Court File and Parties

CITATION: Ontario Football Conference v. Brampton Minor Football Association, 2023 ONSC 4196

COURT FILE NO.: DC-18-50

DATE: 2023 07 17

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Ontario Football Conference, Plaintiff

AND:

Brampton Minor Football Association, Defendant

AND:

Ian Smith, Third Party

BEFORE: Conlan J.

COUNSEL: David J. McGhee, for the Plaintiff

Sean Carter, for the Defendant

Steven K. Stauffer, for the Third Party

ENDORSEMENT on costs

I. Introduction

[1] On February 14, 2020, this Court, sitting as a single judge of the Divisional Court, heard an appeal and cross-appeals from a judgment of the Small Claims Court.

[2] In an Endorsement dated February 20, 2020, Ontario Football Conference v. Brampton Minor Football Association, 2020 ONSC 1061, this Court allowed the main appeal and ordered a new trial.

[3] This Court accepted the arguments advanced by the main appellant, the Brampton Minor Football Association (“BMFA”), that there had been a denial of procedural fairness in the court below and, further, that the reasons of the trial judge were insufficient. This Court also accepted the arguments of the two cross-appellants, the Ontario Football Conference (“OFC”) and Mr. Ian Smith (“Smith”), that they had, likewise, been denied procedural fairness.

[4] Rather than remit the matter back to the Small Claims Court for another trial, on consent of all parties, the new trial was held before this Court. No new evidence was presented. The new trial was held strictly on the basis of the evidence adduced in the Small Claims Court, supplemented by brief submissions by all counsel.

[5] The new trial was heard in this Court on April 11, 2023. In Reasons for Judgment dated April 19, 2023, Ontario Football Conference v. Brampton Minor Football Association, 2023 ONSC 2373, this Court decided as follows: (i) the main action (that commenced by the OFC) was allowed, (ii) judgment was entered against the BMFA and in favour of the OFC in the full amount claimed, $25,000.00 plus interest, and (iii) the third party claim (that commenced by the BMFA against Smith) was dismissed.

[6] Unable to agree on costs, the parties have filed written submissions.

II. The Positions of the Parties on Costs

[7] The OFC, successful in the main action, takes the following position on costs. It submits that it should receive, at a minimum, “costs of the [Small Claims Court] action in the sum of $3750 (15% of $25,000) plus reasonable disbursements” – paragraph 2 of the OFC’s written costs submissions. The OFC submits that this Court should award costs of the Small Claims Court action in an amount that is higher than what would normally be the cap of such costs (15% of the amount claimed and recovered), on account of what is alleged to be unreasonable behaviour on the part of the BMFA and/or its counsel. The disbursements being claimed by the OFC for the Small Claims Court action total $3,869.08 – paragraph 2 of the OFC’s written costs submissions. Finally, added to whatever this Court awards to the OFC for costs of the Small Claims Court action would be something for the costs of the Divisional Court proceeding and something for the costs of the new trial in this Court. The OFC has filed a Costs Outline for the costs in the Divisional Court and in this Court; it shows a total of $61,875.87 on a full recovery basis and $42,383.37 on a partial indemnity basis.

[8] Among other things, the OFC asks that this Court consider its offer to settle the Small Claims Court action, served five days before the commencement of the trial in the Small Claims Court. That offer was for the all-inclusive sum of $20,000.00 to be paid by the BMFA to the OFC.

[9] Smith, successful in the third party claim, has filed a Costs Outline showing a total of $25,136.00 on a substantial indemnity basis and $22,423.46 on a partial indemnity scale. Those figures are with regard to everything – the Small Claims Court action, the Divisional Court proceeding, and the new trial in this Court. That is clear from a reading of page 1 of Smith’s written costs submissions, wherein it is stated that “[c]ounsel [for Smith] has reduced his fees due to his client’s impecuniosity, however, the reduced fees through the Small Claims Court trial (5 days of evidence), plus written submissions, and the first appeal argument and the trial argument, still come to a reduced figure of $25,136.00”.

[10] Smith points this Court to clause 6.01, subclause (ii), of the BMFA’s By-Laws. In essence, that provision states that no director or officer of the BMFA shall be indemnified by the BMFA in respect of court costs of a proceeding involving that person’s alleged breach of his/her duties unless that person was completely successful in that court action (as Smith was).

[11] I pause here to note that Article 6 of the BMFA’s By-Laws is relevant to, but not determinative of, the issue of the costs being sought by Smith as against the BMFA. The opening words of clause 6.01 make it clear that Smith’s indemnification by the BMFA is permissive – he may be indemnified, according to the express wording of the said provision.

[12] The BMFA, unsuccessful in the main action and unsuccessful in the third party claim, submits that “it is the only just conclusion that all parties carry their own costs in all respects” – the final paragraph on page 2 of the BMFA’s written costs submissions. Among other things, the BMFA asks that this Court consider its success in the Divisional Court proceeding, for which it was not awarded any costs, and its status as a registered Canadian charity and non-profit organization. The BMFA has filed its own Costs Outline showing the following figures: $38,557.80 (full indemnity), $34,784.58 (substantial indemnity), and $23,485.16 (partial indemnity). That Costs Outline appears to relate to only the new trial in this Court.

