CITATION: Shekhdar v. K&M Engineering, 2012 ONSC 4413

COURT FILE NO.: 279/10

DATE: 20120727

SUPERIOR COURT OF JUSTICE – ONTARIO – DIVISIONAL COURT

RE: KERSASP SHEKHDAR, Plaintiff/Appellant

AND:

BEARD WINTER LLP, Secured Creditor and Judgment Creditor (Responding Party on appeal)

BEFORE: MOLLOY J.

HEARD: In writing (in Toronto)

ENDORSEMENT

(Costs of Pre-Hearing Motions)

[1] Mr. Shekhdar appealed from a decision of Roberts J. upholding the validity of a Direction assigning the proceeds of litigation to his former counsel, Beard Winter. That appeal was heard in the Divisional Court on December 14, 2011. Costs of $500 were awarded to K&M Engineering, which was only peripherally involved in the appeal, although the original defendant in the action. The main respondent before the Divisional Court was Beard Winter, as represented by one of its own partners Robert Harason. Following written submissions from Mr. Shekhdar and Mr. Harason, the Divisional Court issued an endorsement holding that Beard Winter was entitled to costs and fixing those costs at $2,000 (a substantial reduction from the costs claimed, which were approximately $30,000 on a substantial indemnity basis and $23,000 on a partial indemnity basis).

[2] I have been essentially case-managing this appeal for about two years and in the course of that time have issued a number of administrative directives, as well as actual rulings on motions. Two of the Orders I made were following motions, upon which I reserved the issue of costs until the conclusion of the appeal itself.

[3] I have now received submissions from the parties on the costs payable for those two matters. The first decision is dated September 16, 2010. Mr. Shekhdar (who is self-represented) originally delivered a notice of motion seeking “an extension of time and leave to appeal” from the order of Roberts J. dated March 3, 2010. Beard Winter moved to strike the notice on the grounds that this was a final order and leave to appeal was not required. I found in their favour and ordered that the leave to appeal motion be struck out. However, I noted that in addition to leave to appeal, Mr. Shekhdar had sought an extension of time to appeal. I directed that if Mr. Shekhdar wished to proceed, he should file a motion record for an extension of time, and if Beard Winter was not prepared to consent, opposing material could be filed and I would make a decision.

[4] Beard Winter did not consent. Material was filed and ultimately I heard the motion on the basis of written submissions. For reasons set out in my endorsement dated January 17, 2011, I granted the extension of time requested. That is the second order which is now subject to the costs submissions.

[5] Although there were many other skirmishes of an administrative matter between the parties requiring my intervention, and at times requiring an endorsement or directions, I do not see any of these matters as meriting any award of costs for either party. They were truly more administrative in nature. The two most substantial matters are the Orders dated September 16, 2010 and January 17, 2011. I will address the issue of costs with respect to both of those motions.

[6] Beard Winter seeks costs of both motions. On the first motion (to strike the notice of motion for leave to appeal) Beard Winter was successful. On the second motion, Beard Winter was unsuccessful, but Mr. Shekhdar was granted an indulgence and Beard Winter claims costs in any event. Mr. Shekhdar claims costs of all the matters that were before me in the total amount of $15,000.

[7] I will deal with these two motions in reverse order.

[8] There will be no order as to costs with respect to the second motion seeking to extend the time for appeal. Mr. Shekhdar required an indulgence from the court and is not entitled to costs, even though successful. I also take into account the fact that he was ultimately unsuccessful on the appeal itself. On the other hand, Beard Winter took an unreasonable position in resisting the motion in all of the circumstances. Mr. Shekhdar was not represented by counsel and his lack of legal knowledge is what led to his having brought the proceeding improperly in the first place. In my endorsement dated January 17, 2011, I noted (at para 12):

I recognize that Mr. Harason did tell Mr. Shekhdar that he was following the wrong procedure, but given the level of vitriol between these two gentlemen, it is not surprising to me that Mr. Shekhdar did not rely on his advice.

[9] It would have been reasonable and appropriate for Beard Winter to simply consent to the extension of time, although they were certainly not required to do so. It was not reasonable, however, for Beard Winter to rack up 35.5 hours in solicitor’s time to respond to the motion to extend the time for appeal. The appropriate disposition in all of the circumstances is that each party should bear their own costs.

[10] With respect to the first motion regarding the improperly cast motion for leave to appeal, Beard Winter claims costs of $3000.00 for fees plus disbursements of $383.67 for courier delivery to Pakistan and $100.00 for photocopying and faxes. The claim for fees is based on 29.5 hours at a partial indemnity rate of $350.00 for Mr. Harason (who was called to the Bar in 1980), but with a substantial reduction (the actual fees based on multiplying the hourly rate by the number of hours would be in excess of $10,000). Beard Winter also seeks to justify part of its costs claims as being on a substantial indemnity basis on the grounds that it offered to consent to a motion dismissing the motion for leave to appeal without costs, and ultimately got a better result than that. That position ignores the reality of the situation. Mr. Shekhdar had started the matter improperly and a simple dismissal of his motion for leave to appeal would not suffice; he also needed leave to extend the time for the appeal once properly constituted, to which Beard Winter would not agree. Again, a large part of the problem is the level of animosity between these two gentlemen. This is not an appropriate situation for substantial indemnity costs. That said, Beard Winter was successful on the motion. Although Mr. Shekhdar’s error was as a result of his lack of legal training, the cost of that need not be borne by his opponents. He ought to have obtained legal advice on the proper procedure, particularly after Beard Winter drew it to his attention. In these circumstances, I believe Beard Winter is entitled to its reasonable costs of the motion on a partial indemnity basis.

[11] I have no difficulty with the disbursements claimed by Beard Winter. However, in my view, an award of $3000 for costs for a motion of this nature is out of line. That said, I do recognize that the repeated allegations of impropriety made by Mr. Shekhdar and the level of inflammatory rhetoric in his voluminous email exchanges substantially increased the amount of time that was necessary for Beard Winter to address what should have been a very routine matter. Accordingly, in the unusual circumstances of this case, I am fixing costs of the first motion at $2500.00 inclusive of disbursements and tax, payable forthwith by Mr. Shekhdar.

MOLLOY J.

Date: July 27, 2012