Effort Trust Company v. Kennedy

Effort Trust Company v. Kennedy Court Supreme Court Date 2004-06-08 Citation 2004 NSSC 112 Docket 197411 Judge/Registrar/Adjudicator Edwards, Frank C. (Honourable Justice) Document Type Decision Decision Content IN THE SUPREME COURT OF NOVA SCOTIA Citation: Effort Trust Company v. Kennedy, 2004NSSC112 Date: 20040608 Docket: 197411 Registry: Port Hawkesbury Between: The Effort Trust Company in Trust for the NMF Group Plaintiff v. Russell Kennedy, Petra Kennedy and Russell Kennedy per Gerald A. MacDonald, by Power of Attorney Defendants Judge: The Honourable Justice Frank Edwards Heard: May 21, 2004, in Port Hood, Nova Scotia Counsel: Hugh MacIsaac, Esq., for the Plaintiff By the Court: [1] In this foreclosure action, Counsel is seeking costs in excess of the usual $1,750.00 plus disbursements. He makes this application on the basis of the specific wording of the mortgage document and because of the inordinate amount of work this file entailed. [2] The mortgage in question provides that the Mortgagee may: “... pay all costs, charges, and expenses which may be incurred in taking recovering and keeping possession of the said premises and all solicitor charges or commissions for or in respect of the collection of overdue interest, principal, insurance premiums or any other monies whatsoever payable by the Mortgagor hereunder, as between solicitor and client, whether any action or other judicial proceeding to enforce such payment has been taken or not and the amounts so paid shall be added to the debt hereby secured and be a charge on the said lands and shall bear interest at the same rate and shall be forthwith payable by the Mortgagor to the Mortgagee and the non-payment of such amounts shall entitle the Mortgagee to exercise the powers exercisable for breach of the covenant first hereinbefore contained.” [3] In Canada Trustco v. Homburg (1999), 180 N.S.R. (2d) 258 (N.S.S.C.), Justice Davison dealt with a mortgage that referred to the payment of the Mortgagee’s expenses including solicitor and client costs. In an earlier judgment in 178 N.S.R. (2d) 356 Justice Davison stated: “In my view, the law in Nova Scotia is that where a Mortgage stipulates the Mortgagor pays to the Mortgagee costs on a solicitor and client basis, costs should be awarded on that basis except in special circumstances. The Court has an overall discretion as to costs, but that discretion should not deprive parties to that which they have agreed, except when those special circumstances exist.” [4] After reviewing other authorities Justice Davison reduced a Solicitor Client bill of $69,515.00 plus disbursements and Tax to $40,000.00 plus tax and most of the disbursements plus tax. [5] The Canada Trustco case is referred to in R. V. Innocente (D.J.) (2003) 214 N.S.R. (2d) 263 (N.S.S.C.). This was a “proceeds of crime” sale of a property on which there were two Mortgages. Both Mortgagees claimed solicitor client costs. [6] In this case, LeBlanc J. Reviewed various earlier authorities which dealt with the Court’s discretion to award costs as it sees fit. He reviews also the distinction which is made frequently between “solicitor and client costs” and costs “as between solicitor and client”. [7] Costs “as between solicitor and client” is considered to be party and party costs but on a more generous scale. Costs “between solicitor and client” is a more generous scale and is used where the taxation is between a solicitor and his own client as opposed to a situation where a third party may be liable for payment of the costs. [8] Guided by the wording in each Mortgage, Justice LeBlanc awarded costs on a party and party basis in the Clarica Life Mortgage and in the Citifinancial Mortgage on a party and party basis with an increase of 15% with HST on costs and disbursements. [9] In light of the above, I have decided to increase the usual award of costs but at the same time reduce the accounts as submitted. [10] The Evans MacIsaac MacMillan firm in Port Hawkesbury, Nova Scotia, was retained by the Ontario firm of Stewart, Mitchell & Macklin. The latter firm has submitted a bill for $2,921.10 based upon 10.92 hours at $250.00 an hour. After reviewing the detailed account I have decided to allow 6 hours at $175.00 per hour. I will therefore allow Stewart, Mitchell & Macklin fees in the amount of $1,050.00 plus HST of $157.50 for a total of $1,207.50. [11] The Evans MacIsaac MacMillan firm has submitted an account for $4,869.50 based upon 28.80 hours at $175.00 per hour. The also claimed disbursements amounting to $2,196.80. They claim HST on disbursements of $120.72 plus HST on fees of $730.43, for a total of $7,917.45. [12] After reviewing the Evans MacIsaac MacMillan account, I have decided to allow 20 hours at $175.00 an hour. This works out to $3,500.00 plus HST of $525.00 for a total of $4,025.00. [13] I have reduced the Evans MacIsaac MacMillan claim for disbursements by $1,157.00. I have deducted the administration fee of $7.50, plus the cost of recording the Sheriff’s Deed of $74.50, and the Deed Transfer Tax of $1,075.00. The Mortgagee bought in the property at the sale and accordingly became a purchaser. As a purchaser, it is not entitled to claim the cost of recording its own deed and the payment of the deed transfer tax. I am therefore allowing a total $1,039.80 ($2,196.80 - $1,157.00) plus HST on disbursements of $155.97 for a total on disbursements and HST of $1,195.77. [14] In summary, I am allowing Stewart, Mitchell & Macklin fees including HST of $1,207.50; Evans MacIsaac MacMillan fees including HST of $4,025.00 and disbursements including HST of $1,195.77 for a grand total of $6,428.27. Order accordingly. J.