COURT OF APPEAL FOR ONTARIO

CITATION: Galaxy
    Dragon Limited v. Top Water Exclusive Fund IV LLC, 2012 ONCA 382

DATE: 20120605

DOCKET: C54745

Goudge, Simmons and Rouleau JJ.A.

BETWEEN

Galaxy Dragon Limited

Plaintiff (Appellant)

and

Top Water Exclusive Fund IV LLC, Top Water
    Investment Management LLC, Edge Investment Capital LLC, Bryan Borgia, Travis
    Taylor, and Lauren Roberts

Defendants (Respondents)

Angela Assuras, for the appellant

Vasuda Sinha, for the respondents

Heard and released orally: May 30, 2012

On appeal from the order of Justice Beth Allen of the Superior
    Court of Justice, dated November 17, 2011.

ENDORSEMENT

[1]

The appellant quite properly argued this appeal in the context of the
    recent Supreme Court of Canada decision in
Van Breda
. It relies on
    three factors as presumptive or assumption of jurisdiction by Ontario. One
    recognized in
Van Breda
and the other two proposed by the appellant as
    new presumptive factors.

[2]

In our view, none of the three are established here, assuming that the
    latter two could be considered presumptive in the right case.

[3]

First a tort committed on Ontario, here the conversion pleaded takes place
    outside Ontario and the defendant played no part in moving the funds out of
    Ontario. This factor does not arise in this case.

[4]

Second, the transfer of information. This factor is inapplicable because
    there is no connection with the tort of conversion that is pled.

[5]

Third, personal property in Ontario. Here the only connection with
    Ontario is that the funds were transferred out of Ontario by the appellant.
    Given that tenuous connection, it is not reasonable in the language of
Van
    Breda
to expect that the respondent, that is the defendant, would be
    called to answer legal proceedings in Ontario.

[6]

Since no presumptive connecting factors arise here, the motion judge was
    correct to find that Ontario cannot assume jurisdiction. The appeal must
    therefore be dismissed. Costs of $7500 to the respondent, all inclusive.


COURT OF APPEAL FOR ONTARIO

CITATION:
Galganov
    v. Russell (Township), 2012 ONCA 409

DATE: 20120615

DOCKET: C52704

Weiler, Sharpe and Blair JJ.A.

BETWEEN

Howard Galganov

Applicant (Appellant)

and

The Corporation of the Township of Russell

Respondent

BETWEEN

Jean-Serge Brisson

Applicant
(
Appellant
)

and

The Corporation of the Township of Russell

Respondent

Brian A. Crane, Q.C., Guy Régimbald and Matthew
    Estabrooks, for the appellants Howard Galganov and Jean-Serge Brisson

Ronald F. Caza and Marc Sauvé, for the respondent

Chris Schafer, for the intervener Canadian Constitution
    Foundation

Heard: February 2, 2012

On appeal from the judgment of Justice Monique Métivier
    of the Superior Court of Justice dated August 20, 2010, with reasons reported
    at 2010 ONSC 4566, 325 D.L.R. (4th) 136.

Weiler
    J.A.:

A.

Overview

[1]

Howard Galganov and Jean-Serge Brisson appeal from
    the judgment dismissing their applications to quash a by-law passed by the Township
    of Russell (the Township), a municipality located on the eastern outskirts of
    Ottawa.  The Township has a population of 13,883 and consists of four main
    communities: Embrun, Russell, Limoges and Marionville.  The Township, which has
    a significant Francophone population, also offers its services to the public in
    French and English.

[2]

The by-law in issue, no. 49-2008, (the By-law) requires
    the content of any new exterior commercial signs to be in French and in English,
    although the actual name of a business may be unilingual.

[3]

The application judge dismissed Galganovs
    application on the basis that he did not have standing to bring it as he did
    not reside, own property or operate a business in the Township and he did not
    have any specific interest in the By-law nor was he directly affected by it.

[4]

The application judge held that Brisson had
    standing as he carried on a business in the Township and had a direct interest
    in the By-law.  She therefore dealt with the substance of Brissons application
    and held that the By-law was
intra vires
the Townships
    statutory authority under the
Municipal Act, 2001
,
    S.O. 2001, c. 25 (the Act).  She then turned to the issue of whether
    Brissons rights under the
Canadian

Charter of Rights and Freedoms
were infringed.  In doing so, she held that the By-law was aimed at
    protecting, promoting and recognizing the equal status of French and English.  The
    application judge concluded that the requirement that Brissons sign describing
    his services be in English as well as in French was not an infringement of his
    right to freedom of expression under s.  2(b) or of his equality rights under s.
    15(1) of the
Charter
nor was there a breach of
    international law.  If necessary, she would have held that any
infringement
    was justified
under s. 1 of the
Charter
.
[1]

[5]

The issues on
this appeal are: (
1) whether Galganov has standing to apply to quash the By-law; (2)
    whether the By-law is
ultra vires
the Townships
    authority; (3) if
intra vires
, (a) whether the
    By-law infringes freedom of expression as guaranteed by s. 2(b) of the
Charter
and, (b) if there is an infringement, whether the limit on
    freedom of expression is justified under s. 1 of the
Charter
.
[2]

[6]

For the reasons that follow, I would uphold the
    application judges conclusion that Galganov does not have standing to apply to
    quash the By-law and, for that reason, dismiss his appeal.

[7]

I would also dismiss Brissons appeal.  I agree
    with the application judges conclusion that the Township had the authority to
    pass the By-law. Insofar as the issue of whether Brissons right to freedom of
    expression under s. 2(b) of the
Charter

is
    infringed, I am of the opinion that the application judge erred in concluding
    that there was no infringement. However, I conclude that this infringement is
    justified under s. 1 of the
Charter
.

[8]

For ease of reference, the text of the relevant
    statutory provisions is found at Appendix A to these reasons.

B.

Analysis

(1)

Whether Galganov has standing to apply to quash the By-law

[9]

Section 273(1) of the Act provides that any
    person may apply to quash a municipal by-law.

[10]

The application judge found that Galganov does not live, own property
    or carry on a business in the Township.  Before the By-law was passed, he
    arranged to rent space in a barbershop window in Russell and leaned a
    hand-written sign in the window stating: Galganov Consulting.  The content of
    the sign was written entirely in English.   Notwithstanding the use of the
    words any person in s. 273(1), the application judge held, following prior
    jurisprudence, that the court has the discretion to refuse to grant standing
    where a person has not shown any particular personal interest in a by-law and is
    not directly affected by it.

[11]

Galganov makes three arguments to support his standing claim.  First,
    he relies on the plain wording of s. 273(1), which says that any person may
    apply to quash a by-law.  Second, assuming that the court has the discretion to
    refuse to grant standing, Galganov submits that he is directly affected because
    his sign in the barbershop window is an exterior commercial sign located
    within the boundaries of the Townships jurisdiction and is therefore subject
    to the By-law.  Third, even if he was not affected by the By-law, Galganov
    submits that the application judge had the residual discretion to grant him
    standing and she ought to have done so.

(a)

Whether any person can apply to quash a by-law

[12]

The Act does not define the words any person beyond stating
that
    the term person

includes a municipality unless the context
    otherwise requires in s. 1(1).  Nor have t
he words any person
    received any specific judicial interpretation.

[13]

Prior to the coming into force of the

Act,

a resident of the
    municipality or a person interested in a by-law had the right to apply to
    quash a by-law:
Municipal Act
, R.S.O. 1990, c.
    M.45, s. 136(1), as repealed by
Municipal Act, 2001
, S.O. 2001, c. 25, s. 484(1). A ratepayer had an implied interest in
    the by-laws of the municipality in which he or she paid taxes. The corporation
    of a municipality (or any of its ratepayers) could also apply to quash the
    by-law of another municipality if it could show that it was injuriously
    affected by the by-law: see Ian MacFee Rogers,
The Law of Canadian
    Municipal Corporations,
2d ed., looseleaf (Toronto: Carswell, 1971), vol.
    2, at para. 191.3.

[14]

In repealing the prior version of the
Municipal Act
and
    adopting the term any person

in the Act, the legislature discarded the
    restrictive pigeon hole approach to standing in which it had explicitly
    included certain connecting factors, such as residency, or being a ratepayer, in
    favour of the broader phrase any person.

[15]

I do not accept the respondents submission that the Acts

change
    in wording allowing any person to bring an application was merely procedural.
    However, in using the words any person, the legislature did not eliminate the
    principled exercise of judicial discretion respecting standing.  As noted by
    the application judge, at para. 101 of her reasons:

Standing is sometimes denied for a variety of reasons which may
    impact the exercise of discretion by the court.  Some are listed in the text by
    P.W. Hogg,
Constitutional Law of Canada
,

5th ed, v. 2
    looseleaf (Toronto: Carswell, 2007) at pp. 59-3; and in
Finlay v. Canada
    (Minister of Finance),
[1986] 2 S.C.R. 607 at paragraphs 32-35:

(a) to avoid opening the flood gates to unnecessary litigation;

(b) to screen out the mere busy body;

(c) to ration scarce judicial resources by applying them to
    real rather than hypothetical disputes; and

(d) to avoid the risk that cases will be inadequately presented
    by parties who have no real interest in the outcome. [Citations in original.]

Thus, the court maintains the discretion
    to refuse to grant standing in accordance with the common law rules respecting
    standing.  The words any person in s. 273(1) of the Act mean any person who
    has standing under the common law relating to standing.

(b)

Whether Galganov has standing

[16]

Galganov submits that he is a person directly affected by the By-law
    because he carries on a business within the Township.  The application judge
    rejected this submission. She found, at para. 115 of her reasons, that: The
    placement of a hand-lettered sign in the barbershop window does not qualify as
    operating a business. She noted that Galganovs evidence was that he was not
    paid for any advice he might give when contacted by people and that most
    contacts related to the litigation in issue. I agree that Galganov was not
    carrying on a business within the Township. The application judge properly exercised
    her discretion to refuse to grant Galganov standing because he was not affected
    by the By-law.

