C.L.M. v. M.J.S.

2017 BCSC 2368 C.L.M. v. M.J.S.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: C.L.M. v. M.J.S., 2017 BCSC 2368 Date: 20171221 Docket: 51380 Registry: Kamloops Between: C.L.M. Claimant And M.J.S. Respondent Before: Master R.W. McDiarmid Reasons for Judgment No one appeared on behalf of C.L.M.: Counsel for the Respondent: E.A. Harris Place and Date of Hearing: Kamloops, B.C. November 23, 2017 Place and Date of Judgment: Kamloops, B.C. December 21, 2017 [1] Madam Justice Donegan issued Reasons for Judgment cited at C.L.M. v. M.J.S., 2017 BCSC 799. Those Reasons for Judgment followed a 13-day trial. In those reasons, Donegan J. invited written submissions from both parties on the issue of costs. The respondent father provided written submissions. The claimant mother did not. Written submissions on costs were received June 7, 2017, and Donegan J. issued Reasons for Judgment on costs on August 25, 2017 cited at 2017 BCSC 1517. A summary of her orders is found at para. 66: 1. The claimant pay the respondent's costs of this case on a special costs basis, to be assessed by the Registrar. Forty percent of the costs award is attributable to obtaining Orders for child support and maintenance; 2. The respondent may continue to hold the claimant's share of the sale proceeds from the former family residence in trust pending the Registrar's assessment of costs; 3. The commencement date for the claimant's contribution to

s. 7 expenses is January 1, 2017; 4. The review and updated s. 211 report ordered in the Trial Reasons will not be required if the claimant does not participate in them; 5. Any updated s. 211 report may be prepared by a qualified person through the Family Justice Centre; and 6. The respondent's counsel will draft the Orders arising from the Trial Reasons in conjunction with these reasons on costs and clarification. Given her non-participation post-trial, the signature of the claimant on the form of the Order is dispensed with. [2] On September 1, 2017, the respondent filed an appointment appointing September 13, 2017 as the time and place for a pre-hearing conference and 3 p.m. on October 11, 2017 as the time and place for an assessment of the Bill of Costs of the respondent. At the pre-hearing conference, the claimant attended representing herself. Respondent's counsel, Ms. Lammers, attended. [3] The claimant attended the pre-hearing conference along with her mother, who, with the consent of respondent's counsel, was present throughout the pre-hearing conference. [4] At the pre-hearing conference, the claimant confirmed that all materials to be served on the claimant may be served by delivery to 805 Columbia Street, Kamloops, or by ordinary mail to that address, postal code V2C 2V7 with mail deemed received seven days after posting. [5] At the pre-hearing conference, I was of the view that the time set was insufficient. Dates were canvassed with both the claimant and respondent's counsel. The claimant advised that she would make herself available for the November 8, 2017 hearing. [6] I made the following orders: 1. The assessment hearing is adjourned to 2:00 PM November 8, 2017.

2. All materials to be served on the claimant may be served by delivery to 805 Columbia Street, Kamloops, B.C. or by ordinary mail to that address, postal code V2C 2V7, with mail deemed received 7 days after posting.

3. Ms. Lammers has leave, pursuant to the Law Society of B.C.'s Code of Professional Conduct for B.C., Chapter 5, Section 5-2-1, to advocate, speak to her own affidavit(s) and testify.

4. By October 2, 2017 the Claimant must set out in a letter to the Respondent's lawyer which fees and disbursements she takes issue with as well as her position on the amount of special costs which should be paid. These objections must be detailed, not merely a blanket statement of disc agreement, to enable the Respondent to properly prepare for the assessment.

5. By October 23, 2017, the Respondent must file and deliver any affidavit materials being relied on together with summaries of evidence of any witnesses, including the Respondent if he is going to testify, and Ms. Lammers if she is going to testify, who will be testifying at the Assessment.

6. By November 1, 2017 the Claimant must file and deliver to Ms. Lammers' office, 3rd Floor, 180 Seymour Street, Kamloops, any affidavit materials being relied on by her together with summaries of evidence of any witnesses, including the Claimant herself, who will be testifying at the Assessment.

