Key Designs Limited v. Zovko, 2010 ONCA 487

CITATION: Key Designs Limited v. Zovko, 2010 ONCA 487

DATE: 2010-07-07

DOCKET: C50787

COURT OF APPEAL FOR ONTARIO

MacPherson, Cronk and Karakatsanis JJ.A.

BETWEEN

Key Designs Limited

Plaintiff / Appellant

and

Ciril Zovko, Importanne Marketing Inc., Importanne Investments Doo, Importanne Galleria

Defendants / Respondents

COUNSEL:

Richard P. Quance, for the appellant

Kenneth W. Movat, for the respondents

HEARD: July 6, 2010

On appeal from the judgment of Justice Colin L. Campbell of the Superior Court of Justice, dated July 9, 2009.

ENDORSEMENT

[1] Following a trial in 2002, Campbell J. determined that the appellant was entitled to be reimbursed for architectural services it provided to the respondents relating to development projects in Croatia on a quantum meruit basis. The trial judge rejected all other bases of liability against the respondents. This judgment was upheld by this court in 2004.

[2] In 2009, the damages portion of the trial took place. The trial judge awarded the appellant damages of $100,000 plus prejudgment interest at 5 percent per annum from June 20, 1994, being a total sum of $175,260.30. The trial judge ordered the respondents to pay costs of $40,000, divided equally between the liability and damages trials.

[3] The appellant appeals from the $100,000 quantum meruit damages award and from the trial judge’s costs award at the damages trial. The respondents cross-appeal from the prejudgment interest and costs components of the damages trial.

The Appeal

[4] The appellant contends that the trial judge erred by choosing an honorarium method, rather than a percentage of construction costs method, for quantifying damages on a quantum meruit basis.

[5] We do not accept this submission. The trial judge found that there was no reliable evidence regarding the work done and expenses incurred. The trial judge was entitled to reject the percentage construction cost approach. We agree with the trial judge’s observation:

The court is left to exercise discretion to provide what might be regarded as a fair amount in all the circumstances.

[6] Based on our review of the record, we can see no basis for interfering with the trial judge’s method for calculating, or quantification of, the quantum meruit damages award.

[7] The trial judge’s award of $20,000 for the costs of the damages trial was discretionary. We see no error in principle in the trial judge’s approach to costs. The appellant sought $73,000 for the costs of this trial. The costs award was proportionate in the circumstances and not plainly wrong.

The Cross-appeal

[8] The respondents contend that the trial judge erred by awarding the appellant prejudgment interest from 1994 in light of the appellant’s delay in moving forward with its action. The respondents also challenge the trial judge’s costs award. They say that they were substantially successful in the damages trial and that they should receive costs of approximately $190,000.

[9] We disagree. The trial judge carefully explained the duration and percentage of his prejudgment interest award and explicitly linked it to his quantum meruit award. We can see no basis for interfering with his exercise of discretion in this regard. As for costs, the important point is that the appellant was successful in the action, albeit modestly so. Accordingly, a modest costs award of $40,000, far below the $288,000 sought by the appellant, seems appropriate to us.

Disposition

[10] The appeal and cross-appeal are dismissed. No costs of the appeal or cross-appeal.

[11] It is ordered that the $35,000 plus accrued interest paid into court pursuant to the order of Campbell J. dated April 17, 2009 be released to the appellant Key Designs Limited.

“J. C. MacPherson J.A.”

“E. A. Cronk J.A.”

“Karakatsanis J.A.”