(c)

Whether, although Galganov had no connection to the By-law, the court
    should have granted him standing because of his
Charter
claim

[17]

Galganov submits that
[
t]he
    Court always has a residual discretion to grant standing, particularly in cases
    involving
Charter
claims.  Because Galganov
    claims that his right to freedom of expression under s. 2(b) of the
Charter
is being infringed, he submits the application judge ought
    to have granted him standing.

[18]

The argument Galganov makes was dealt with by the application judges
    decision not to grant him public interest standing.  Galganov has chosen not to
    appeal this holding.

[19]

Accordingly, I reject Galganovs standing claim and would dismiss his
    appeal.

[20]

On appeal, there is no question as to Brissons standing to apply to
    quash the By-law; he operates a business in the Township. Thus, I will consider
    the substance of his appeal in respect of the remaining issues.

(2)

Whether the By-law is
ultra vires
the Townships authority under
    the Act

[21]

For ease of reference, the text of the By-law is as follows:

Section 2.1: Message or content of any new exterior commercial
    signs

The message or content of any new exterior commercial signs
    shall be bilingual. The lettering of an exterior commercial sign (dimension and
    style) must be identical in French and in English.  However, the name of a
    business can be unilingual for an exterior commercial sign.

[22]

The application judge concluded that the By-law was
intra
    vires
as it came within the power of the Township under s.
    11(3)(7) of the Act to pass a by-law respecting [s]tructures, including fences
    and signs as well as under s. 11(2)(5) of the Act to pass by-laws for matters
    respecting [e]conomic, social and environmental well-being of the
    municipality.

(a)

Whether specific authority in the Act is required in order to enact the
    By-Law.

[23]

In appealing the application judges holding, Brisson makes two related
    arguments.  He submits that the power to legislate languages must be expressly found
    in the enabling statute, and that no such power exists in this case.  The only
    provision in the Act expressly

concerning language is s. 247, which provides that the by-laws and
    resolutions of a municipality, official plan and minutes of proceedings shall
    be in English or in both English and French.  Second, Brisson submits that, in
    any event, the power to enact the By-law cannot be derived from the general
    municipal powers under the Act; these are mere statements of principles.

[24]

Brissons narrow interpretation cannot be reconciled with the language
    of the Act.  The general spheres of jurisdiction in s. 11 of the

Act are
    more than statements of principles; the Act gives them teeth by providing that
    they may be exercised so as to regulate, prohibit or require persons to do
    things respecting these matters (see s. 8(3)(a)-(b) of the Act).  Thus, s. 8(3)
    makes clear that specific by-laws may be enacted pursuant to the general
    municipal powers and spheres of jurisdiction.  Brissons submission ignores
    this.

[25]

Broad support for using the general municipal powers as a source of
    jurisdiction is also found in s. 8(1) of the Act. This section provides that the
    powers of a

municipality are
    to be interpreted broadly so as to enable it to govern its affairs as it
    considers appropriate and to enhance its ability to respond to municipal issues.
    Section 8(2) of the Act reinforces the language of s. 8(1) by providing that
    ambiguity as to the authority to pass a by-law is to be resolved in favour of
    municipal power.

[26]

Brissons submission is also inconsistent with the jurisprudential
    evolution respecting the scope of municipal by-law making authority.  This
    evolution has been traced by Feldman J.A. in
Croplife Canada v.
    Toronto (City)
(2005), 75 O.R. (3d) 357 (C.A.), at paras.
    16-29, leave to appeal to S.C.C. refused, [2005] S.C.R. v.  I do not propose to
    repeat it here.

[27]

In particular, the Supreme Court of Canadas decision in
114957
    Canada Ltée (Spraytech, Société darrosage) v. Hudson (Town),
2001 SCC 40,
    [2001] 2 S.C.R. 241 is authority for the proposition that where no specific
    power is granted, a general provision in the Act

may be the source of
    power for the enactment of a specific by-law. While acknowledging that
    municipalities are statutory bodies that may only exercise the powers expressly
    provided or impliedly conferred on them by statute, LHeureux-Dubé J., at para.
    18, stated that, [i]ncluded in this authority are general welfare powers,
    conferred by provisions in provincial enabling legislation, on which
    municipalities can draw. Thus, the general welfare powers could be the
    source of authority for the specific by-law banning pesticides. She also quoted
    the following statement from Rogers, vol. 1, at para. 63.35:

Undoubtedly the inclusion of general welfare provisions was
    intended to circumvent, to some extent, the effect of the doctrine of
ultra
    vires
which puts the municipalities in the position of having to point to
    an express grant of authority to justify each corporate act.

[28]

More recently, the Supreme Court of Canada held in
United
    Taxi
Drivers Fellowship of Southern Alberta v. Calgary (City),
2004 SCC 19, [2004] 1 S.C.R. 485 that the non-enumerated regulatory
    powers under the spheres of jurisdiction in Albertas
Municipal
    Government Act
, S.A. 1994, c. M-26.1 were broad enough to
    include not only the power to
licence
taxis but also the
    power to enact a by-law limiting the number of
licences
.
Bastarache
J. noted, at para. 6, that several provinces were moving away from
    granting specific powers to municipalities in particular subject areas and instead
    choosing to give them broad authority over generally defined matters.  This
    legislative approach reflected the need for greater flexibility required by
    modern municipalities in fulfilling their statutory purposes.

[29]

Suffice it to say, there has been a shift away from the restrictive,
    specifically prescribed interpretive approach to municipal power in favour of a
    broad purposive approach recognizing more flexibility in municipal government.
[3]

I would reject Brissons argument that specific authority in the
    Act is required in order to enact the By-Law.

(b)

Authority for the By-law under the Act

(i)

Whether the By-law is legislation in relation to a thing

[30]

The general municipal powers granted to a
    municipality in s. 11(1) of the Act allow it to provide any service or thing
    that the municipality considers necessary or desirable for the public.  Brisson
    submits that the By-law is not a service or thing and thus it is
ultra vires
the Township
.

[31]

The word thing is defined as a material or non-material entity, idea,
    action, etc., that is or may be brought about or perceived: see
Canadian
    Oxford Dictionary
, 2d ed.,
sub verbo
thing.  The enactment of
    the By-law respecting commercial exterior signs is an action taken by the Township
    relating to a material entity (signs) or a non-material entity or idea
    (well-being of persons).  I would reject Brissons argument that the By-law is
    not in relation to a thing.  That said, the Townships authority to enact the
    By-law is contained in s. 11(2)(5) of the Act, the provision relating to the
    social well-being of the Township, as discussed below.

(ii)

Whether the By-law relates to the social well-being of the
    municipality found in the spheres of jurisdiction in s. 11(2)(5) of the
Act

[32]

The By-law requires persons who operate a commercial business to do
    something respecting a matter in s. 11(2)(5) of the Act

economic or social well-being.
    Specifically, the By-law requires a commercial establishment that chooses to
    erect a new exterior sign to ensure that the message or content of the sign is
    bilingual, in French and in English, unless it is the name of the business.

[33]

One argument put forward is that, instead of promoting the economic or social
    well-being of the municipality, the By-law detracts from it.  This argument is
    based on the supposition that a commercial establishment with a bilingual
    exterior sign signals that it will be able to serve customers in both languages.
     If a commercial unilingual English establishment is compelled to post an
    exterior bilingual sign, customers will be misled and upset if they cannot be
    served in French.  No evidence was proffered in support of this submission and
    I would not give effect to it.  Indeed, the evidence is that about 70 per cent
    of the exterior commercial signs in the Township are already bilingual.
[4]
The large number of bilingual signs is some indication that most
    commercial establishments in the Township do not consider an exterior bilingual
    sign as detracting from the social well-being of the Township.

[34]

Considerable evidence that the By-law would instead preserve and
    enhance the social well-being of the municipality can be found in the expert
    evidence of Dr. Raymond Breton, a well-known sociologist, the expert evidence
    of Dr. Robert Choquette, a retired professor of the University of Ottawa who
    was head of research in French-Canadian civilization, and the evidence of Mr.
    François Benoît, the Director of Education and secretary-treasurer for the
    Conseil des écoles publiques de lEst de lOntario.

[35]

Dr. Breton is of the opinion that the By-law is a symbolic recognition
    of the equality of the French and English languages and cultures.  I note that
    this recognition is not happening in a vacuum but in a community that has
    chosen to designate itself as a bilingual Township and to offer municipal
    services in French and in English.

[36]

According to Dr. Choquette, the Township encompasses a community where
    the Francophone population reached 80.4 per cent in 1961.  It remains the home
    of a large Franco-Ontarian population.

[37]

Mr. Benoîts evidence is that more than 11,000 students attend the
    Conseil des écoles publiques de lEst de lOntarios 37 French public schools,
    including primary and secondary schools.  These schools serve a geographic
    region which includes, among others, the communities of Embrun, Russell,
    Limoges and Marionville (all located within the Township).  In his opinion:

Le règlement a pour effet daccroître la
    visibilité de la langue française dans la sphère communautaire.  Le règlement
    contribue ainsi à la mise en valeur de la langue française dans le milieu
    communautaire, en dehors des enceintes de lécole et de la famille.

[38]

Mr. Benoîts opinion that the By-law increases the visibility of the
    French language in the community is clear.  His conclusion that the By-law
    indicates that the French language has value in the community outside of schools
    and family life is also not surprising.

[39]

The application judge accepted the evidence of these experts as well as
    the evidence of Mr. Benoît and she was entitled to do so.

[40]

The By-law promotes the social well-being of the Township pursuant to
    s. 11(2)(5) of the Act.  In view of my conclusion, it is unnecessary for me to
    address whether the By-law comes within s. 11(3)(7) of the Act respecting
    [s]tructures, including fences and signs.

