Desjardins et al. v. Côté et al., (2003) 267 N.B.R.(2d) 354 (TD)

• Judge: LaVigne, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: December 10, 2003
• Jurisdiction: New Brunswick
• Citations: (2003), 267 N.B.R.(2d) 354 (TD);2003 NBQB 437

Desjardins v. Côté (2003), 267 N.B.R.(2d) 354 (TD);

    267 R.N.-B.(2e) 354; 702 A.P.R. 354

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2003] N.B.R.(2d) TBEd. DE.029

Élide Desjardins and Léonide L. Côté (plaintiffs) v. Fernand A. Côté and Association régionale des personnes handicapées physiquement de Grand-Sault Inc. (defendants) and The Town of Grand Falls/La Ville de Grand-Sault, a town incorporated under the Municipalities Act of the Province of New Brunswick and Amie-e des personnes handicapées physiquement de Mad-Vic/Friends of the Physically Handicapped of Mad-Vic an unincorporated association (third parties)

(E/C/204/92; 2003 NBQB 437)

Indexed As: Desjardins et al. v. Côté et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Edmundston

LaVigne, J.

December 10, 2003.

Summary:

Two members of a non-profit corporation brought a derivative action against the com­pany and its president (the defendant Côté). They sought the return to the company of parcels of land and sums of money that were allegedly illegally transferred to the presi­dent. The New Brunswick Court of Queen's Bench, Trial Division, in a decision reported at 267 N.B.R.(2d) 115; 702 A.P.R. 115, ordered that the parcels of land and sums of money be returned to the company. The plaintiffs sought costs on a solicitor and client basis, asked that the solicitor for the company personally reimburse all costs that the com­pany would be ordered to pay, and that the company be held liable for all costs that the plaintiffs could not recover from the other parties.

The New Brunswick Court of Queen's Bench, Trial Divi­sion, ordered the defen­dants to pay, jointly and severally costs of $120,000.00 to the plaintiffs and costs of $29,175.00 to the Town, which had provided financial assis­tance to the plaintiffs. In addi­tion, the defen­dant Côté had to completely indemnify the company for the amounts that it had to pay to the plaintiffs and to the Town. Finally, since this was a derivative action for the benefit of the company, the company was ordered to pay the plaintiffs $50,000.00.

Barristers and Solicitors - Topic 842

Duty to court - Liability for costs - For improper conduct - Two members of a non-profit corporation brought a derivative action against the company and its presi­dent - They sought the return to the com­pany of parcels of land and sums of money that were allegedly illegally transferred to the president - The court ordered that the parcels of land and sums of money be returned to the company - The plaintiffs argued that the company's solicitor had acted in disregard of the interests of justice and that he should be held personally liable for costs that the company would be ordered to pay - The New Brunswick Court of Queen's Bench, Trial Division, was of the opinion that some of the posi­tions taken by the company had caused costs to be wasted - However, the court was not satisfied that the solicitor was responsible for having caused costs to be wasted or that he had acted in bad faith by encouraging abuses or delays - See para­graphs 59 to 71.

Company Law - Topic 9413.1

Actions by corporations - Parties - Deriva­tive actions - Costs - Two members of a non-profit corporation brought a derivative action against the company and its presi­dent - They sought the return to the com­pany of parcels of land and sums of money that were allegedly illegally transferred to the president - The court ordered that the parcels of land and sums of money be returned to the company - The plaintiffs argued that they were entitled to costs on the derivative action - The New Brunswick Court of Queen's Bench, Trial Division, ordered the company to pay $50,000.00 to the plain­tiffs - The course of action taken by the plaintiffs was reasonable and in the inter­ests of the company - The legal fees were in excess of what could be considered reasonable in the circumstances - See paragraphs 72 to 84.