III. Decision on Costs

[13] I do not accept the BMFA’s submission that each party should bear its own costs in all respects. That, simply put, would not be in accordance with the well-established principle that successful parties (the OFC in the main action and Smith in the third party claim) are presumed to be entitled to some costs.

[14] There is no reason to depart from that presumption in this case.

[15] I do accept, however, the BMFA’s submissions that this Court should consider (i) its success in the Divisional Court proceeding and (ii) the BMFA’s status as a non-profit organization.

[16] On the former, the BMFA was completely successful in its appeal of the judgment rendered by the Small Claims Court. Although it is correct that the cross-appellants, the OFC and Smith, also raised valid arguments on appeal that were accepted by this Court, it is also true that the BMFA’s appeal could, in fact should, have been simply consented to by the OFC and Smith. With respect, it should have been obvious to all concerned that the BMFA’s appeal would succeed on the sole basis that the judgment rendered after the trial in the Small Claims Court was infected by procedural unfairness – it was rendered without considering any of the lengthy written submissions that had been filed on behalf of the BMFA.

[17] On the latter, Rule 57.01(1), clause (i), of the Rules of Civil Procedure, grants a court the authority to consider any other relevant matter not specifically enumerated in its consideration of what would be a fair, just, reasonable, and proportionate quantum of costs to award in any particular case. This case is not a matter of public interest litigation, and the BMFA is not a non-party, but I think it is common sense to conclude that the BMFA, as a non-profit organization dedicated to the betterment of minor football in the Brampton area, does not likely have the ability to pay sizeable costs awards in favour of the OFC and/or Smith.

[18] Turning first to the costs being claimed by the OFC, I agree with counsel for the OFC that this Court should award something on account of the Small Claims Court action that exceeds the normal cap of 15% of the amount claimed and recovered. There is one major reason for that. The BMFA should have accepted the offer to settle made by the OFC prior to the start of the trial in the Small Claims Court. The BMFA should have simply consented to a judgment in favour of the OFC in the reduced amount of $20,000.00, as offered, and then pursued its own claim against Smith. It was unreasonable for the BMFA to have not done so.

[19] In light of that unreasonableness on the part of the BMFA, for the Small Claims Court action, this Court orders that the BMFA shall pay costs to the OFC in the total amount of $11,369.08.

[20] I arrive at the said figure by doubling the normal 15% cap ($3750.00 multiplied by 2 equals $7500.00) and then adding the full amount of the disbursements claimed ($3869.08).

[21] For everything else (the Divisional Court proceeding and the new trial in this Court), this Court orders that the BMFA shall pay costs to the OFC in the total amount of $13,630.92.

[22] Thus, the total costs award against the BMFA and in favour of the OFC is $25,000.00 ($11,369.08 plus $13,630.92).

[23] This Court recognizes that the said figure of $13,630.92 is far below the partial indemnity costs being claimed by the OFC ($42,383.37). The reduction is justified, however, on two bases: (i) the $42,383.37 includes costs for the Divisional Court proceeding, and in my opinion the OFC should not receive any costs for that proceeding because it ought to have consented to the BMFA’s appeal of the Small Claims Court judgment, and (ii) to award in favour of the OFC costs for all steps in the proceeding (including the Small Claims Court action) that exceed the total principal amount of the actual judgment in favour of the OFC ($25,000.00) would, in my respectful view, be grossly disproportionate.

[24] Turning next to the costs being claimed by Smith, this Court orders that the BMFA shall pay costs to Smith in the total amount of $15,081.60.

[25] That figure represents 60% of the actual costs billed to Smith by his counsel ($25,136.00). That, in my opinion, is a reasonable partial indemnity quantum of costs to award to the successful Smith.

[26] Because of the serious allegations made by the BMFA against Smith, which serious allegations were not accepted by this Court, I may have been persuaded to award to Smith a partial indemnity quantum of costs that exceeds 60% of the actual costs incurred by Smith, or even substantial indemnity costs in favour of Smith, however, I have taken into account that Smith, like the OFC, ought to have consented to the BMFA’s appeal of the Small Claims Court judgment, and it should be noted that the figure of $25,136.00 includes costs related to the Divisional Court proceeding.

[27] In summary, I think that these costs awards are fair, just, reasonable, and proportionate having taken into account all of the circumstances, including but not limited to (i) the success of the OFC and Smith, (ii) the very reasonable offer to settle extended by the OFC prior to the start of the trial in the Small Claims Court, (iii) the success of the BMFA in its appeal at the Divisional Court (which proceeding the BMFA initiated), (iv) the BMFA’s legal status and its ability to pay, and (v) the amount of the judgment itself.

[28] I think, further, that these costs awards adequately reflect the modern principles of costs in that they (i) at least partially indemnify the successful litigants (the OFC and Smith), and (ii) they encourage settlement, and (iii) they take into account any bad faith (none here, as I see it) or clearly unreasonable conduct (some on the part of the BMFA, in terms of forcing the main action to trial rather than focussing exclusively on the only legitimate issue at play – the potential of the third party claim as against Smith).

[29] Finally, the written submissions on costs filed on behalf of the OFC contain a calculation of the prejudgment interest owing to the OFC, which shall form part of the formal Judgment issued against the BMFA. I have reviewed those calculations. They are hereby approved by this Court.

Conlan J.

Date: July 17, 2023