(c)

Whether the broad purposive interpretation of general municipal powers
    can be applied to language rights

[41]

Brisson acknowledges that the By-law may come within the sphere of
    jurisdiction under s. 11(2)(5) of the Act

giving a municipality the
    power to pass by-laws respecting matters related to the social well-being of
    the municipality.  However, Brisson submits that, because of the importance of
    language rights, a specific power rather than a general power is required.
The general municipal powers outlined
    in the Act

cannot be used as the source for substantive by-laws
    dealing with language.

[42]

Brisson relies on two decisions in support of his submission that the
    power to legislate in relation to language on a commercial sign must be
    expressly stated in the enabling statute:
Chaperon v. Sault Ste.
    Marie (City)
(1994), 19 O.R. (3d) 281 (Gen. Div.) and
Trumble
    v. Kapuskasing (Town)

(1986), 57 O.R. (2d) 139 (H.C.J.),
affd
    (1988), 63 O.R. (2d) 798 (C.A.).
In
Chaperon
,

the issue was the
    validity of a by-law declaring English the official language of the City of
    Sault Ste. Marie.  In
Trumble
, the validity of a
    by-law declaring the Town of Kapuskasing an officially bilingual municipality
    was at issue.  In both cases, the argument was that authority to pass the
    respective by-laws arose from provisions of the
Municipal Act
which
    were similar in wording to
s. 247 of the Act.  It will be
    recalled, that that section states that the by-laws and resolutions of a municipality,
    the official plan and the minutes of proceedings may be in English or in both
    English and French.  Section 247 is not put forward as the source of the
    Townships power in this case and, in my opinion, these decisions are simply
    not relevant.

[43]

The authorities on which Brisson relies were also decided prior to the
    enactment of spheres of jurisdiction in the Act.  I appreciate that Brisson
    argues that a change in wording of a statute does not imply a change in the
    law: see s. 56(2) of the
Legislation Act, 2006
, S.O. 2006, c. 21, Sch.
    F.  However, this submission is met by the jurisprudence indicating there has
    been a change in the approach to municipal law: see
Croplife
.  Furthermore,
    the decisions on which Brisson relies exemplify a situation where the
    municipality was trying to expand the ambit of a specific authorized power under
    the then
Municipal Act
.  This is not the situation here.  This is also
    not a situation analogous to
R. v. Greenbaum,
[1993]
    1 S.C.R. 674,

where recourse
    could not be had to the omnibus or general provisions of the municipal
    legislation because specific powers dealing with the subject matter had been
    carved out of the other general powers in the municipal legislation at issue.
[5]

What is sought here is to use a general provision in the

Act as the source of power for a specific
    by-law.

[44]

I see no reason to distinguish the interpretation of the By-law in
    question from the existing broad and purposive approach to interpretation.  Indeed,
    such an approach is consistent with decisions requiring that language rights be
    given a liberal and generous interpretation in a manner consistent with the
    preservation and development of official language communities: see
R.
    v. Beaulac
, [1999] 1 S.C.R. 768 and
Lalonde v.
    Ontario (Commission de restructuration des services de santé)

(2001), 56 O.R. (3d) 505 (C.A.), affg (1999), 48 O.R. (3d) 50 (Div.
    Ct.), both decided after the authorities on which Brisson relies.

[45]

I would therefore reject Brissons submission that because of the
    importance of language rights, a specific power rather than a general power is
    required.

(d)

Whether specific authority is required to enact a by-law respecting
    language because of the
French Language Services Act

[46]

Brisson argues that the Townships authority to enact the By-law
    pursuant to the broad powers of s. 11(2)(5) of the Act is undermined by the
French
    Language Services Act
, R.S.O. 1990, c. F.32 (the
FLSA
).

[47]

Brisson submits that the
FLSA
ousts the jurisdiction of a
    municipality to enact by-laws under the general powers provisions of the
Municipal
    Act, 2001
.  Section 14(1) of the
FLSA
provides that
    a municipality that is in a designated area, such as the Township here, may
    pass a by-law providing that the administration of the municipality shall be
    conducted in both English and French and that all or specified municipal
    services to the public shall be made available in both languages.  Brisson
    argues that, if the
Municipal Act
,
2001
conferred broad
    authority on municipalities to enact by-laws pertaining to language use within
    the municipality, s. 14(1) of the
FLSA
would be entirely unnecessary.
    In effect, Brisson submits that s. 14(1) of the
FLSA
limits the power
    to enact language by-laws to strictly municipal services contained in that
    section.  I disagree.

[48]

Brissons submission ignores s. 6 of the
FLSA
which provides
    that: This Act shall not be construed to limit the use of the English or
    French language outside of the application of this Act.  Thus, the express
    powers of a municipality regarding official languages as provided for in the
FLSA
do not derogate from any general power included in the general grant of power
    provision in the
Municipal Act, 2001
.
    Furthermore, the
FLSA
deals with services provided by municipalities
    in the French language; it does not deal with promotion of the social
    well-being of municipalities.

(e)

Conclusion on
ultra

vires
argument

[49]

The By-law is
intra vires
the Townships authority.  This conclusion takes into account the
    wording of the Act
,
the jurisprudence respecting the broad and
    purposive interpretation of municipal powers, and the expert evidence that the
    By-law is a means of preserving and enhancing the social well-being of the
    Township under s. 11(2)(5).  Read in conjunction with s. 8(3)(b) of the Act
,
which, as I have indicated, provides that a by-law under s.
    11 may require persons to do things respecting the matter, I am of the
    opinion that the Township had the authority to enact the By-law.

(3)

If
intra vires
, (a) whether the By-law infringes freedom
    of expression as guaranteed by s. 2(b) of the
Charter
and, (b) if there
    is an infringement, whether the limit on freedom of expression is justified
    under s. 1 of the
Charter

(a)

Whether the By-law infringes freedom of expression as
    guaranteed by s. 2(b) of the
Charter

[50]

Brisson, supported by the intervener, submits that the By-law infringes
    his right to freedom of expression as guaranteed by s. 2(b) of the
Charter
.

[51]

In deciding whether the By-law infringes freedom of expression, I must
    undertake the two-step analysis mandated by
Irwin Toy Ltd. v. Quebec
    (A.G.),
[1989] 1 S.C.R. 927.  The first step is to determine whether the
    conduct falls within the sphere of activity protected by freedom of
    expression.  If so, the second step is to determine whether the purpose or
    effect of the government action restricts freedom of expression.

[52]

The fact that Brissons sign is a commercial sign does not remove it
    from the scope of the protected freedom in s. 2(b): see
Ford v.
    Quebec (A.G.)
, [1988] 2 S.C.R. 712, at pp. 766-767.  Commercial
    expression is included within the protection of freedom of expression if it
    conveys meaning.

[53]

One has only to read Brissons sign to appreciate that it conveys
    meaning respecting the nature of his business.  Below his business name,
    Independent Radiator Services, the sign reads:

Radiateurs réparés et neufs

Air climatisé rempli et réparé

Réparation mécanique mineure

[54]

The sign indicates that the nature of Brissons business is repairing
    and installing new radiators, filling air conditioners [with fluid] and
    repairing them, and doing minor mechanical repairs. Thus, Brissons sign conveys
    meaning and cannot be excluded from the protection of s. 2(b).

[55]

I must therefore determine whether the purpose or effect of the By-law
    violates Brissons right to freedom of expression. Brisson and the intervener submit
    that compelled bilingualism on new exterior commercial signs forces commercial
    entities into a course of action they would not have chosen for themselves and
    that this compulsion violates the guarantee of freedom of expression under s. 2(b).
    Accordingly, they

contend
    that the application judge erred in holding there was no

infringement of Brissons right to freedom
    of expression.

[56]

Choice of language is an important aspect of expression. In
Ford,
at
    p. 748, the Supreme Court of Canada observed that [l]anguage is not merely a
    means or medium of expression; it colours the content and meaning of
    expression. The court held that s. 58 of the Quebec
Charter of the French
    Language
, R.S.Q., c. C-11, which stated that
[p]
ublic signs and posters and commercial advertising shall be solely in
    the official language [French] was inoperative because it violated the
    guarantee of freedom of expression in s. 3 of the Quebec
Charter of Human Rights
    and Freedoms
, R.S.Q. c. C-12, (the Quebec
Charter
),

which
    is the equivalent of s. 2(b) of the Canadian
Charter.
The court
    concluded that s. 3 is infringed when one is compelled to use a particular
    language and is thereby prohibited from using ones language of choice.  Nor
    was s. 58 justified under s. 9.1 of the Quebec
Charter
.
Section 9.1 is a provision corresponding to s. 1 of the Canadian
Charter
subject, in its application, to a
    similar test of rational connection and proportionality.

[57]

In the related case of
Devine v. Quebec (A.G.)
, [1988] 2 S.C.R. 790,

one of the sections which the court
    considered was s. 57 of the
Charter

of the French Language
which
    required that
[
a]pplication forms
    for employment, order forms, invoices, receipts and quittances be drawn up in
    French. This provision was interpreted as requiring the use of French but
    permitting the use of another language at the same time because, pursuant to s.
    89 of the
Charter of the French Language,
another language could be
    used together with French where exclusive use of French was not specifically
    required: see
Devine
, at pp. 812-813, 816).  I have chosen to discuss
    this joint use of French provision as it was called, specifically because, in
    addition to infringing the freedom of expression provision in s. 3 of the
    Quebec
Charter
, s. 57 was held to also infringe s. 2(b) of the
    Canadian
Charter
.

[58]

Similar to its holding in
Ford,
the Supreme Court of Canada
    held in
Devine
,

at p. 813, that:

[T]he freedom of expression guaranteed by s. 2(b) includes the
    freedom to express oneself in the language of ones choice....  That freedom is
    infringed not only by a prohibition of the use of ones language of choice but
    also by a legal requirement compelling one to use a particular language.  As
    was said by Dickson J. (as he then was) in
R. v. Big M Drug Mart Ltd.,
[1985] 1 S.C.R. 295, at p. 336, freedom consists in an absence of compulsion as
    well as an absence of restraint.
[Citation  in original.]

