SUPREME COURT OF Nova Scotia
Citation: Landry v. Kidlark, 2014 NSSC 432
Date: 20141204
Docket: PIC No. 287773
Registry: Pictou
Between:
Joseph Philip Bernard Landry and E. Anne MacDonald Landry
Plaintiffs
v.
Jeffrey G. Kidlark, Joan C. McKale, John Peter MacKay, Vivian Carol MacKay
Defendants
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Judge: |
The Honourable Justice Suzanne M. Hood |
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Heard: |
October 8, 2014, in New Glasgow, Nova Scotia |
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Written Decision: |
December 4, 2014
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Counsel: |
Roseanne M. Skoke, for the Plaintiff Alain Bégin, for the Defendants Jeffrey Kidlark and Joan McKale Brian Hebert, for the Defendants John Peter MacKay and Vivian Carol MacKay |
By the Court:
INTRODUCTION
[1] In a decision dated April 30, 2014, I dismissed all claims against both sets of defendants and either dismissed or awarded no damages on the counter-claims by the defendants Jeffrey G. Kidlark and Joan C. McKale (hereinafter Kidlark and McKale). I concluded that John Peter MacKay and Vivian Carol MacKay (hereinafter the MacKays) were entitled to their costs. I sought submissions from all counsel on the subject of costs, noting the mixed success of Kidlark and McKale.
FACTS
[2] The dispute involved lands in Pictou County and centered around the protection of the plaintiffs’ views of the Northumberland Strait and their access to the shore.
[3] The action was commenced in 2007, and in 2010 the MacKays brought a summary judgment motion. It was unsuccessful, but as is required by Rule 13.07 Justice John Murphy gave directions thereafter. His directions required the plaintiffs to amend their pleadings against the MacKays. In essence, he concluded that the only claims the plaintiffs could possibly have against the MacKays arose out of their consolidation of Lot 4 and Parcel A with no notice to the plaintiffs and whether there was a representation made by the MacKays that the plaintiffs would have a view to the Northumberland Strait arising from a June 2000 agreement. He specifically said there was no issue with respect to the location of Parcel VP-2, the view plane that the plaintiffs had by virtue of a subsequent agreement, or any issue with respect to the pedestrian right-of-way, and these were not to be issues at trial.
[4] Kidlark and MacKay were not parties to the summary judgment motion and were not the subject of the directions Justice Murphy gave at its conclusion, although their counsel did attend.
GENERAL PRINCIPLES
[5] Civil Procedure Rule 77 deals with costs including party and party costs and disbursements. It provides that costs are within the court’s discretion. Rule 77.02(1) provides:
(1) A presiding judge may, at any time, make any order about costs as the judge is satisfied will do justice between the parties.
(2) Nothing in these Rules limits the general discretion of a judge to make any order about costs, except … [Exception is not applicable in this case.]
[6] Rule 77.06 refers to the tariffs pursuant to the Costs and Fees Act. It provides as follows:
(1) Party and party costs of a proceeding must, unless a judge orders otherwise, be fixed by the judge in accordance with tariffs of costs and fees determined under the Costs and Fees Act …
[7] The tariffs may be varied by taking into consideration the factors referred to in Rule 77.07(2).
(2) The following are examples of factors that 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 Rule 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.
[8] In Williamson v. Williams, 1998 NSCA 195, Freeman, J.A. quoted from Landymore v. Hardy (1992), 112 N.S.R. (2d) 410 where Saunders, J. (as he then was) stated:
The underlying principle by which costs ought to be measured was expressed by the Statutory Costs and Fees Committee in these words:
“… the recovery of costs should represent a substantial contribution towards the parties’ reasonable expenses in presenting or defending the proceeding, but should not amount to a complete indemnity.”
[9] Freeman, J.A. then continued:
In my view a reasonable interpretation of this language suggests that a “substantial contribution” not amounting to a complete indemnity must initially have been intended to mean more than fifty and less than one hundred per cent of a lawyer’s reasonable bill for the services involved. A range for party and party costs between two-thirds and three-quarters of solicitor and client costs, objectively determined, might have seemed reasonable. There has been considerable slippage since 1989 because of escalating legal fees, and costs awards representing a much lower proportion of legal fees actually paid appear to have become standard and accepted practice in cases not involving misconduct or other special circumstances.
[10] The costs awarded should be a substantial contribution to the parties’ costs, but not a complete indemnity. They should also be in relation to a lawyer’s reasonable bill for the services rendered.
