Court File and Parties

COURT FILE NO.: CV-20-635391 DATE: 20200508 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Eva Oppong, Applicant AND: Desaro Holdings Inc., Respondent

BEFORE: Kimmel J.

COUNSEL: Reshma Kishnani, for the Applicant (reshma.kishnani@millsandmills.ca) Karanpaul Randhawa, for the Respondent (kp.randhawa@me.com)

READ: May 6, 2020 (written cost submissions of the Applicant dated April 20, 2020, responding cost submissions of the Respondent dated April 28, 2020 and reply cost submissions of the Applicant dated May 4, 2020)

COSTS ENDORSEMENT

[1] By endorsement dated April 1, 2020, following an urgent hearing I granted the primary relief sought by the applicant, declaring her lease to be valid and continuing. I found that the landlord did not have the right to terminate the lease pursuant to a purported lease amending agreement that was not proven. I ordered a trial of issues on damages, which I remain seized of, and a timetable for completion of the pre-hearing steps leading up to that trial.

The Positions of the Parties on Costs

[2] At the hearing, the applicant sought her substantial indemnity costs of this application which were estimated to be approximately $28,000.00, inclusive of all fees and disbursements to date. This request has since been confirmed in her written cost submissions and costs outline, wherein she seeks $27,607.26 in substantial indemnity costs, comprised of $2,931.79 in disbursements and fees of $24,675.47 calculated at 90% of actual rates, both amounts inclusive of HST. Her partial indemnity costs, calculated at 70% of actual rates, are indicated to be $18,853.03 inclusive of HST, plus the same disbursements, for a total of $21,784.82.

[3] The applicant seeks substantial indemnity costs under Rule 57 of the Rules of Civil Procedure and s. 131 of the Courts of Justice Act, R.S.O. 1990, c. 42 (“CJA”), primarily on the basis of what she describes as the respondent’s reprehensible, scandalous and outrageous conduct, not only for having wrongfully terminating her lease in reliance on an amending agreement that was never produced, but also for its delay in response to this application, failure to adhere to timetables set and agreed to, and its repeated requests for adjournments necessitating five appearances. She also points to the respondent’s conduct in having entered into a lease with a new tenant under suspicious circumstances in an apparent attempt to create rights in a third party to prevent the return of the leased premises to her, and in apparently allowing the new tenant to use her name, chattels and tools that the landlord refused to return to her after locking her out.

[4] The applicant relies upon the case of People’s Choice Inc. v. C & E Real Estate Holdings Inc., 2002 CarswellOnt 2623 at paras. 4-5, in which a landlord was ordered to pay substantial indemnity costs to a tenant wrongfully locked out of leased premises before the end of the lease term, as a means of the court registering its “strong disapproval of the Respondent’s conduct, both in terminating the lease and in answering the Applicant’s application.” See also Mars Canada Inc. v. Bemco Cash & Carry, 2018 ONCA 239 at paras. 42-43.

[5] The respondent asked for, and was afforded by me in my April 1, 2020 endorsement, an opportunity to make submissions as to costs. The respondent opposes the applicant’s request for substantial indemnity costs. The respondent argues that there should be no costs or, if costs are awarded, they should be on a partial indemnity scale and in an amount less than what the partial indemnity costs of the applicant are indicated to be in her costs outline.

[6] On the scale of costs, the respondent argues that substantial indemnity costs are reserved for rare and exceptional cases in which there is a clear finding of reprehensible conduct that warrants an expression of the court’s disapproval (this is consistent with the jurisprudence cited by the applicant, such as in Mars Canada and Davies v. Clarington (Municipality), 2009 ONCA 722). The respondent contends that this is not such a case. The respondent points to the various explanations that were provided and that were accepted by the court when the adjournments were requested and maintains that, while not proven, its belief in the validity of the lease amending agreement was the basis on which it acted as it did and justified its conduct.

[7] On the quantum of costs, the respondent argues that: a. The amounts have not been calculated in accordance with the tariff or grid and that partial indemnity costs should be 60% of the actual costs, not 70%; b. The time spent on certain steps, such as the first appearance, is excessive and the hourly rates charged for students and clerks are too high; c. The amounts claimed are not reasonable and were not within the contemplation of the respondent, whose costs outline indicates full indemnity costs of $17,258.50 all inclusive (and partial and substantial indemnity amounts of $11,045.24 and $15,704.19, respectively); and d. The amounts claimed are not proportionate to the amount in issue in this case, where the annual rent payable by the applicant under her lease of $15,600.00 per annum (plus utilities) is less than the costs sought by her on this application.

[8] The applicant’s further submissions by reply included reference to the case of Bain v. UBS Securities Canada Inc., 2018 ONCA 190 at para. 32 that reiterated that the manner of calculating partial and substantial indemnity costs is a matter of discretion that does not require the application of a specific formula and rejected the application of the costs grid as outdated. The applicant also noted that the respondent’s position does not account for the respondent’s failure to produce the amending agreement or to initially respond to the application at all (before the adjournments were requested) [1].

[9] The respondent sought to re-argue some of the points raised on the application, about the conduct of the applicant and advantages that she has received by virtue of my finding that there is no amending agreement (and thus allegedly no consideration for a reduction in her share of the utilities), in support of its position that there should be no costs awarded or that the applicant’s costs should be reduced. I rejected those arguments on the application and do not consider them to be relevant to the question of costs.