[59]

The Township seeks to distinguish
Devine
on the basis that, at
    pp. 817-818 of its reasons (in relation to s. 57 as well as s. 52 which dealt
    with catalogues and brochures),

the court stated:

[T]
he human right or freedom in issue in
    this case is freedom of expression guaranteed by s. 3 of the Quebec
Charter
.
    In
Ford
it was found that the right guaranteed by s. 3 extended to
    protect the freedom to express oneself in the language of ones choice; in this
    case, however, we have found that s. 3
does not extend to guarantee a right
    to express oneself exclusively in ones own language.
This result was
    reached by operation of s. 9.1, which does not limit the application of s. 10
    [protecting the right against discrimination] but does limit the application of
    s. 3. [Emphasis added.]

[60]

I am persuaded that the Townships reliance on
    this passage is misplaced. The concluding sentence of this passage indicates
    that the courts decision upholding s. 57 was reached only
after
it
    had applied s. 9.1 of the
Quebec Charter
, which, as I have indicated,
    is

the

equivalent to s. 1 of the Canadian
Charter
. The
    courts answers under the subheading Answers to the Constitutional Questions
    and Disposition of the Appeal at the conclusion of its reasons makes clear
    that this was the courts central holding. In addition to finding a violation
    of s. 3 that was justified by s. 9.1 of the Quebec
Charter
, the court
    held that s. 57 violated s. 2(b) but was justified under s. 1 of the Canadian
Charter
.

[61]

Having regard to the Supreme Courts holdings in
Ford
and
Devine,
by compelling the use of both French and English on new exterior
    commercial signs, the By-laws purpose infringes Brissons right to freedom of
    expression as guaranteed by s. 2(b) of the
Charter
. I must now
    consider whether such infringement is justified under s. 1 of the
Charter
.

(b)

Whether the limit on freedom of expression is justified
    under s. 1 of the
Charter

[62]

The application judge correctly set out the criteria that must be
    satisfied to establish that a limit is reasonable and demonstrably justified in
    a free and democratic society.  Citing
R. v. Oakes
, [1986] 1 S.C.R. 103 and
Dagenais v. Canadian Broadcasting
    Corp.
, [1994] 3 S.C.R. 835, she stated, at para. 176 of her
    reasons, that:

(a) The objective to be served by the measures limiting a
Charter
right must be sufficiently important to warrant overriding a constitutionally
    protected right or freedom.

(b) The party invoking section 1 of the
Charter
must
    show the means to be reasonable and demonstrably justified.  This involves the
    following proportionality test:

(i) The measures must be fair and not arbitrary, carefully
    designed to achieve the objective in question and rationally connected to that
    objective;

(ii) In addition, the means should impair the right in
    question as little as possible;

(iii) Lastly, there must be proportionality between the
    deleterious effects of the by-law and the objective, and there must be a
    proportionality between the deleterious and salutary effects of the measures.

[63]

Brisson and the intervener submit that the application judge did not
    apply any of these criteria correctly.

(i)

Whether the By-law serves an objective that is sufficiently important

[64]

Brisson submits that the first criterion, namely that the By-law serves
    a pressing and substantial objective, is not met because protection of the
    French language is not within the jurisdictional scope of a municipality.  I
    have already held that the By-law is
intra vires
the Township under its powers in s. 11(2)(5) of the Act,

which enables
    a municipality to pass by-laws respecting the social well-being of the Township.

[65]

Moreover, in
Andrews v. Law Society of British Columbia
, [1989] 1 S.C.R. 143, at p. 184, the Supreme Court of Canada stated
    that deference must be shown to elected officials on the question of whether
    the legislation is aimed at a pressing and substantial concern. The application
    judge exercised such deference.

[66]

The application judge held, at para. 181 of her reasons, that the aim
    of the language policy underlying the By‑law is a serious and legitimate
    one, namely to protect and assist the survival of the French language while
    promoting the equality of French and English. Because of its remedial purpose
    and the vulnerability of the French language in the Township, the application
    judge concluded that the By-law met the first criterion.

[67]

The evidence before the court,
[6]
concerning the social well-being of the municipality, discussed under the
    authority to enact the By-law in (2)(b)(ii) above, establishes the importance
    of the purpose the By-law addresses  the preservation and enhancement of the
    equality of the status of the French language in the Township, a municipality which
    has chosen to designate itself as bilingual under the
French Language
    Services Act
and to offer its services to residents in both languages.  The
    objective of the By-law, the promotion of the equality of status of both French
    and English, the official languages of Canada, is a pressing and substantial one.

[68]

Accordingly, the By-law meets the first criterion of s. 1 of the
Charter
.

(ii)

Whether the By-law meets the proportionality test in the second
    criterion

[69]

Having found that the By-law meets the first criterion, the next
    question is whether the means used are reasonable and demonstrably justified by
    applying the proportionality test in the second criterion.

[70]

Before proceeding to the analysis of this question, I must first deal
    with Brisson and the interveners submission that the By-law prohibits business
    owners from using any language, other than French and English, on an exterior
    commercial sign.  The effect given to this submission will inform the
    proportionality analysis.

[71]

Upon reviewing the text of the By-law, I note that the By-law simply
    says that the content of all new exterior commercial signs must be bilingual
    and that the lettering of such message (i.e. dimension and style) must be
    identical in French and English.  Although the term bilingual can be
    ambiguous, I agree with the Township that the use of bilingual in the By-law
    means both French and English as opposed to any two languages.  This
    interpretation is based on the ordinary meaning of the term in Canada, which
    has two official languages, French and English.  Further, the By-law does not
    expressly prohibit the use of another language.  Accordingly, I reject the
    submission that the By-law prohibits the use of other languages on exterior commercial
    signs.

[72]

Brissons further submission is that the By-law indirectly restricts
    the use of other languages as it would be impractical to put a third or fourth
    language on an exterior commercial sign. This is a bald submission without any
    supporting evidence and I reject it.

[73]

In this second stage, the court must first determine whether the measures
    are rationally connected to the By-laws objective. Brisson submits that the
    application judge erred in refusing to qualify Dr. Conrad Winn as an expert
    and, as a result, in ignoring his evidence that forced bilingualism in
    commercial advertising will not effectively address the issue of declining use
    of French and the need to protect the minority language. Thus, he submits that
    the application judge erred in holding there was a rational connection between
    the By-laws requirement of bilingualism and its objective.

[74]

Dr. Winn is a professor of political science at Carleton University who
    also operates a specialized public opinion research firm. He conducted a poll
    among a sample group of 70 Franco-Ontarians in Northern Ontario, which showed
    that six out of seven respondents believe that residents of Ontario should be
    entitled to unilingual French signs on their own property if they wish to. Brisson
    failed to establish how Dr. Winns evidence would assist the court in better
    understanding the evidence before it and inform the court as to the impact of
    the By-law on the French language community in the Township.  I see no error in
    the application judges refusal to qualify Dr. Winn as an expert.

[75]

The application judge had before her evidence that French was, in 2006,
    the first language learned of 45.5 per cent of the Townships population, English
    was the first language learned of 50.3 per cent of that population and 4.2 per
    cent of the population had another first learned language.  Although the total
    number of Francophones in the Township increased, the evidence of Dr.
    Castonguay, an expert who is a retired University of Ottawa mathematics
    professor and has published extensively on linguistic assimilation, is that the
    proportion of French speakers is decreasing because of linguistic assimilation.
     Overall, Dr. Breton, a sociologist whose focus is on linguistic and cultural
    minorities, and Dr. Choquette, an expert on the history of Franco-Ontarians,
    say that the French population in Ontario and elsewhere in Canada is
    decreasing.  In order to preserve the French language, a linguistic environment
    is necessary.
The material that the application judge did
    accept indicated a rational connection between protecting the equal status of
    the French language and assuring that the reality of Quebec society is
    communicated through the visage linguistique as discussed by the Supreme
    Court in
Ford
.

[76]

Support that the By-law is rationally connected to its objective can
    also be found in
Devine
where
,
at p. 820, the court observed
    that:

We have already determined [in
Ford
, at p. 780] that
    the requirement of joint use of French is rationally connected to the
    legislatures pressing and substantial concern to ensure that the
visage
    linguistique
 of Quebec reflects the predominance of the French language.

[77]

Similarly, the joint use of French and English is rationally connected
    to the Townships concern of ensuring that its bilingual nature is reflected on
    exterior commercial signs.

[78]

I also note that deference to the governments choice is also owed at
    the rational connection stage: see
Lavoie v. Canada
, 2002 SCC 23, [2002] 1 S.C.R. 769, at para. 59.  Given the evidence of
    the symbolic importance of affirming the equal status of the two official
    languages, there is a rational connection between the By-law and the
    furtherance of the equal status of French and English as well as the preservation
    of French more generally.

[79]

On the second question of whether the means minimally impair the right
    in question, Brisson submits that the By-law severely restricts the freedom of
    expression of persons who wish to communicate in a language other
than French or English.  As a result, he submits the By-law does not
    minimally impair freedom of expression.

[80]

I have already held that the By-law does not prohibit the use of
    languages in addition to French and English. Although, as Brisson contends,

the re
quirement of
    joint use of French and English might create an additional burden for merchants
    and shopkeepers, there is nothing which impairs their ability to use another
    language equally. Persons engaged in commerce can use any language of their
    choice along with French and English.

[81]

The process undertaken by the Township prior to the enactment of the
    By-law involved consultation with the public and consideration of other
    alternatives.
It resulted in a By-law that applied only to new,
    exterior and commercial signs. In
Montréal (City) v. 2952-1366 Québec Inc.
, 2005 SCC 62, [2005] 3 S.C.R. 141, at para. 94, the court observed:

First, in dealing with social issues like this one, where
    interests and rights conflict, elected officials must be accorded a measure of
    latitude.  The Court will not interfere simply because it can think of a
    better, less intrusive way to manage the problem.  What is required is that the
    City establish that it has tailored the limit to the exigencies of the problem
    in a reasonable way.

[82]

In tailoring the By-law as it did, the Township has established that it
    dealt with the problem in a way that minimally impairs freedom of expression.

