SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 11-27894
DATE: 2012-01-09

RE: Janet Hilson and 1771085 Ontario Limited, Plaintiffs

AND:

Waterloo Condominium Corporation No. 340 and Canlight Hall Management Inc., Defendants

BEFORE: R. B. Reid J.

COUNSEL:
H. Reininger, Counsel, for the Plaintiffs

G. Petker and J. Postnikoff, Counsel, for the Defendant Waterloo

D. Wilson, Counsel, for the Defendant Canlight Hall

HEARD: October 20 and 21, 2011

COSTS ENDORSEMENT

[ 1 ] The defendants were successful in their motion for summary judgment asking that the action be dismissed. I invited the parties to file costs submissions in the event that they were not able to agree.

[ 2 ] I was advised by counsel for the defendant, Canlight Hall that the costs issue has been resolved as regards that party.

[ 3 ] Written submissions have been filed by the defendant, Waterloo Condominium Corporation No. 340 (“WCC”) and by the plaintiffs.

[ 4 ] The parties have agreed that costs should be awarded to WCC. The plaintiff suggests costs on a partial indemnity basis and the defendant WCC seeks substantial indemnity costs.

[ 5 ] Rule 20.06 of the Rules of Civil Procedure allows costs to be assessed on a substantial indemnity basis if a party acted unreasonably by making or responding to the motion for summary judgment or if a party acted in bad faith for the purpose of delay in bringing the motion. Those provisions apply specifically to summary judgment motions and in particular are designed to avoid abuse of that procedure. In this case, the summary judgment motion was successful on the part of the defendant WCC and therefore in my view the mischief that Rule 20.06 was designed to prevent or correct has not occurred in this case.

[ 6 ] The general discretion of the court to award costs is found in section 131 of the Courts of Justice Act. Rule 57.01 sets out the factors to be considered by the court in exercising its discretion. The defendant WCC seeks substantial indemnity costs on the basis that, in effect, there was no merit to the plaintiffs’ action but rather that it was a strategy to attempt to extricate money from the defendants based presumably on the cost and inherent risk of litigation.

[ 7 ] The defendant WCC notes that the plaintiff chose not to join Paul Ivany as a defendant or include his evidence as a witness for the plaintiff. This was despite the fact that he was the primary source of the plaintiffs’ knowledge about the use of their funds that led them to believe that there was a good cause of action against the defendants.

[ 8 ] The defendant WCC supports its submission for substantial indemnity costs based on refusals made during the cross-examination of the plaintiff Hilson, and the failure to disclose documents until cross-examination. The defendants did not bring any motions to compel answers.

[ 9 ] Having considered these matters, I am not satisfied that the conduct of the plaintiffs in pursuing the action was so reprehensible, scandalous or outrageous as to attract what amounts to the punitive award of substantial indemnity costs. There were apparently no Rule 49 Offers to Settle which would provide the other basis on which a substantial indemnity award could be made.

[ 10 ] As a result, the defendant WCC will have its costs from the plaintiffs on a partial indemnity basis.

[ 11 ] The plaintiff takes issue with the hours spent by counsel for the defendant WCC, as compared with the hours shown by the co-defendant. However, as appears from the transcripts of the cross-examinations and the argument in court, the defendant WCC carried the bulk of the load in the defence of the claim. In addition, the plaintiffs did not provide a bill of costs so that a comparison could be made as between plaintiffs’ and defendant’s costs which would be relevant to the reasonable expectation of the parties.

[ 12 ] The claim was for an amount in excess of $900,000 which is obviously substantial and deserving of serious attention by way of a defence. Cross-examinations of the three parties were conducted on the affidavits filed. Facta and case law briefs were provided and the argument took place over two days. I do not consider the time claimed by the defendant WCC to be unreasonable. Nor do I consider, as suggested by the plaintiffs, that the hours docketed by a law clerk should be subsumed into the defendant counsel’s hours. I consider to the contrary that where appropriate services can be provided by a law clerk at a lower rate, that practice is to be encouraged and recognized as a legitimate item in the costs award.

[ 13 ] I agree with the plaintiffs’ submission that the services itemized as “other” by counsel for the defendant WCC to deal with realtors, solicitors and others concerning the status certificates and closing issues for condominium unit sales do not properly relate to costs of this action. Whether there will be claims made by third parties against the defendant WCC, and whether WCC chooses to bring proceedings against the plaintiffs in that regard are matters to be determined in the future. As a result, there will be a deduction of 5.91 hours from the defendant WCC’s costs claim, resulting in total hours of 91.13 by counsel and 13.58 by the law clerk.

[ 14 ] There is no issue taken with the partial indemnity rates claimed by the defendant WCC and I consider them to be reasonable.

[ 15 ] Finally, on the subject of disbursements, the plaintiffs have disputed disbursements claimed for photocopying, courier charges, legal research, agency fees and the cost of obtaining documentation requested by the plaintiffs on cross-examination. All those items appear to be reasonable expenses incurred by the defendant WCC in its defence of the claim and I allow them.

[ 16 ] I note that the defendant has claimed HST on its costs and disbursements, which is appropriate. However, there is also an amount of $87.73 in the disbursement claim relating to “taxes on disbursements”. In the absence of any other explanation, I consider them to be duplications of the HST claim, and therefore that amount will be deducted from the disbursements claimed prior to the addition of HST.

[ 17 ] As a result, the defendant WCC will have partial indemnity costs from the plaintiffs as follows:

(a) Legal fees: $22,730.86 plus HST

(b) Disbursements: $3,466.49 plus HST based on the corrected disbursement summary provided by the defendant WCC in its responding submission.

Reid J.

Date: January 9, 2012