Date: 20030122
Docket: T-822-01
Neutral citation: 2003 FCT 61
BETWEEN:
TRUDY KALKE
Plaintiff
- and -
HER MAJESTY THE QUEEN IN
RIGHT OF CANADA, THE HONOURABLE
DAVID COLLENETTE, MINISTER OF
OF TRANSPORT, MOHAMMED AKHTAR,
and WILLIAM J. NASH
Defendants
REASONS FOR ORDER
ROULEAU J.
[1] By an order dated December 12, 2002, Prothonotary Hargrave awarded costs to the plaintiff arising out of a mediation proceedings in this action which he fixed at $5000.00 payable forthwith.
[2] The defendants filed an appeal challenging the award of costs to the plaintiff as being excessive or premature and, in the alternative, that they had not been given an opportunity to argue the awarding of costs on the day the matter had been entertained by the Prothonotary.
[3] This action arises out of a long-standing dispute between this plaintiff, a vessel owner, and the Ministry of Transport dealing with an alleged detention order of the vessel owned by the plaintiff and concerned with safety and other deficiencies arising out of inspections conducted in 1996 and 1999.
[4] Certain aspects of the 1999 detention order were debated by way of judicial review before Mr. Justice O'Keefe of this Court, but there remained outstanding a number of other issues.
[5] The plaintiff had initiated an action in damages in this court in May 2001. Following the decision of Justice O'Keefe in August 2002, Prothonotary Hargrave, having been appointed case manager of the proceedings, was of the view that mediation was the best approach to resolving a number of the outstanding issues and with the consent of counsel, resulting from a case management conference, he wrote to the parties on October 16, 2002, fixing December 10 for mediation pursuant to Rule 387 of the Federal Court Rules and allowed a full day for the proceedings. He wrote: "Each side should have a client, or representative, as the case may be, present, with full enough instructions to make mediation worthwhile". In the same letter, he requested mediation briefs by December 5 which were to be kept sealed in the court file; further, he expected the plaintiff to make financial information, being the basis of damages, available to the defendants by November 22.
[6] On December 3, a further letter was sent to counsel instructing them that the mediation was to proceed on December 12 and that they were expected to file their sealed mediation briefs by December 9.
[7] The plaintiff filed a considerable volume of invoices and other statements with respect to damages as well as a mediation brief on December 9. Similarly, the defendants filed their sealed brief on the same date.
[8] Prothonotary Hargrave, having instructed the parties that the meeting was a mediation proceeding according to Rule 387(A) of the Federal Court Rules, intended the meeting to be a discussion to attempt to reach a mutually acceptable resolution of the dispute.
[9] The plaintiff attended at Vancouver with his client who had arrived from Edmonton, and the defendants' counsel brought forward a Mr. Nash who was representing the Ministry of Transport. Within a few minutes of opening the meeting it was apparent that Mr. Hargrave met with a difficult situation.
[10] It is alleged in argument by the plaintiff during this appeal that, at the mediation meeting, Mr. Nash immediately took the position that "he would not pay a dime" and did not offer any reasonable alternative during the proceeding. As a result, Mr. Hargrave issued the following "Order" and "Reasons for Order":
ORDER
This Order arises out of a mediation which, after all were convened, could not proceed because the Defendants' representatives came with no instructions to move from a position of no liability and thus to engage in any mediation would not only have been meaningless but prejudicial. The Plaintiff shall have, as costs, the sum of $5,000.00 payable forthwith.
REASONS FOR ORDER
[1] Mediation is a process by which an impartial and neutral person assists the parties in the isolation of issues so as to develop options in looking at alternatives, in exploring strengths and weaknesses and, if successful, in reaching a consensual resolution consistent with the needs of each side. In order to make the process work, each side must be open to a frank, full and realistic examination of his or her case and be able to adjust expectations as the mediation unfolds.
[2] To come to a mediation not only with a fixed position, set out in a brief, that there is no liability, but also without instructions to move to any compromise position, is unacceptable. If a party, having agreed well in advance to a mediation, finds his or her position to be inflexible, the proper course of action is to so advise both the other side and the mediator that, as there is nothing to mediate, the mediation should not take place.
[3] Here, well in advance of the mediation, I wrote to counsel about the mediation process, including that "each side should have a client, or representative, as the case may be, present, with full enough instructions to make mediation worthwhile".
[4] At the opening of the mediation I explained, for the benefit of the Plaintiff and the Defendants' representatives, the purpose of a mediation. I confirmed with the Plaintiff, as indicated in the brief prepared by her counsel which contained largely facts, both verified and from the Plaintiff's point of view, that she came prepared to compromise. However, it turned out that the Defendants' representatives had no instructions to move from the position, set out in counsel's brief, which was to a degree written argument that one would expect to see at trial, that there was, for a number of reasons, factual and legal, no liability and that "...the Defendants respectfully submit that the Statement of Claim should be struck out in whole or in part, or alternatively, be dismissed with costs." As I say, the Defendants' representatives came with no instructions which would allow a worthwhile mediation.
[5] To proceed with a mediation in such circumstances would constitute an exercise in which the Plaintiff would be bidding against herself, allowing the Defendants a risk-free fishing expedition to learn about the weaknesses which the Plaintiff perceived to be inherent in her case. This is unacceptable in a mediation, for it will not bring about any mutually acceptable settlement of the dispute. Such a tactic, coming to a mediation without any meaningful instructions, and perhaps hoping to gain information, is both vexatious and abusive, and prejudicial to the other side.
[6] To proceed with some form of an evaluation, in place of a mediation, was not an option. Counsel, in their briefs, had taken approaches which were very different, including as to degree of disclosure of their cases and the presence or absence of legal argument.
