Court File and Parties

COURT FILE NO.: 270/06

DATE: 20071002

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Carmelo Celebre and Connie Celebre Plaintiffs/Respondents

-and-

1082909 Ontario Limited o/a Amerispec Inspection Services Defendant/Appellant.

HEARD: In writing, August, September 2007.

BEFORE: Lane A/R.S.J.

COUNSEL: Moses Muyal, for the Plaintiffs, Respondents Ronald G. Chapman, for the Defendant, Appellant

E N D O R S E M E N T A S T O C O S T S

[1] This appeal was dismissed on July 17, 2007. The parties have now made submissions as to costs in writing. The appeal was from the Small Claims Court which had awarded the plaintiffs $9,148.58 and costs of $175 for the negligence of the defendant in carrying out a pre-purchase home inspection.

[2] After the appeal was launched, the defendant offered on March 13, 2007, to pay the plaintiffs $500 for a dismissal of the appeal on consent and without costs. On May 14, 2007, the plaintiffs offered to accept $8,000 inclusive of costs and interest. The appeal would be dismissed and releases exchanged. Neither offer was accepted.

[3] The plaintiffs, having been entirely successful, claim partial indemnity costs up to May 14, 2007 and substantial indemnity costs thereafter, pursuant to Rule 49.10. Their Bill of Costs claims for 17.7 hours charged by a lawyer of 14 years experience at $225 if partial and $300 if substantial indemnity costs, for totals of $3,982.50 if partial and $5,310 if substantial.

[4] Counsel for the defendant/appellant submits that:

a) Such an award is so large as to discourage litigants from using the court system; it is unreasonable and beyond the expectations of reasonable parties that the costs should exceed half of the amount of the judgment; Small Claims Court cases should carry only very small costs: Roach v Adamson: [1982] O.J. No. 3346 (Taxing Officer)

b) Rule 49.10 does not apply to appeals: Niagara Structural Steel v W. D. Laflamme Ltd. (1987), 58 O.R. (2d) 773 (C.A.).

[5] The plaintiffs/respondents submit, and I agree, that I can consider the offers even if Rule 49.10 does not apply. They further submit that the appellants launched the appeal with full knowledge of the costs consequences if they failed.

[6] In my opinion, Roach, supra, is not applicable directly as the legislation has been substantially altered and the Tariff in issue there is no longer in force.

[7] There is, however, much common sense in the position of the appellant that small cases cannot carry big fees. Certainly this is true in the Small Claims Court itself where the costs are normally limited to 15% of the amount claimed, or in this case some $1,400. While there is no similar statutory limit on costs on appeal, it is still true that small cases cannot carry big fees and moderation should be the order of the day to prevent the cost getting out of reach of the litigants. At the same time, the costs award should not be so low that it deprives the successful party of the fruits of the judgment. For example, in the present case, if the plaintiffs had to pay their own counsel’s substantial indemnity costs amount, the result would be to leave them with some $3150 or just over one-third of their judgment. In my opinion that would not be a reasonable result. Similarly, for the defendant/appellant to pay the whole of the plaintiff’s substantial indemnity costs is not called for simply because their appeal was unsuccessful. An award of substantial indemnity costs must be based on more than the lack of success.

[8] In considering the offers, I note that the defendant’s offer of $500 was somewhat derisory; that of the plaintiff was a genuine effort to resolve the case. I decline to discount the costs awarded to the plaintiffs because the defendant made such an offer. The plaintiffs’ offer was reasonable and they should get some benefit for it. Nevertheless, I do not think that substantial indemnity costs are called for here.

[9] Weighing these factors and those in Rule 57, I conclude that a fair figure, within the reasonable expectations of the parties to a litigation at the appeal level involving about $10,000, and taking into account the offers, is $4,000 all-inclusive. The defendant will pay that sum to the plaintiffs within 30 days of the release of these reasons.

Lane A/R.S.J.

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