SUPREME COURT OF Nova Scotia
Citation: MacDonald v. MacCallum, 2022 NSSC 37
Date: 20220104
Docket: Amh. No. 492943
Registry: Amherst
Between:
Cameron MacDonald and Nancy MacDonald
Applicants
v.
Brian MacCallum
Respondent
DECISION (COSTS)
|
Judge: |
The Honourable Justice Jeffrey R. Hunt |
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Trial Decision: |
September 15, 2021, in Amherst, Nova Scotia |
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Written Submissions on Costs: |
November 15, 2021 |
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Decision: |
January 4, 2022 |
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Counsel: |
Brian S. Creighton, Solicitor for the Applicants Brian MacCallum, Respondent, Self-Represented |
By the Court:
Background
[1] On September 15, 2021 the Court delivered a decision in a boundary and trespass dispute between the parties. The parties were afforded some time to attempt to resolve the remaining issues of costs and disbursements. Unfortunately they have been unable to reach agreement.
[2] I have had the benefit of reviewing written submissions from both parties. I have considered the positions and arguments set out in their briefs.
Governing Law
[3] Civil Procedure Rule 77 deals with costs. In Henneberry v. Compton, 2014 NSSC 412, Justice Wright addressed the relevant principles at para 13:
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.
[4] In the following paragraph he commented on the difficulty in using Tariff A in the context of a boundary line dispute:
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.
[5] Civil Procedure Rule 77.18 (c) describes claims involving non-monetary issues:
In these Tariffs unless otherwise prescribed, the “amount involved” shall be
...
(c) where there is a substantial non-monetary issue involved and whether or not the proceeding is contested, an amount determined having regard to
(i) the complexity of the proceeding, and
(ii) the importance of the issues;
[6] The Nova Scotia Court of Appeal also discussed the applicable general principles in Armoyan v. Armoyan, 2013 NSCA 136, and Williamson v. Williams, 1998 NSCA 195. I have considered the direction provided in these decisions in resolving this matter.
Position of the Applicants
[7] The Applicants say that they are the successful party and ought to be entitled to their costs on a full or near indemnity basis. They have provided copies of their legal invoices. They ask the Court to consider the settlement positions exchanged between the parties.
Position of the Respondent
[8] Mr. MacCallum argues that he tried multiple times to resolve the dispute between himself and the MacDonalds. He believes they failed to negotiate in good faith by demanding that any settlement discussions be premised on the correctness of the survey report produced by their expert.
[9] One potential argument for the Respondent is that the decision of the Court reflects divided success due to the fact the Applicants sought damages against him in trespass and were awarded only the nominal sum of $1.00.
[10] Otherwise the Respondents were largely unsuccessful with respect to the balance of the issues in dispute.
Analysis
Determination of Successful Party for Costs Purposes
[11] In this case the Applicants sought a number of remedies. These included damages in trespass. They ultimately were awarded the nominal amount of $1.00. Does the notional damage award reflect a case of divided success perhaps justifying reduced or split costs?
[12] In this regard, I am aware of two comparable decisions. In Podgorski v. Cook, 2012 NSSC 418, the Respondent in a boundary and trespass dispute claimed divided success and argued that all parties should bear their own costs. Justice Coady stated at para 3:
[3] Ms. Podgorski started this application in chambers seeking an order as to the location of the subject property line. She also requested damages for trespass as well as special damages and costs.
He continued at paras 10 and 11:
[10] In my decision dated May 2, 2012 I found in favour of Ms. Podgorski. I ruled that the mutual property line is as shown in the 2009 Berrigan Survey. I declined an award of damages as I did not find Mr. Cook’s trespass to be worthy of damages.
[11] The principle issue in this application was the location of the property line. The claim for damages was clearly a secondary issue. Assessment of damages played a minor part in pre-trial and trial proceedings. Very little of the witness examination involved damages. Consequently, I rule that Ms. Podgorski is the successful party.
[13] In the case of Shannon v. Frank George's Island Investments Ltd., 2015 NSSC 133, the same conclusion was reached by Justice Chipman in a similar situation.
[14] In the present case the real issue was the setting of the boundary. The damages claim was very much a side issue. I have closely reviewed the evidence presented at the hearing. Very little time was devoted to any matters relating to damages. The overwhelming majority of the case revolved around boundary and right of way issues.
[15] It is my conclusion that this can not be considered a case of divided success. The Applicants must be considered the successful party for purposes of costs.
Application of the Civil Procedure Rules
[16] The costs provisions of the Civil Procedure Rules are easiest to apply where the case involves a straightforward ‘amount involved’. For instance, a dispute over a $200,000.00 breach of contract claim yields an obvious figure on which to base the application of the Tariff.
[17] A boundary dispute case must be approached differently as the core issue is a non-monetary claim. In many such cases the Court approaches the calculation of costs by settling on a notional amount involved based on the complexity of the matter and the importance of the issues. A pure lump sum approach may also be employed.
[18] In the Podgorski v. Cook case, which was referred to above, the Court set the notional amount involved at $75,000.00. The evidence in the case had taken 3.5 court sitting days. Evidence in the present case took less court time. Although the proceeding was spread over three days, only part of day one was used as the Applicant’s expert had a personal commitment that required the days to be broken up somewhat.