[83]

One must also recall the specific facts of this case. The argument that,
    Brissons freedom of expression is more than minimally impaired by requiring
    the description of his services on his new French only sign to also be in
    English, loses much of its force having regard to the following facts: the name
    of Brissons business, Independent Radiator Services, is unilingually
    English, and is entitled to remain so;  for most of the 34 years Brisson has
    been in business the content of his sign has been in English only; and he
    continues to hand out business cards and invoices in English.  Thus, in the
    past, Brisson has chosen to express himself only in English; he now chooses to
    express himself only in French on his exterior sign while continuing to employ
    English in other aspects of his business. To require him to employ English on
    his sign in addition to French is a minimal impairment of his right to freedom
    of expression.

[84]

Having passed the minimum impairment stage, the final question asks
    whether the infringing effects of the By-law outweigh the importance of the
    objective sought.  Brisson has not advanced any arguments on this aspect of the
Oakes
test.  In light of the importance of the
    protection and promotion of the equal status of the French language, I would hold
    that the benefits of the By-law are proportional to any deleterious effect on
    freedom of expression or inconvenience suffered.

[85]

For these reasons, although the By-law is a breach of Brissons rights
    under s. 2(b) of the
Charter
, it is a breach that
    is demonstrably justified in a free and democratic society under s. 1 of the
Charter
.

C.

conclusion

[86]

I would dismiss the appeal with respect to both Galganov and Brisson.

[87]

The Township is entitled to its costs of the appeal on a partial
    indemnity basis from Galganov and Brisson jointly and severally. I would fix
    those costs at $60,000, inclusive of disbursements and all applicable taxes.

Released: June 15, 2012

KMW                                                               Karen
    M. Weiler J.A.

I
    agree Robert Sharpe J.A.

I
    agree R.A. Blair J.A.

Appendix A
    List of Statutory Provisions

Canadian
    Charter of Rights and Freedoms
, Part I of the
Constitution Act,
    1982
, being Schedule B to the
Canada Act 1982
(U.K.), 1982, c. 11

1. The
Canadian Charter
          of Rights and Freedoms
guarantees the rights and freedoms set out in it
          subject only to such reasonable limits prescribed by law as can be
          demonstrably justified in a free and democratic society.

2. Everyone has the
          following fundamental freedoms:

...

(b) freedom of thought,
          belief, opinion and expression, including freedom of the press and other
          media of communication....

15.

(1) Every individual is equal before and under the law and has the
          right to the equal protection and equal benefit of the law without
          discrimination and, in particular, without discrimination based on race,
          national or ethnic origin, colour, religion, sex, age or mental or physical
          disability.

16. (3) Nothing in this
          Charter limits the authority of Parliament or a legislature to advance the
          equality of status or use of English and French.

French Language
    Services Act
, R.S.O. 1990, c. F.32

6. This Act shall not be
        construed to limit the use of the English or French language outside of the
        application of this Act.

14. (1) The council of a
        municipality that is in an area designated in the Schedule may pass a by-law
        providing that the administration of the municipality shall be conducted in
        both English and French and that all or specified municipal services to the
        public shall be made available in both languages.

Legislation Act, 2006
, S.O. 2006, c. 21, Sch. F

56. (2) The amendment
          of an Act or regulation does not imply that the previous state of the law was
          different.

Municipal Act
, R.S.O. 1990, c. M.45, as repealed by
Municipal
    Act, 2001
, s. 484(1)

136. (1) The Ontario Court
          (General Division) upon application of a resident of the municipality or of a
          person interested in a by-law of its council may quash the by-law in whole or
          in part for illegality.

Municipal Act, 2001
, S.O. 2001, c. 25

1. (1)  In this Act, ...

person includes a
          municipality unless the context otherwise requires....

8. (1)  The powers of a
          municipality under this or any other Act shall be interpreted broadly so as
          to confer broad authority on the municipality to enable the municipality to
          govern its affairs as it considers appropriate and to enhance the
          municipalitys ability to respond to municipal issues.

8
. (2)  In the event
          of ambiguity in whether or not a municipality has the authority under this or
          any other Act to pass a by-law or to take any other action, the ambiguity
          shall be resolved so as to include, rather than exclude, powers the
          municipality had on the day before this Act came into force.

8. (3)  Without limiting the generality of
          subsections (1) and (2), a by-law under sections 10 and 11 respecting a
          matter may,

(a) regulate or prohibit
          respecting the matter;

(b) require persons to do
          things respecting the matter;

(c) provide for a system of
          licences respecting the matter.

11.

(1) A lower-tier municipality and an
          upper-tier municipality may provide any service or thing that the
          municipality considers necessary or desirable for the public, subject to the
          rules set out in subsection (4).

11. (2)  A
          lower-tier municipality and an upper-tier municipality may pass by-laws,
          subject to the rules set out in subsection (4), respecting the following
          matters:

1. Governance structure of
          the municipality and its local boards.

2. Accountability and
          transparency of the municipality and its operations and of its local boards
          and their operations.

3. Financial management of
          the municipality and its local boards.

4. Public assets of the
          municipality acquired for the purpose of exercising its authority under this
          or any other Act.

5. Economic, social and
          environmental well-being of the municipality.

6. Health, safety and
          well-being of persons.

7. Services and things that
          the municipality is authorized to provide under subsection (1).

8. Protection of persons
          and property, including consumer protection.

11. (3)  A
          lower-tier municipality and an upper-tier municipality may pass by-laws,
          subject to the rules set out in subsection (4), respecting matters within the
          following spheres of jurisdiction:

1. Highways, including
          parking and traffic on highways.

2. Transportation systems,
          other than highways.

3. Waste management.

4. Public utilities.

5. Culture, parks,
          recreation and heritage.

6. Drainage and flood
          control, except storm sewers.

7. Structures, including
          fences and signs.

8. Parking, except on
          highways.

9. Animals.

10. Economic development
          services.

11. Business licensing.

247. (1) The by-laws and resolutions
          of a municipality shall be passed in English or in both English and French.

247. (2) An official plan
          adopted by a municipality shall be in English or in both English and French.

247. (3) Every council and
          every committee of council may conduct its proceedings in English or French
          or in both English and French.

247. (4) Despite subsection
          (3), the minutes of the proceedings shall be kept in English or in both
          English and French.

273. (1) Upon the
          application of any person, the Superior Court of Justice may quash a by-law
          of a municipality in whole or in part for illegality.

273. (1)
          Sur présentation dune requête par quiconque, la Cour supérieure de justice
          peut annuler tout ou partie dun règlement municipal pour cause
          dillégalité.

[1]
In separate reasons, reported at 2011 ONSC 3065, [2011] O.J. No. 2416, and 2011
    ONSC 5609,  [2011] O.J. No. 4698, the application judge also awarded costs.
    Her costs award is the subject of a separate appeal, C54486, heard immediately
    following this appeal.  The reasons in the costs appeal, while dealt with
    separately, are being released concurrently with this appeal.

[2]
The holdings that the By-law does not infringe s. 15(1) of the
Charter
and does not violate international law are not the subject of appeal.

[3]
See also Ron Levi & Mariana Valverde, Freedom of the City: Canadian Cities
    and the Quest for Governmental Status (2006) 44 Osgoode Hall L.J. 409.

[4]

The reason that some signs remain unilingual is explained by
    the fact that the By-law only applies to
new
exterior commercial sign and not to
existing
exterior commercial sign that were erected before the By-law was passed.

[5]
LHeureux-Dubé J. distinguished
Greenbaum

in part on this basis
    in
Spraytech
, at para. 22.

[6]
See paras. 47-95 of the application judges reasons for a more detailed
    discussion of the evidence.


COURT OF APPEAL FOR ONTARIO

CITATION:
Galganov v. Russell
    (Township), 2012 ONCA 410

DATE: 20120615

DOCKET: C54486

Weiler, Sharpe and Blair JJ.A.

BETWEEN

Howard Galganov

Applicant (Respondent)

and

The Corporation of the Township of Russell

Respondent

BETWEEN

Jean-Serge Brisson

Applicant (Respondent)

and

The Corporation of the Township of Russell

Respondent

Allan OBrien and Ashley Deathe, for the appellant,
    Kenneth Bickley

Brian A. Crane, Q.C. and Matthew Estabrooks, for the
    respondents, Howard Galganov and Jean-Serge Brisson

Ronald F. Caza and Marc Sauvé, for the respondent, The
    Corporation of the Township of Russell

Heard: February 3, 2012

On appeal from the orders of Justice Monique Métivier of
    the Superior Court of Justice dated May 30, 2011 and September 23, 2011, with
    reasons reported at 2011 ONSC 3065 and 2011 ONSC 5609.

Weiler J.A.:

A.

Overview

[1]

This appeal respecting costs was heard immediately following the appeal
    in C52704 and these reasons are being released concurrently with the decision
    in that appeal.

[2]

The appellant, Mr. Kenneth Bickley, is a lawyer who represented Messrs.
    Howard Galganov and Jean-Serge Brisson in their respective applications to
    quash a by-law passed by the Township of Russell (the Township).  The by-law
    in issue, no. 49-2008, (the By-law) requires that the message or content of
    new exterior commercial signs be in French and in English.  After four days of
    hearing, the application judge dismissed both applications.  This court confirmed
    the application judges conclusion in C52704 and dismissed the appeal.

[3]

The application judges decision on costs was based both on written
    submissions and on a motion for costs brought by the Township against Bickley
    personally.
[1]
On consideration of the factors in rule 57.01(1) of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194

applicable to the courts
    discretion to award costs, the application judge ordered costs of $180,000
    against Galganov and Brisson ($100,000 against Galganov and $80,000 against
    Brisson).  However, she ordered that 40 per cent of the costs order be payable by
    Bickley personally ($72,000) pursuant to rule 57.07(1) of the
Rules of
    Civil Procedure
.  She made the order against Bickley on a joint and
    several basis with Galganov and Brisson.

