Court File and Parties

Court File No.: 07-1404
Date: 20120411
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Robert Faris, Plaintiff

AND:
Chris Eftimovski, CLE 72330 Limited, Wally Magee, Horst Rosner, Carriage South Simcoe Real Estate Services Ltd., Exit Realty (or Exit Realty Advanced), RE-Max Rouge River Realty Ltd., Anthony John Laskowsky (first named in these proceedings as Anthony Laskowsky, Jr.) in his own capacity and as Litigation Administrator representing the interest of the Estate of Anthony Edward Laskowsky (first named in these proceedings as Anthony Laskowsky, and now deceased), Defendants

BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY

COUNSEL:
D. Yiokaris, Counsel for the Plaintiff’s Lawyer

K.A. Charlebois, Counsel for the Defendant Re/Max Rouge River Realty Ltd.

T. Robinson for the Defendant, The Estate of Wally Magee

The Defendant, Horst Rosner, Self-Represented

HEARD: By written submissions

COSTS ENDORSEMENT

[ 1 ] This endorsement is the ruling on costs related to the status hearing heard by this court on February 2, 2012. This court dismissed the action with written reasons released on February 15, 2012.

[ 2 ] Written submissions were received from only four of the defendants. The defendant Re/Max Rouge River Realty Ltd. seeks costs of the action in the amount of $398.25, and costs of the status hearing in the amount of $29,370.62. The Estate of Wally Magee seeks costs of the action and the status hearing combined in the amount of $12,250. Eftimovski and CLE 72330 Limited together seek costs of the action only in the amount of $1,233. These amounts are advanced on a partial indemnity basis.

[ 3 ] The plaintiff contends that the costs claimed by Re/Max and Magee are not proportionate to the time warranted by the preceding, nor within the reasonable expectation of the losing party. He further contends that the hourly rates used in the bill of costs prepared on behalf of these parties exceed the rates recommended by the costs grid, are inconsistent with the caselaw, and are contrary to the Rules of Civil Procedure . It is the plaintiff's submission that these defendants are entitled to an award of costs, in turn, in the amounts of $4,000, $3,000, and $1,000.

[ 4 ] Having regard to the factors outlined in Rule 57.07(1), it is first noted that the plaintiff was seeking to recover $1.5 million in damages for alleged breaches of contractual and fiduciary duties, and the defendants were successful in obtaining a dismissal of the action.

[ 5 ] In terms of complexity, the result sought by the defendants is not one that should ever be made lightly and without abundant evidence of delay sufficient to meet the required test. While the evidentiary burden was on the plaintiff to explain the delay, the onus still rested on the defendants to satisfy the court that the action should not be permitted to continue. The plaintiff attempted to meet his evidentiary burden through the introduction of affidavit material that focused primarily on other actions and that unsuccessfully attempted to draw links between those proceedings and the delay in this file. Transcripts were relied on by the plaintiff from those related proceedings. A good portion of the oral argument and the responding material necessarily had to relate to this evidence, which this court ultimately found to be of no relevance to the central issue to be determined at the status hearing. Ultimately, it was the position taken by the plaintiff with respect to this extraneous evidence that truly complicated the hearing and unnecessarily drove up the costs incurred by the defendants.

[ 6 ] The hearing was of vital importance to both sides due to the potential result. The affidavits and facta filed demonstrate that both the plaintiff and the primary defendants, Re/Max and Magee, put significant efforts into thoroughly preparing for this hearing, which was also reflected in the oral argument of counsel at the hearing.

[ 7 ] In addition, the plaintiff failed to take any responsibility at all for the delay and attempted to cast that responsibility on one or more of the defendants. This was a failure to admit that which should have been admitted, namely that the deaths of two defendants created prejudice and that there was a lack of attention to moving this action forward.

[ 8 ] Turning to Rule 57.01(1)(0.a), the hourly rates set out in Bill of Costs of Re/Max (revised) and Magee are within the Practice Direction established by the Costs Subcommittee of the Civil Rules Committee. It is noted in that Practice Direction that these are, normally, to be maximum rates when fixing partial indemnity costs. However, beyond that, the Rules require only that partial indemnity costs be awarded in accordance with Part I of Tariff A. It mandates that counsel fees be determined in accordance with s. 131 of the Courts of Justice Act and the factors set out in Rule 57.01(1). Wide discretion in fixing costs therefore remains with the court, bearing in mind the principles enunciated in the leading Ontario cases such as Anderson v. St. Jude Medical Inc . (2006), 2006 85158 (ON SCDC) , 264 D.L.R. (4th) 557 (Ont. Div. Ct.), Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA) , 71 O.R. (3d) 291 (C.A.), and Clarington (Municipality) v. Blue Circle Canada Inc ., 2009 ONCA 722 , 100 O.R. (3d) 66.