[11] The court may also award a lump sum for costs rather than tariff costs pursuant to Rule 77.08, which provides:
A judge may award lump sum costs instead of tariff costs.
[12] With respect to disbursements, the court is to award “necessary and reasonable disbursements” according to Rule 77.10(1).
[13] The tariffs define “amount involved” in instances where “the main issue is a monetary claim which is dismissed”. In such a case, I am to consider the amount claimed, the complexity of the proceeding and the importance of the issues.
[14] The tariffs also set out a range of fees allowable based upon the amount involved and scales 1, 2 (basic), or 3. In addition, the trial judge is to consider as an additional factor the length of trial and $2,000 per day of trial is to be added to the amount otherwise calculated.
[15] In this case there was a formal offer to settle pursuant to Rule 10, filed by the MacKays. If I accept that the MacKays obtained “a favourable judgement”, I may award increased costs pursuant to Rule 10.09(2)(d) which provides as follows:
(2) A judge may award costs to a party who … successfully defends a proceeding and obtains a favourable judgment, in an amount based on the tariffs increased by one of the following percentages: ...
(d) twenty-five percent, if the offer is made after the finish date.
[16] Favourable judgment is defined in Rule 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.
[17] Where fraud is alleged, but not proven, increased party and party costs have been awarded.
ISSUES APPLYING TO BOTH DEFENDANTS
[18] I will deal hereinafter with costs with respect to each set of defendants. However, I can first conclude some issues of application to both.
Amount Involved
[19] The “amount involved” is made up of several components. The plaintiffs claimed economic loss for which they provided an expert appraisal report. They also sought general damages: for the tort of wrongful interference with their lands and their rights; against the defendants Kidlark and McKale for breach of agreements with respect to the right-of-way; with respect to both defendants, breach of the view plane agreement; and negligent misrepresentation.
[20] The defendants say the economic loss claimed was $115,000 to which should be added $10,000 or more for the general damage claim, bringing the claim within the $125,000 to $200,000 range in the tariffs.
[21] The plaintiffs say there was no specific dollar amount claimed and the court therefore must consider other factors. On the issue of the appraiser’s report, the plaintiffs say the appraiser concluded the damage with respect to the loss of a large part of the view plane is approximately $74,000. It was upon that value that the plaintiffs based their claim. I accept that amount as the first component of the damage claim, but I agree with the defendants that in addition the general damages claim would exceed $10,000. That puts the amount involved in the range of $65,000 to $90,000 pursuant to the tariffs.
Length of trial
[22] The defendants say there were six days of trial and accordingly an additional $12,000 should be added to the tariff costs. The plaintiffs say that some days were only part days and therefore six days should not be used. From the court records, I determine there were six trial days and other part days. I conclude $12,000 should be added.
HST on costs award
[23] The defendants claim they should be paid HST on the costs award. The plaintiffs do not dispute this.
Plaintiffs’ experts
[24] The plaintiffs say they retained both the appraiser and the surveyor, and the latter was heavily relied on by all parties. The plaintiffs say that this should be considered by the court in awarding costs. It is true that the court relied on the report and testimony of George Sellers, the surveyor. However, the plaintiffs commenced the action and could not have proceeded with it or with their claims for damages without these experts. I therefore do not consider this to be a factor in reducing the costs award to the MacKays or to be taken into account in considering the issue of costs relating to Kidlark and McKale.
Conduct affecting expense of proceeding
[25] Overall this matter could have been dealt with more efficiently and expeditiously had the plaintiffs heeded the words of Justice Murphy, that the case was “out of control” and he urged them to take a “hard look” at their positions. He specifically mentioned factual disputes for which there was no basis in fact.
[26] Although the pleadings were amended as a result of the directions given after the summary judgment motion, it appears that the position of the plaintiffs in some respects remained the same as in the unamended pleadings. I compare these to the plaintiffs’ pretrial brief.
[27] For example, Justice Murray pointed out that the plaintiffs could not advance at trial the fact that the MacKays told them the right of way “abutted” their lot. He said it was “directly in front of it”. Nevertheless, in their pretrial brief, they quote from the Reply to Demand for Particulars (“RDP”), which had been filed before the summary judgment motion and the directions following it. In the RDP (quoted in paragraph 56 of the pretrial brief) they refer to “Representations made by the Defendant MacKay” and in item (d) say “ … the Defendants MacKay represented to the plaintiffs a wide right-of-way which bounded on the Plaintiffs’ property …”.