[4]

In respect of the order for costs against Bickley personally, the
    Township alleged that in preparation for and during the hearing, Mr. Bickleys
    conduct was often highly inappropriate, incompetent and the cause of
    unnecessary costs.  The application judge therefore considered several
    allegations of incidents which caused costs to be incurred without reasonable
    cause (see paras. 67-68 of the reasons reported at 2011 ONSC 3065).
[2]

[5]

Bickley submitted that he was prevented from responding to some of the
    allegations because of solicitor-client privilege and Galganov and Brisson refused
    to waive such privilege.  He submitted that he took no step in the proceeding
    without the proper instructions and authority of his clients.  The application
    judge accepted this submission and indicated that this was a reason why a costs
    order against a lawyer should be made sparingly, and only in the clearest of
    cases.

[6]

The application judge found that Bickley did not act in bad faith
    but also held that this was not a necessary element for a costs order under
    rule 57.07(1).  She then addressed each of the complaints and found that several
    incidents of Bickleys conduct caused costs to be incurred unreasonably,
    including: (1) the ongoing debate of whether the mayor of the Township, Mr. Ken
    Hill, would be called as a witness; (2) the decision to propose both Galganov
    as an expert witness in Brissons application as well as Dr. Conrad Winn, a
    Carleton University political science professor and public opinion researcher;
    (3) the attempted introduction of an article which had not been put to the
    Townships expert, Dr. Charles Castonguay, a retired University of Ottawa
    mathematics professor; and (4)
the request to turn the
    application into a trial relying on an erroneous reference to rule 39.5 (this
    rule does not exist in the
Rules of Civil Procedure
).

[7]

The application judge also held that Bickleys
    filing of additional affidavits and his disorganized manner in presenting his
    argument, together with his inability to find materials, was indicative of a
    serious lack of preparation.  She found that this amounted to negligence.

[8]

Finally, the application judge found that the
    Township incurred very significant costs as a result of various positions taken
    by Bickley and by his lack of preparation, which in some cases amounted to
    negligence.

[9]

While there was no causal connection between the
    complaints and specific actual costs as shown in the Townships bill of costs, the
    application judge held that nothing in rule 57.07(1) required that negligent or
    inappropriate conduct be related to specific costs.  She held that an amount of
    40 per cent of costs against Bickleys was warranted.

[10]

The
    primary issue on appeal is whether the application judge erred in ordering costs
    personally against Bickley.  If she did not, a number of ancillary issues are
    raised.  I must also fix costs of the appeal in C52704 as well as the costs of
    this appeal.

[11]

For
    the reasons that follow, I am of the opinion that the application judge did err
    in ordering costs against Bickley personally.  As a result, I would set aside
    the costs order against him. In view of my conclusion, I need not address the
    ancillary grounds of appeal.

B.

Basis for a Costs Order Against a lawyer Personally:
rule 57.07(1)

(1)

General principles

[12]

A
    lawyer whose conduct results in costs being incurred unreasonably, or wasted,
    may be deprived of his or her costs or required to pay the costs of any other
    party.  Rule 57.07 deals with orders for costs against a lawyer personally:

(1) Where
    a lawyer for a party has caused costs to be incurred without reasonable cause
    or to be wasted by undue delay, negligence or other default, the court may make
    an order,

(a) disallowing costs between the lawyer and
    client or directing the lawyer to repay to the client money paid on account of
    costs;

(b) directing the lawyer to reimburse the client
    for any costs that the client has been ordered to pay to any other party; and

(c) requiring the lawyer personally to pay the
    costs of any party.

(2)
    An order under subrule (1) may be made by the court on its own initiative or on
    the motion of any party to the proceeding, but no such order shall be made
    unless the lawyer is given a reasonable opportunity to make representations to
    the court.

(3) The court may direct that notice of an order
    against a lawyer under subrule (1) be given to the client in the manner
    specified in the order.

[13]

The
    governing principles in awarding costs personally against a lawyer were set out
    by the Supreme Court of Canada in
Young v. Young
, [1993] 4 S.C.R. 3,
    at pp. 135-136:

The basic principle on which costs are awarded is as
compensation
for the successful party, not in order to punish a barrister. Any member of the
    legal profession might be subject to a compensatory order for costs if it is
    shown that repetitive and irrelevant material, and excessive motions and
    applications, characterized the proceedings in which they were involved, and that
    the lawyer acted in bad faith in encouraging this abuse and delay. It is clear
    that the courts possess jurisdiction to make such an award, often under statute
    and, in any event, as part of their inherent jurisdiction to control abuse of
    process and contempt of court.... [C
]
ourts must be
    extremely cautious in awarding costs personally against a lawyer, given the
    duties upon a lawyer to guard confidentiality of instructions and to bring
    forward with courage even unpopular causes. A lawyer should not be placed in a
    situation where his or her fear of an adverse order of costs may conflict with
    these fundamental duties of his or her calling. [Emphasis in original.]

[14]

The
    court in
Marchand

(Litigation Guardian of) v. Public General
Hospital Society of Chatham
(1998), 16 C.P.C. (4th) 201
    (Ont. Gen. Div.), at para. 121,
recognized that the criteria on which
    an order for costs may be made against a solicitor personally pursuant to
[
r]ule 57.07 and pursuant to the inherent jurisdiction of the
court may differ.  Accordingly, rule 57.07(1
) is not
    simply a codification of the common law.  Rather, it is designed to protect and
    compensate a party who has been subjected to costs being incurred without
    reasonable cause, not to punish a lawyer: see also
Young
, at p. 135.

[15]

Similarly,
    in
Carleton v. Beaverton Hotel
(2009), 96 O.R. (3d) 391 (Div. Ct.), at
    para. 24, the court held that costs against a lawyer personally are intended to
    be compensatory and rule
57.07(1)
    clearly speaks to the issue of compensating parties for unnecessary costs.  The
    courts inherent power to order costs in rare cases for contempt or to control
    its officers in which punishment is an objective is a separate issue from a
    costs order under rule 57.07
(1).

[16]

Rule
    57.07(1) is therefore not concerned with the discipline or punishment of a
    lawyer, but only with compensation for conduct which has caused unreasonable
    costs to be incurred.

(2)

Legal test

[17]

The court in
Carleton
, at para. 21, approved a
    two-part test to determine the liability of a lawyer for costs under rule
    57.07(1).

[18]

The first step is to inquire whether the lawyers conduct falls
    within rule 57.07(1) in the sense that it caused costs to be incurred unnecessarily.
Rule 57.07(1) refers specifically to conduct that caused
    costs to be incurred without reasonable cause or to be wasted by undue delay,
    negligence or other default.  The court in
Marchand

held that mere negligence can attract costs consequences in addition
    to actions or omissions which fall short of negligence.  The court confirmed
    that bad faith is not a requirement for imposing the costs consequences of
    rule 57.07(1) and concluded, at para. 122, that [i]t is only when a lawyer
    pursues a goal which is clearly unattainable or is clearly derelict in his or
    her duties as an officer of the court that resort should be had to [r]. 57.07.

[19]

In determining whether a lawyers conduct falls
    within rule 57.07(1), the court must consider the facts of the case and the
    particular conduct which has been attributed to the lawyer: see
Marchand
, at para. 115.

[20]

In
Rand Estate v. Lenton
, 2009 ONCA 251, [2009]
    O.J. No. 1173, at para. 5, this court noted that rule 57.07(1) requires an
    examination of
the entire course of litigation that went on before the
    application judge so that the application judge can put in proper context the
    specific actions and conduct of counsel.  This holistic examination of the
    lawyers conduct produces an accurate tempered assessment.

[21]

Although the conduct as a whole must be considered, a court must
    consider specific incidents of conduct in determining whether the conduct falls
    within rule 57.07(1).  In
Carleton
, the court confirmed, at para. 20,
    that a general observation does not permit identification of what conduct may
    have contributed to delay and unnecessary costs.  Further, the abse
nce
    of s
pecific evidence or
circumstances considered in
    making a general observation precludes meaningful appellate review of the criteria
    of rule 57.07(1).
Above all, t
he
    legal test under rule 57.07(1) is not concerned with a lawyers professional
    conduct generally, but whether such conduct, including the conduct of the
    litigation, caused unreasonable costs to be incurred:
Carleton
, at para. 18.

[22]

The
    second step is to consider, as a matter of discretion and applying the extreme
    caution principle enunciated in
Young
, whether, in the circumstances,
    the imposition of costs against the lawyer personally is warranted.  The extreme
    caution principle, as stated in
Young
, means that these awards must
    only be made sparingly, with care and discretion, only in clear cases, and not
    simply because the conduct of a lawyer may appear to fall within the
    circumstances described in
[
r]ule 57.07(1):
Carleton
,
    at para. 15.

C.

Analysis

(3)

Standard of review

[23]

The determination as to costs is a matter within the discretion
    of the application judge.  An appellate court may set aside a costs award if
    the application judge made an error in principle or if the costs award is
    plainly wrong:
Hamilton v. Open Window Bakery Ltd.
, 2004 SCC 9,
[2004] 1 S.C.R. 303, at para. 27.

[24]

In
Rand Estate
,
    this court held, at para. 2, that:

The application judge who managed the proceedings was in a much
    better position than this court to make the necessary assessments underlying
    the findings of fact he eventually made. Those findings are, by their nature,
    somewhat subjective and the cold paper record cannot, in our view, capture all
    of the considerations that would be relevant to those findings. We defer to the
    [application] judges findings unless they are clearly in error and clearly
    material to his ultimate determination.

[25]

As
    a result, this court owes a high degree of deference to the application judges
    holding that Bickleys conduct caused costs to be unreasonably incurred and, in
    the particular circumstances, the imposition of costs against him personally was
    warranted.

(4)

Whether Bickleys conduct caused costs to be incurred unnecessarily

(a)

Mayor Hill incident

[26]

The
    application judge found, at para 67 of her reasons, that the Mayor Hill
    incident ... clearly caused additional costs to this case.  The question is,
    however, whether Bickley personally caused the additional costs or whether he
    was acting as the agent of his clients.

