SUPREME COURT OF NOVA SCOTIA Citation: Doucette v. Nova Scotia, 2016 NSSC 78 Date: 2016-03-24 Docket: Hfx No. 412065 Registry: Halifax Between: Laura Doucette Plaintiff v. Her Majesty in right of the Province of Nova Scotia and David Grimes Defendant DECISION ON COSTS Judge: Heard: Final Written Submissions: The Honourable Justice Denise M. Boudreau November 23, 24, 25, 26 and 30, 2015, in Halifax, Nova Scotia February 17 2016 Counsel: David G. Coles, QC and Meghan E. Russell, for the Plaintiff Duane Eddy, for the Defendants
Page 2 By the Court: [1] In February of 2013 the plaintiff brought this action, seeking damages for defamation and breach of privacy. The defendants filed a Defence in April 2013, wherein they pled the alternate defences of truth and justification. [2] A Notice of Motion to amend the Defence was filed on October 13, 2015; this amendment withdrew the defences and admitted liability. The amendment was opposed by the plaintiff and was the subject of a court hearing. On October 28, 2015, a decision granting the motion to amend was issued (Doucette v. Nova Scotia, 2015 NSSC 320). [3] The trial of this matter (as to damages only) started before me on November 23, 2015, and took five days. Despite the admission of liability, and despite formal admissions having been made, no Agreed Statement of Facts was put forward. Most or all witnesses to the matter were still required to testify. This Court rendered a decision (Doucette v. Nova Scotia, 2016 NSSC 25) awarding the Plaintiff $35,000 in general damages, $15,000 in punitive damages, and $2,640 in special damages.
Page 3 [4] I now turn to a consideration of costs. The plaintiff seeks significant costs in this proceeding; specifically, she seeks solicitor client costs. The defendants submit that each party should bear their own costs, or in the alternative, the plaintiff should be awarded party and party costs at the tariff amounts. Solicitor client costs / Party and party costs [5] Rules 77.01 (1) (b) and 77.03(2) of the Civil Procedure Rules provide for solicitor and client costs in cases where rare and exceptional circumstances may be shown. They are the exception, and not the general rule. [6] It is the plaintiff s submission that this is an appropriate case for solicitor client costs. The plaintiff relies upon three defamation cases where the defendant persisted in its defence of justification until the eve of trial, before acknowledging liability and proceeding to a trial on damages: Farrell v. CBC [1983] NJ No. 201; Rose (T) Construction v. Omex International 122 Nfld & PEIR 280; and Canada v. Lukasik [1985] A.J. No. 1104. [7] It is the plaintiff s submission that solicitor client costs should be awarded up to the time of the amendment of the pleadings, that being October of 2015. After that date, the plaintiff submits that the court should award 2/3 of actual costs. The plaintiff s conclusion is that she should be awarded costs of over $130,000.
Page 4 [8] The defendants submit that this case contained no special circumstances which would warrant a departure from tariff costs. They note that there were no expert witnesses, minimal documentation, and the issues of law were not unusually complex. They further note that additional circumstances in these cases militate against solicitor client costs. [9] I shall enumerate the factors which, in my view, are relevant to the question as to whether the plaintiff should be awarded solicitor client costs. a) Conduct of defendants [10] I agree that the defendants were late in admitting liability. As I noted in my substantive decision, even assuming that the defendants were entitled to wait until discoveries before making these admissions, those discoveries were completed by February 2014. On August 25, 2015, defence counsel, Mr. Eddy, wrote to plaintiff counsel, Mr. Coles, formally indicating that his clients would admit liability and proceed to trial on damages only. This was after the finish date, but before the trial readiness conference. The delay in admitting liability certainly resulted in additional burden and costs to the plaintiff. [11] Mr. Eddy acknowledges in his affidavit that he should have sought instructions to admit liability from his clients sooner, perhaps after the discoveries
Page 5 were concluded. On the other hand, it would appear from the decision of Rosinski, J. that Mr. Eddy at least broached the subject of amending his defence as early as April 2014 (Doucette v. Nova Scotia 2015 NSSC 320, paragraph 11). [12] Having said that, I note that the plaintiff opposed the defendants motion to amend their pleadings and admit liability. While I understand that the plaintiff was displeased with the timing of that motion, I frankly cannot understand her logic in opposing it. The amendment was, in the final analysis, to the plaintiff s benefit. This is reflected in the fact that the Court awarded costs against the plaintiff. [13] Plainly, the delay in the recording of the admission of liability, was only compounded by the defendants having to undertake a contested motion. [14] I have reviewed the decision of Rosinski, J. in granting that motion. He notes as para. 25 that both parties could be reproached for their actions in the course of the proceeding. The court ordered (nominal) costs against the plaintiff. I take that into account. [15] I note for the record that my decision on costs is in no way bound by the decision of Rosinski, J. He did not preclude the ordering of solicitor client costs by the court following the trial. I am not precluded from doing so in any way.
