



COURT OF APPEAL FOR ONTARIO

CITATION: Marcus v. Cochrane, 2014
    ONCA 207

DATE: 20140320

DOCKET: C55101

Goudge, Sharpe and Rouleau JJ.A.

BETWEEN

Louise Marcus

Plaintiff (Appellant)

and

Carol Ann Cochrane and Low Murchison LLP

Defendants (Respondents)

Richard R. Marks, for the appellant

Heather J. Williams, for the respondents

Heard: March 5, 2014

On appeal from the judgment of Justice Bonnie Warkentin
    of the Superior Court of Justice, dated January 24, 2012, with reasons reported
    at 2012 ONSC 146.

Goudge
    J.A.:

[1]

At trial, the appellants claim against the respondent solicitor and her
    firm for solicitors negligence was dismissed.  The trial judge found that, in
    the circumstances of this case, the respondent solicitor did not breach the
    standard of care owed to the appellant, her client.  The trial judge also found
    that, in any event, the appellant suffered no damages due to the respondents
    conduct.  Finally, the trial judge awarded costs to the respondents on a full
    indemnity scale in the amount of $160,706.99.

[2]

Counsel for the appellant challenges all three findings in this court. 
    In my view, there is no merit to his argument that the trial judge was wrong to
    dismiss the claim for solicitors negligence.  Nor is there any error in the
    trial judges finding that the appellant suffered no damages in any event.  However,
    in my opinion, the costs award was excessive and must be substantially reduced.

[3]

The background facts are straightforward.  The appellant separated from
    her husband on August 1, 2005.  By early February 2006, they had prepared their
    own draft separation agreement, which resolved their family law issues.  It
    provided for a small equalization payment to the appellant.  The appellant then
    sought legal advice from the respondent solicitor on the agreement she had
    reached with her husband.  The list of her assets at separation, which was
    attached to the agreement, included a severance payment of approximately
    $120,000 she received on March 16, 2006.  She received the payment as a result
    of the termination of her employment on January 19, 2006, which was after the
    date of separation.

[4]

The respondent cautioned her not to sign a final agreement until there
    had been full financial disclosure so that a proper equalization calculation
    could be made.  The appellant rejected this advice and, subject to several
    minor changes, proceeded to sign the agreement she had reached with her
    husband.

[5]

Mr. Marks argues that by not advising the appellant that her severance
    payment should be excluded from any equalization calculation, but rather
    suggesting that she had a severance pay entitlement at separation that would
    have to be factored in, the respondents conduct fell below the standard of
    care owed to the appellant.

[6]

The trial judge dealt with this issue by first finding the scope of the
    respondent solicitors retainer.  She concluded that it was only to accept the draft
    agreement prepared by the appellant and her husband, and with some minor
    amendments, incorporate that agreement into a final separation agreement.  That
    is a finding of fact for which there was ample evidence at trial.  There is no
    basis to disturb it on appeal.

[7]

The trial judge then turned to the standard of care required of a
    solicitor with such a retainer.  The appellant called no expert evidence on
    this question.  The respondents called as an expert witness a senior family
    practitioner in Ottawa.  His opinion was that in discharging this retainer, the
    respondent did not breach the standard of care required of a reasonably
    competent lawyer in the circumstances.  The trial judge accepted this opinion
    and found that the respondent was not negligent.  This conclusion was amply
    justified on the evidence the trial judge had before her.  We cannot interfere
    with her finding.

[8]

The trial judge then turned to the appellants claim that if she had
    been properly advised about her severance payment, she would have been able to
    negotiate an equalization payment of $70,000 to $80,000, rather than the
    $4,573.59 she did receive.

[9]

The trial judge found this position entirely unsupported by the
    evidence.  Rather, she concluded that the evidence indicated that had the
    appellant sought such a payment from her husband, he would not have agreed to
    it.  Nor would a court have ordered it.  The evidence was that, had full
    financial disclosure been made, the equalization result would have been much
    the same as that provided for by the agreement signed in March 2006.  This
    finding of fact was entirely open to the trial judge on the record.  As a
    result, I see no error in her conclusion that in any event the appellant
    suffered no damages.

