written submissions. [ 4 ] The Applicants claim costs, based on a lump sum amount, of $89,254.76, jointly and severally against the three Respondents. The Respondents say that costs should be determined on the basis of Tariff A, Scale 1 in the amount of $10,000.00. Governing Law: Tariff A or Lump Sum

[ 5 ] Civil Procedure Rule 77 deals with costs. Justice Wright in Henneberry v. Coopton , 2014 NSSC 412 summarized the principles applicable to costs at para. 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 he 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 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. [ 6 ] Civil Procedure Rule 77.06(2) states: Party and party costs of an application in court must, unless the judge who hears the application orders otherwise, be assessed by the judge in accordance with Tariff A as if the hearing were a trial. [ 7 ] In order to apply Tariff A, there must be a determination of the “amount involved.” There is no “amount involved” in this right of way dispute.

Where there is no monetary amount at issue, Courts have sometimes applied a “rule of thumb” to calculate the amount involved. For example, in MacCormick v. Dewar , 2011 NSSC 10 , a case about a boundary dispute, Bourgeois J. applied the rule of thumb: 11 In the circumstances, I see no reason to vary away from costs as contemplated in Tariff A. I agree with the Plaintiff, that in determining the “amount involved” where this matter was not a monetary claim, the Court should apply a formula which assigns a value reflective of the length of trial.

Given this matter extended over four days, I find that the “amount involved” should be $80,000.000, and note that a similar approach has been recently applied by the Court (see Urquhardt v. LeBlanc 2009 NSSC 324 and Jachimowicz v. Jachimowicz 2007 NSSC 303 ). [ 8 ] It is noted that Wright J. in Henneberry v. Compton commented that in MacCormick v. Dewar the “rule of thumb” was “effectively a last resort” as the successful party's lawyer did not provide evidence of the actual legal fees incurred. Wright J. stated: 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. [ 9 ] Wright J. commented upon the difficulty of using Tariff A in the context of the boundary line dispute which he had decided: 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. [ 10 ] In Shannon v.

Frank George's Island Investments Ltd. , 2015 NSSC 133 Chipman J. referred to Justice Wright’s decision in Henneberry v Compton and determined that it was appropriate to take a lump sum costs approach in the context of deciding whether a road was private or public. In that case, Chipman J. noted that a lump sum costs award approach was taken by the Nova Scotia Court of Appeal in Armoyan v. Armoyan , 2013 NSCA 136 (N.S.C.A.) and Williamson v. Williams , 1998 NSCA 195 (N.S.C.A.). As did Chipman J., I find those cases to be helpful to my analysis. [ 11 ] In Armoyan v.

Armoyan Fichaud J.A. stated that tariffs “are the norm, and there must be a reason to consider a lump sum” (para. 15) and the “basic principle is that a costs award should afford substantial contribution to the party's reasonable fees and expenses.” (para. 16). A “substantial contribution” does not amount to a complete indemnity and means more than fifty and less than one hundred per cent of a lawyer's reasonable bill for the services involved.” (Freeman J. in Williamson v. Williams ). [ 12 ] Burgoyne v. Hutton , 2016 NSSC 302 was a costs decision in a right of way dispute. Muise J. cited Henneberry v.

Compton and ordered lump sum costs, stating as follows at paragraph 38: 38 The Court in Henneberry rejected the approach of using an artificial amount involved for the non-monetary issue it had to decide. Instead, given that it had an accounting of the actual fees incurred, it used the lump sum approach of providing a substantial contribution towards the Respondents' reasonable legal expenses, that falls short of complete indemnity. It awarded $20,000 in costs, which was approximately 57% of the reasonable legal costs.

It noted that that amount would have been higher but for the minimal success of the Applicants. [ 13 ] The Respondents ask the Court to proceed under Tariff A. Tariff A provides for $2,000.00 for each trial day. There were four hearing days in this application, so that Tariff amount would be $8,000.00. As noted previously, Tariff A also provides for a fixed amount based on the “amount involved.” The Respondents invite the Court to apply “Scale 1” because they say that the Applicants were

“only successful in on of the five claims plead.” The Respondents say that the Court should determine that the “amount involved” is less than $25,000.00. If the Court accepts the Respondents’ approach, this would result in costs of $11,000.00. [ 14 ] I reject the Respondents’ approach to the calculation of the Applicants’ costs. I find no need to pick a number out of the air in a case where there was no monetary amount involved. In the context of the overall case, the Applicants were the successful party.

The issue of the widening of the travelled roadbed to allow them to take advantage over their deeded rights of way was the central theme of the case. The Applicants were wholly successful in that regard. While I declined to exercise my discretion to issue injunctions against the Respondents, doing so was not central to the issues before the Court. In assessing costs, nothing turns on the fact that the Court did not issue an injunction. The Applicants have an order of this Court providing for their rights as against the Respondents.

