Court File No.: 130/06
Date: 2007-07-26
Ontario Superior Court of Justice (Divisional Court)
Between:
Joao Luis Dasilva Cecilio Applicant (Respondent and Cross-Appellant)
-and-
Tarion Warranty Corporation Respondent (Appellant)
-and-
Lexington Green Enterprises Inc. Added Party (Respondent)
Heard: Written costs submissions April-May, 2007;
Before: Lane, Swinton and M.G.J. Quigley, JJ.
Counsel: Joel Oliphant, for the Appellant David J. McGhee, for the Respondent and Cross-Appellant Darren Gluckman, for the Added Party, Respondent
REASONS AS TO COSTS
LANE J.:
[1] On April 12, 2007, we released reasons remitting the matters complained of in the appeal and cross-appeals to the Tribunal for further consideration in the light of the reasons of this court. The appeal resulted from an order of the Tribunal that Tarion conduct sound transference tests of the party wall between the Cecilio's home and their neighbour. As a result of the commencement of Tarion's appeal, Mr. Cecilio cross-appealed on an issue relating to the garage wall. The builder, Lexington, appealed from the Tribunal's decision as to the kitchen floor.
[2] Tarion submitted that it was successful in that the order that it perform the testing was set aside. Lexington said that it was successful in that we remitted the issue to the Tribunal to determine the useful life of the floor in its present state. The homeowner succeeded in establishing that the Tribunal erred in finding that there was no violation of the Building Code in the construction of the garage wall.
[3] Tarion and Lexington both submitted that success was divided and the parties should bear their own costs. Tarion also submitted that in any event, it ought not to bear any costs of Lexington's appeal.
[4] The homeowner had a different analysis. Counsel submitted that an examination of the issues that were argued shows that in fact Tarion lost on most of the points it put forward. First, Tarion put forward a very restrictive view of its powers of inspection under s. 18 of its Act[^1] which the Court rejected. The Court held that Tarion's powers of inspection (and inferentially the duty) were not confined to the period of construction, but extended into the warranty period, albeit with the homeowner's permission. Second, Tarion submitted that the Tribunal ought to have dismissed the homeowner's case for lack of proof that the wall actually transmitted more than the permitted level of sound, attacking the Tribunal's analogy to Snell v Farrell[^2]. The Court held that the analogy was a helpful one; that the homeowner had proved enough to cast the burden on the builder to call evidence; that the builder had failed to call competent evidence on the point; that the Tribunal had not erred in refusing to dismiss the case; and that the Tribunal was not a court, but a Tribunal administering a consumer protection act and so did not need to require proof on the Court's standard.
[5] Having regard to these findings, the parties did not emerge from the appeal on equal terms. Tarion lost some of the policy points it was trying to make and did not rid itself of the homeowner's case. On the kitchen floor issue, the Court upheld the Tribunal's finding that the floor was defective and non-compliant with the Code. The referral back to the Tribunal was on the damages. On the garage wall issue, the homeowner succeeded in establishing that the Tribunal misread the Building Code and that aspect was also returned to the Tribunal. Overall, the homeowner was substantially successful.
[6] I agree with most of the homeowner's analysis. His submissions gloss over the finding that in these circumstances, the builder, and not Tarion, should perform the inspection, with the cost to be allocated by the Tribunal. Nevertheless, Tarion should bear the bulk of the reasonable appeal costs of the homeowner. The kitchen floor occupied a small part of the proceeding overall; the bulk of the argument was as to Tarion's role in the matter. Therefore the builder's share of the homeowner's costs should be minor.
[7] The homeowner's costs are put forward at $21,445 if partial indemnity costs and $28,334 if substantial indemnity costs. There is nothing in the case that supports substantial indemnity costs. Turning to partial indemnity costs, Tarion submits that $1,000 should suffice bearing in mind that it won its appeal. As noted, the victory was somewhat less than complete and that figure is merely nominal.
[8] On the other hand, it is true, as Tarion submitted, that a costs award should not be the arithmetic product of hours times rates. The court does not assess costs; it fixes them. It is not necessary to critique the hours or the rates, but rather to ask the key question:
At the end of the day, what is the total for fees and disbursements that would be a fair and reasonable amount to be paid by the unsuccessful parties in the particular circumstances of this case, which was neither complex nor lengthy?[^3]
[9] The award does not necessarily equal the sum of the parts; an overall sense of what is reasonable should be factored in to determine the ultimate award. The reasonable expectations of the paying party are also a factor to be considered. This is not a subjective inquiry, but an objective one. What would the reasonable litigant expect might be his or her exposure to costs?
[10] Normal awards for appeal costs for a half-day appeal in this court do not approach the sum requested. I do not doubt that the work was done, but that is not the whole story. There is no "tariff" here, but the general understanding would not support the claim. In my view, a fair and reasonable sum in line with the norm, is $6,500 plus disbursements of $731.10 and GST. The builder will bear 10% of the total and Tarion will bear the rest.
Lane J.
Swinton J.
M.G.J. Quigley J.
DATE: July 26, 2007
[^1]: Ontario New Home Warranties Plan Act [^2]: Snell v. Farrell, 1990 70 (SCC), [1990] 2 S.C.R. 311 [^3]: See Murano v. Bank of Montreal (1998) 1998 5633 (ON CA), 41 O.R. (3rd) 222, at page 247; Zesta Engineering Ltd. v. Cloutier, (2002), 2002 25577 (ON CA), 21 C.C.E.L. (3rd) 161 (Ont. C.A.); Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3rd) 291 (C.A.); Moon v Sher (2004) 2004 39005 (ON CA), 246 D.L.R. (4th) 440 (C.A.)