[27]

For
    over a year, Bickley sought to examine Mayor Hill.  He first served a notice of
    examination of Mayor Hill in March 2009 seeking full disclosure.  When advised
    that full disclosure of the documents sought had already been made, were
    protected by solicitor-client privilege, or were publicly available, he served
    a notice of motion to have Mayor Hill examined.  In response, the Township
    filed a lengthy affidavit containing all the documents which set out details of
    how the By-law came to be, including the minutes of council meetings.  Nothing
    was done until a year later when a notice of intention to call Mayor Hill as a
    witness was served.  When the Township asked why this was necessary, the
    response was that Galganov and Brisson wanted to ensure the admissibility of a
    radio interview with Mayor Hill.  The Township offered to consent to the
    admission of the transcript of that interview if the summons was revoked.  This
    was refused.  The Township then offered to have Mayor Hill examined out of
    court.  This was also refused.  The Township prepared a factum in anticipation of
    Bickley bringing a motion at trial.  Bickley eventually changed his mind and said
    that he would not call Mayor Hill.  The summons was revoked.  The application
    judge commented that the evidence in issue was irrelevant to the matter.

[28]

As
    I have indicated, and the application judge acknowledged, in determining
    whether the imposition of costs against a lawyer personally is warranted, a
    factor is whether the lawyers clients have waived solicitor-client privilege.  A
    court should be cautious in awarding costs personally against a lawyer where it
    would be necessary to infringe on solicitor-client privilege: see
Nazmdeh
    v. Ursel
, 2010 BCCA 131, 3 B.C.L.R. (5th) 277, at para. 110.  Solicitor-client
    privilege was not waived in this case. Bickleys unchallenged affidavit
    contained a general denial, that [he] acted at any step in the proceeding
    without the instructions and authority of
[
his]
    clients.  In addition, at para. 29 of his affidavit, Bickley responded in part
    to the allegation of the Township:

As I explained to counsel for the Township of Russell, my
    primary reason to cross-examine Mayor Ken Hill was to ensure the admissibility
    of the transcript of the radio interview with Mayor Ken Hill which took place
    on June 18, 2008 and to expand upon his positions.  In seeking his attendance at
    the hearing, I deny that my intention was to embarrass Ken Hill as alleged by
    the Township of Russell in the within motion.
At all times, I was
    following instructions of my client.
[Emphasis added.]

[29]

The
    application judge accepted Bickleys assertion that he was prevented from
    responding to some of the allegations because of solicitor-client privilege and
    also that he took no step in the proceeding without the instructions and
    authority of his clients.  Given this, it was incumbent on the application judge
    to consider not only whether the Mayor Hill incident caused unnecessary costs
    but whether, in doing so, Bickley was acting in his personal capacity or as an
    agent for his clients.  The application judge made no attempt to distinguish
    Galganov and Brissons conduct from Bickleys conduct.  She erred in principle
    in failing to make such distinction.  Their conduct must be assessed separately
    as Bickley should not be responsible for advancing a weak case if instructed to
    do so by Galganov and Brisson.  Specifically, clients are not obliged to accept
    the judgment of their lawyer but are entitled to obtain the judgment of the
    court: see
Walsh v. 1124660 Ontario Limited
, 2007 CanLII 4789 (Ont.
    S.C.), at para. 23.

(b)

Decision
to propose Galganov as an expert witness in
    Brissons application as well as Dr. Winn

[30]

After Bickley obtained leave to have the Brisson
    and Galganov applications heard together, Bickley proposed Galganov as an
    expert in Brissons application.  The application judge commented, at para. 68
    of her reasons, that: The Township wasted time and money in cross-examining
    Mr. Galganov as to his expertise and researching the state of the law on
    biased expert witnesses.  The application judge also rejected Dr. Winn, the
    other expert witness proposed by Galganov and Brisson and concluded that this
    amounted to wasted time and money on the part of the Township.

[31]

In his affidavit, Bickley explained that the
    order providing for the applications to be heard together made it clear that it
    would be in the application judges discretion to determine whether the
    evidence submitted in one application could apply to the other.  It was for
    this reason that he proposed to have Galganov provide expert evidence for use
    in Brissons application.

[32]

It appears from Bickleys affidavit that it was
    his idea to propose Galganov as an expert witness in the Brisson application
    although Galganov was an interested party and clearly lacked any qualifications
    as an expert.  Such conduct would fall below the standard of care expected of a
    reasonably competent lawyer in Bickleys position.  Again, however, accepting
    his affidavit, his clients approved of it.

[33]

The rejection of Dr. Winn is not in the same
    category and the application judge erred in attributing the proposal of this
    expert to Bickley rather than to Galganov and Brisson.  While the application
    judge did not ultimately accept Dr. Winn as an expert, this does not mean he
    should never have been proposed.  Nor does this mean that Bickley should be
    held personally responsible for the costs the Township incurred in
    cross-examining Dr. Winn and in preparing submissions against the admissibility
    of his evidence at trial.  Hindsight cannot be used to evaluate Bickleys
    decision: see
Rand Estate
,
at para. 5.

(c)

Attempted
    introduction of an article; erroneous reference to rule 39.5; and whether
    Bickleys negligence added to costs

[34]

Bickley sought to introduce an article that
    appeared to contradict some of the assertions of one of the Townships experts,
    Dr. Castonguay, without an evidentiary foundation.  After reviewing the
    article, Dr. Castonguay prepared a supplementary affidavit.  The application
    judge did not permit the article to be entered as evidence.

[35]

The application judge found that Bickley sought to convert the application
    to a trial under rule 39.5, which does not exist in the
Rules of
    Civil Procedure
, because he contested facts in the
    affidavits of the Townships experts and contended they were not admissible.  The
    Township was aware of Bickleys position and prepared a factum in response to
    this argument.  Eventually, after being directed to read Rule 39 of the
Rules
    of Civil Procedure
, Bickley agreed his position was not
    tenable.  The application judge held that this was indicative of a lack of
    preparation which caused costs to be wasted.

[36]

Overall,
    the application judge found, at para. 90 of her reasons, that some time was
    wasted during the hearing, but very significant costs were incurred by the
[Township]
as a result of the various positions taken by Mr.
    Bickley, by his lack of preparation, which in some cases amounted to
    negligence.

[37]

In
    oral submissions before us, Bickleys counsel submitted that the application
    judges reasons are contradictory because in subparagraph 84(7) of her reasons
    she held that:

Mr. Bickleys disorganized manner of presenting his argument,
    together with his inability to find materials, did not add costs.  However,
    this was clearly indicative of a serious lack of preparation amounting to
    negligence.

[38]

The
    application judges comments in this subparagraph are in response to the
    Townships allegation, at subparagraph 68(7), that, at the hearing, Bickley
    often could not find cases to which he referred, had not always brought the
    materials he needed with him and did not understand that the joint book of
    authorities filed by the Township referred to the Galganov and Brisson
    applications being heard jointly and were not intended for the joint use of
    counsel.

[39]

While
    the reasons are not entirely clear, I am of the opinion that at para. 90 of her
    reasons, the application judge was referring to the Townships complaints
    respecting Bickleys conduct both before and at the hearing.  At subparagraph
    84(7) she was solely referring to the Townships complaints of Bickleys
    conduct at the hearing.

[40]

In
    summarizing Bickleys conduct at paras. 92 and 93 of her reasons, the
    application judge again appears to be referring to Bickleys conduct prior to
    the hearing:

This situation is far different from the facts in
Rand
    Estate v. Lenton
, where discrete issues arose: for example, there was no
    merit to a particular will issue; or, there had been a particular motion which
    was found to be needless, and costs could be attributed to those specific
    events.

While a precise accounting would be preferable, the moving
    target presented by Mr. Bickleys conduct of the case meant that positions,
    documents, and the law, had to be constantly examined, re-examined, and
    re-considered, only to then find a particular position was changed, a motion
    would not be brought, a stated ground not argued at the hearing, etc.  all
    over a period of two years.  The prime example is the to-ing and fro-ing over
    the cross-examination of Mayor Hill. Mr. Bickley directly and negligently
    caused additional costs to be incurred.  [Citations omitted.]

[41]

Reading
    the reasons as I have, the application judges reasoning is not entirely
    contradictory.  While there may be some overlap in her reasoning, her decision
    to order costs against Bickley personally is mainly based on his conduct vis-à-vis
    the Township prior to the hearing.

(5)

Whether an award of
    costs should have been made against Bickley

[42]

The
    application judges decision to award costs personally against Bickley is based
    on the cumulative effect of what she found to be his negligent conduct which caused
    the Township to incur costs unnecessarily.  As I have indicated, the
    application judge erred in principle in respect of the Mayor Hill incident by not
    separating Bickleys conduct from that of his clients.  She also erred in using
    hindsight with respect to the costs related to proposing Dr. Winn as an expert.
     These incidents are so important to, and so intertwined with, her overall
    conclusion, that the award of costs against Bickley personally must be set
    aside.  I cannot discretely quantify what remains nor am I of the opinion that,
    even if Bickley were negligent, his conduct would merit an award of costs
    against him personally, given the dictate of the Supreme Court of Canada in
Young
.

[43]

Finally,
    if an order of costs is to be made against a lawyer personally on the basis of
    negligence, then that negligence must be based on a breach of the objective
    standard of care of a reasonably competent lawyer in the same position. Here,
    that position would be of a lawyer acting on instructions or with the approval
    of his clients. The court must also bear in mind to whom the lawyers duty of
    care is owed. That duty is primarily to the client and to the court.
The rule was not intended to allow the frustration of the opposing partys
    counsel to be taken out against a counsel personally because he or she went
    down a series of blind alleys with his or her clients instructions or
    approval. Rather, resort is to the general principles governing costs between
    parties, which include deterrence of unnecessary steps that unduly prolong
    litigation: see
1465778 Ontario Inc. v. 1122077 Ontario Ltd.,
(2006)
    82 O.R. (3d) 757 (C.A.).  The application judge appears to have taken the
    blind alley factor into account in awarding party and party costs of the
    litigation.

