Court File and Parties

COURT FILE NO.: CV-17-4968-00 DATE: 2020 06 01

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Ketan Jansari and Kalpana Jansari v. Manish Jansari and Neha Jansari

BEFORE: Lemay J

COUNSEL: Surya Sasan, for the Applicants Matthew Urback, for the Respondents

COSTS ENDORSEMENT

[1] The parties to this action are all on title to a property municipally known as 24 Ural Circle in Brampton. The Applicants brought an application for a declaration that the Respondents held their share of the property in trust for the Applicants. I dismissed this application by way of written reasons dated April 27th, 2020 (see 2020 ONSC 2473).

[2] I am now required to fix the costs for this Application.

Positions of the Parties

[3] The Respondents seek their costs in an amount between the partial and substantial indemnity amounts. The Respondents argue that they were successful on the Application, they made an offer to settle that should result in an increase in the costs award and that the conduct of the Applicants justify a higher award of costs. The Respondents seek costs in the sum of $27,000.00 inclusive of HST and disbursements, which is between the partial and substantial indemnity amounts.

[4] The Applicants acknowledge that the Respondents are entitled to costs. However, the Applicants argue that these costs should be limited to $10,000.00 inclusive of HST and disbursements on the basis that the offer to settle does not justify anything other than an award of partial indemnity costs, the costs sought by the Respondents’ counsel are excessive, and the partial indemnity rate charged by the Respondents’ counsel is excessive.

Analysis and Decision

[5] The principles associated with the fixing of costs are set out in Rule 57.01. The parties are agreed that the overarching principle of indemnity to the successful party applies in this case. Therefore, the Respondents are entitled to costs. The question is how much? In answering that question, I will address the most relevant of the factors set out in Rule 57.01.

[6] I start with the offer to settle. It was made at 3:38 p.m. on the day before the motion. As a result, the provisions of Rule 49 are clearly not triggered. In essence, the offer was for the Applicants to buy out the Respondents’ interest in the property for 40% of its net value, with the value to be determined by appraisals. The Respondents achieved a result on the Application that was arguably better than their offer. This offer is a factor that should be considered in assessing the costs.

[7] However, I agree with the Applicants’ counsel that this is not a case where the conduct of the Applicant rises to the level that would attract substantial indemnity costs. Outside of the provisions of Rule 49, substantial indemnity costs are something that should be awarded only in rare and exceptional cases to mark the disapproval of the conduct of the party required to pay substantial indemnity costs (see Hunt v. T.D. Securities Inc. (2003), 66 O.R. (3d) 481). The Applicants have not engaged in any conduct that would meet this test.

[8] That being said, one of the criteria under Rule 57 is conduct of a party that tended to shorten or lengthen the proceedings. In this case, the Applicants initially pled that they needed help buying the property because of their poor credit rating. Then, the Applicants amended their pleadings to claim that it was the Respondents that needed help with their credit rating. In addition, the Applicants took a very narrow view of the facts by alleging that they paid all of the carrying costs on the property when they knew that there were rental payments that covered many of these expenses. In addition, the Applicants provided a significant amount of financial information without much in the way of explanation of what the precise expenses were. As a result, the conduct of the Applicants is a factor that justifies a higher award of costs.

[9] The other factors under Rule 57.01 that are relevant are the complexity of the matter and the importance of the issues in dispute. I will address each factor in turn.

[10] In terms of the complexity of the matter, this was a case involving an oral understanding between the parties that had been reached more than fifteen years prior to the hearing of the Application. The documentary record was thin, which required a lot of investigation and consideration on the part of counsel. As a result, this is a factor that supports a higher award of costs.

[11] In terms of the importance of the issues in dispute, it was difficult to precisely quantify the amount in dispute between the parties, but it appears to have been in the range of hundreds of thousands of dollars as an order of magnitude. In addition, the issues relate to the ownership of the residence where the Applicants live. As a result, I accept that these issues were important to both sides, and that this is also a factor that supports a higher award of costs.

[12] Then, there is the issue of the rate Respondents’ counsel was claiming as a partial indemnity rate. He is a 2011 call to the bar, and was charging an actual rate of $300.00. This is an entirely reasonable actual rate for counsel’s level of experience. Counsel claims a partial indemnity rate of $185.00. Counsel for the Applicants argues that this rate should be reduced to $150.00. I see no reason that partial indemnity rates would be 50% of the actual rate and counsel for the Applicants cites no case to support his position. Indeed, in a recent case the court has held that partial indemnity rates can be 60% of the actual rate (see Donleavy v. Ultramar Ltd. 2019 ONSC 2985 at para. 51). I accept the Respondents’ counsel’s rate of $185.00 as being a reasonable partial indemnity rate in the circumstances of this case.

[13] Finally, the Applicants have acknowledged that the disbursements of $3,050.58 are proper disbursements. The Applicants’ position that the remainder of the costs would have been less than $7,000.00 for a motion with this level of complexity, as well as cross-examinations, a half-day argument and post-hearing submissions is not reasonable.

[14] I note that the Applicants’ counsel has not provided his bill of costs for this matter so I cannot assess the amount of time he spent on this application. Given the description of the action in the previous paragraph, I am of the view that legal costs of between $15,000.00 and $20,000.00 inclusive of HST for this action would have been in the reasonable contemplation of either party if they had lost this Application.

[15] Considering all of the foregoing, I am of the view that costs in this matter should be fixed in the sum of $22,000.00 inclusive of HST and disbursements. The costs are payable by the Applicants to the Respondents within thirty (30) days of the release of these reasons, and the Applicants are jointly and severally liable for those costs.

LEMAY J DATE: June 1, 2020