[28] Justice Murphy also said there was no question with respect to the location of the pedestrian right-of-way; however, at paragraph 45 of their pretrial brief, the plaintiffs say Kidlark and McKale “altered the location of the right-of-way”.
[29] As another example, Justice Murphy said the issue of the lot consolidation of Lot 4 with Parcel A had nothing to do with the view plane agreement which created Parcel VP-2. However, in the plaintiffs’ brief at paragraph 43, they say:
It is the position of the Plaintiffs that the Defendants’ consolidation of lands has affected the benefits granted to the Plaintiffs by the July 12, 2004 agreement by adding lands to Lot 4 so that a portion of the consolidated Lot 4 and 4A would not be bound by the said agreement.
They repeat this at paragraph 78 of their brief.
[30] They also quote a portion of their RDP dealing with the lot consolidation and the view plane agreement in paragraph 56(a)(1) of their brief, saying “… said consolidation was subject to the existing registered View Plane Agreement …” They also said in paragraph 56(a)(4):
The Defendant MacKays have wrongfully interfered with the easement view plane and right-of-way by consolidating Lot 4A and Lot 4 … . By consolidating the two lots, the view plane agreement extends to the remainder lands … pursuant to the Agreement of July 12, 2004: …
[31] Justice Murphy also said “the lawsuit going forward will not deal with enforcement of the right-of-way and the view plane agreements”. He said “they do not provide the Plaintiff the basis to proceed”. However, the pretrial brief asks the court for the following relief (paragraph 128(h)):
i) a declaration of the existence and enforcement of the terms of the right-of-way agreement;
ii) a declaration of the existence and enforcement of the terms of the restrictive Covenant contained in the view plane easement …
[32] After obtaining directions from Justice Murphy in November 2010, the plaintiffs should have recognized that their claims against the MacKays should have focused on: 1) whether the MacKays “dealt improperly with the Remainder Lands” (quoting the words of Justice Murphy); that is, whether they said they would do nothing with respect to Parcel A that would interfere with the plaintiffs’ view of the Northumberland Strait, such as selling Parcel A; and, 2) whether there was a representation that there would be no obstruction of the view from Lot 5 or the dwelling on Lot 5.
[33] The evidence of the plaintiffs should have been about only these issues. The legal submissions needed to address: 1) the law of negligent misrepresentation with respect to the above issues; 2) the legal effect of a lot consolidation; 3) whether the June 9, 2000 agreement continued in effect after the July 2014 agreement was executed (especially since their own lawyer had told them it was too vague to be enforceable in any event); and, 4) whether there was a contractual arrangement contrary to the Statute of Frauds (a grant of easement or interest in land not in writing). These were straightforward issues requiring a minimum of testimony and focused legal argument.
[34] Instead, much of the plaintiffs’ testimony related to the entire history of their dealings with the MacKays, without focussing on the core issues.
[35] A substantial amount of trial time was taken up with allegations against the MacKays unrelated to the key factual issues. The MacKays had to be prepared to respond to all these allegations involving their conduct between 1999 and 2006 when they sold Lot 4A to Kidlark and McKale. Their counsel had to cross-examine the plaintiffs about these events. It was a costly endeavour.
[36] With respect to Kidlark and McKale, the plaintiffs admitted in their pretrial brief that Parcel A, the portion of Lot A sometimes referred to as the “remainder lands”, was not bound by the view plane agreement of July 12, 2004. At paragraph 43 of their brief, they said:
Lot 4A had a common boundary with Lot 5 but had not been made subject to the view plane easement of the July 12, 2004 agreement because it was believed by the Plaintiffs at that time they already held an easement over this portion of Lot 4A.
[37] As I said in my decision at paragraph 61 with respect to the so-called remainder lands:
I find as a fact that it was the plaintiffs’ mistaken belief, not attributable to anyone else, that their view was protected by virtue of the pedestrian right-of-way and the NSPI easement. They had counsel acting for them with respect to the agreement for Parcel VP-2 and retained the surveyor.
[38] The plaintiffs knew the remainder lands were not subject to the view plane agreement of July 12, 2004. The only question with respect to Kidlark and McKale, with respect to it, was whether they had done things on Parcel VP-2 contrary to that agreement. The other issues with respect to Kidlark and McKale were: 1) whether they had interfered with the plaintiffs’ use of the pedestrian right-of-way; 2) whether they improperly removed the stairs to the beach; and, 3) whether their actions with respect to the Nova Scotia Power easement interfered with the plaintiffs’ rights.