An injunction, in some ways, would be superfluous. [ 15 ] Similarly, I do not consider the lack of an award of general damages to the Applicants to have any impact on the costs award. [ 16 ] As previously stated, in the overall context of this case, the Applicants were the successful party. They are not to be deprived of their reasonable party and party costs by a parsing of their success on individual claims advanced. The claim for injunctive relief and the claim for general damages occupied negligible Court time. I exercise my discretion to award lump sum costs.

The Applicants’ July 22, 2016 Settlement Offer [ 17 ] Civil Procedure Rule 10.03 deals with settlement offers and costs: 10.03 – Settlement offers and costs A judge who determines costs may take into consideration a written offer of settlement made formally under this Rule or otherwise, unless the offer was made at a settlement conference or under an agreement that the offer would not be admissible in relation to costs. [ 18 ] The Applicants advanced a settlement offer dated July 22, 2016, which was rejected by the Respondents.

I find that this settlement offer was more favourable to the Respondents than was my March 8, 2017 decision. [ 19 ] The settlement offer proposed a total width of proposed changes to the Respondents’ Lot 1 of 40.68 feet. This was less than the 53.81 feet provided for in the Court's order. The settlement offer proposed a total width of changes to the Respondent Suzanne Cleary’s Lot 4 at 10 feet.

The order of this Court provided for a 20-foot width. [ 20 ] The Applicants noted in their July 22, 2016 settlement offer that they intended to seek lump sum costs if successful, if the Respondents did not achieve a result equivalent to what it was offering (or better). The Applicants offered to settle costs at that point at $60,000 including HST and disbursements. [ 21 ] The Applicants’ July 22, 2016 settlement offer is a significant factor in considering costs. The Respondents' Settlement Offer dated July 7, 2016 [ 22 ] The Respondents also made a settlement offer dated July 7, 2016.

This settlement offer included a site plan with a road-widening plan. The Applicants did not accept this offer. The Respondents’ settlement offer was less favourable to the Applicants than the decision of this Court. The site plan did not provide for any widening of the roadway in Lot 1 and provided for less use of the westernmost part of Lot 4 than either the Applicants’ settlement offer or the order following this Court's decision.

The Reasonableness of the Fees Incurred [ 23 ] Counsel for the Applicants has provided full details and supporting documentation with respect to his firm’s legal accounts for fees and disbursements sent to the Respondents and paid by them (a small amount of fees remain outstanding). The Applicants have paid $103,206.18 in legal fees (inclusive of HST). The Applicants have adjusted their legal fees, for the purpose of costs assessment, to $100,000.00.

I must determine whether those fees were reasonably incurred. [ 24 ] I have carefully reviewed the entries, the hourly rates and the work conducted by the Applicants’ counsel. I find these fees to have been reasonably incurred. [ 25 ] The costs awarded to the Applicants must constitute a substantial contribution to their legal fees, but not amount to a full indemnification. I must award a percentage of the actual fees incurred that lies somewhere between 50% and less than 100%. [ 26 ] The Applicants invite the Court to award them 80% of their legal fees.

In coming up with an 80% indemnification, they rely upon their July, 2016 settlement offer, which I have determined was more favourable to the Respondents than are the terms of my decision. They also say that the Notice of Respondents’ Claim where the Respondents sought damages and an injunction took up a significant amount of time in the proceeding. The Applicants’ counsel notes that counsel for the Respondents in closing arguments put a $1.00 value on his clients’ damage claim and the Respondents’ claim for injunctive relief was dismissed.

The Applicants also say that a motion for disclosure of documents from the Respondents was unnecessary. [ 27 ] The Applicants also say they were forced to file a motion by correspondence to settle the terms of the order following the decision. I agree with the Applicants that the order the Court issued following review of submissions of counsel was substantially in the form provided by counsel for the Applicants, with the exception of the Court’s deletion of terms of injunctive relief. [ 28 ] I have carefully considered the submissions of counsel on costs.

I conclude that the strongest factor in favour of a high percentage of actual costs is the Respondents’ rejection of the Applicants’ July, 2016 settlement offer. [ 29 ] I find, in all of the circumstances, that 75% of legal fees incurred to be appropriate - applying 75% to the $100,000.00 resulting in a costs award of $75,000.00 (inclusive of HST).

[ 30 ] I have reviewed the disbursements claimed by the Applicants which amount to $10,254.75 (inclusive of HST). I find these to be reasonably incurred and see no reason why the Applicants should not be reimbursed for them. Costs plus disbursements total $85,254.75. Conclusion [ 31 ] The Applicants will have judgment against the Respondents, jointly and severally, for a costs award in the total amount of $84,254.75. The $1,000.00 deduction is based on an agreement between the parties relating to the late filing of one of the Applicants’ affidavits. Smith, J.