Practice - Topic 6981

Costs - Entitlement - General - Two mem­bers of a non-profit corporation brought a derivative action against the company and its president - They sought the return to the company of parcels of land and sums of money that were allegedly illegally transferred to the president - The court ordered that the parcels of land and sums of money be returned to the company - The plaintiffs claimed legal fees - The defendants argued that the plaintiffs were not liable to pay legal fees because the third party, Amie des personnes handi­capées de Mad/Vic, had paid the plaintiffs' legal fees when the file was in the hands of the law firm of Duffie, Friel and Deschênes - The file was transferred to the law firm of McInnes Cooper - The New Brunswick Court of Queen's Bench, Trial Divi­sion, found that the plaintiffs were liable for the fees - The plaintiffs and McInnes Cooper never entered into an agreement limiting their right to claim their entitle­ment - See para­graphs 9 to 30.

Practice - Topic 7019

Costs - Party and party costs - Entitlement to party and party costs - General prin­ciples - [See Practice - Topic 6981 ].

Practice - Topic 7110

Costs - Party and party costs - Special orders - Increase in scale of costs - General - Two members of a non-profit corporation brought a derivative action against the company and its president - They sought the return to the company of parcels of land and sums of money that were alleged­ly illegally transferred to the president - The court ordered that the parcels of land and sums of money be returned to the company - The New Brunswick Court of Queen's Bench, Trial Division, ordered the defendants to pay party and party costs - Given the complexity of the case, the length of the trial and the substantial ex­penses incurred by the parties, the Court fixed costs pay­able to the Town, which had provided financial assistance to the plaintiffs, by using scale 5 instead of scale 3 of the tariff - The court fixed costs payable to the Town at $29,175.00 - See paragraphs 51 to 58.

Practice - Topic 7117

Costs - Party and party costs - Special orders - Lump sum in lieu of taxed costs - Two members of a non-profit corporation brought a derivative action against the company and its president - They sought the return to the company of parcels of land and sums of money that were alleged­ly illegally transferred to the president - The court ordered that the parcels of land and sums of money be returned to the company - The New Brunswick Court of Queen's Bench, Trial Division, ordered the defendants to pay party and party costs - Costs under tariff A were clearly inade­quate - Given the complexity of the case, the length of the trial and the substantial expenses in­curred by the parties, the court fixed costs payable to the plaintiffs at $120,000.00 - See paragraphs 51 to 58.

Practice - Topic 7453

Costs - Solicitor and client costs - Entitle­ment to solicitor and client costs - Delay­ing tactics and unduly prolonging proceed­ings - Two members of a non-profit cor­poration brought a derivative action against the company and its president - They sought the return to the company of par­cels of land and sums of money that were allegedly illegally transferred to the presi­dent - The court ordered that the parcels of land and sums of money be returned to the company - The New Brunswick Court of Queen's Bench, Trial Division, refused to order solicitor and client costs - The court was of the opinion that the defendants had unduly prolonged the proceedings by refus­ing to disclose or produce documents and by filing several motions, one of which was to seek leave to add third parties - However the defendants' conduct was not unrea­sonable and the action brought against the third parties was neither frivo­lous nor vexatious - See paragraphs 31 to 50.

Cases Noticed:

Johnston v. Law Society of Prince Edward Island (1988), 73 Nfld. & P.E.I.R. 239; 229 A.P.R. 239; 54 D.L.R.(4th) 18 (P.E.I.C.A.), refd to. [para. 19].

University of New Brunswick Student Union Inc. et al. v. Vaillancourt et al. (1989), 88 N.B.R.(2d) 39; 224 A.P.R. 39 (C.A.), consd. [para. 20].

Rogers v. Administrator of Ontario Works for Greater Sudbury (City) et al., [2001] O.T.C. 630 (Sup. Ct.), refd to. [para. 23].

Young v. Young et al., [1993] 4 S.C.R. 3; 160 N.R. 1; 34 B.C.A.C. 161; 56 W.A.C. 161, refd to. [para. 33].