7. The binder containing all materials (Affidavits, Order, summaries of evidence and any other materials) must be filed by noon November 7, 2017.

8. The Respondent must forthwith provide an entered copy of Donegan J's order to the Claimant. [7] At the request of the Court, the matter was then adjourned by requisition filed October 16, 2017 to November 23, 2017 at 2 p.m. The claimant was served with the requisition and notified by email of the change of date from November 8 to November 23, 2017. She was paged by the clerk. She did not attend. [8] I was advised that she did not send any letter setting out which fees and disbursements she takes issue with. Despite that, I remain required to assess special costs; I cannot merely accept what has been provided to me by counsel for the respondent. [9] Ms. Lammers, who was the respondent's counsel throughout, testified. Two exhibits were entered. Exhibit 1 is a binder which included the appointment, a copy of the requisition rescheduling the assessment to November 23, 2017, another copy of the special costs claimed (an identical copy was attached to the appointment), an affidavit of Brenda Bumstead, legal assistant to Ms. Lammers, setting out details of all of the disbursements claimed, a copy of Donegan J.'s Reasons for Judgment on Costs, a 77-page disbursement print-out showing disbursements incurred on the file and a 10-page document showing time posted to the file by Ms. Lammers and the other lawyers who worked on the file. [10] Exhibit 2 is a chronology prepared by

respondent's counsel. It was not prepared for this proceeding, but as aid memoire for trial. It sets out in time sequence what occurred with respect to this file. It sets out all of the court appearances to the conclusion of the trial. [11] Ms. Lammers testified that she was called in 2005. She testified that her present hourly rate was $325.00 an hour, which she said was comparable to other lawyers in Kamloops having similar experience to herself. She confirmed that the work done by her with respect to this file was all billed at $300.00 an hour, which was the hourly rate she charged when she was initially retained. She testified she did not increase that rate. [12] She testified with respect to the circumstances set out in Rule 16-1(2)(b) of the Supreme Court Family Rules, B.C. Reg. 169/2009 [Family Rules]. [13] With respect to complexity and difficulty, she testified that this proceeding was complex in that it involved all of the matters which are the subject of family law disputes, apart from spousal support, but in particular the issue of alienation of the parties' son from her client. [14] She testified that she practices primarily in the area of family law. [15] With respect to the amount involved, that was not a significant factor in the litigation. [16] She testified that the time she spent was, in her view, necessary. She gave examples of when matters could be dealt

with by utilizing an articling student. She also testified that the time that was billed was somewhat less than the time she actually spent on the file. [17] One significant factor was the conduct of the claimant which is set out at length in Donegan J.'s reasons. As set out in those reasons, the claimant failed to comply with procedural orders, failed to abide by or cooperate with the court ordered sale of the family residence, disobeyed a protection order and generally conducted herself in a manner summarized by Donegan J. in para. 29 of her Reasons for Judgment on Costs as follows: [29] The claimant's negative and obstructionist attitude toward Court Orders and court proceedings generally forced the respondent to incur significant unnecessary litigation expenses, which not only damaged his financial well-being, but his emotional well-being as well. [18] Ms. Lammers testified that this matter, especially with respect to issues involving his son, was extremely important to her client. The result obtained was a clear success, including the order for special costs as opposed to the usual order for party/party costs.

SUMMARY OF THE LAW [19] The starting point is Rule 16-1(2)(a): Assessment of special costs (2)On an assessment of special costs, a registrar must (a) allow those fees that were proper or reasonably necessary to conduct the family law case [20] In determining fees which were proper or reasonably necessary, I am to consider all of the circumstances, including those circumstances set out in subrule (b). [21] As noted above, Ms. Lammers testified with respect to those matters. [22] With respect to disbursements, subrule (4) requires me to determine which disbursements have been necessarily or properly incurred and allow a reasonable amount for those disbursements. [23] In assessing special costs, the law has evolved from the decision of Bradshaw Construction Ltd. v. Bank of Nova Scotia (1991), 54 B.C.L.R. (2d) 309. In that case, discussing special costs, Mr. Justice Bouck wrote: If the plaintiff is awarded Special Costs, counsel for the plaintiff says that the registrar would allow him fees of $116,250.00 under Rule 57(3) for his efforts in prosecuting the case on its behalf. From my reading of the material, the suggested fee of $116,250.00 is not necessarily advanced as a fee the plaintiff will recover on an assessment of Special Costs. Rather it was put forward as a fee that counsel for the plaintiff estimated a registrar would award under a review pursuant to the Legal