[39] Although these too were relatively straightforward issues and required limited testimony, the counterclaim by Kidlark and McKale muddied the waters to some degree. They counterclaimed that there were repeated trespasses by the plaintiffs and that the plaintiffs had breached the view plane agreement. They also sought removal of the plaintiffs’ underground power lines. In addition, at trial, they claimed for the first time that the pedestrian right-of-way was invalid.
[40] Once George Sellers, the plaintiffs’ own expert, provided a plan showing the location of trees and parking pads, the claims of the plaintiffs with respect to interference with their rights pursuant to the VP-2 agreement should have been seen to be unfounded. Yet there was a great deal of testimony by the plaintiffs with respect to trees and parking of cars.
[41] The plaintiffs at trial admitted that there was no obligation on Kidlark and McKale to maintain the stairs to the beach.
[42] The issue with respect to the pedestrian right-of-way was based upon an erroneous assumption about the rights the plaintiffs had as a result of that grant of right-of-way. An ordinary plaintiff could be forgiven perhaps for persisting in this view, but E. Anne MacDonald is an experienced real property lawyer who should have known the restriction on rights-of-way, especially pedestrian rights-of-way.
[43] As for the underground power lines, it should have been apparent that Nova Scotia Power was a necessary party to any dispute about how the underground power was installed on lands not owned by the plaintiffs but under lands encumbered by a Nova Scotia Power easement.
[44] The trespass claims did not require much testimony and there was no testimony about how the plaintiffs had breached the view plane agreement.
Plaintiffs’ settlement efforts
[45] The plaintiffs also say their efforts at settlement should be considered in an award of costs. It is true they did try to settle and agreed to participate in a settlement conference. However, all their settlement efforts were predicated upon obtaining a view plane over the so-called remainder lands. They also persisted in attacking the actions of both sets of defendants as interfering with their rights. The judgment in this matter completely vindicated both sets of defendants as acting entirely within their legal rights.
Plaintiffs’ Bill of Costs
[46] The plaintiffs provided a Bill of Costs for their disbursements totalling $14,184.72. Much of that cost related to their experts, which I have dealt with above. The balance appears to be transcript and discovery costs. These are properly the responsibility of the plaintiffs.
“Novel” Argument
[47] The plaintiffs also say they made what the court referred to as a “novel” argument and that should be a factor mitigating the amount of the costs award. In the decision, I said at paragraphs 93 and 94:
[93] The plaintiffs allege that by virtue of the consolidation of Lot 4 and Parcel A to form Lot 4A that the view plane agreement should be extended to cover the portion of Parcel A between parcel VP-2 and Lot 5. As support for this proposition, they note that the PID for Lot 4A is the same as for Lot 4.
[94] However no authority was cited for this novel proposition. In my view, it is an argument without merit. If that principle were of general application, anyone who owned land encumbered by, for example, a view plane restriction or an easement, would be deemed to have granted those encumbrances over later acquired land. That is not a result which accords with the basic principles of real property law. In this case, Parcel VP-2 is described in a metes and bounds description clearly setting out its limits. The plaintiffs had counsel at the time the agreement was entered into, it was their proposal for its location and they retained the surveyor to prepare the plan and description of it.
[48] In cases where new arguments are made and given serious consideration by the court, it may be appropriate that that be a factor in the award of costs. I do not conclude such was the case here.
THE MACKAYS’ COSTS
[49] The MacKays seek costs and disbursements totalling $121,980.35. They say their actual legal costs were approximately $185,000 plus HST and that the amount they seek represents a substantial contribution to, but not a complete indemnity of, their costs.
[50] The plaintiffs say a lump sum award of $20,000 is an appropriate costs award in that they say it furthers the purpose of the 2008 Civil Procedure Rules, which were designed to provide access to justice in a cost-effective manner.
[51] I conclude the following to be the considerations involved in an award of costs in favour of the MacKays:
1) the amount claimed is within the range of $65,001 to $90,000;
2) there were six days of trial;
3) there was a formal offer of settlement;
4) there were allegations of fraud;
5) the issues were not complex. I have outlined above what the issues should have been with respect to the MacKays. I have also set out examples of issues that continued to be raised in spite of the directions given by Justice Murphy;
6) the actual costs incurred; and,
7) whether lump sum or tariff costs should be awarded.