Ruling on Entitlement to and Scale of Costs

[10] Costs should follow the event. The applicant is entitled to an award of costs as the successful party on this application.

[11] Having considered the submissions of the parties and having regard to the Rule 57.01 factors that are to guide the exercise of my discretion in awarding costs under s. 131 of the CJA, I am awarding the applicant her partial indemnity costs of this application in the full amount claimed. In the People’s case relied upon by the applicant in support of her request for substantial indemnity costs, there was a specific finding of bad faith and oppressive conduct on the part of the landlord. My findings in this case do not go that far. I do not find that the landlord’s conduct rises to a level that warrants the court’s sanction, even though there remain questions in my mind about the genuineness of the landlord’s belief in a purported lease amending agreement that it was unable or unwilling to produce an original signed copy of.

[12] The principle of indemnity, which is a relevant consideration under Rule 57.01(0.a), does not translate into an award of full or even substantial indemnity costs in most cases. Those are the exceptions; the norm is partial indemnity costs. An award of the applicant’s claimed partial indemnity costs strikes the right balance in this case. While the landlord’s conduct has not been found to be so reprehensible so as to entitle her to be fully or even substantially indemnified, the applicant also should also not find herself to be too far out of pocket for having been put to the trouble of hiring a lawyer and bringing this application to enforce her legal rights. Awarding to the applicant her claimed partial indemnity costs leads to a fair and reasonable outcome in the circumstances of this case.

Ruling on Quantum of Costs

[13] The court has a broad discretion when determining the issue of costs. Rule 57.01 sets a non-exclusive list of factors that may be considered in the exercise of that discretion. I have considered those factors that are applicable in this case, including the result of the application, the principle of indemnity (taking into account the experience and rates of the lawyers involved), the amount at issue, the complexity and importance of the issues and the conduct of the parties.

[14] I have also considered the amount of costs that the unsuccessful party could reasonably have expected to pay in costs of this application. This is a relevant factor that has been expressly incorporated into Rule 57.01(1)(0.b).

[15] The partial indemnity costs indicated in the costs outline of the respondent is not the only objective benchmark against which the reasonable expectation of the respondent can be assessed. The fact that the applicant’s claimed partial indemnity costs are higher than the amounts indicated by the respondent in its costs outline does not mean that the higher amount was outside of the realm of what the respondent could reasonably and objectively have contemplated it might have to pay if it lost. It should be expected that an applicant in a case such as this would incur more costs and disbursements than the respondent who is in possession of the documents and the property.

[16] Nor do I consider it to be disproportionate to award partial indemnity costs reasonably incurred by the applicant in the amount indicated, even if it is more than the base rent she would pay in a year. She has reasonably incurred these costs in the pursuit of her legal right to remain in possession of the premises. She is not getting “free rent” but rather is being indemnified for some of what it cost her to enforce her rights which the landlord has infringed upon.

[17] It does not lie in the landlord’s mouth to be critical of the time spent or hourly rates of the applicant’s counsel. The hourly rates are commensurate with counsel’s experience and the staffing of the file appears reasonable. Given the difficulties that the applicant faced in getting this on for a hearing the time spent is not unreasonable. The respondent’s delays in responding to the applicant’s requests and to the application itself, and the many adjournment requests, are relevant in this regard.

[18] I accept the costs outline signed and certified by applicant’s counsel to be an accurate reflection of the time that was spent on this matter and accept as accurate the amounts indicated. I also adopt the reasoning in the Bain case and reject the arguments that the rates or percentages applied to the applicant’s actual costs are too high in comparison to the costs “grid”. I consider the rates and percentages applied to calculate the applicant’s partial indemnity costs to be reasonable in the circumstances.

Order and Implementation

[19] In the exercise of my discretion under s. 131 of the CJA and having regard to the factors in Rule 57.01, I am awarding the applicant her partial indemnity costs of this application fixed in the amount of $16,684.10 in fees, plus HST of $2,168.93, and all of her disbursements totalling $2,931.79 (inclusive of taxes). The respondent is ordered to pay to the applicant the aggregate amount of $21,784.82 in partial indemnity costs forthwith. I find this amount to be fair and reasonable in the circumstances. It should be paid now to defray the applicant’s expenses incurred already, especially since it has already been recognized that there may be a delay in the applicant’s re-entry of the leased premises because of the situation created by the landlord having leased those premises to another tenant.

[20] Pursuant to Rule 59.05 of the Rules of Civil Procedure, this endorsement is effective from the date it is made and is enforceable as a Judgment without any need for entry and filing. In accordance with Rule 1.04, no formal Judgment need be entered and filed unless an appeal or a motion for leave to appeal is brought to an appellate court. Any party to this endorsement may nonetheless submit a formal Judgment for original signing, entry and filing when the Court returns to regular operations.

Kimmel J. Date: May 8, 2020

Footnote:

[1] The applicant’s reply also referred to conduct of the respondent since my April 1, 2020 endorsement, of which there is no evidence before me, nor any authority that would justify my consideration of it. I have not considered or taken this subsequent conduct into account in my decision on costs.