Profession Act. Therefore, it is only an approximation of what amount a registrar would allow if the services were assessed on the basis of Special Costs. The error probably arose because of the uniqueness of the new tariffs and on the mistaken understanding that fees assessed as Special Costs are the same as fees allowed under the Legal Profession Act. On my interpretation of the rules, the two are different. [24] Mr. Justice Bouck further wrote: Special Costs are mostly reserved for those situations where the unsuccessful party has been guilty of gross misconduct or the like. They are assessed on an objective basis: what would a reasonably competent solicitor charge for the services rendered? They will usually result in about an 80% to 90% indemnity for fees assessed by the successful solicitor against the successful party under the Legal Profession Act. [25] In that case, Bouck J. awarded the plaintiff costs taxed at 60% of special costs. [26] The test remains the same - what would a reasonably competent solicitor charge for the services rendered? [27] An appeal from Bouck J.'s decision was dismissed. In giving the decision of Court of Appeal, Madam Justice Proudfoot wrote: It is, in my opinion, totally unnecessary for this Court to deal any further with the question of costs. The trial judge dealt most adequately with the issue. For the reasons as delivered by the trial

judge, I would dismiss the appeal by the Bank. [28] In Lee (Guardian ad litem of) v. Richmond Hospital Society, 2005 BCCA 107, the Court of Appeal reviewed the law respecting special costs in the context of an impecunious plaintiff entering into a contingency fee agreement in a medical negligence action. In issuing written reasons for the Court, concurred by Chief Justice Finch and Madam Justice Levine, Mr. Justice Smith writes at paras. 3-5 the background as follows: [3] This case is a classic example of the adage that contingent fee contracts provide a key to the courthouse for impecunious plaintiffs. The appellant, through his mother, his guardian ad litem, engaged his counsel in this matter pursuant to an agreement that counsel would be entitled to 35% of the amount recovered plus reimbursement of disbursements incurred. In the event of no recovery, counsel would receive no fee and no reimbursement of disbursements. [4] The appellant, a young man, suffered profound cognitive and physical impairment as a result of a brain injury caused by the negligent failure of the respondent's nursing staff to monitor his post-operative condition. After a lengthy trial, during which the respondent admitted liability, the trial judge awarded damages of approximately $5,000,000: see [2002] B.C.J. No. 644 (QL), 2002 BCSC 469, supplemental reasons at 3 B.C.L.R. (4th) 91, 2002 BCSC 862. The

respondent's appeal of the award of damages was dismissed by this Court: see [2003] B.C.J. No. 2762 (QL), 2003 BCCA 678. [5] Because of the difficulty and expense inherent in the pursuit of medical negligence actions, the appellant could not have brought his claim but for counsel's willingness to act on a contingent fee agreement. Counsel achieved an excellent result in a difficult case through the application of stellar skill and ability. His fee pursuant to the agreement is $1,731,321. [29] Obviously that was a case significantly different from this case. Here, the respondent retained counsel on an hourly rate basis and now seeks recovery of the fees he has paid or owes to his lawyers. What Smith J.A. writes at paras. 49-51 is of guidance in this costs assessment. He writes: [49] In my view, the legislative intention is clear that special costs under Rule 57(3) are in their nature to resemble closely the reasonable fees that would be charged by a lawyer to his or her own client. It may be that, in some cases, they will be equal in amount. However, special costs and lawyers' reasonable fees are not identical. [50] The Yule factors are statutorily mandated for consideration in the review of lawyers' bills by s. 71(4) of the Legal Profession Act. Such bills are reviewed pursuant to s. 71: 71 (1) This section applies to a review or examination under section 68 (7), 70, 77 (3), 78