1) and 2) Amount claimed/days of trial
[52] Tariff A provides for costs of $9,750 on the basic scale where the amount in issue is $65,001 to $90,000. To that I add $12,000 for six days of trial ($2,000 per day) for a total of $21,750.
3) Formal offer of settlement
[53] The MacKays say any award of costs to them should be increased by twenty-five percent because they made a formal offer of settlement which was more favourable to the plaintiffs than the result they achieved. The formal offer was made after the finish date, so twenty-five percent is the appropriate percentage. If I determine it was a more favourable judgment, I am entitled to consider that offer and may award an additional sum to the amount calculated by the tariffs.
[54] The MacKays’ offer was to consent to any order that would extend the view plane over the so-called remainder lands; to extend the plaintiffs’ right-of-way over the cul-de-sac; and be paid costs of $20,000.
[55] The difficulty with this offer is, as the plaintiffs pointed out, it was dependent upon Kidlark and McKale agreeing to extend the view plane over what were now their lands. The MacKays had no ability to force Kidlark and McKale to do so, and Kidlark and McKale made no such formal offer to settle.
[56] The plaintiffs did, in fact, obtain a court ruling extending the right-of-way over the cul-de-sac, so the offer in this regard gave the plaintiffs “a result no better than” what was offered by the MacKays.
[57] Insofar as the costs portion of the formal offer is concerned, I note that with costs and disbursements the defendants will obtain costs of more than the $20,000 they referred to in their offer, which was an offer inclusive of HST and disbursements.
[58] The principal issue is how the court should treat an offer to settle where one component is beyond the control of the party making the offer. I conclude that, without a corresponding offer from Kidlark and McKale, it is meaningless. Even if Kidlark and McKale had made such an offer, they could have settled their claim with the plaintiffs without the participation of the MacKays. The MacKays’ consent to the plaintiffs settling with the other party would not have been required. I therefore disregard that portion of the offer and look only at the other two parts. The gist of the formal offer was that they would grant a further right-of-way and be paid $20,000 in costs. The formal offer was a favourable one for the defendants. I conclude it is appropriate to increase the costs award by twenty-five percent ($5,437.50), to a total of $27,187.50.
4) Allegations of fraud
[59] The MacKays say their costs award should be doubled because of the allegations of fraud made against them. The plaintiffs say they did not make fraud allegations. However, when E. Anne MacDonald was questioned by the MacKays’ counsel, she said she had no evidence of fraud but it might come out in the evidence of the MacKays themselves. Therefore, although not proven by the plaintiffs, it is clear that E. Anne MacDonald, at least, had not abandoned the concept.
[60] The MacKays cite Wambolt v. Armstrong, 2013 NSSC 81, where Moir, J. dealt with a claim for solicitor-client costs up to the time when allegations of fraud were withdrawn. He concluded the costs related to fraud allegations could be “better handled by increasing party and party costs” (paragraph 10). In the result, the costs award of $18,250 was increased by $8,000.
[61] The statement of claim makes no reference to fraud or even fraudulent misrepresentation. The plaintiffs alleged the MacKays acted in their own interests and contrary to the interests of the plaintiffs, but the word “fraud” did not appear. Justice Murphy, in his directions, told the plaintiffs “there is no bad faith finding” and the pleadings were amended in that regard. Allegations of bad faith are, of course, distinct from allegations of fraud and less serious.
[62] Although the word “fraud” was used on occasion by the plaintiffs, it did not form part of their claim. Plaintiffs should, however, be discouraged from carelessly characterizing the actions of others as fraud or fraudulent misrepresentation when they have not claimed it and provide no evidence of it. These plaintiffs were told several years before trial there was no evidence even of bad faith. I therefore conclude that an increase in party and party costs award is a means by which to deter parties from such behaviour.
[63] There were no allegations of fraud in the pleadings, but it was referred to by the plaintiffs. Because it was not pleaded in a public document and only referred to in evidence before me briefly, I conclude only a small increase in costs against the plaintiffs should be made, as a means of deterring them, and others in other matters, from carelessly calling into question the character of other parties. I award an additional $1,000 in costs, for a total of $28,187.50.
5) Issues were not complex
[64] As I have said, the issues were not complex, but were overtaken by extraneous matters. Rule 77.07(2)(e) deals with such a situation. It provides:
(3) The following are examples of factors that may be relevant on a request that tariff costs be increased or decreased after the trial of an action …
…
(e) conduct of a party affecting the speed or expense of the proceeding;
…
[65] I may add an amount to tariff costs where a party has affected the expense of the proceeding. By raising issues with respect to the MacKays beyond those which should have been dealt with, the trial was lengthened and accordingly became more costly for them. It is difficult to say with certainty by how much the trial was extended. Some costs consequences should flow from conduct which lengthened the trial and resulted in the MacKays having to pay for their counsel’s efforts in this regard. In my view, an additional $15,000 in the costs award is appropriate, bringing the total to $43,187.50.
