ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 09-1137
DATE: 20120327

BETWEEN:

C.C. TATHAM & ASSOCIATES LTD. Applicant – and – 2057870 ONTARIO INC. Respondent

M.A. Cummings, for the Applicant

S.R. Fairley, for the Respondent

HEARD: May 31, June 2, 2011, September 29, November 28,2011, January 27, February 22, 2012

M.P. EBERHARD

[ 1 ] The Applicant, as Tenant, and the Respondent, as Landlord, had a trial over their lease in the spring 2011 sittings. Findings made against the Landlord seemed to bring about a result that was excessively harsh since I presumed maintenance work had been done but my judgment prevented the Landlord from claiming for the work by a fixed maintenance fee. So I gave the Landlord a chance to account for the work done in the past and clarified the need for record keeping after the release of my judgment to claim for maintenance thereafter.

[ 2 ] The Respondent is a numbered corporation of course, but when I speak of the Landlord I am referring to Graham O’Donnell who makes the decisions and does much of the work associated with this tenancy.

[ 3 ] Without doubt the Landlord is his own worst enemy. Litigation continued on a contested basis that required the Tenant to provide extensive analysis of the factual history of maintenance and how it matched up with the sparse records available. Why? Because the Landlord did not. Naturally, this led to the Tenant’s expenditure because the Landlord had not.

[ 4 ] Now the Tenant claims costs of $185,421.51 after trial, not counting a preliminary phase that was addressed by a costs order from Wood J., being $141,580.56 claimed in Costs submissions delivered in July 2011 and after subsequent motions, being $43,840.95 claimed in Costs submissions delivered in March 2012.

[ 5 ] I will address the points raised in the Respondent’s Costs submission in the sequence raised:

[ 6 ] [re para 2] As a preliminary matter, the Tenant also claimed Pre judgment interest. A calculation was provided by letter received in the judicial chambers March 19, 2012. I waited for response from counsel for the Landlord. Included in his counsel’s Costs submissions is the objection to interest being dealt with by that correspondence. Of course, correspondence to a judge, unless invited, is not a procedure for resolution of a disputed issue. I direct counsel to correspond to discuss their dispute as to the calculation and provide a consent figure by April 6, 2012. Failing consent, fix a motion and spend some more money.

[ 7 ] [re para 3] The Landlord submits that the costs claim is excessive having regard to the amounts in dispute and greater than an unsuccessful party could have expected to pay. On an early motion Justice Wood granted $5,000 on $27,500 claimed demonstrating both an overreaching and a total cost incurred of over $200,000 to gain a judgment for less than that.

[ 8 ] A common sense response has been variously stated ( Smith Estate v Rotstein 2010 ONSC 4487 , [2010 O.J. No. 3266), that in litigation what is reasonable has to be assessed by taking into account what the opponent is doing. The “it takes two to tango” principle is that you cannot accuse the other of being excessive if excess is necessary because of your own action. Or inaction.

[ 9 ] In this case, the Tenant was forced to undertake an accounting exercise because the Landlord did not. Proving a negative can involve closing off a lot of possibilities. The Tenant’s materials were truly enormous, but who can say they were not necessary? An opponent providing a reasonable accounting could. This Landlord cannot.

[ 10 ] [re para 4] The Landlord submits that substantial indemnity is limited to two circumstances: the operation of rule 49.10 and where a party has engaged in behaviour worthy of sanction. ( Davies v The Corporation of the Municipality of Clarington et al ONCA 722 OCA). I agree that a party does not get substantial indemnity costs just for winning.

[ 11 ] The Tenant asserts that the result beat all offers. I agree. The Landlord asserts that the structure of the offers required adjustment to the lease not ordered by the court and so cannot be compared based only on monetary criteria. I agree. It is a reality, when we are discussing costs, that the offers provided an alternative to litigation which would have save both parties these enormous costs. The Landlord chose to take his chances.

[ 12 ] As to behaviour deserving sanction, the Tenant provides a list of conduct that contributed to the escalation of the dispute. Certainly it has become personal and certainly it is mutual. This court often sees dispute that has become vendetta where neither side thinks clearly about resolution on a cost/benefit analysis. In the present case the Tenant’s anger caused him to become organized in his Application before the court. The Landlord’s anger seems to have caused him to retreat into non-cooperation. His response to the conflict was in the nature of “bring it on” and the Tenant brought it.

[ 13 ] The behaviour of the Tenant resulted in his loss of the litigation. It wasn’t litigation misbehaviour so much as failure to conduct his business in a manner that could succeed in the litigation. In the proceedings in March 2012 he was given opportunity to help himself but he foolishly stuck to accounting methods I had already ruled he could not use.

[ 14 ] I find that the non-comparability of the offers and the nature of the misbehaviour fall short of generating substantial indemnity costs but I have the discretion to fix costs on an enhanced partial indemnity basis.

[ 15 ] [re para 5] This example of the counting every second spent is not particularly persuasive as such amounts are smoothed over where costs are fixed rather than assessed. It is an interesting assertion in a case where the Landlord claimed that he should be compensated for attending to maintenance matters mentioned to him in circumstances of similar informality. Absence of the discipline of time keeping is part of the substance of the problem in this file.

[ 16 ] [re para 6] This repetition of the excess argument, the suggestion of duplication and proposal of a reasonable costs award for the Tenant lacks support by any calculation but does raise again the principle of what an unsuccessful litigant would expect to incur. I have addressed that already. It does not come easily from the opponent whose response, or lack of response, generated the need. However, it is a principle I keep in mind.

[ 17 ] [re para 7] I have already addressed the mutuality of the animosity. That drove a litigation approach that I tend to refer to as “hardball”. Counsel, for whatever reason, did not seem able to accommodate one another. I found the lack of out of court discussion of resolution shocking and unusual in the Simcoe County milieu. But “hardball” is not prohibited. Much litigation is, sadly, conducted that way.

[ 18 ] What is interesting in the Landlord’s paragraphs is the absence of specific reliance on the factors set out in Rule 57. The Tenant’s precision is once again apparent.

[ 19 ] The Tenant played hardball and the Landlord never really stepped up to the plate.

[ 20 ] I fix costs to the Tenant, all in, at $135,000.

EBERHARD J.

Released: March 27, 2011