Page 6 [16] As I have said, I agree that there would have been unnecessary time spent by plaintiff counsel due to the delay in admitting liability. However, I am unconvinced that the delay caused such additional work to the plaintiff that it should result in solicitor client costs. [17] As I have already noted, most or all of the evidence was called at trial in any event. I am convinced that the discoveries would also have proceeded, regardless of the admission of liability. [18] The plaintiff also submits that a decision to plead justification, in and of itself, may lead to increased costs awards, as an aggravating factor. As I noted in my earlier decision, McConchie and Potts state in Canadian Libel and Slander Actions: An unsuccessful plea of justification may be taken into account by the court when assessing damages. Depending on the circumstance, a failed plea of truth may aggravate the plaintiff s damages or underpin an award of exemplary damages. It may also lead to a more substantial award of costs against the defendant. (Toronto: Irwin Law, 2004) at p. 501 [emphasis added] [19] I awarded aggravated damages against the defendants in my decision. In my view this award encapsulates all of the aggravating features that exist in this matter. I do not see that solicitor client costs are also required.
Page 7 b) Admissions [20] A number of formal Requests for Admissions were made between the parties. The plaintiff delivered her first on August 27 2015: the defendants responded on August 28, 2015, admitting 38 out of 42 requests and partially admitting the others. A supplementary Request for Admissions was made by the plaintiff on September 1, 2015, containing 14 more requests: the defendants admitted 5, partially admitted 8, and denied 1. The defendants provided a Request for Admissions to the plaintiff on August 28, 2015 containing 3 requests: the plaintiff responded on Sept 1, 2015 with 2 partial admissions and 1 denial. [21] I also note that seven people were discovered in the course of this matter, in late 2013 and early 2014. Their evidence at discovery was the subject of a number of these requests for admissions. [22] Despite these extensive admissions (in particular from the defence), and despite the admission of liability, there were no agreed facts for trial. As a result, and unfortunately, it does not appear that these admissions (including the admission of liability), saved any appreciable court time. This Court heard the entire case, with all witnesses being called, examined, and cross-examined, over
Page 8 the course of five days. This included those persons who had been discovered. I am unaware of any witness in this matter who was exempted from testifying. [23] Mr. Eddy indicates in his affidavit that the plaintiff refused to enter into an Agreed Statement of Facts, which would have removed the need for some or all witnesses to testify and thereby shortening the trial. Mr. Coles indicated during the hearing that, in his view, this was a reasonable and necessary position for him to take, as he believes the Court needed to hear of all the details of the evidence, including cross-examination. [24] While I agree that some of this evidence needed to be called, I find that there was certainly room for some of this evidence to have been the subject of agreements or stipulations. Many of the witnesses were discovered years ago, and their evidence was known. The admissions that were sought/agreed to, were no different than the viva voce evidence that I heard; and while I note that there were some areas of dispute, they were mainly related to certain smaller points in issue (for example, the evidence relating to the special damages claim). I find that three days, at most, should have been necessary to present this case. c) Settlement offers [25] Rule 77.07 provides as follows:
Page 9 77.07(1) A judge who fixes costs may add an amount to, or subtract an amount from, tariff costs. (2) The following are examples of factors which may be relevant on a request that tariff costs be increased or decreased after the trial of an action, or hearing of an application: (a) the amount claimed in relation to the amount recovered; (b) a written offer of settlement, whether made formally under Role 10 Settlement or otherwise, that is not accepted; (c) an offer of contribution; (d) a payment into court; (e) conduct of a party affecting the speed or expense of the proceeding; (f) a step in the proceeding that is taken improperly, abusively, through excessive caution, by neglect or mistake, or unnecessarily; (g) a step in the proceeding a party was required to take because the other party unreasonably withheld consent; (h) a failure to admit something that should have been admitted. [26] I also note Rules 10.05 and 10.09: Formal offer to settle an action 10.05 (1) A party who makes a formal offer to settle under this Rule 10.05 may take advantage of the applicable provisions for costs in Rules 10.08 and 10.09. (2) A party may make a formal offer to settle an action, or a counterclaim, crossclaim or third party claim in an action, by delivering an offer to settle.