[10]

The
    third issue before us is the award of trial costs on a full indemnity scale. 
    The trial judge concluded that this was justified because the appellants
    conduct of the trial was reprehensible.  She based her conclusion on two
    reasons, neither of which is sustainable in my view.

[11]

The
    first concerned two emails that the respondent solicitor sent to the
    appellant.  After admitting on discovery that she received them, the appellant
    gave evidence at trial that she had not received them or thought it unlikely
    that she did, because the emails had no date and time stamp.  The IT
    information she received led her to believe they were invalid.  The trial
    judge found that the appellant was in effect suggesting that the respondent had
    falsified documents for trial and was calling her honesty into question, thus
    justifying full indemnity costs.  In my view, the appellants evidence cannot
    be taken that far.  I cannot read the appellants evidence as suggesting any
    deliberate conduct, let alone dishonesty, on the part of the respondent
    solicitor.

[12]

The
    second reason was that the appellant failed to call expert evidence on the
    standard of care and misstated her damages when she knew or ought to have
    known that she suffered no damages.  The failure to call expert evidence is
    normally a decision of trial counsel.  There is nothing here to suggest
    otherwise, let alone to lay the responsibility for it at the feet of the
    appellant.  While counsels decision may have been unwise, it is hardly
    reprehensible conduct justifying full indemnity costs against the appellant. 
    The same is true of trial counsels decision to advance a theory of damages
    (namely that the appellant could have negotiated a vastly superior equalization
    payment) that the trial judge ultimately rejected.  I see no basis on this
    record to say that the appellant ought to have known that this would happen, or
    that she in fact knew it would happen.

[13]

Since
    neither of the trial judges reasons can be sustained, I conclude that it was
    an error in principle to fix trial costs on a full indemnity basis.  In order
    to bring a merciful end to these proceedings, this court should determine the
    appropriate trial costs order rather than remit the issue to the trial court.

[14]

In
    my opinion, there is no basis on this record to depart from the usual partial
    indemnity scale in fixing trial costs.

[15]

In
    fixing those costs, it is important to remember that the dispute was
    essentially about a claim for approximately $80,000.  The partial indemnity
    bill of costs of appellants counsel Mr. Marks was $172,645.55.  The full
    indemnity bill of costs of the respondents was $160,706.99.  The comparison of
    what this dispute was about and what was spent on it is stark and difficult to
    justify.  While undoubtedly Mr. Marks, as counsel asserting the claim, must
    bear the greater responsibility, the principle of proportionality which is
    fundamental to any sound costs award cries out for application by both
    counsel.  With the assistance and indeed the direction of the trial judge if
    need be, counsel simply must cut the cloth to fit.  The health of the justice
    system depends on it.  Trial costs cannot serve as an incentive to look away
    from this important challenge.

[16]

In
    the end, the order for trial costs against the appellant must be fair and
    reasonable: see
Boucher v. Public Accountants Council for the Province of
    Ontario
(2004), 71 O.R. (3d) 291
    (C.A.), at p. 299
.  Making that assessment is more art than
    science.  Of particular importance here is that, primarily, this was a trial
    about a modest amount of money.  In my opinion, an award to the respondents of
    $60,000 together with disbursements represents a fair and reasonable order for
    trial costs.  I would so order.

[17]

With
    this change in the costs provision, the appeal is otherwise dismissed.

[18]

Finally
    I turn to costs of the appeal.  Both counsel have submitted bills of costs.

[19]

Mr.
    Marks bill on a partial indemnity basis is $202,649.15.  Even if he charges
    his own client on no more than a partial indemnity basis, the appellant will
    face a total cost from her own lawyer of some $375,000 to try and unsuccessfully
    appeal a claim for $80,000.  In my view, that is completely unjustifiable.

[20]

Respondents
    counsel has submitted a vastly more reasonable partial indemnity bill of
    $49,001.53.  While the appellant succeeded on one issue, she was unsuccessful
    on two of the three issues in this court.  The respondents therefore deserve
    some modest costs.  I would order costs of the appeal to the respondents in the
    sum of $20,000 inclusive of disbursements and taxes.

Released: March 20, 2014 (S.T.G.)

S.T. Goudge J.A.

I agree. Robert J. Sharpe
    J.A.

I agree. Paul Rouleau J.A.


