ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 12-53280
DATE: 2012/05/18

BETWEEN:

2628 ST-JOSEPH BOULEVARD INC. Applicant – and – FONDATION OLANGI-WOSHO Respondent

Douglas G. Menzies, and Richard Nishimura, for the Applicant

Ronald Caza, for the Respondent Fondation Olangi-Wosho (Kandolo Faction)
Francois Kasenda Kabemba, for the Respondent Olangi-Wosho (Kabelu Faction)

HEARD: By Written Submissions

DECISION ON COSTS

Kane J.

ENTITLEMENT

[ 1 ] The applicant purchaser is entitled to costs of this application argued on January 20, 2012, on a partial indemnity basis against the respondent corporation.

[ 2 ] The respondent vendor corporation is not entitled to costs.

[ 3 ] Neither of the two factions is a party. This court in addition did not decide, as between the factions, who were the duly appointed representatives of the respondent corporation at the relevant time. This court limited its analysis as to representations by them which the purchaser was entitled to rely on.

[ 4 ] This costs decision does not determine the entitlement, if any, of costs as between the respondent corporation and the two competing factions identified as the Kabelu faction and the Kandolo faction. Each faction alleged they were the duly appointed representatives of the respondent corporation. Action is threatened between the factions. There is an outstanding appeal by the Kandolo faction of the decision on the merits.

RULE 57.01 CONSIDERATIONS

[ 5 ] The applicant was successful in obtaining an order that the respondent corporation agreed to extend the closing to February 1, 2012, and remained obligated to convey title to this property under the terms of the agreement of purchase and sale on that closing date, as extended by this court to February 17, 2012, as amended.

[ 6 ] The Kandolo faction on behalf of the vendor was unsuccessful in its position that the vendor was no longer contractually obligated under the agreement of purchase and sale to convey title to the purchaser. Its written offer proposing no sale is not relevant to this award of costs.

[ 7 ] The Kabelu faction on behalf of the vendor was successful in supporting the relief sought by the applicant.

[ 8 ] Both factions represented that they were the authorized representatives of the corporate vendor. These competing positions resulted in opposition in the name of the vendor to the sale to this purchaser. Accordingly, it is appropriate to award costs against the vendor and leave the issue as to any recoverability or indemnification for those costs for determination between the corporation and the two factions.

[ 9 ] The offer of settlement by the purchaser applicant, dated less than seven days prior to commencement of the hearing does not, pursuant to Rule 49.03 attract substantial indemnity costs.

[ 10 ] The hourly rates as identified by applicant’s counsel appear appropriate. I do not, however, on the evidence filed on the costs submissions, have the regular hourly rates for several of the individuals identified on the computer printout nor do I know when several of these individuals were called to the bar.

[ 11 ] This court should issue this decision as to costs which may also be placed before the Court of Appeal. This court is in the best position to evaluate all of the relevant costs considerations of this application as argued. This costs award should not be left for determination by the Court of Appeal.

[ 12 ] The immediate payment of this costs award from the proceeds of sale cannot be determined beyond the directions in paragraphs 89 and 90 of the reasons for decision. This court does not know what other amounts are claimed, by whom and the respective priorities between possible claimants without notice to argument of the same.

[ 13 ] It is appropriate that senior counsel utilize more junior counsel in order to perform the work in a cost effective manner. The 37 hours docketed by such senior counsel as compared to the 33 hours docketed by junior counsel does not demonstrate an inappropriate division of labour. The result of that division is that the total costs of legal fees claimed would be higher had Mr. Menzies performed all the work himself.

[ 14 ] I agree that s. 131 of the Courts of Justice Act , R.S.O. 1990, c. C.43, permits this court to award a level of costs higher than partial indemnity. There is no reason however to justify a higher level of costs. The opposition by the Kandolo faction was determined to be incorrect, factually and legally. That result does not warrant a higher level of costs.

[ 15 ] The level of complexity was moderate.

[ 16 ] The outcome of this decision was important to each party and involved a considerable amount of money.

[ 17 ] The issues argued by the Kandolo faction were not, under Rule 57.01, inappropriate arguments on these facts to put before the court. They were unsuccessful.

[ 18 ] The costs award sought, the hours expended and the hourly rates charged are not unreasonable.

[ 19 ] It would be an error to not award costs in favour of the purchaser in this case.

[ 20 ] The application was drafted and argued as to the enforceability of this contract of purchase and sale and whether the closing date thereunder had been extended by agreement. There was no allegation of fraud as between the named parties which might attract a higher level of costs.

QUANTUM OF COSTS AWARD

[ 21 ] The time dockets submitted stop at January 19, 2012. They total some $22,000 plus disbursements of some $865, including tax, making a total of $22,900.

[ 22 ] The purchaser in its submissions claims $36,516 including tax which represents full indemnity. There is no evidence supporting this difference beyond the estimated six hours court attendance to argue this matter on January 20, 2012, and the fact that there must have been some preparation time prior to argument of the matter.

[ 23 ] For the above reasons, I fix costs payable by the respondent vendor corporation to the applicant purchaser at $16,973 for fees and $1,890 for disbursements, each figure including tax, for a total of $18,863. This amount does not exceed what an unsuccessful party in this case should have contemplated.

Kane J.

Released: May 18, 2012

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: 2628 ST-JOSEPH BOULEVARD INC. Applicant FONDATION OLANGI-WOSHO Respondent DECISION ON COSTS Kane J.

Released: May 18, 2012