(3) A formal offer to settle must contain the standard heading of the action, be entitled in one of the following ways, and be dated and signed: (a) Offer to Settle by Claimant (Monetary), if it offers to settle entirely on the basis that money is paid to the party who makes the offer; (b) Offer to Settle by Claimant (Non-monetary), if it offers to settle on terms that include a requirement the other party do, or refrain from doing, something in satisfaction of a non-monetary claim; (c) Offer to Settle by Person Claimed Against (Monetary), if it offers to settle entirely on the basis that money is paid to the other party by the party who makes the offer; (d) Offer to Settle by Person Claimed Against (Nonmonetary), if it offers to settle on terms that require the party making the offer to do, or refrain from doing, something in satisfaction of a non-monetary claim made by the other party. (4) The offer must include terms that would settle all claims in the proceeding between the party making the offer and the party to whom it is made, and the term that would settle costs must provide for one of the following: (a) payment on acceptance of an amount stated in the offer; (b) payment of an amount for costs to be determined by a judge; (c) an option for the other party to choose between a stated amount for costs or determination by a judge. (5) The offer must also contain both of the following terms: (a) it is open for acceptance until it is withdrawn or the trial begins; (b) it may be accepted only by delivery of a written acceptance to the party making the offer. Page 10
Page 11 Determining costs if formal offer not accepted 10.09 (1) A party obtains a favourable judgment when each of the following have occurred: (a) the party delivers a formal offer to settle an action, or a counterclaim, crossclaim, or third party claim, at least one week before a trial; (b) the offer is not withdrawn or accepted; (c) a judgment is given providing the other party with a result no better than that party would have received by accepting the offer. (2) A judge may award costs to a party who starts or who successfully defends a proceeding and obtains a favourable judgment, in an amount based on the tariffs increased by one of the following percentages: (a) one hundred percent, if the offer is made less than twenty-five days after pleadings close; (b) seventy-five percent, if the offer is made more than twenty-five days after pleadings close and before setting down; (c) fifty percent, if the offer is made after setting down and before the finish date; (d) twenty-five percent, if the offer is made after the finish date. (3) A judge may award costs in one of the following amounts to a party who defends a proceeding, does not fully succeed, and obtains a favourable judgment: (a) the amount that the tariffs would provide had the party been successful, if the offer is made less than twenty-five days after pleadings close; (b) seventy-five percent of that amount, if the offer is made more than twenty five days after pleadings close and before setting down;
Page 12 (c) sixty percent of that amount, if the offer is made after setting down and before the finish date; (d) nothing, if the offer is made after the finish date. [27] It would appear that there were two settlement offers made by the defendant in this matter, neither accepted by the plaintiff. [28] The first was made October 21, 2015, in the amount of $75,000 all inclusive. Acceptance was possible until any time before trial begins. The second was made on November 20, 2015, in the amount of $50,000 all inclusive, again with a possible acceptance any time before trial began. [29] The plaintiff submits that these offers are not compliant with Rule 10 and therefore, should have no formal consequences on my assessment of costs. [30] I find both offers are Rule 10 compliant. In my view the defendants fall in the category described in Rule 10.09 (3), in that they defended a proceeding and did not fully succeed. Did the defendants obtain a favourable judgment per Rule 10.09 (1)(c)? In relation to the $75,000 offer, I find that they did, in that the award granted to the plaintiff was no better than the offer. [31] The finish date here was August 21, 2015. This offer was made in October. By the provisions of Rule 10.09(3)(d), no deduction would be made.