6) Actual costs
[66] I then must consider awarding costs which should be a substantial contribution towards the MacKays’ costs, but not a complete indemnity. Their costs total $184,988.80, not including HST of $27,748.32, and disbursements of $16,415.10. The parties have agreed that HST should be added to the costs award. I will deal with disbursements hereinafter.
[67] I have said above that some of these costs related to preparation for and attendance at the defendants’ summary judgment motion and subsequent court appearance to obtain Justice Murphy’s directions pursuant to Rule 13.07. Without knowing the exact amount attributable to this, I recognize that some allowance must be made. A reasonable allowance in my view is $20,000, which includes not only the court time over two separate days or part days, but also the preparation of documentation to initiate the summary judgment motion, drafting the affidavit of John Peter MacKay with exhibits, the brief of defendants’ counsel with case authorities and preparation for the motion itself. That reduces the total invoices attributable to this proceeding to approximately $164,000.
7) Lump sum or tariff costs
[68] The total to which I have arrived above is $43,187.50. That is just over twenty-five percent of the MacKays’ legal fees (excluding the summary judgment motion).
[69] I have the authority, pursuant to Rule 77.08, to award lump sum costs instead of tariff costs. The MacKays seek costs of approximately $105,000, which I note includes the costs of the summary judgment motion and related matters.
[70] I am to make a costs award which will provide a substantial contribution towards the costs of the successful party. In doing so, I have regard to the decision in Williamson v. Williams, supra, where Freeman, J.A. referred to “a lawyer’s reasonable bill for the services involved”. He said these solicitor and client costs should be “objectively determined”.
[71] I have not had the opportunity to review the actual invoices for the services rendered. I do not know Mr. Hebert’s hourly rate, what work was done, or whether such things as a “file administration fee” have been added.
[72] In Williamson, supra, Freeman, J.A. did not have the actual invoices for fees billed. He said:
The appellant’s counsel claimed to have booked time equivalent to $80,000 in fees to Dr. Williamson through to the end of the first trial. There was no evidence that a contingency fee agreement was in place, although Dr. Williamson’s counsel suggests there was an informal agreement of some nature, nor was there evidence of an actual account for legal fees. Dr. Williamson is nevertheless liable to pay them. By an objective standard no reasonable person informed as to the current level of legal fees based on time charges would anticipate that Dr. Williamson, as a successful litigant, could expect to be billed far below the range of the $80,000 mentioned by counsel in total for all stages of proceedings. Even if evidence of the exact legal fees Dr. Williamson is to be charged were before us, this would not be determinative. An exercise of judicial discretion to assess objectively what was a reasonable amount would still be necessary.
[73] I must use my judicial discretion to objectively determine what is a reasonable amount in this case. What the MacKays were charged is not necessarily the answer.
[74] Just as Freeman, J. A. concluded in Williamson, I conclude the tariff amount for costs is not sufficient. A reasonable person would not expect legal fees for a trial of six days plus discovery examinations, preparation time, etc. to be only in the range of $43,000.
[75] Some guidance may be obtained from the actual invoices for the fees charged to Kidlark and McKale. I recognize that Kidlark and McKale were not parties to the summary judgment motion, nor did they make a nonsuit motion as the MacKays did. However, after adjusting for GST included in the total of $78,000, the fees rendered to Kidlark and McKale were approximately $65,000.
[76] The plaintiffs complain about the total costs incurred by the MacKays. They refer to the discovery of experts and the cost of obtaining tapes and transcripts of the proceedings. In response, the MacKays say that the discovery of the experts was by consent and, in their view, proved very helpful at trial. They also say it would have been more costly to have a second lawyer at trial than to subsequently obtain tapes and transcripts. They also point out that since E. Anne MacDonald is a member of the local bar, it was appropriate for the MacKays to obtain outside counsel. They also point out that hourly rates vary by region. As well they say plaintiffs’ counsel had assistance from her lawyer client.
[77] I agree with the responses made by counsel for the MacKays. However, I must objectively determine what reasonable amount was necessary to provide the legal services in this matter. Hourly rates may be greater in Halifax than in Truro but not substantially so. It was reasonable in the circumstances for the MacKays to retain counsel outside of the Pictou County area.
