1992 CarswellOnt 3137

Jaffe v. Dearing

Sidney L. Jaffe and Ruth Jaffe, Plaintiffs and Daniel S. Dearing, Defendant

Daniel S. Dearing, Plaintiff by Counterclaim and Sidney L. Jaffe and Ruth

Jaffe, Defendants by Counterclaim

Sidney L. Jaffe, Ruth Jaffe and Gabriel Alter, Plaintiffs and Daniel S. Dearing

and Sun Bank of Tallahassee, Defendants

Ontario Court of Justice (General Division)

Judge:  Austin J.

Heard:  March 30, 1992

Judgment:  April 10, 1992

Docket:  Toronto 5236/85, 10453/86

Related references:  Additional reasons Further 7 C.P.C. (3d) 225, 1992 CarswellOnt 444 (Ont. Gen. Div.); Additional reasons (1991), 3 W.D.C.P. (2d) 399 (Ont. Gen. Div.)

Counsel:  Sidney L. Jaffe in Person.

Sheila M. Corey, for Daniel Dearing.

Subject:  Civil Practice and Procedure

Practice — Costs — Taxation or assessment of costs — Right to — General.

Austin J.:

1 These reasons deal with the fixing of the costs of these two actions pursuant to rule 57.01 (3).

2 The actions were tried October 7 - 11, 1991. Jaffe, living in Canada, was kidnapped by Florida bounty hunters and incarcerated in Florida. Dearing is an attorney in Florida. He was hired to secure Jaffe's release. This was achieved by, amongst other things, paying out about $100,000 in "restitution money". Shortly before Jaffe was to be released he was charged with further offences. Another $150,000 had to be put up by way of guarantee that Jaffe would appear for the trial. Jaffe did not appear and the $150,000 was seized.

3 Dearing secured judgment in Florida against Jaffe for unpaid fees and disbursements of about $62,000. Jaffe then sued Dearing in Ontario for the recovery of the $100,000, the $150,000 and an approximately $156,000 paid to Dearing in fees, plus other damages. Jaffe's first action was for the recovery of the $100,000 plus $156,000 paid in fees and disbursements. Dearing counterclaimed in that action for the unpaid fees of $62,000. Jaffe's second action was for the $150,000 bond money.

4 Jaffe's actions were dismissed. Dearing's action on the Florida judgment was also dismissed. Dearing's parallel claim for his unpaid fees and disbursements was successful. The reasons disposing of the two actions were released on November 14, 1991. I invited the parties to make submissions by letter as to interest and costs.

5 Dearing made his submissions on December 2, 1991, and Mr. Wortzman on behalf of the Jaffes on January 22, 1992. On February 20, 1992 I delivered reasons dealing with a number of questions respecting interest and costs. I ruled that Dearing was entitled to his costs of the two actions on a party and party scale and that I would fix those costs rather than have them assessed. Dearing had acted on his own behalf at trial. I ordered that he be entitled to his transportation and accommodation expenses and to fees for preparation and appearance at trial.

6 In the reasons of February 20th I indicated my need for further information respecting interlocutory motions and orders. That information was supplied by Dearing within a few days. A letter from counsel or former counsel for Jaffe then raised the question whether I had in fact tried the second action. Judgment in the first action had been issued but the issuance of judgment in the second was apparently being held up by that question.

7 To resolve the problem I called a meeting for March 16th. It was attended by Mr. Jaffe, Mr. Cole, Ms. Dawe and Miss Corey. Miss Corey had acted for Dearing until a few months before the pretrial of these actions. Her aid was re-enlisted by Dearing to get the judgment issued and the costs fixed. Ms. Dawe and Mr. Cole were from the firm that had acted for the Jaffes at trial; Ms. Dawe had been junior counsel. It was not clear to me whether Ms. Dawe and Mr. Cole were still acting for Jaffe or attended as a matter of courtesy.