D.

Conclusion

[44]

For
    these reasons, I would allow the appeal respecting the order of costs against
    Bickley personally and set it aside.  In view of my conclusion, it is
    unnecessary for me to deal with the ancillary issues raised.

[45]

I
    would award Bickley the costs of the motion before the application judge, the
    motion for leave to appeal and this appeal on a partial indemnity basis. I
    would fix those costs at $25,000, inclusive of disbursements and all applicable
    taxes, and order that those costs be paid by the Township.

Released: June 15, 2012

KMW                                                                Karen
    M. Weiler J.A.

I
    agree Robert Sharpe J.A.

I
    agree R.A. Blair J.A.

[1]
Galganov and Brisson retained independent counsel for their written submissions
    regarding the quantum of costs, Mr. Martin Mason of Gowling Lafleur Henderson
    LLP.  They were represented by Mr. Mason on the motion for costs against
    Bickley personally, while Mr. Allan OBrien and Ms. Ashley Deathe represented
    Bickley.  Gowling Lafleur Henderson LLP also represents Galganov and Brisson in
    their underlying appeal.  Although this was a motion for costs, that motion was
    further to the application and for consistency, I refer to the judge at first
    instance in C52704 and in these reasons as the application judge.

[2]

All references hereinafter to the application judges reasons
    refer to the reasons reported at 2011 ONSC 3065.


COURT OF APPEAL FOR ONTARIO

CITATION:
Hannafin v. Adair
    Morse LLP, 2012 ONCA 402

DATE: 20120612

DOCKET: C54599

Rosenberg, MacPherson and Cronk JJ.A.

BETWEEN

Edmund J. Hannafin and Judith G. Hannafin

Clients (Respondents on Appeal)

and

Adair Morse LLP

Lawyers (Appellant)

John J. Adair and Jennifer L. King, for the appellant

R. Steven Baldwin, for the respondents

Heard: June 8, 2012

On appeal from the orders of Justice John A. McMunagle of
    the Superior Court of Justice, dated October 31, 2011 and January 26, 2012.

By the
    Court:

I.        Background

[1]

The appellant law firm was retained by the respondents in 2006 to act on
    their behalf in litigation arising out of the respondents sale of their
    interest in a business.  Written retainer agreements were executed by the
    respondents in February 2006 and 2007.  Under the retainer agreements, the
    parties agreed that: (1) the appellant would render interim accounts for fees
    and disbursements incurred, which would be payable by the respondents within 30
    days of receipt; (2) the appellants interim fees would be billed at 50% of its
    applicable hourly rates; (3) if the litigation concluded without recovery of
    damages by the respondents  either by settlement or judgment  the appellant would
    receive no further payment in excess of its interim billings; and (4)
    conversely, if the litigation concluded with recovery of damages by the
    respondents, the appellant would be paid a fee in addition to fees already
    billed that would result in total fees billed at 150% of its applicable hourly
    rates.

[2]

As agreed, interim accounts were rendered by the appellant and paid by
    the respondents. However, in approximately mid-August 2008, the respondents
    informed the appellant that they were unable to continue to fund the
    litigation, even on the agreed 50% interim fee basis.  After negotiations
    regarding alternate payment arrangements proved unsuccessful, the respondents
    retained new counsel to assume carriage of the litigation on their behalf.

[3]

Difficulties then arose concerning the transfer of the respondents file
    to their new counsel and the terms of an Irrevocable Direction that the
    appellant wished the respondents to sign to protect the appellants account.
    At this point, although unresolved, the litigation was well underway and
    various discoveries had been held.

[4]

On January 26, 2010, on motion by the respondents, Tausendfreund J. of
    the Superior Court of Justice directed that the appellant deliver the
    respondents litigation file to the respondents new solicitors.  He also
    directed that the appellants accounts  both paid and unpaid  be assessed
    under the
Solicitors Act
, R.S.O. 1990, c. S. 15 (the Assessment
    Order).

[5]

The assessment hearing was originally scheduled for June 9, 2011.  By
    that time, the respondents new solicitors had settled the respondents
    litigation for the sum of $1 million, payable to the respondents.

[6]

In early June 2011, on request of the respondents solicitors, the
    appellant delivered a final account dated June 1, 2011 (the June Account),
    which represented the appellants total claimed outstanding fees, including the
    premium payment envisaged under the retainer agreements.  When the respondents
    disputed the amount claimed and the appellants entitlement to have the June
    Account included in the assessment, the appellant moved for directions
    regarding the assessment hearing.

[7]

By order dated October 31, 2011, McMunagle J. of the Superior Court of
    Justice ruled that the June Account was not to be included in the assessment.
    By order dated January 26, 2012, he also awarded the respondents their costs of
    the motion for directions, on a full indemnity basis.

[8]

The appellant appeals both rulings by the motion judge.

II.       Issues

[9]

The appellant contends that the motion judge erred in three respects in
    excluding the June Account from the assessment: (1) by considering irrelevant
    factors, including the reasonableness of the fees claimed by the appellant and
    the appellants entitlement to the fees and disbursements covered by the June
    Account; (2) by failing to consider relevant factors, in particular, the plain
    language and context of the Assessment Order; and (3) by concluding that, by
    operation of s. 6(1) of the
Solicitors Act
and the two-year limitation
    period under the
Limitations Act, 2002
, S.O. 2002, c. 24, the
    appellants right to deliver the June Account and to seek compensation on the
    basis reflected in the June Account was statute-barred.

III.      Discussion

[10]

In
    our view, the language of the Assessment Order is dispositive of this appeal.

[11]

There
    was only one issue properly before the motion judge for determination: whether
    the June Account should be included in the assessment.  All other issues
    considered by the motion judge, including the fairness of the quantum of the
    June Account and the appellants entitlement to deliver and to seek payment as
    contemplated by the June Account, were extraneous to the motion judges task.
    These were matters for the assessment officer.

[12]

The
    Assessment Order explicitly contemplated that the assessment hearing was to be
    held in Belleville at the earliest convenient date.  It directed an
    assessment of all accounts paid to date, unpaid accounts, interim accounts and
    final accounts of the appellant directed to the respondents.  It also provided
    that the appellant was to deliver all accounts, pre-bills [and documents
    related to the appellants accounts]
forthwith
, to permit the
    [respondents] sufficient opportunity to prepare for the assessment (emphasis
    added).

[13]

The
    appellant failed to comply with a critical term of the Assessment Order: it did
    not deliver the June Account until June 2011, almost 18 months after the date
    of the Assessment Order.

[14]

The
    appellant contends that it was unable to deliver its final account to the
    respondents forthwith after the Assessment Order, as required, because the amount
    of its final account could not be determined until the outcome of the
    respondents litigation was known.  As the litigation was not settled until the
    fall of 2010, the amount of the appellants compensation entitlement was not
    known until then.

[15]

We
    reject this submission.  The Assessment Order stipulated, in clear and
    unambiguous language, that all accounts were to be delivered by the appellant
    forthwith and that the assessment hearing was to be held at the earliest
    convenient date.  The appellant acknowledges that the maximum amount of the
    compensation potentially to be claimed by it was known to all parties
prior
    to
the appearance before Tausendfreund J.  the appellant had sought to
    have this amount included in the Irrevocable Direction that it proposed the
    respondents should sign as a condition of the transfer of their file to their
    new solicitors.

[16]

Thus,
    from the fall of 2009 at the latest, when the respondents moved for an order
    compelling the release of their file by the appellant, the appellants maximum
    potential compensation claim was known and, indeed, under debate by the
    parties.  In our view, the fact that the amount of that claim might require
    future adjustment downwards, depending on the outcome of the respondents
    litigation, did not prevent the delivery of an account in the full amount of
    the claim in accordance with the Assessment Order.  The terms of the account
    could easily have stipulated that it was subject to adjustment, depending on
    the outcome of the respondents litigation and the assessment.  But the
    appellant failed to deliver the June Account on a timely basis, in accordance
    with the Assessment Order.  It also failed to appeal the Assessment Order or to
    seek a variation of its terms, as it was entitled to do under the
Rules of
    Civil Procedure
.

[17]

We
    therefore agree with the motion judge, although for reasons that differ in part
    from his, that the June Account is not to be included among those accounts to
    be considered at the assessment hearing.

[18]

We
    reach a different conclusion regarding the appellants challenge to the motion
    judges costs order of January 26, 2012.

[19]

The
    motion judge awarded the respondents their full indemnity costs of the motion
    for directions, subject to minor adjustments that he regarded as appropriate.
    However, he made no finding of reprehensible conduct by the appellant and does
    not appear to have considered the narrow circumstances in which costs on the
    full indemnity scale  the maximum scale for costs  may be granted: see
Toronto
    Star Newspapers Ltd. v. Fraleigh
, 2011 ONCA 555, at paras. 34 to 39.  As a
    result, in our view, the motion judge erred in principle and his costs award
    cannot stand.

[20]

The
    respondents were successful on the motion for directions in resisting the
    inclusion of the June Account in the court-ordered assessment.  Thus, they are
    entitled to their costs of the motion.  We see no basis for departing from the
    usual, partial indemnity costs scale in respect of the motion.  We fix the
    respondents costs of the motion in the amount of $8,565.00, inclusive of
    disbursements and all applicable taxes.

IV.     Disposition

[21]

For
    the reasons given, the appeal from the motion judges order dated October 31,
    2011 is dismissed.  Leave to appeal the motion judges costs order dated
    January 26, 2012 is granted and the appeal from that order is allowed, in
    accordance with these reasons.  The respondents are entitled to their costs of
    the proceeding in this court, fixed in the amount of $9,000.00, inclusive of
    disbursements and all applicable taxes.

Released:

MR                               M. Rosenberg J.A.

JUN 12 2012                 J.C. MacPherson J.A.

E.A. Cronk J.A.