[19] The Applicants argued in their Brief (page 8) for the application of the rule of thumb that a day of court time equates to a notional amount involved of $20,000.00 per day. Applying Tariff A Scale 2 this results in a base figure of $7,250.00. To this would be added three days @ $2,000.00/day pursuant to the Tariff for a total of $13,250.00.
[20] I have not lost sight of the fact the Applicant’s primary argument is that costs ought to be assessed on a full indemnity or near full indemnity basis. Although the Applicant did not use the term solicitor-client costs, based on the amounts sought, their request would effectively equate to costs at that level.
[21] Indemnity or near indemnity costs will be considered in a variety of circumstances. Often they are used to convey a message from the Court that the manner in which the unsuccessful party has conducted themselves was obstructionist, oppressive or abusive.
[22] Although the Respondent did explore issues in cross examination which were not ultimately central to the determination of the case, at no time did he conduct himself in anything but a professional and respectful manner. There was nothing in his conduct of the trial which would require the Court to award solicitor-client costs as a means of denouncing his conduct.
[23] Courts have also awarded solicitor-client costs where the unsuccessful party has accused the other party of fraudulent behavior, and this claim is rejected by the Court. Although the theory of the Respondent’s case was that the Applicants had misrepresented the historical use of the lands in dispute, the manner in which the case was put did not cross the line into groundless suggestions of fraud.
[24] I have weighed the arguments of the Applicants and reviewed a number of costs decisions in boundary dispute cases. I have determined that the proper approach is to address the matter as Justice Coady did in Podgorski v. Cook. I consider the appropriate amount involved to be $60,000.00. With the addition of a three-day court per diem, I conclude that the base party and party costs figure is $13,250.00.
[25] This is also a case where the Court is required to consider whether, in order to do justice between the parties, the addition of an additional sum pursuant to Rule 77.07 is required. This case should not have gone to trial. I have assessed the sequence of settlement positions exchanged between the parties. The Respondent ought to have taken account of the realities of the situation and acted to resolve this matter. At a bare minimum the proceeding could have been shortened by a more focused approach to the issues.
[26] Additionally, I have carefully assessed the costs incurred by the Applicants. I had the benefit of the invoices rendered to the Applicants. Some additional contribution is required in order to do justice between the parties.
[27] In addition to the base party and party amount above, and pursuant to Rule 77.07, I conclude there ought to be added to the base party and party cost figure the sum of $4,500.00.
HST on Party and Party Costs Component
[28] The Applicant has claimed for HST on the party and party costs component of the award. I appreciate there is some inconsistency in the authorities with respect to whether this is available. In some older trial level decisions it has been permitted. My review of the more recent authorities and Court of Appeal guidance leads me to conclude that, at least with respect to party and party costs, HST is not claimable.
[29] This issue was considered, for instance, in the case of Brocke Estate v. Crowell, 2014 NSSC 269, as follows:
136 In my view, our Court of Appeal, has clearly determined that HST is not to be added to a costs award: R. (G.B.) v. Hollett, [1996] N.S.J. No. 345 (N.S. C.A.), at para 198; Mader v. Lahey, 1997 CarswellNS 572 (N.S. S.C.), at para 43, affirmed 1998 CarswellNS 180 (N.S. C.A.); and, MacIntyre v. Cape Breton District Health Authority, 2010 NSSC 170 (N.S. S.C.), at para 27, affirmed 2011 NSCA 3 (N.S. C.A.).
[30] A number of other cases which have explored the Court of Appeal direction on this point have reached the same conclusion. See for instance Andrews v. Keybase Financial Group Inc., 2014 NSSC 287 at paragraph 33, where Justice Wright finds that the weight of authority is that HST is not collectable. He also notes that HST was not made payable in the leading Court of Appeal costs decision of Armoyan v. Armoyan, 2013 NSCA 136.
[31] I consider this to be a correct interpretation of the Court of Appeal position. HST will not be awarded on the party and party component of a costs award. The treatment of disbursements is different.
[32] The costs contribution owing from the Respondent to the Applicants will be the sum of $13,250.00 plus $4,500.00 lump sum for a total of $17,750.00. To this must be added an amount for allowable disbursements.
Disbursements
[33] I have assessed the disbursement amounts advanced by the Applicants. I have considered the reasonableness and necessity of the individual items. The largest component of the claim relates to the cost of producing the expert report and testimony for trial.
[34] I am aware of and have considered the relevant case law on disbursements. I find the claimed amounts are entirely reasonable and were required litigation expenditures, with one exception.
[35] From the list of recoverable disbursements should be removed the cost for serving the Protection of Property Act notice. That is not a collectable disbursement on this proceeding.
[36] The remaining amount of $7.284.60 is approved. There is no controversy with respect to whether HST may be claimed on disbursements. It is applicable on all the approved disbursements, with the exception of the court filing and witness fees which are exempt.
Conclusion
[37] Total party and party costs are awarded in the sum of $17,750.00. Disbursements are allowed in the amount of $7,284.60, plus HST as noted. As with many decisions on costs, I assume the Applicants may view the award as inadequate while the Respondent will consider it excessive.
[38] Notwithstanding the fact the self-represented Respondent conducted his case in a respectful manner, it should not have gone to trial. The Respondent ought to have recognized the reality of the situation and resolved the matter prior to the commencement of the hearing. Ultimately there is a cost to rolling the dice and being unsuccessful. This decision reflects that reality. Costs are payable forthwith.
J.