8 Mr. Cole indicated that Mr. Jaffe would make submissions but that there were two issues, namely whether I had tried the second case and if I had, whether I should have. Mr. Jaffe then made both written and oral submissions to the effect that Dearing was in breach of trust. As I understood the allegations, the $150,000 was sent to a bank in Tallahassee and the bank issued a letter of credit in favour of the Governor of Florida. According to Jaffe the form of the letter of credit was improper and accordingly it should never have been accepted and if accepted, the authorities in Florida should never have been able to act upon it. Dearing as trustee was liable because it had been acted upon and the $150,000 lost.

9 I expressed the view that this defence, or something akin to it, was raised by paragraphs 40 to 44 of the statement of claim in the second action. Even if the issue was not so raised, it could have been raised in the second action. I stated that in my view I had tried the second action and accordingly I was prepared to settle the form of judgment to be issued in that action. Miss Corey presented a from, no one had any quarrel with it and I approved it for issuance in that form.

10 In passing I should note that the actions were pretried together by Rutherford J. on April 24, 1991. The endorsement on the 1986 action reads:

Pretried. To be tried with Action 5236/85. A/C May 16 one week.

The Jaffes were represented by senior and junior counsel at trial. There was no suggestion from anyone prior to March of 1992 that the two actions should not be tried together. The evidence of the plaintiffs' witnesses including that of Mr. Jaffe himself covered both actions. On behalf of the Jaffes, a Mr. Belz, a Florida attorney was called to give an expert opinion as to Dearing's conduct with respect to the $150,000.

11 Following the approval of the form of judgment I set March 30th at 4:30 p.m. for a hearing with respect to the fixing of costs.

12 Between March 16 and March 30 I had a number of letters from Mr. Jaffe, apparently acting on his own behalf, asking that the fixing of costs be adjourned. Most of the reasons given had to do with his alleged involvement in a hearing before the Supreme Court of the United States having to do with the circumstances under which a Doctor Alvarez was removed from Mexico to the State of California. I refused an adjournment upon the ground that Mr. Jaffe had had ample time to deal with the matter of costs. It seemed to me that he was simply delaying the proceedings.

13 When he appeared with Miss Corey on March 30th he again asked for an adjournment, this time on the ground that his previous solicitors had just removed themselves from the record and he had not yet had time to retain new counsel. In dismissing this request I relied upon the letter of Mr. Cole, received by me at about 4:20 p.m. on March 30th, stating that his firm had removed itself in timely fashion. In any event it was apparent by at least late February or early March that Mr. Jaffe and his trial counsel had reached or were reaching a parting of the ways. As noted in my reasons of November 14, 1991 at page 7, Mr. Jaffe is not unfamiliar with the legal profession. Had he wished to retain counsel to deal with the matter of costs on March 30th I have not the slightest doubt that he could and would have done so without difficulty.

14 Turning to the fixing of costs, the source documents are two draft bills prepared in the usual party and party form by Miss Corey but with Mr. Dearing's name on the back. They deal with the normal costs of an action up to the point of preparation for trial, the point at which Miss Corey and her firm, McKeon, Ross, Halfnight & Corey ceased to act for Dearing. The other source documents are two cerlox binders. One is from Dearing and has his letter of December 2, 1991 on the cover. The other is from Mr. Wortzman of the Shibley, Righton firm and has his letter of January 22, 1992 on the cover. At the request of Mr. Jaffe, other correspondence may be included in the record of these proceedings should the matter go further. All the material will be referred to in Appendix "A" to these reasons.

15 I am not assessing the costs in the same fashion as would an assessment officer. Instead I am considering the source documents as guides in the fixing of appropriate fees and disbursements. In this regard the only item in the two bills prepared by Miss Corey which is out of line is the item in the bill for the 1985 action "preparation and delivery of statement of defence and counterclaim (13 hours) $1,300". If this were an assessment I expect that item would be reduced by $600 or $700.