[78] Having considered all these issues, I conclude an appropriate award of costs to the MacKays is $75,000 plus HST.
Disbursements
[79] Disbursements are claimed in the amount of $14,916.07.
[80] In a consideration of what disbursements are “necessary and reasonable”, the following issues arise:
1) photocopying and facsimile charges;
2) costs of materials sent to clients;
3) research charges;
4) out of town travel costs; and,
5) tapes and transcripts.
[81] The courts have almost consistently looked at whether the charges for copies and faxes are a cost recovery for a law firm or a revenue source. Mr. Hebert’s invoices show photocopies were charged at 25 cents per page. I also note that a charge of 35 cents per page for photocopies appears on the invoice from Goodman MacDonald Patterson Daley. In light of modern technology and the true cost of photocopying, I conclude a charge of 25 cents or 35 cents per page is not justifiable as a necessary and reasonable cost. The same is true for the cost of sending faxes. Photocopying and printing are totalled together at $2,023.42. The charge for facsimiles is $628.76. As a matter of contract, the MacKays are obliged to pay these amounts but I conclude these totals are not appropriate to be added to a party and party costs award. In addition, I conclude some of these disbursements would have been incurred to provide materials to the clients and some costs would be included in normal office overhead.
[82] I reduce the claim for disbursements set out in items 14 and 17 of Exhibit A to Mr. Hebert’s affidavit to $1,000 as an estimate of the reasonable and necessary disbursements for copies, printing and faxes. I also reduce the amount claimed in the Goodman MacDonald Patterson Daley invoice by $120.
[83] Legal research charges are $3,038.16 and are addressed in paragraph 9 of Mr. Hebert’s affidavit where he says:
I am not aware of the rate charged for disbursement item 15, legal research. These were charged for the use of on-line legal research databases such as Westlaw eCarswell. They were likely charged on a per-minute billing rate. To my knowledge the firm has a flat rate monthly billing plan with the legal research service providers.
[84] He says they were “likely” charged on a per-minute basis, but then refers to a flat rate billing plan. In my view, this is insufficient information to satisfy me that this is a reasonable and necessary disbursement for which the plaintiff should be responsible. I disallow these charges in their entirety.
[85] The plaintiffs have raised the issue of the MacKays retaining out of town counsel. There are travel costs associated with Halifax counsel travelling to Pictou for trial. However, I noted that the plaintiff E. Anne MacDonald is a member of the Pictou County bar. For that reason, I conclude it was reasonable and necessary for the MacKays to retain out of town counsel. Although Kidlark and McKale retained counsel from Truro (where they reside), I cannot conclude the MacKays’ choice of Halifax counsel was unreasonable or unnecessary. The travel expenses are therefore allowed in the amount of $1,227.15.
[86] The plaintiffs also raise the issue of the costs of obtaining tapes and transcripts. The trial was held over a period of eight months and Mr. Hebert did not have junior counsel with him. I conclude it was a reasonable and necessary expense in these circumstances to obtain tapes and transcripts.
[87] The only other disbursement with which I have difficulty is the filing fees. Mr. Hebert said at paragraph 5 of his affidavit that these included filing fees for the summary judgment motion. I therefore reduce that disbursement by one half to $73, since there was a prior order with respect to those disbursements.
[88] Overall I allow disbursements in the total amount of $10,000.
[89] The award of costs and disbursements to the MacKays is costs of $75,000 plus HST, and disbursements of $10,000.
COSTS, KIDLARK AND MCKALE
[90] Kidlark and McKale successfully defended the action against them. They were awarded no damages on their counterclaim, although I did find that minor trespass had occurred.
[91] The plaintiffs seek costs from Kidlark and McKale or, in the alternative, that they pay a portion of the costs ordered to be paid to the MacKays. I know of no authority for the alternate argument, but, if the plaintiffs were successful on their main argument, the effect would be the same. They could use any costs award they obtained towards the costs payable to the MacKays.
[92] Although the claims against Kidlark and McKale were numerous, in summary they were that they interfered with the plaintiffs’ view plane, their pedestrian right of way, and access to the beach by a set of stairs. However, the plaintiffs admitted at trial that Kidlark and McKale had no obligation to provide the stairs. I have addressed the issue of the pedestrian right of way above.
