Court File and Parties

Court File No.: Div. Ct. 06-66-000

Date: 2007-07-09

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Jovan Kuzev, Plaintiff/Respondent

-and-

Roha Sheet Metal Ltd. and Kriste Spasevski, Defendants/Appellants

HEARD: March 20, 2007; submissions as to costs in writing.

BEFORE: Lane J.

COUNSEL: Marvin B. Shifman, for the Appellants Jordan B. Farkas, for the Respondent.

E N D O R S E M E N T (C O S T S)

[1] On March 22, 2007, I dismissed the defendant’s appeal from the Trial Judge’s award of $4,000.00 to the plaintiff. I have now considered the submissions of the parties as to costs.

[2] The plaintiff seeks costs on the substantial indemnity scale of $7,691, or if on the partial indemnity costs scale, $6,223.87. The basis for this request is two-fold:

• the defendant must be taken to know that the cost of responding to the appeal would be significantly more than the award;
• the appellant’s factum was unfocused which increased the cost for the respondent.

[3] The defendant responds on both points. The award was $4,000. The suggestion that the appellant must be taken to know that the costs will exceed that amount is wrong and a veiled threat that some punitive action is required. As to the factum, it raised a number of issues, some of which were not pursued at the argument, but none were abandoned. Counsel sought to focus the appeal, but the other issues were there if needed. Counsel further submits that this was not a frivolous appeal; there were a number of issues canvassed of importance. He suggested the figure of $2,000 as appropriate.

[4] It is just common sense to observe that it is a fact of life that small cases cannot carry large fees. If a $4,000 case is appealed, neither side can reasonably spend $6,000 on it and expect that the other side will indemnify them. A review of my reasons for judgment will show that there were a number of issues canvassed which were not frivolous or ill-conceived, but were nevertheless unsuccessful. Even if a case has little merit, that alone does not justify substantial indemnity costs: Young v. Young, [1993] 4 S.C.R. 3. This is not a case for substantial indemnity costs.

[5] Even on a partial indemnity costs scale the amount sought, while the product of hours spent and a reasonable hourly rate, is nevertheless unreasonably high. It is out of proportion to the amount at stake and well beyond the reasonable expectations of persons involved in a $4,000 Small Claims Court appeal. The right of appeal is given by statute and must not, in effect, be taken away by prohibitive costs orders.

[6] Finally, I ask the question: At the end of the day, is the total for fees and disbursements a fair and reasonable amount to be paid by the unsuccessful parties in the particular circumstances of this case?[^1] This is the major guiding principle in the fixing of costs, as reiterated by Borins J.A. for the Court of Appeal in Moon[^2] where he observed that the case law established that such an award must:

…reflect “more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant”. This is a fundamental concept in fixing or assessing costs.

[7] Borins J.A. went on to observe that such an amount is not arrived at arithmetically, but by determining what is fair and predictable. The paying party must not be faced with an award that does not reasonably reflect the amount of time and effort that was warranted by the proceedings. (emphasis added).

[8] In my view an award of $2,500 plus disbursements of $351.47 reflects these principles, and I so order.

Lane J.

DATE: July 9, 2007

[^1]: See Murano v. Bank of Montreal (1998), 41 O.R. (3rd) 222, at page 247; and Zesta Engineering Ltd. v. Cloutier, Ont. C.A. Nov. 27, 2002. [^2]: Moon v. Sher (2004), 246 D.L.R. (4th) 440, at para. 30 (Ont. C.A.)