16 The first item on the 1985 bill is for $2,300. It refers to a motion by Dearing to set aside the service on him of the statement of claim in that action upon a variety of grounds including lack of jurisdiction and forum non conveniens. That motion was dismissed by Master Peppiatt. His order is dated January 25, 1986, and awarded costs in the cause. Both Mr. Dearing and Mr. Jaffe swore affidavits and there were cross examinations of considerable length. Miss Corey's evidence, which I accept, is that she and Mr. Halfnight between them docketed 23 hours on this matter. $2,300 is an entirely appropriate fee in the circumstances.

17 On page 2 of the bill in the first action is a fee of $2,500 for preparation for and attendance on the examination for discovery of Dearing and the Jaffes. The three examinations took place on three consecutive days and covered both actions. Having regard to the nature of the matter I would have expected considerably more hours to be consumed in the process. The fee is entirely proper.

18 On the same page is an item "preparation for and attendance on the defendants by counterclaims' motion for leave to issue third party proceedings (9 hours) $900". This was a motion by the Jaffes as defendants by counterclaim to add as third parties a variety of officials of the State of Florida. The motion was brought after the action had been set down for trial. Jaffe already had actions proceeding in Ontario against the proposed third parties. There was a distinct possibility that if the third parties were added the actions would be consolidated or ordered to be tried together with the result that the actions against Dearing would be slowed down even more then they had been thus far. The motion was originally brought in April 1989 and it was still alive two years later. There were two hearings before the Master. Miss Corey or Mr. Halfnight attended on the first. Mr. Dearing attended by telephone conference on the second at which time the motion was withdrawn. In those circumstances rule 37.09(3) entitled Dearing to costs. Having regard to Miss Corey's description of this motion it is surprising that as little as 9 hours was docketed to it. In my view the $900 fee claimed is entirely appropriate.

19 The final item on the bill for the first action is "preparation for trial (5 hours) $500". Miss Corey said that under this item she had grouped those services for Dearing such as legal research, locating and interviewing witnesses and preparing documents. I accept her evidence in this regard and would approve that amount.

20 A similar bill was prepared in the second action. Miss Corey testified in support of it. I accept her evidence and would allow the items as claimed.

21 As a matter of comparison, Miss Corey's firm billed Mr. Dearing $18,752. He described their fees as "modest, but well earned". Two draft bills less $600 or $700 would come to just under $11,000. There is therefore not an inappropriate relationship between the party and party and solicitor and client bills in this matter.

22 The remaining claims are found in the cerlox binder from Mr. Dearing with his letter of December 2, 1991 on the front. Costs are dealt with at page 5 and at Exhibits 1 (disbursements) and 2 (fees). Insofar as fees are concerned I have dealt with the question whether Mr. Dearing is entitled, as an attorney acting on his own behalf, to preparation for trial and counsel fee at trial, in my reasons of February 20 at pages 9 to 12. I concluded that he was entitled to such fees.

23 The first item on Exhibit 2 deals with Mr. Dearing's preparation for and attendance on Mr. Jaffe's motion to add third parties. As noted earlier the rule provides that on abandonment responding parties are entitled to their costs. The next three items are referable to Dearing's preparation for and attendance in Toronto for the pretrial conference. None of the foregoing are unreasonable; having regard to the nature of the claims and the way the matter was litigated, the time spent appears to me to be understated.

24 The entries from 9-5-91 to 10-6-91, with exception of the travelling time, deal entirely with preparation for trial. It is apparent from those entries and from Miss Corey's evidence that Mr. Dearing travelled to Toronto several days before the trial and spent several days intensively engaged in preparation for trial in Miss Corey's office.

25 Mr. Jaffe was invited to comment on each and every item in the bill. With respect to preparation for trial he stated that attorneys appearing on their own behalf are not entitled to fees. He said that this proposition was based on the fact that having been involved in the matters in question they would know what the facts were and accordingly would not need to prepare. As a result, he was not prepared to allow Mr. Dearing anything for preparation time. I have dealt with the basis upon which lawyers have traditionally been denied preparation and counsel fees in my reasons of February 20th.