Page 13 [32] Rule 77.07(2)(b) provides that I can still take an offer of settlement into consideration, despite it not falling squarely within the four corners of Rule 10. I further note that the offer of $75,000 was made after the motion to amend had been filed, but before the hearing of that motion. [33] Therefore, as the offer was late, I make no specific deduction. However, it is a fact that I still take into account in my assessment of costs for the plaintiff. d) Rule 57 [34] Counsel for the defendants raises Rule 57.04 (4) which provides that, where a plaintiff would otherwise be entitled to costs, but unreasonably refused to bring their action under that rule, they would be disentitled to costs. It is the defendants submission that the plaintiff s actions fit within that Rule and should therefore be disentitled to costs. [35] The plaintiff submits that it was not unreasonable for them to have brought the action outside Rule 57, as defamation claims certainly can result in awards of greater than $100,000. Such a claim has an element of intangibility to it, since it is not a claim for a debt or an easily quantifiable amount. Further, the plaintiff submits that this case required the discoveries that were held, and that the
defendant did not disagree with those discoveries. It would be inappropriate, in their view, to have tied themselves to a Rule 57 proceeding. Page 14 [36] I agree with the plaintiff as to that issue. This particular case would have been more difficult to quantify that others. I do not fault the plaintiff for not bringing this as a Rule 57 action, and this has no bearing on my decision. e) Contingency Fee Agreement [37] The defendants have requested that the plaintiff advise whether her arrangement with her counsel involves a contingency fee agreement; if it does, the defendants seek disclosure of its terms. The plaintiff and her counsel have refused to confirm or deny the existence of such an agreement, citing solicitor client privilege. [38] As a result, the defendant submits that this is another reason why solicitor client costs should not be ordered. When considering an appropriate measure of costs, one significant consideration for the Court is the actual fee charged to the client by counsel (Landymore v. Hardy [1992] N.S.J. No. 79). Mr. Coles has provided the Court with an itemized pre-bill for his firm s services, obviously in reference to that principle.
Page 15 [39] Mr. Eddy points out that if Mr. Coles and the plaintiff have a contingency fee agreement, then this bill in no way represents the actual cost to the plaintiff. Rather, the fee would be some percentage of the amount granted by the Court. [40] The plaintiff disagrees that it can be ordered to produce any such document; and further, that it does not need to be produced (if it exists) in order to ground a claim for solicitor client costs. [41] I have no difficulty finding that any agreement between the plaintiff and her counsel is solicitor client privileged; it is beyond the scope of my ability to order its disclosure. [42] Having said that, it remains my duty to make an order for costs. The plaintiff s submission includes a pre-bill provided by Mr. Coles firm in the plaintiff s case. Without knowing whether a contingency fee agreement exists, I have no evidence as to whether this pre-bill is at all helpful. I cannot give it weight as evidence of the legal costs of the plaintiff.
Page 16 Conclusion [43] The plaintiff was ultimately successful in this litigation and, in my view, is entitled to costs. I disagree with the defendants proposal that each party bear their own costs. [44] I also find that both parties have engaged in conduct within this litigation that have caused unnecessary work and/or expense to the other party. [45] I acknowledge that in some cases involving some similar facts, courts have ordered solicitor client costs. I have considered that issue carefully; I simply do not believe this to be a case where such an award is justified or appropriate, given all of the circumstances I have outlined. [46] I therefore find that this is not an appropriate case for solicitor client costs. I will be ordering costs payable to the plaintiff, with adjustments due to the factors I have noted. [47] I will use the upper tariff (Scale 3) to compensate the plaintiff for the extra factors involved in this case. My total award in the substantive decision was $52,640, resulting in tariff costs of $9,000.
[48] I would add an amount for three days of court time (for reasons I have already mentioned), at $2,000 per day, for an additional $6,000. Page 17 [49] In conclusion I award party and party costs to the plaintiff, payable forthwith by the defendants, in the amount of $15,000, plus reasonable disbursements as can be agreed upon by counsel, or if no agreement, as taxed. Boudreau, J.