[ 9 ] While the plaintiff relies on Boyd v. Taj Mahal Stables Inc., 2009 32256 (ON SC) , for the proposition that partial indemnity costs should be 55% of actual solicitor and client costs, this amount has no antecedent in the case law and is a departure from the more commonly seen fraction of two-thirds of the solicitor and client bill. The definition of substantial indemnity in rule 1.03 of the Rules states that it is 1.5 times partial indemnity costs. Therefore, partial indemnity is presumably two-thirds of the solicitor-client bill. The partial indemnity rates used in Magee’s Bill of Costs fall slightly below the two-thirds ratio and are well below the maximums suggested in the Practice Direction. The Bill of Costs of Re/Max does not set out the lawyers’ actual rates, but the partial indemnity rates used for Ms. Charlebois and Ms. Marks again fall below the maximum suggested in the Practice Direction. The exception is the summer student Ms. Mosstaghimi, for whom the Practice Direction outlines a maximum of $60/hr - if students, whether articling or summer students, are to be treated alike. Although the plaintiff objects to Ms. Charlebois’ rate as being the maximum set out in the Practice Direction, she is a 2001 call and so, as a ten-year practicing lawyer, is entitled to claim up to $300/hr on a partial indemnity scale. Also, there is no indication of Ms. Ackman’s year of call. Adjusting the rate used for Ms. Mosstaghimi to $50/hr and eliminating Ms. Ackman’s time due to the above omission, Re/Max’s Bill of Costs is reduced by approximately $1,160. Beyond that, a review of the two Bills of Costs does not suggest an obviously inflated amount of time being spent on the legal work involved or an unreasonable figure for disbursements incurred.

[ 10 ] With respect to the partial indemnity rate of $240 requested by Ms. Patterson, counsel for Eftimovski and CLE, that rate too is well within the Practice Direction for a 1987 call.

[ 11 ] Turning to Rule 57.01(0.b), the court is required to consider the amount of costs that the plaintiff could reasonably have expected to pay in relation to this status hearing. Counsel for Magee submits that the failure of the unsuccessful party to file a bill of costs may be taken into account when considering the reasonable expectations of the unsuccessful party and that it is a permissible inference that that party’s costs are similar to those sought by the successful party: Smith Estate v. Rostein , 2011 ONCA 491 , 106 O.R. (3d) 161. There is no indication of the plaintiff’s expectations except perhaps for the position taken with respect to the amounts to be awarded the plaintiff. However, this falls short of giving the court a true indication of the costs that the plaintiff anticipated he would be exposed to if unsuccessful. Simply discounting this factor entirely due to this shortcoming would be an error, in my view, because the court is still required to use its experience and common sense in order to reach a just result. In this instance that requires it to consider generally what an unsuccessful party on a status hearing of this nature would expect to pay in costs.

[ 12 ] At this point in the analysis it is essential, as directed by the Court of Appeal in Boucher , to step back and consider the result produced and assess whether, in all the circumstances, the result is fair and reasonable. The first point to be made is that a hearing such as this one is necessitated entirely by the dilatory conduct of the plaintiff who initiated this lawsuit and put the defendants to the cost of retaining counsel. These defendants will still be out-of-pocket given that costs are being sought on a partial indemnity basis only. Second, this was not a case where the plaintiff presented a highly arguable case, notwithstanding the efforts of able counsel; the plaintiff was in fact unable to provide any reasonable explanation for his delay.

[ 13 ] That being said, this hearing was essentially a long motion that took a half day at most to argue, did not require cross-examinations and required only one prior attendance. This attendance did result in additional costs to the defendants, who were ready to proceed but who received an affidavit from the plaintiff on the very day of the hearing. As stated earlier, while there is nothing in the Bills of Costs that suggests an obviously inflated amount of time for any step, the overall sum being sought by Re\Max is considerable for a hearing of this nature, even having regard to the factors outlined in Rule 57.01. The sum of $29,000 to provide opposition to the action proceeding is slightly outside what seems reasonable to this court.

[ 14 ] Taking all of the above into account, this court orders that the plaintiff shall pay costs to the following parties in the amounts set out below, inclusive of HST, within 30 days:

(i) to Re/Max, the sum of $24,500;

(ii) to the Estate of Wally Magee, the sum of $12,000;

(iii) to Eftimovski and CLE 72330 Limited, the sum of $1,200.

HEALEY J.

Date: April 11, 2012