SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 2737/11
DATE: 2012-08-23

RE: THE TORONTO-DOMINION BANK, Plaintiff

AND:

537058 ONTARIO LIMITED, ANTONIA KOLIA and IDRIS KOLIA also known as IDRI KOLIA, Respondents

BEFORE: GRAY J.

COUNSEL:
James M. Butson, Counsel for the Plaintiff

J. David Keith, Counsel for the Defendants

COSTS ENDORSEMENT

[ 1 ] In my endorsement dated July 30, 2012, I invited the parties to file written submissions with respect to costs. Those submissions have now been filed.

[ 2 ] The motion that gave rise to my endorsement was a motion for summary judgment brought by the Bank on two personal guarantees. The action is under the simplified rules. In the final analysis, I determined that the matter was not appropriate for summary judgment, and I dismissed the Bank’s motion.

[ 3 ] Counsel for the defendants requests costs on a substantial indemnity basis in the amount of $18,234.61. He bases his request for substantial indemnity costs on essentially two grounds.

[ 4 ] First, he argues that the Bank would be entitled to substantial indemnity costs by virtue of its contractual agreements with the defendants. In fairness, he submits, the defendants should be entitled to costs on the same basis, since they would have reasonably expected costs to be awarded on that basis.

[ 5 ] Second, he submits that the Bank should not have persisted in its summary judgment motion, having regard to the comments of the Court of Appeal in Combined Air Mechanical Services Inc. v. Flesch , 2011 ONCA 764 , at paras. 252-257 . The Court of Appeal made it clear that in a case under the simplified rules, a motion for summary judgment should only rarely be pursued, if at all. Counsel submits that since the Bank insisted on pursuing its summary judgment motion notwithstanding the observations of the Court of Appeal, it should pay costs on a substantial indemnity basis.

[ 6 ] Counsel for the Bank submits that there is no basis for awarding costs to the defendants on a substantial indemnity basis. Unlike the Bank, they can claim no contractual entitlement to costs on a substantial indemnity basis, and there is no conduct by the Bank that would warrant costs on that basis. Counsel submits that costs should be awarded on a partial indemnity basis in a maximum amount of $4,000.

[ 7 ] In my view, costs should be awarded to the defendants on a partial indemnity basis. I agree with counsel for the Bank that, unlike the Bank, the defendants can claim no contractual entitlement to substantial indemnity costs. Indeed, even in a case where substantial indemnity costs can be claimed pursuant to a contract, the Court retains its discretion to award costs on a partial indemnity basis: see Bossé v. Mastercraft Group Inc. (1995), 123 D.L.R. (4 th ) 161 (Ont. C.A.), at paras. 64-68 .

[ 8 ] The Bank has not engaged in the kind of reprehensible conduct that would justify substantial indemnity costs. As stated by Epstein J.A. in Davies v. Clarrington (Municipality) (2009), 2009 ONCA 722 , 100 O.R. (3d) 66 (C.A.), at para. 40 , “Apart from the operation of rule 49.10, elevated costs should only be awarded on a clear finding of reprehensible conduct on the part of the party against which the costs award is being made.” That standard is not met here.

[ 9 ] The defendants’ request for costs is clearly excessive.

[ 10 ] It should be noted that the defendants changed counsel between the time the defendants’ material had been prepared and the date the motion was ultimately argued. Their original solicitors prepared affidavit material and a factum. Those solicitors expended 22.2 hours of lawyer time, and 28.3 hours by an articling student. Costs for those solicitors are claimed in the amount of $12,399.66.

[ 11 ] The defendants’ new solicitors expended approximately 26 hours of lawyer time, and costs for those solicitors are claimed in the amount of $5,834.95. Those solicitors prepared a supplementary factum, engaged in correspondence and reviewing the file, researched case law and prepared submissions for the motion.

[ 12 ] As might be expected, there was some duplication of the time and effort expended by the two sets of lawyers. Since the defendants decided to change counsel, they would undoubtedly expect to pay for that sort of duplication, but the plaintiff can hardly be expected to do so.

[ 13 ] Apart from this feature, I think the total time expended by the lawyers and an articling student on a motion of this complexity is excessive. Lawyers alone spent more than 48 hours on the motion. An articling student spent a further 28.3 hours. It would not be reasonable to require the plaintiff to compensate the defendants for this sort of effort on a motion of this complexity. The motion itself was argued very efficiently in considerably less than one hour.

[ 14 ] In the final analysis, my task is to fix costs that are reasonable in the circumstances: see Boucher v. Public Accountants Council of Ontario (2004), 71 O.R. (3d) 291 (C.A.).

[ 15 ] I order that the plaintiff pay the costs of the defendants, fixed in the amount of $5,000, all-inclusive, within 30 days.

GRAY J.

Date: August 23, 2012