26 I count about 60 hours of preparation claimed, assuming that about half of the 8 hours claimed on October 5th was spent travelling. Mr. Dearing has claimed at the rate of $175.00 U.S. per hour. As I indicated in my reasons of November 14th, at page 46, I found Mr. Dearing a very competent attorney. It seemed to me that he used time very carefully; his cross examinations were models of economy. In the circumstances an hourly rate of $150.00 CDN. or a total of $9,000, would be the minimum to which he should be entitled.

27 The trial took five days. On those days, for trial and preparation, Dearing has allocated a total of 75 hours. Rather than split the time into trial and preparation it seems to me to be more appropriate to establish a daily rate of $2,000 per day for both trial and preparation time. The total for trial and preparation would therefore be $10,000. This added to $9,000 equals $19,000.

28 The other item is disbursements. These are dealt with at Exhibit 1 of Dearing's cerlox binder. Leaving aside the fees for the moment, the numbers themselves appear appropriate for what was involved, namely travel from Florida and Washington to Toronto and accommodation, meals etc in Toronto.

29 The first claim is for attendance in Toronto for discovery. The wrong dates are given according to Miss Corey but there is no question that Dearing did attend here for the discovery. Oddly enough there is no claim for meals or accommodation on that occasion although he was here for at least three days.

30 The next item is for Dearing's attendance at the pretrial. There is nothing in the tariff for pretrial disbursements. This is understandable as the tariff does not contemplate a client, particularly one residing in Florida, attending in Ontario for pretrial purposes. Miss Corey testified that an attempt was made to persuade counsel for the plaintiffs to waive a pretrial. Counsel refused. In the circumstances I see no reason whatever why the unsuccessful parties should not suffer the consequences. I would allow the disbursement in full.

31 The next item is in the amount of $2,704.80. This is to cover the cost of Dearing and his legal assistant (his son) to rent a car, bring their material to Toronto, prepare for trial and attend at trial including accommodation and meals. It covers a period of 10 days. Mr. Wortzman questions the need of an assistant. Having regard to the distance to be travelled, the substantial volume of material to be gathered and organized and the fact that Dearing was operating in a foreign jurisdiction, the use of an assistant was entirely understandable. I can certainly vouch for the fact that Dearing wasted none of the Court's time. It is also worthy of noting that Mr. Wortzman himself had an assistant. The quantum of the claim in this regard is surprisingly modest.

32 With respect to the witnesses Baldwin and Beranek, Mr. Wortzman argued that the fee of $2,800 paid to Beranek would have to be established in evidence as being proper. He also argued that Baldwin could not be considered as an expert and hence no fee was payable to him.

33 In the Ontario Annual Practice, 1991-1992, immediately following s.1 of the Courts of Justice Act the editors made the following comment:

Judges in the Ontario Court (General Division) are being encouraged to fix costs on motions and to direct payment forthwith. The intent is probably to discourage motions without a real purpose in a merged court that finds itself under seige, at least in Metro Toronto. The backup in the Master's office and the intent not to replace the Masters will undoubtedly make this practice much more prevalent and counsel should come to Court, including trials, prepared to address the appropriate amount of a costs award. Expect about $2500 on a Divisional Court appeal and somewhat less in Weekly Court. At the time of going to press for issue the instructions to judges were to seek to assess costs at the conclusion of short trials and, where the judge feels it is appropriate, on lengthier and more complicated trials.

The writing is on the wall. Assessment of costs by motions and trial judges will end the tradition of painstaking analysis of each step in the litigation with dockets presented and then attacked on cross examination. Inevitably there will be a more general approach to costs returning, to some extent, to the process of thirty years ago when the weight and "feel" of a file and issue indicated the appropriate assessment.

34 The editors correctly assessed the situation. Whether or not it would be either realistic or just to require Mr. Dearing to "prove" the reasonableness of Beranek's fee of $2,800, on an assessment it is not necessary to do so in the present circumstances. Beranek is a Florida attorney and a former judge, with particular expertise in the matter of fees. His testimony was made necessary by the refusal of the Jaffes to pay the fees of Mr. Dearing to which they had already agreed. There was no attack of any substance or weight whatever against Mr. Dearing's charges or against Beranek's testimony. Beranek's report and his live testimony were both received in evidence. In my view a fee of $2,800 U.S. was eminently fair. I would allow it in full.