(2) or 79 (3). (2) Subject to subsections (4) and (5), the registrar must allow fees, charges and disbursements for the following services: (a) Those reasonably necessary and proper to conduct the proceeding or business to which they relate; (b) Those authorized by the client or subsequently approved by the client, whether or not the services were reasonably necessary and proper to conduct the proceeding or business to which they relate. (3) Subject to subsections (4) and (5), the registrar must allow fees, charges and disbursements for the following services, even if unnecessary for the proper conduct of the proceeding or business to which they relate: (a) Those reasonably intended by the lawyer to advance the interests of the client at the time the services were provided; (b) Those requested by the client after being informed by the lawyer that they were unnecessary and not likely to advance the interests of the client. (4) At a review of a lawyer's bill, the registrar must consider all of the circumstances, including (a) the complexity, difficulty or novelty of the issues involved, (b) the skill, specialized knowledge and responsibility required of the lawyer, (c) the lawyer's character and standing in the profession, (d) the amount involved, (e) the time reasonably spent, (f) if there has been an agreement that sets a fee rate that is based on an amount per unit of time

spent by the lawyer, whether the rate was reasonable, (g) the importance of the matter to the client whose bill is being reviewed, and (h) the result obtained. (5) The discretion of the registrar under subsection (4) is not limited by the terms of an agreement between the lawyer and the lawyer's client. [Emphasis in original] [51] Notably, the language in s. 71(2)(a) parallels the language in Rule 57(3) - those fees, charges, and disbursements that are "reasonably necessary and proper to conduct the proceeding or business to which they relate" must be allowed. However, in contrast to Rule 57(3), s. 71(2)(b) requires the registrar to allow, in addition, those fees, charges and disbursements "authorized by the client or subsequently approved by the client, whether or not the services were reasonably necessary and proper to conduct the proceeding or business to which they relate". Moreover, by s. 71(3), the registrar may allow certain fees, charges, and disbursements "even if unnecessary for the proper conduct of the proceeding or business to which they relate". In this respect, fees reviewed by the registrar under the Legal Profession Act differ from special costs assessed by the registrar pursuant to Rule 57(3). [30] Rule 57(3) is for all practical purposes identical to Rule 14-1(3) of the Supreme Court Civil Rules, B.C. Reg. 168/2009 and for the purposes of this assessment,

Rules 16-1(2) of the Family Rules. [31] In Gichuru v. Smith, 2014 BCCA 414, the Court of Appeal considered the issue of special costs ordered against an unsuccessful plaintiff. Mr. Gichuru commenced an action against his former employer for unjust dismissal and breach of fiduciary duty. Mr. Gichuru worked as an articled student for the defendants' law firm. The trial judge found just cause, dismissed the breach of fiduciary duty claim and summarily ordered lump sum special costs against Mr. Gichuru. [32] In commenting on the approach to take with respect to special costs, Mr. Justice Harris and Mr. Justice Goepel, in written reasons concurred by Madam Justice Stromberg-Stein, wrote at paras. 123-125: [123] In A.B.C., Kirkpatrick J. noted that while special costs are not necessarily the fees that a successful solicitor would recover from his or her client there may well be circumstances in which special costs and a bill taxed under the Legal Profession Act would be equivalent. She noted the similarities between the provisions in the then R. 57(3) and s. 71(4) of the Legal Profession Act which a registrar must consider on a review of a lawyer's bill. [124] This Court in Lee also noted the comparison between the special costs rule and the provisions of the Legal Profession Act. Both incorporate most of the factors in Yule v. Saskatoon (City) (1955), 16 W.W.R. 305 (Sask. Q.B.). In