[93] Once the plaintiffs’ surveyor had shown them where the view plane was and where trees had been planted (not within it), the only claim remaining against Kidlark and McKale was that the 2000 agreement continued in effect and protected a greater view plane over their lands than was protected by the later VP-2 agreement. This claim was made in spite of the fact that the plaintiffs’ own lawyer had told them the 2000 agreement was too vague to be enforceable.
[94] Accordingly, by the time the summary judgment motion and directions following it were done, it should have been obvious to the plaintiffs that there could be no successful claim against Kidlark and McKale. Had Kidlark and McKale sought summary judgment, it could well have succeeded. Nevertheless, they proceeded with their defence and counterclaim as they were entitled to do.
[95] Kidlark and McKale argued unsuccessfully that the right of way and view plane agreements were invalid. They sought to have the power pole on their property relocated even though it appears NSPI had permitted the plaintiffs to connect their underground power supply to it, which connection is within the NSPI easement. I refused to grant an order possibly affecting NSPI without its input.
[96] Kidlark and McKale’s counsel says they should receive either a solicitor-client costs award or a costs award starting with the tariff amount. He provided his affidavit to which he attached a copy of the invoices he rendered to Kidlark and McKale. His legal fees and disbursements totalled $78,339.57 including HST and disbursements of $3,178.55. The amount of legal fees before HST was therefore approximately $65,000. I have reviewed the entries on the invoices. I conclude this is a reasonable amount for this matter. I do note that it did include work related to the counterclaim.
[97] It is less than half the amount of legal fees invoice to the MacKays. Two things account for this in large part: 1) Kidlark and McKale did not participate in the summary judgment motion, although their counsel did attend the summary judgment hearing and the subsequent hearing when Justice Murphy gave directions to the other parties; and, 2) the MacKays made a nonsuit motion in which Kidlark and McKale took no part.
[98] I am not satisfied this is one of those rare and exceptional cases where solicitor-client costs should be awarded. I have been provided no case authority where that has been done in a situation similar to this.
[99] I therefore consider whether an award of tariff costs is appropriate or whether I should exercise my discretion to order lump sum costs instead.
[100] I have above calculated the tariff costs to be based upon an amount involved in the range of $65,000 to $90,000 ($9,750 plus $12,000 for six days of trial for a total of $21,750).
[101] As I considered above, an amount can be added to a costs award because of a party’s conduct which affected the expense of the proceeding. I concluded above that an additional $15,000 should be awarded to the MacKays. As I have said, much of the testimony and exhibits of the plaintiffs related to their dealings with the MacKays, before Kidlark and McKale bought Lot 4A in August 2006.
[102] The evidence of the plaintiffs concerning the allegations against Kidlark and McKale was briefer than the plaintiffs’ evidence concerning the history up to that time. Jeff Kidlark testified as well but only about events occurring after the fall of 2006.
[103] Although counsel for Kidlark and McKale was of course at trial when the plaintiffs testified and were cross-examined by the MacKays’ counsel, he did not have to spend time preparing for this evidence nor did his clients have to pay for such preparation.
[104] In all these circumstances, I conclude an additional $10,000 should be awarded to Kidlark and McKale, bringing their total costs to $31,750.
[105] I have regard to the concept of a costs award being a substantial contribution to the successful party’s actual costs. In this case, I must also bear in mind Kidlark and McKale’s lack of success on their counterclaim. I agree with Kidlark and McKale that the time spent on their counterclaim was not substantial. It did, however, require the plaintiffs to respond to it in their submissions both before and after trial, and in their evidence.
[106] On the other hand, I have said above, there was little chance of success of the plaintiffs’ claims against Kidlark and McKale. Their counsel had to prepare to meet those claims.
[107] Had there been no unsuccessful counterclaim, I would have concluded an appropriate award of costs to Kidlark and McKale would be a lump sum of $35,000 plus HST, representing a substantial contribution towards their costs. In light of their lack of success on the counterclaim, I reduce the award of costs to $30,000 plus HST.
[108] Kidlark and McKale’s total bill included disbursements of $3,178.55. I have reviewed these and find them to have been necessary and reasonable. The copying charges are miniscule ($8.81 plus HST). I have said above it was reasonable for the MacKays to retain out of town counsel. For the same reason, it was reasonable for Kidlark and McKale to do so, and to be reimbursed his travel costs. Most of the disbursements related to discoveries and transcripts of discovery which are also necessary and reasonable.
[109] The costs award to Kidlark and McKale is $30,000 plus HST and disbursements of $3,178.55.
Hood, J.