CITATION: Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, et al 2014 ONSC 4715
COURT FILE NO.: No. 34/13
DATE: 20140814
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT AT TORONTO
RE: Fram Elgin Mills 90 Inc. (formerly Frambordeaux Developments Inc.) Plaintiff/Respondent
AND:
Romandale Farms Limited, Jeffrey Kerbel, 2001251 Ontario Inc. and First Elgin Developments Inc., Defendants/Appellant/Respondents as follows:
Romandale Farms Limited, Defendant/Appellant
Jeffrey Kerbel, 2001251 Ontario Inc. and First Elgin Developments Inc., Defendants/Respondents
BEFORE: Kiteley J.
COUNSEL: Sara J. Erskine, for the Plaintiff/Respondent Ranjan Das, for the Defendant/Appellant, Romandale Farms Limited Martin J. Henderson, for the Defendants/Respondents Jeffrey Kerbel, 2001251 Ontario Inc. and First Elgin Developments Inc. (“the Kerbel defendants”)
HEARD: In writing
ENDORSEMENT AS TO COSTS ARISING FROM MOTION HEARD MARCH 31, 2014
[1] In an endorsement dated June 20, 2014, I dismissed the appeal by Romandale [2014 ONSC 3785] from the order of Master Graham dated December 21, 2012 and I directed counsel to make written submissions as to costs.
[2] In his written submissions, Mr. Henderson asked for costs on a substantial indemnity basis in the amount of $30,960.47 or on a partial indemnity basis in the amount of $20,776.18. He took the position that the appeal was “entirely improper, vexatious and unnecessary” and was a “blatant attempt by Romandale to completely reverse the position it had taken in the underlying litigation for many years”. His explanation for a costs outline that added up to 50 hours (including over 31 hours spent by him) was that the appeal had been adjourned twice and therefore extra preparation had been required.
[3] In his submissions, Mr. Das made the following points. He pointed out that Mr. Henderson had failed to bring a costs outline with him to the appeal, which necessitated these written submissions. He asserted that having failed to bring a costs outline, the court should infer that the Kerbel defendants did not intend to seek costs. He referred to rule 57.01(6) which provides as follows:
Unless the parties have agreed on the costs that it would be appropriate to award for a step in a proceeding, every party who intends to seek costs for that step shall give to every other party involved in the same step and bring to the hearing, a costs outline (Form 57B) not exceeding three pages in length.
[4] Mr. Das’ main submission was that the Kerbel defendants should not recover any costs.
[5] Mr. Das reminded me that he had provided a costs outline at the hearing of the appeal, which on a partial indemnity basis included fees of approximately $5000 plus $400 as an estimate of counsel fees for the hearing of the appeal, disbursements of approximately $600 and, with HST, the total costs outline was in the amount of $5536.31. Mr. Das would have asked for those costs from both Fram Elgin and the Kerbel defendants, or $2750 from each.
[6] Mr. Das also reminded me that Ms. Erskine had come to the appeal with a costs outline in which the total claimed on a partial indemnity basis was less than $10,000. He advised that he and Ms. Erskine had agreed that Romandale would pay costs of Fram Elgin Mills 90 Inc. in the amount of $5000.
[7] As a result of the hearing before Master Graham, Romandale was ordered to pay costs of $4000. Mr. Das observed that the current claim in the amount of almost $31000 was 7 times greater than the amount awarded by the Master.
[8] Mr. Das also noted that Mr. Henderson had not provided any dockets to support the claim of 31.5 hours for himself nor the 12.2 hours for an associate. Furthermore, he observed the similarity of the factum filed on behalf of Fram Elgin Mills to the factum that had been filed on behalf of the Kerbel defendants.
Analysis
[9] I agree with the observation made by D. Brown J. in AGF Management Limited v. Westwood Holdings Group Inc. [2013 ONSC 2816] at paragraph 25 that the requirement in rule 57.01(6) has not been enforced in the Toronto Region and that the time had come to do so. Counsel having failed to bring costs outlines to the motion to stay a counterclaim and to stay a second action, he ordered costs in the cause.
[10] Rule 57.01(6) is designed to ensure that the issue of costs of a motion not take on a life of its own requiring additional written submissions and attracting additional unnecessary costs. That rule also encourages fairness and balance in that counsel are expected to estimate their costs and prepare to take a position on costs without necessarily knowing the outcome of the motion.
[11] According to my notes, at the conclusion of submissions on March 31st, Mr. Henderson acknowledged that he had not brought a costs outline but said he would ask for $7500. Yet, after being successful on the appeal, when he delivered written submissions, his claim was 3 times that amount. This is an example of a case where the claim for costs increased dramatically when the costs outline was not provided in compliance with rule 57.01(6). The claim for $7500 would have not been proportionate to the circumstances, let alone a claim for 3 times that amount.
[12] I agree that the court should impose consequences for the failure to comply with rule 57.01(6). I understand the rationale for the order for costs in the cause given the nature of the motions to stay before D. Brown J. However, in this appeal from the order of the Master on a pleadings motion, another approach is required. While I am not prepared to deny a successful party some recovery of costs, I am satisfied that it is a fair outcome to allow costs to the Kerbel defendants in the amount that Romandale would have asked based on the costs outline that Mr. Das brought to the hearing of the appeal in compliance with rule 57.01(6).
[13] The basis for making this order is non-compliance with rule 57.01(6). Had I considered the substance of the costs outline provided by Mr. Henderson, I would have discounted it significantly to reflect the fact that the position taken as reflected in quotations in paragraph 2 above was without foundation.
ORDER TO GO AS FOLLOWS:
[14] On consent, Romandale Farms Limited shall pay to Fram Elgin Mills 90 Inc. costs of the motion fixed in the amount of $5000 payable within 30 days.
[15] Romandale Farms Limited shall pay to the Kerbel Defendants costs in the amount of $2750 payable within 30 days.
Kiteley J.
Date: August 2014