Lee, K. Smith J.A., writing for the Court, noted that in National Hockey League v. Pepsi-Cola Canada Ltd. (1995), 2 B.C.L.R. (3d) 13 (C.A.), this Court had approved the formula suggested by Bouck J. in Bradshaw Construction that special costs will "in most instances" be less than a bill assessed under the Legal Profession Act. [125] The Court went on to note, however, that the rule of thumb approach of a deduction from legal fees is merely an aid to a proper assessment and each case will turn on what is proper or reasonably necessary in the particular circumstances within the meaning of the words in R. 57(3). Smith J.A. concluded his discussion at para. 49: In my view, the legislative intention is clear that special costs under Rule 57(3) are in their nature to resemble closely the reasonable fees that would be charged by a lawyer to his or her own client. It may be that, in some cases, they will be equal in amount. However, special costs and lawyers' reasonable fees are not identical. [33] In summarizing general principles, Harris J.A. and Goepel J.A. wrote at paras. 154-156: [154] We would briefly summarize the principles as discussed above. The decision to fix the quantum of costs under R. 14-1(15) is a matter of judicial discretion that should be sparingly exercised. The court officer best placed to conduct an assessment is usually the registrar, whose knowledge and

experience in assessing legal bills is extensive and seldom matched by that of a trial judge. An exception may arise in cases when the judge is intimately familiar with the litigation or the time and cost of a registrar's hearing cannot be justified or where the parties consent. The fact that a judge has heard the trial does not necessarily lead to the conclusion that the best use of judicial resources is for the judge to assess costs. A concern that a party who might have to pay costs will prolong the costs assessment by requiring a microscopic review of the services provided by counsel must be balanced against the right of that party to challenge the reasonableness of the proposed costs. [155] When assessing special costs, summarily or otherwise, a judge must only allow those fees that are objectively reasonable in the circumstances. This is because the purpose of a special costs award is to provide an indemnity to the successful party, not a windfall. While a judge need not follow the exact same procedure as a registrar, the ultimate award of special costs must be consistent with what the registrar would award in similar circumstances. Thus, a judge must conduct an inquiry into whether the fees claimed by the successful litigant were proper and reasonably necessary for the conduct of the proceeding as set out in R. 14-1(3)(a), taking into account all of the relevant

circumstances of the case and with particular attention to the non-exhaustive list of factors in R. 14-1(3)(b). [156] A special costs assessment, whether before a judge or a registrar, cannot proceed in absence of evidence of the amount of legal fees incurred. Usually this will be provided in the same form as a bill between a solicitor and client under the Legal Profession Act. This is necessary to allow a court to inquire as to the objective reasonableness of the fees claimed by a litigant, as the fact that a solicitor has billed a certain sum does not necessarily make the fee reasonable. Where production of a bill of special costs would lead to a loss of solicitor-client privilege, the party seeking special costs must either waive privilege or can elect to preserve privilege by having its costs assessed after all appeals are exhausted. [34] Costs assessments flow from the facts in each case, and thus while re-statement of applicable principles is important, the actual decisions are fact-dependent. In reaching my decision in this case, I was assisted by the approach taken by Registrar Cameron in 567 Hornby Apartment Ltd. v. Soleil Hospitality Inc., 2016 BCSC 1340 and Le Soleil Hospitality Inc. v. Louie, 2017 BCSC 162. In those cases, Registrar Cameron applied the principles to the facts before him in a case where the successful parties incurred legal fees in excess of $3.1

million, plus taxes and disbursements of approximately an additional $540,000.00. In that case, Registrar Cameron took a global approach in assessing the appropriate special costs and disbursements. [35] In this case, Ms. Lammers was retained in late April 2015 to represent the respondent in a Notice of Application brought prior to a Judicial Case Conference ("JCC") and with short leave. That matter came on for hearing before me on April 27, 2015, which resulted in dismissal of most of the claimant's application and an award of costs to the respondent. [36] Shortly after that, the first lawyer retained by the claimant withdrew. A JCC took place in July 2015. There followed court applications on November 10, 2015, May 11, 2016, June 8, 2016, August 2, 2016, August 3, 2016 (Provincial Court), August 24, 2016 (Provincial Court), September 7, 2016 (Provincial Court), September 21, 2016 (Provincial Court), October 3, 2016 and then the trial management conference on October 20, 2016. [37] It is not clear whether the trial judge intended to include costs for the Provincial Court proceedings in the special costs order. [38] Rule 14-1(1)(a) and (b)(i) of the Civil Rules states "the costs of the proceeding be assessed as special costs." The "proceeding" presumably is the Supreme Court civil action. [39] Rule 16-1(1)(b)(i) of the Family Rules states "the costs of the family law case be

