CITATION: Security Stores.Com Inc. v. Avenue Motor Works Inc., 2013 ONSC 4472

COURT FILE NO.: DC-12-438

DATE: 2013-06-28

ONTARIO DIVISIONAL COURT

SUPERIOR COURT OF JUSTICE

BETWEEN:

SECURITY STORES.COM INC. Plaintiff (Respondent)

– and –

AVENUE MOTOR WORKS INC.; ANDY KNOWLES Defendants (Appellants)

COUNSEL:

J. Sestito, for the Plaintiff (Respondent)

J.D. Weir, for the Defendants (Appellants)

HEARD: By Written Submissions

REASONS ON COSTS

DiTomaso J.

[1] The appellants Avenue Motor Works Inc.; Andy Knowles (“Avenue Motor”) appealed from the decision of Deputy Judge B. Aron dated June 22, 2012. The trial judge ordered Avenue Motor to pay the respondent Security Stores.Com Inc. (“Security Stores”) the sum of $6,872, prejudgment and post-judgment interest plus court costs of $175 and legal costs of $500.

[2] This appeal was heard on April 2, 2013. Reasons for decision were released on May 14, 2013.

[3] For reasons set out therein, the appeal was dismissed.

[4] Costs were determined by way of written submissions.

Positions of the Parties

a. Position of the Appellant

[5] The appellant submits that a 15% limit should be the first guideline as to the reasonable expectations of an unsuccessful party. The amount in dispute is only $6,782. At the 15% rate that would be $1,030. Tripling the amount would give approximately $3,000. Because of the unnecessary time taken by the respondent and the efficiency of the appellant, it is submitted that the amount to be awarded for costs of the appeal should be $2,000 plus HST which is $2,260.

b. Position of the Respondent

[6] The respondent submits that it is entitled to substantial indemnity costs for three reasons:

(1) The decision at trial should never have been appealed. The trial judge delivered a concise and poignant decision with no room for appeal.

(2) The appellants refused to negotiate and forced the respondent to respond to this appeal.

(3) It would not be fair and reasonable to award partial indemnity costs as the respondent’s entire judgment would be wiped out.

[7] On a partial indemnity scale, the respondent claims the sum of $9,732.71 for fees and $98.89 for disbursements. On a full indemnity scale, the respondent claims the sum of $13,760.58 for fees plus $98.89 for disbursements. All of these figures include HST.

Analysis

[8] The costs of this appeal are not limited by costs in Small Claims Court actions as set out by s. 29 of the Courts of Justice Act which expressly limits costs to 15%. Rather, the costs of this appeal are governed by s. 131(1) of the Courts of Justice Act RSO 1990 C.43 as amended.

[9] Costs of this appeal are in the discretion of the court.

[10] The respondent was the successful party on this appeal and costs follow the event.

[11] In this case, the respondent was successful both at trial and upon the appeal.

[12] I am not persuaded that the applicable scale of costs in this case is either on a substantial indemnity or full indemnity scale. Rather, the appropriate scale of costs in this case is on a partial indemnity scale. No special circumstances have been demonstrated that would justify an award of costs greater than on a partial indemnity scale.

[13] The claim for costs on a partial indemnity scale by the respondent is the sum of $9,633.82 for fees inclusive of HST and $98.99 for disbursements inclusive of HST. In this case I do not agree with this amount claimed.

[14] Rather, I am guided by the overarching principles of what is fair, reasonable and proportional in fixing costs. The amount in issue at trial was the sum $6,872 plus interest with costs. The amount being claimed by way of partial indemnity costs is approximately $3,000 more than the amount in issue. In my view, the claim for costs is not proportional.

[15] Also, I am guided by whether the costs award is “fair and reasonable” and by the principles considered in Davies v. Clarington (Municipality) 2009 ONCA 722. at paras 50-56. The court considered the applicable principles in awarding fair and reasonable costs.

[16] Awarding costs on a partial indemnity scale as claimed by the respondent would neither be fair, reasonable or proportional in all the circumstances.

[17] In the exercise of my discretion, I fix costs in the amount of $3500 all inclusive of disbursements and HST payable by the appellants to the respondent. This amount in my judgment is fair, reasonable and proportional in all of the circumstances.

DiTomaso J.

Released: June 28, 2013