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2006 CarswellOnt 7633 (Ont. C.A.), Docket C42809, 06 December 2006 (Weiler, Rosenberg and Laforme JJ.A., paras. 4, 81; 85-86.)

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On appeal from the Orders of Justice Nancy L. Backhouse of the Superior Court of Justice dated November 24, 2004, with reasons reported at 8 R.F.L. (6th) 32, and February 7, 2005, with reasons reported at 14 R.F.L. (6th) 245.

. . . .


[4] …. the appellant appeals….costs, fixed in the amount of $2.25-million, inclusive of a premium of $150,000, awarded against him. …


. . . .


[81] The trial judge awarded the respondent $2,250,000 in costs. The appellant’s offers were all significantly less than the trial judgment. The appellant withdrew all offers minutes before the trial started. ….


. . . .


[85] The trial judge concluded that this was an appropriate case in which to [also] award a premium to reflect the exceptional skill of the respondent’s solicitors, the result achieved at trial, the enormous difficulties caused by the appellant’s bad-faith litigation, and the financial risk if the proceedings failed. She concluded that a premium of $150,000 was warranted.


[86] Following the trial judge’s award of a premium and the argument of this appeal, the Supreme Court of Canada released its decision in ^ Walker v. Ritchie, 2006 SCC 45, on October 13, 2006, in which it held that unsuccessful defendants did not have to pay the premium charged by counsel for a successful plaintiff. The rationale for the court’s decision was that unsuccessful defendants should expect to pay similar amounts by way of costs across similar pieces of litigation. Since a defendant has no knowledge of the fee arrangement made by the plaintiff, the defendant would have no means of measuring the risk of engaging in litigation insofar as costs were concerned. The [Supreme] Court also held that the application of Rule 49 and the award of substantial indemnity costs, did not warrant a difference in approach. Finally, the opportunity for counsel to charge his or her own client a risk premium, or (as the law now allows) a contingency fee, encourages competent counsel to take on the cases of impecunious persons and disallowing a premium would not impede access to justice. …. Accordingly, I would allow the appeal with respect to the premium imposed and set it aside.


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Kloosterman v. Kloosterman


(2006), 33 R.F.L. (6th) 459 (Ont.Sup.Ct.J.), Turnbull, J.


(Fact summary; decision in part, at paras. 1-4; 9; 28-30) ______________________________________________________________________________

Parties separated and divorce proceedings were intiated. Mother hired solicitor to as represent her in proceedings. Matter proceeded through several conferences and motions prior to ultimate judgment at trial. Mother was granted favourable ruling at trial. Trial judge held that father was liable for one-third of mother’s costs throughout proceedings.


. . . .


Costs Endorsement


[1] … I asked that Ms. Saunders [counsel for the mother] provide detailed records of times and services provided to her client plus disbursements that were actually charged to her client.


[2] Ms. Saunders argues that her client is entitled to her costs of the proceeding, with an offset for any costs ordered at any steps prior to the trial.


[3] Ms. Saunders has billed her client $45,018.29 inclusive of disbursements and Goods and Services taxes for all services rendered by her to her client to this stage, excluding submissions as to costs and the submissions I have received with respect to the present issue to be determined.


[4] …. I ruled … [previously] that the Applicant shall pay one third of the Respondent’s costs which relate to the trial of the action and the necessary steps to get the matter to trial. However, I indicated in my reasons that costs will not be payable for any step in the proceeding where the judge dealing with that particular step did not either fix the costs, reserve them to the trial judge or otherwise take any action required under Rule 24 (10) of the Family Law Rules. ….


. . . .


[9] [To determine the Respondent’s costs] I will deal with the accounts rendered by Ms. Saunders in the chronological date they were rendered to the client.


. . . .


[28] It is therefore ordered that the Applicant shall pay to the Respondent the sum of $5766.94 as ordered in the earlier costs judgment in this matter [i.e., one-third of the Respondent’s accounts from her solicitor; being one-third of the solicitor’s accounts totalling $45,018.29 reduced by the Court, for determining costs, to $17,300.82; one-third of which was $5,766.94].


[Editor’s Note: The court then proceeded, of its own motion, to address the reasonableness of the accounts, totalling $45,018.29, rendered to the Respondent by her counsel who, presumably, was claiming the accounts, less costs of $5,766.94 payable by the husband, from her ‘wife client’.]


[29] Under Rule 24 (9) of the Family Law Rules, the court may on its own initiative order that a lawyer not charge a client for certain work that may be specified in an order. In reviewing this matter, I have serious concerns that the complexity of the issues warranted a legal bill being rendered to Mrs. Kloosterman in the sum of $45,000.00. In a case where the parties do not have a lot of money, the family home is valued at no more than $100,000.00 and they have two children to support, the costs have to bear some relationship to the issues and the assets in dispute. In the end, the result attained by the client is clearly relevant to a bill rendered to a client. The amount of time spent on a matter is only one of the factors to be taken into account in determining what constitutes a reasonable sum for services rendered.


[30] In the circumstances, I direct Ms. Saunders to attend before this court to clearly explain the basis of all billing rendered to her client in this matter, including all time charged to the date of such a hearing. I direct that Ms. Kloosterman shall attend the hearing and be given a written copy of these reasons.



Responsibility 14.07.08




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