assessed as special costs." I was not referred to any law with respect to this matter. The fact that the claimant displayed a cavalier attitude toward both the Provincial Court and Supreme Court proceedings was commented upon by Donegan J. (see for example para. 83 of the trial decision at 2017 BCSC 799). [40] However, in this case, the issue is moot, because while Ms. Lammers and her articling student recorded time for the August 3, 2016 Provincial Court appearance (Ms. Lammers recorded 2.5 hours and the articling student recorded 2.1 hours), that time was recorded as non-billable and was not charged to the client. [41] No time appears to have been recorded, and nothing charged to the client with respect to the September 7 and September 21, 2016 Provincial Court appearances. [42] The articling student appears to have attended on August 24, 2016 and recorded and billed .9 hours at $100.00 an hour, so a charge of $90.00. The articling student also recorded other time when she accompanied Ms. Lammers to Supreme Court proceedings and, although recording the time, recorded it as non-billable and it was not charged to the client. It significantly exceeded the .9 hours charged for the one Provincial Court appearance. [43] In the circumstances, her attendance at the Provincial Court proceeding was proper. The amount involved is minimal and is more than offset by other time which could

have been but was not billed to the client. [44] On November 21, 2016, the claimant sought an adjournment of the trial. The trial then commenced on November 22, 2016 and went for 13 days. Thus, counsel attended Supreme Court on 22 days up to the end of the trial. [45] The claimant has billed $75,521.00 for legal fees, mostly billed by Ms. Lammers. However, there were occasions when articling students attended court. Two of the students who billed time on the file billed their time at $175.00 per hour. A law student also billed some time on the file at $100.00 per hour. This is not a situation where there were fees, charges and disbursements which were unnecessary for the proper conduct of the proceeding or business to which they relate. I conclude that this is one of those circumstances where special costs and legal fees reviewed under the Legal Profession Act would be equivalent. [46] A summary of what is being claimed here is set out in paragraph 2 of Ms. Bumstead's affidavit as follows: 2. The aggregate amount owing on the Special Bill of Costs is $93,322.87 which comprises time of $81,783.52 and disbursements of $11,539.35. Attached and marked as Exhibit "A" is the proposed Bill of Costs. [47] Photocopies have been charged at $.25 per page; typically fee agreements between lawyers and their clients have a slightly higher rate for photocopies, but $.25 per page is what is

often used as the baseline for assessing the reasonableness of photocopying in party/party bills (see Administrative Notice 5, the photocopying and fax charges guideline). [48] In assessments of party/party costs, registrars employ a "rough justice" approach to photocopying, recognizing that generally a significant portion of the photocopying is notionally subsumed in the work encompassed in tariff items. In assessing special costs, I am required to determine whether the photocopying has been necessarily or properly incurred in the context of what would be reasonable objectively. According to as she has sworn in her affidavit, 15,680 photocopies were made and charged to this file. [49] In a case where there has been a 14-day trial, eight other Supreme Court appearances and four Provincial Court appearances, that is a reasonable number of photocopies. [50] I am satisfied, based on the evidence provided to me, that the legal fees which have been billed were proper or reasonably necessary to conduct the family law case and I allow those fees as claimed. [51] Similarly, I am satisfied that the disbursements have been necessarily or properly incurred in the conduct of the family law case and that the amount claimed for them is reasonable and I allow those disbursements as claimed.

SUMMARY [52] I allow legal fees as claimed in the amount of $75,521.00, less $2,500.00 already paid. [53] Thus I allow $73,021.00 in legal fees, GST at 5%, which is an amount of $3,651.05, PST at 7% which is $5,111.47 for a subtotal for fees and taxes on fees of $81,783.52. [54] I allow disbursements as claimed, including the appropriate taxes imposed under provincial sales tax and excise tax (GST). Total disbursements and taxes are allowed as claimed at $11,539.35. [55] The total special costs allowed are $93,322.87. [56] Accompanying this decision, I have issued a Certificate of Costs in that amount following assessment. "Master R.W. McDiarmid" MASTER McDIARMID