ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 10-CV-402545
DATE: 2012-06-22
BETWEEN:
CBS Outdoor Canada, a division of CBS Canada Holdings Co.
Plaintiff
- and -
Clarity Outdoor Media Inc., Stephen Amo and Tribar Industries Inc.
Defendants
COUNSEL:
• Robert C. Dunford for the Plaintiff
• Allan Herman for the Defendants
HEARING DATE: In writing.
PERELL, J.
REASONS FOR DECISION - COSTS
A. INTRODUCTION
[ 1 ] The Plaintiff CBS Canada Holdings Co. (“CBS Outdoor”) sues the Defendants Clarity Outdoor Media Inc. (“Clarity”), Stephen Amo, and Tribar Industries (“Tribar”). Clarity has a counterclaim and a claim to a set-off.
[ 2 ] Pursuant to Rule 20 of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194, CBS Outdoor moved for summary judgment against Clarity for $545,581.05 owed under advertising contracts, plus $114,840.04 for interest. Clarity resisted the motion for summary judgment, and by cross-motion, the Defendants moved for summary judgment dismissing or striking certain claims against Clarity, Mr. Amo, and Tribar.
[ 3 ] I dismissed CBS Outdoor’s motion for summary judgment with costs in the cause. I allowed the Defendants’ motion to strike the claims against Clarity, Mr. Amo, and Tribar with costs payable to Mr. Amo and Tribar, and costs in any event of the cause to Clarity. See CBS Outdoor Canada v. Clarity Outdoor Media Inc . , 2012 ONSC 2547 .
[ 4 ] The parties made written submissions about the scale and quantum of costs. These are my Reasons for Decision about costs.
[ 5 ] For the following reasons, I order that $9,539.65 be paid to Mr. Amo and Tribar forthwith and that Clarity be awarded $40,521.15 (inclusive of GST/HST) in any event of the cause.
[ 6 ] The Defendants’ claim for disbursements of $3,060.61 is in the cause because the disbursements can be attributed to dismissing CBS Outdoor’s motion for summary judgment.
[ 7 ] Clarity, Tribar, and Mr. Amo claim costs of $40,521.15 (inclusive of GST/HST) for the motion for summary judgment plus disbursements of $3,060.61. Mr. Amo and Tribar, against whom the action has been dismissed, claim an additional $9,539.65 (all inclusive) in costs for the dismissal of the action.
[ 8 ] Clarity, Tribar, and Mr. Amos’ claims are on a substantial indemnity scale on the basis that: (a) they had made an offer to settle that they submit was more favourable to CBS Outdoor than the eventual outcome; and (b) because they submit that CBS Outdoor made unsupported allegations of fraud against them and accordingly it should pay costs at a punitive scale.
[ 9 ] Clarity, Tribar, and Mr. Amos’ offer to settle provided for the dismissal of the claims that were eventually dismissed by court order, but provided for a dismissal without costs for the motion up to February 7, 2011 and for partial indemnity costs after February 8, 2011.
[ 10 ] I find that this offer to settle is more favourable than the outcome of the motion.
[ 11 ] Clarity, Tribar and Mr. Amos’ claim for costs in the aggregate totals $53,121.41. By way of contrast and comparison, at the hearing, CBS Outdoor filed a bill of costs claiming $104,438.06 on a partial indemnity basis (all inclusive) and $165,843.91 (all inclusive) on a full indemnity basis.
[ 12 ] CBS Outdoor submits that that the circumstances of this case do not justify a departure from the normal rule that the successful party is entitled to costs on a partial indemnity scale. It points out and relies on the fact that although I dismissed its motion for summary judgment on the invoices, I made costs in the cause, which recognizes the reasonableness of the, albeit unsuccessful, motion for a summary judgment.
[ 13 ] CBS Outdoor also submits that its resistance of Clarity, Tribar, and Mr. Amos’ cross-motion for summary judgment should not be judged with the hindsight that they were ultimately unable to support the claims that were dismissed. It submits that based on the information it had when the motion was brought it was reasonable for it to resist the motion and for it to submit that there were genuine issues for trial about the defendants’ alleged misconduct. It relies on the comment of Justice Arbour in Hamilton v. Open Window Bakery Ltd. 2004 SCC 9 at para. 26 that an unsuccessful attempt to prove fraud does not inexorably lead to the conclusion that the unsuccessful party should be liable for solicitor-and-client costs since not all such attempts will be considered to amount to reprehensible, scandalous or outrageous conduct. CBS Outdoor submits that its approach of tactically advancing an alternative claim based on fraud when there was some basis for it does not support a departure from the general principle of costs on a partial indemnity scale.
[ 14 ] CBS Outdoor submits that Clarity, Tribar and Mr. Amos’ offer to settle supports only an award on a partial indemnity basis.
[ 15 ] CBS Outdoor submits that the quantum of costs claimed is excessive and that the appropriate and reasonable sum should be no more than $30,000 and only a nominal amount to Tribar and Amo with respect to the partially dismissed action.
[ 16 ] In my opinion, except for the disbursements, Clarity, Tribar and Mr. Amos’ claim for costs on a substantial indemnity basis is appropriate and reasonable, especially when compared with the bill of costs prepared by CBS Outdoor.
[ 17 ] I see no answer to Clarity, Tribar and Mr. Amos’ argument that they are entitled to costs on substantial indemnity basis based on the declined offer to settle.
[ 18 ] I agree, as I must, with a Supreme Court of Canada judgment that holds that that an unsuccessful attempt to prove fraud does not inexorably lead to the conclusion that the unsuccessful party should be liable for solicitor-and-client costs.
[ 19 ] However, in my opinion, a court should be strict and not go easy on a party who makes what it acknowledges was a tactical decision to plead fraud as an alternative to its straightforward claim for breach of contract and as a tactical means to resist a motion for summary judgment.
[ 20 ] In my opinion, awarding costs on a substantially indemnity basis is justified precisely to discourage tactical allegations of fraud. Pleading fraud or disreputable conduct among other things impugns a party’s honour and integrity and demands a defence. In the case at bar, the defence was successful, and, in my opinion, substantial indemnity costs should be ordered.
[ 21 ] While it cannot be categorically said that all unsupported allegations of fraud are reprehensible, it can categorically be said that all unsupported allegations of fraud are problematic and potential candidates for the discipline of a punitive costs award. In my opinion, in the circumstances of the case at bar, substantial indemnity costs are warranted
[ 22 ] Order accordingly.
Perell, J.
Released: June 22, 2012
COURT FILE NO.: 10-CV-402545
DATE: 2012-06-22
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CBS Outdoor Canada, a division of CBS Canada Holdings Co.
Plaintiff
‑ and ‑
Clarity Outdoor Media Inc. Stephen Amo and Tribar Industries Inc.
Defendants
REASONS FOR DECISION-COSTS
Perell, J.
Released: June 22, 2012