35 Professor Fletcher Baldwin Jr. is a professor of constitutional law at the University of Florida. He was called by Mr. Dearing and gave extensive expert evidence on "bounty hunting" inside and outside the United States. He also testified on the question of state involvement in bounty hunting and its consequences. He referred to the rule of posse comitatus. In a nutshell, what he said was that people can kidnap but states cannot. He testified as well on the effect of state involvement in a kidnapping upon the jurisdiction of a court before whom a kidnapped person was brought. Mr. Wortzman, counsel for the Jaffes objected to the fact that there was no expert's report filed with respect to Professor Baldwin's testimony. Having done that, he then cross examined at length on the Ker-Frisbie doctrine and the necessity of an evidentiary hearing once the question of jurisdiction has been raised. Although no expert's report was in fact served or filed it would in my view be improper not to allow a reasonable fee for Professor Baldwin. Again, as in the case of Beranek the fee claimed here appears to be entirely reasonable.

36 One of the witness listed by Mr. Dearing is a Mr. Hauser. Jaffe said he did not remember him and that he was not called as a witness. In fact he was called by Dearing and cross examined by Mr. Wortzman on Thursday, October 10, 1991. Mr. Hauser was formerly an attorney in the U.S. Department of Justice. His specific title was Deputy Counsel to the President. He had been contacted by Mr. Dearing in September, 1982 with a view to getting the Department of Justice to activate the U.S. Government on behalf of Mr. Jaffe. I see nothing wrong with the expenses claimed with respect to Mr. Hauser.

37 In summary I find the bills of Miss Corey, less $600 to $700 to be appropriate. Mr. Dearing's claims for time with respect to Jaffe's motion to add third parties, the pretrial and preparation for trial are fair and reasonable and a total fee of $2,000 for each of five days at trial would be in order. Mr. Dearing's disbursements are entirely in order. Allowing for the cost of exchange on the disbursements, which were paid in U.S. dollars, I fix his fees and disbursements at a total of $48,500.

38 Mr. Dearing is also entitled to his costs of the fixing of the costs of trial. I set them at $1,500.

Appendix "A"

Bill of Costs in 5236/85

Bill of Costs in 10453/86

Cerlox binder of Dearing December 2, 1991

Cerlox binder of Wortzman January 22, 1992

Order of Master Peppiatt January 25, 1986

Accounts (11) of Paul W. Rosenberger

Letter 28 January 1992 Dearing to Austin

Letter 31 January 1992 Wortzman to Austin

Letter 6 February 1992 Dearing to Austin

Letter 20 February 1992 Austin to Wortzman and Dearing

Letter 20 February 1992 Wortzman to Austin

Letter 25 February 1992 Wortzman to Dearing

Letter 26 February 1992 Dearing to Austin

Letter 3 March 1992 Austin to Wortzman

Letter 5 March 1992 Cole to Austin

Letter 9 March 1992 Dearing to Austin

Letter 9 March 1992 Jaffe to Austin

Letter 12 March 1992 Austin to Cole and Dearing

Letter 12 March 1992 Cole to Austin

Letter 12 March 1992 Corey to Austin

Letter 12 March 1992 Dearing to Austin

Letter 13 March 1992 Dearing to Austin

Letter 16 March 1992 Jaffe to Austin

Letter 19 March 1992 Jaffe to Austin

Letter 23 March 1992 Austin to Jaffe

Letter 24 March 1992 Jaffe to Austin

Letter 24 March 1992 Dearing to Austin

Letter 26 March 1992 Jaffe to Austin

Letter 27 March 1992 Jaffe to Austin

Letter 30 March 1992 Cole to Austin

Letter 31 March 1992 Jaffe to Austin