





CITATION:
Peterborough
          (City) v. Kawartha Native Housing Society Incorporated,
2011 ONCA 146




DATE: 20110225



DOCKET: C50793



COURT OF APPEAL FOR ONTARIO



Rosenberg, Armstrong and Juriansz JJ.A.



BETWEEN



The Corporation of the City of Peterborough



Plaintiff (Respondent)



and



Kawartha
          Native Housing Society Incorporated and Otonabee Native Homes Inc.




Defendants (Appellants)



Frank Bennett and Vilko Zbogar, for the appellants



Douglas O. Smith, for the respondent



Mervyn  D.
          Abramowitz, for the receiver Mintz & Partners Limited



Murray Klippenstein and Basil Alexander, for the
          interveners Co-operative Housing Federation of Canada, Ontario Non-Profit
          Housing Association, and National Aboriginal Housing Association



Heard: June 10, 2010



On appeal from the order of Justice Barry G. A. MacDougall of
          the Superior Court of Justice dated June 17, 2009.



COSTS ENDORSEMENT



Introduction

[1]

This endorsement addresses two matters:

(i)        The costs of a re-argued motion before
    MacDougall J. of the Superior Court of Justice; and

(ii)       The costs of the appeal.

(i)

The costs of the re-argued
    motion

[2]

We
    released our reasons for judgment in this matter on October 26, 2010.  In para. 44 of those reasons, we said that
    the boards of the corporations were
entitled to reimbursement for the
    costs of the corporations for the re-argument of the March 14, 2008 motion, which
    was re-argued on February 2, 2009.  The March
    14, 2008 motion resulted in the extension of the receivership for one year, the
    approval of certain of the receivers accounts and a disclosure order in favour
    of the boards.  The motion judge also
    ordered the receiver to pay, from the funds of the corporations, costs of
    $32,230.64 for counsel retained by the boards of the corporations.

[3]

On the re-argued motion on February 2, 2009 the
    motion judge effectively reversed his position on costs and concluded that the
    boards did not have the right to retain counsel after the receivership order
    was made, based on his interpretation of the operating agreements between the
    City of Peterborough and the corporations.  The motion judge rescinded his previous costs order of $32,130.64.  Although he had concluded that the boards did
    not have the right to retain counsel he made a costs order in favour of the
    boards in the amount of $15,000.  He declined
    to award the boards costs for non-litigation legal work of $9,412.60.

[4]

Much of the argument in the re-argued motion was
    directed to the issue of whether the boards had the right to retain
    counsel.  The boards now seek costs of
    the re-argued motion, which they claim on a partial indemnity scale in the amount
    to $34,304 and on a full indemnity scale in the amount to $46,716, now reduced
    to $44,000.

[5]

The appellant corporations are public sector
    organizations, which operate affordable rental housing for approximately 300
    persons from the Aboriginal community in the Peterborough area.  We would not expect public sector
    organizations to pay full indemnity hourly rates.  In any event, whether one applies the hourly
    rates on either a full indemnity scale or a partial indemnity scale to the
    number of docketed hours for the re-argued motion, it produces an unreasonable
    result.

[6]

On the original motion argued on March 14, 2008,
    this court awarded $7,500 in costs to the boards, a sum suggested by counsel
    for the boards.  Counsel for the boards
    submits that the re-argued motion was based on a broader record, which
    justifies a greater costs award.  The
    total hours docketed by counsel for the boards is 156.1.  Although we accept that this was the time
    spent by counsel, it appears to us excessive.  Also, a number of orders made on the original motion were not the
    subject of the re-argued motion.  The
    principal issue on the re-argued motion was the right of the boards to retain
    counsel.  This is an important issue and
    arguably attracts a costs award greater than $7,500.  That said, we do not agree that it warrants 156.1
    hours of lawyer time.

[7]

We fix the costs of the re-argued motion in the
    amount of $15,000, inclusive of disbursements and applicable taxes.

(ii)

The costs of the appeal

[8]

After
    the notice of appeal was delivered in this case, the appellants moved before
    Blair J.A. in chambers for,
inter alia
,
    direction concerning whether the appellants may be represented in the appeal by
    counsel and a declaration that the appellants have the right to have their
    legal fees and expenses for the appeal paid out of the appellants funds.

[9]

Blair
    J.A. ordered that the appellants were entitled to retain counsel for the appeal
    and that the boards of directors of the appellants were entitled to retain
    counsel on their behalf.  Blair J.A. also
    ordered, 
that
the reasonable legal fees and expenses
    of counsel so retained are to be paid out of the Corporations assets, after
    assessment.

[10]

Paragraph
    47 of our reasons for judgment provides that the appellants shall have their
    costs of the appeal in accordance with the order of Blair J.A.

[11]

The
    appellants have requested that we fix the costs rather than require them to
    proceed to an assessment as provided for in the order of Blair J.A.  The respondent takes no issue with the
    appellants request.

[12]

We have decided to fix the costs as it will no
    doubt save valuable time required to educate an assessment officer on the
    factual and legal issues in the appeal.

[13]

The
    appellants bill of costs shows docketed time for Mr. Zbogar (a 2002 call) of
    170.7 hours and 30 hours for Mr. Bennett (a 1970 call).  The partial indemnity hourly rate for Mr.
    Zbogar is $150 and $500 for Mr. Bennett.  The substantial indemnity hourly rates are $200 and $750.  While these rates appear to reflect rates charged
    by counsel for private sector clients, we are of the view that the rates of Mr.
    Bennett are high for a public sector client.  The boards of the appellants filed bills of costs claiming $63,370 on a
    full indemnity scale and $46,533 on a partial indemnity scale.

[14]

As
    in the case of the re-argued motion, we are of the view that the 
hours
times rates approach produces an unreasonable result
    whether on a full indemnity or partial indemnity scale.  This essentially single issue appeal simply
    does not attract costs in the range sought by counsel for the appellants.

[15]

In
    our view, a reasonable award of costs in respect of work done of this kind for
    public sector clients is $30,000.  We
    therefore fix the costs of the appeal payable to the boards of the appellants
    in the amount of $30,000 including disbursements and applicable taxes.

M. Rosenberg J.A.

Robert P. Armstrong J.A.

R. Juriansz J.A.