[7] The mediation being stymied by the Defendants, the Plaintiff will have costs. In calculating a suitable lump sum award I have taken into account the time and effort of counsel for the Plaintiff, Tariff B, that the Plaintiff travelled here from Alberta and, costs as a deterrent or penalty. In Towards a New World of Costs, an article in volume 51 of The Advocate, at page 717, Gordon Turriff, points out that recent decisions have moved toward an aspect of costs as a known penalty which counsel may take into account for the purpose of managing litigation. In that article Mr. Turriff refers both to Houweling Nurseries Ltd. v. Fisons Western Corporation (1988) 37 B.C.L.R. (2nd) 2, a decision of Madam Justice of Appeal McLachlin, as she was then and Fullerton v. District of Matsqui (1992) 74 B.C.L.R. (2nd) 311 (B.C.C.A.).
[8] In Houweling Madam Justice of Appeal McLachlin, in writing for the Court, said that:
Costs in our system of litigation serve the purpose, not only of indemnifying the successful litigant to a greater or lesser degree, but of deterring frivolous actions or defences. Parties, in calculating the risks of proceeding with a particular action or defences, should be able to forecast with some degree of precision what penalty they face should they be unsuccessful. (p. 25)
Certainly Madam Justice of Appeal McLachlin pointed out that costs should be kept within relatively modest limits, an appropriate boundary. Modest limits vary with the times and the circumstances.
[9] In Fullerton, the Court of Appeal, at pages 318 and 319, pointed out that special costs might be awarded when a Court expressed its disapproval, the award going beyond a mere indemnity and entering the realm of punishment.
[10] In the present instance, taking all of the circumstances into consideration, including those set out above, an appropriate award of costs is $5,000.00 payable forthwith.
[11] In this appeal, the Defendants' counsel argues that the costs awarded were punitive, that he was not given an opportunity to make submissions on the issue of costs and that, essentially, he was of the view that the meeting should have been considered an evaluation process. Further, that Mr. Nash, had he been made aware of the intent of the prothonotary, could have telephoned Ottawa for further instructions if he felt that there was some merit to the plaintiff's case and may have considered some compensation by way of damages, thus meeting the underlying purpose of a mediation meeting.
[12] A cursory perusal of the defendants' mediation brief discloses that the defendant Minister was adamant in denying any liability to the point of arguing that the Statement of Claim had no merit and should be dismissed.
[13] A review of exhibits and Mr. Hargrave's order reveal the following: his letter of October 16 is quite clear that the meeting of December 10, eventually held December 12, 2002, was a mediation encounter; he found that the defendants' brief contained no compromise position and that Mr. Nash did not indicate that he had any instructions to deviate from that position and he therefore concluded that there was nothing to mediate.
[14] He was also satisfied that the plaintiff was prepared to compromise but taking into account the defendants' stance, it would amount to no more than a fishing expedition that would only benefit the Defendants and would amount to a disclosure of the weaknesses of the plaintiff's case without any reciprocal benefit to her and that this was unacceptable. He concluded that advancing with some form of valuation in place of mediation was not an option.
[15] It is well settled law that the Court may only review a discretionary decision of a prothonotary when the decision is clearly wrong, when the exercise of discretion was based upon a wrong principle or erroneous finding of fact; or when the decision raises questions vital to the final issue of the case.
[16] I am satisfied that the same principles apply to the prothonotary's discretion as it relates to the award of costs.
[17] It is evident that the prothonotary's ruling does not affect the final issue of the case. I have not been convinced that the decision was based on an erroneous principle or misinterpretation of the facts.
[18] There was no evidence adduced by the defendants that would convince me that, when Mr. Nash appeared at the mediation hearing, he had any other intention but to deny the validity of the plaintiff's claim nor that he had any instructions whatsoever to be prepared to compromise the Minister's position.
[19] Did Mr. Hargrave exceed the exercise of discretion by fixing the amount of costs payable by the defendants for the aborted mediation proceedings; was $5000.00 excessive? Rule 400(3) sets out a number of factors the court should consider when exercising discretion in awarding costs: the result, the amount of work and the conduct of a party. He determined that the Defendants' conduct could almost be described as vexatious. He must have taken into account that the plaintiff herself had travelled from Edmonton to attend the proceedings, and that a day had been set aside for the mediation. As I review these facts, I am persuaded that the award was not excessive.
[20] It was suggested by counsel that he should have been given an opportunity to make submissions with respect to costs. I am not aware of any strict rule that one adjudicating a matter is under an obligation to entertain representations on such an issue. Costs is a purely discretionary matter always left to the determination of the trier. I am of the view that the prothonotary did not affront any legally binding principles. I have not been convinced that the amount awarded was excessive; since Mr. Hargrave is perfectly free to exercise his discretion relating to facts, why should he not possess the same discretion with respect to awarding of costs?
[21] At the close, I was advised that the costs of $5000.00 initially awarded have remained in counsel's trust account until this appeal was disposed of, at termination, I directed that the money be paid into court for the benefit of the plaintiff.
[22] The appeal is dismissed.
(Sgd.) "P. Rouleau"
Judge
Vancouver, B.C.
January 22, 2003
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-822-01
STYLE OF CAUSE: TRUDY KALKE v. HER MAJESTY THE QUEEN
IN RIGHT OF CANADA et al.
PLACE OF HEARING: Vancouver, B.C.
DATE OF HEARING: January 20, 2003
REASONS FOR ORDER: ROULEAU J.
DATED: January 22, 2003
APPEARANCES:
Mr. Roger S. Watts for Plaintiff
Mr. Joseph Spears for Defendants
SOLICITORS OF RECORD:
McEwen, Schmitt & Co. for Plaintiff
Vancouver, B.C.
J. Spears & Company for Defendants
West Vancouver, B.C.
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