Rice, P.C.J. v. New Brunswick, [2002] 1 S.C.R. 405; 282 N.R. 201; 245 N.B.R.(2d) 299; 636 A.P.R. 299; 209 D.L.R.(4th) 564, refd to. [para. 33].

St-Amand (A.G.) et Files Inc. v. Butler et al. (1996), 184 N.B.R.(2d) 128; 469 A.P.R. 128 (C.A.), refd to. [para. 34].

Sirois v. Centennial Pontiac Buick GMC Ltd. and General Motors of Canada Ltd. (1988), 89 N.B.R.(2d) 244; 226 A.P.R. 244 (C.A.), consd. [para. 35].

Alles v. Maurice, [1992] O.J. No. 331, refd to. [para. 47].

Discovery Enterprises Inc. v. Ebco Indus­tries Ltd. (1998), 114 B.C.A.C. 235; 186 W.A.C. 235 (C.A.), refd to. [para. 47].

Mottershead v. Burdwood Bay Settlement Co., [1991] B.C.J. No. 2554, refd to. [para. 47].

MacLean v. International Brotherhood of Electrical Workers, Local 2309 et al. (2003), 256 N.B.R.(2d) 338; 670 A.P.R. 338 (Q.B.), refd to. [para. 49].

Stamper v. Finnigan, Via Rail Canada Inc., Canadian National Railway Co. and New Brunswick (1988), 84 N.B.R.(2d) 362; 214 A.P.R. 362 (Q.B.), refd to. [para. 56].

Blair v. Ouellette et al. (1990), 108 N.B.R.(2d) 171; 269 A.P.R. 171 (C.A.), refd to. [para. 63].

Perley v. Sypher et al. (1990), 109 N.B.R.(2d) 427; 273 A.P.R. 427 (C.A.), refd to. [para. 63].

Wallersteiner v. Moir (No. 2), [1975] 1 All E.R. 849 (C.A.), consd. [para. 74].

Baniuk v. Carpenter et al. (No. 2) (1987), 85 N.B.R.(2d) 385; 217 A.P.R. 385 (C.A.), refd to. [para. 74].

Turner v. Mailhot (1985), 50 O.R.(2d) 561 (H.C.), refd to. [para. 74].

Canadian Commercial Bank (Liquidation), Re (1989), 98 A.R. 353 (C.A.), refd to. [para. 74].

Hillcrest Housing Ltd., Re (1992), 97 Nfld & P.E.I.R. 124; 308 A.P.R. 124 (P.E.I.S.C.), affd. (1992), 100 Nfld & P.E.I.R. 355; 318 A.P.R. 355 (P.E.I.C.A.), refd to. [para. 74].

Discovery Enterprises Inc. v. Ebco Indus­tries Ltd. (1999), 131 B.C.A.C. 150; 214 W.A.C. 150 (C.A.), refd to. [para. 74].

Authors and Works Noticed:

Orkin, The Law of Costs (2nd Ed.), pp. 2-6 [para. 21]; 2-61, 2-62 [para. 35]; 2-98, 2-99 [para. 22].

Counsel:

John C. Friel, Q.C., and Brigitte Sivret, for the plaintiffs;

Paul A. Bertrand, for the defendant, Fer­nand A. Côté;

Rino Long, for the defendant, L'Associa­tion régionale des personnes handicapées de Grand-Sault Inc.;

J.C. Marc Richard, Q.C., and Chantal Thibodeau, for the third party, The Town of Grand Falls/La Ville de Grand-Sault;

Gérald Carroll, for the third party Amie-e des personnes handicapées physiquement de Mad-Vic/Friends of the Physically Handicapped of Mad-Vic;

Charles D. Whelly, Q.C., for David R. Oley.

This action was heard on October 6 and 31, 2003, by LaVigne, J., of the New Bruns­wick Court of Queen's Bench, Trial Divi­sion, Judicial District of Edmundston, who delivered the following decision on Decem­ber 10, 2003.