SUPERIOR COURT OF JUSTICE - ONTARIO

GUELPH COURT FILE NO.: 846/06
DATE: 20121011

RE: Wellington Standard Condominium Corporation No. 124

v.

Fergus Mill Inc., Murray Koebel, Altus Group Limited, Bank of Montreal, Ian Milroy, The Corporation of the Township of Centre Wellington, Robert Foster, Anatoly Morgulis, Construction Control Inc., Israel Katzenberg, RN Design Group Inc., Emcad Consulting Engineers (1995) Inc., and Ridley Windows & Doors Inc.

BEFORE: Daley J.

COUNSEL:
R. Dowhan, for the plaintiff

I. Marks, for the defendants, Altus Group Limited, Bank of Montreal and Ian Milroy

J. Bennett, for the defendants, The Corporation of the Township of Centre Wellington and Robert Foster

C. Simcoe, for the defendant Anatoly Morgulis

C O S T S E N D O R S E M E N T

[1] This endorsement follows my reasons for judgment dated July 12, 2012 in respect of summary judgment motions brought by the Moving Defendants and respect of the claims of the plaintiff and the defendant Morgulis.

[2] Both motions for summary judgment were dismissed.

[3] The plaintiff and the defendant Morgulis seek costs from the Moving Defendants on a substantial indemnity and full indemnity basis respectively.

[4] While the Moving Defendants failed on their summary judgment motions, in my view, the plaintiff and the defendant Morgulis were both reasonably vulnerable on these motions due to their sparse pleadings and the minimal evidentiary record put forward on their behalf.

[5] Having considered the submissions filed, I am of the view that costs to be awarded on these motions should follow the cause and that the quantum of the costs be determined and fixed at this time.

[6] Both the plaintiff and the defendant Morgulis were successful in opposing the motions of the Moving Defendants, however, in both instances the determination was a very close call. As noted in my reasons for judgment, the case put forward by the plaintiff just minimally met the threshold needed so as to preclude the granting of a summary judgment.

[7] Similarly, the defendant Morgulis just barely defeated the motion for summary judgment.

[8] Further, it was not unreasonable for the Moving Defendants to bring these summary judgment motions.

[9] In the result, I conclude that although the plaintiff and the defendant Morgulis succeeded in opposing these motions, this is a case where overall justice would be best served by fixing fair and reasonable costs and awarding them to the plaintiff and the defendant Morgulis in the cause: Marini v. Muller [2001] O.J. No. 259 ; Smith v. Barna Estate [2012] O.J. No. 1029 ; Allen v. Weir Foulds LLP , 2012, ONSC 5028 .

[10] As to the plaintiff's claim for costs, I can find no basis whatsoever to fix costs on a substantial indemnity scale. Substantial indemnity costs should only be awarded on a record showing the clearest reprehensible misconduct: Davies v. Clarington (Municipality) , 2009 ONCA 722 , [2009] O.J. No. 4236.

Similarly there is no basis to warrant the fixing of costs in respect of Morgulis at an elevated level.

[11] The overarching requirement that costs awarded be reasonable in the circumstances is to be considered by examining the following principles:

(1) the discretion of the court must be exercised in light of the specific circumstances of the case in relation to the factors set out in rule 57.01(1);

(2) consideration of the experience of counsel, the rates charged and hours spent subject to the overriding principle of reasonableness within the factual matrix of the particular case;

(3) the reasonable expectation of the unsuccessful party as to its potential cost liability if unsuccessful;

(4) the court should seek to avoid inconsistencies with comparable costs awards; and

(5) the court should also seek to balance the indemnity principle with the principles of access to justice.

[12] The Moving Defendants do not take issue with the time spent by the principal lawyers involved in representing the plaintiff, but do take issue with the hourly rates used. Further, it is asserted that the costs outline does not provide adequate particulars as to a number of the persons who provided services to the plaintiff. I agree that the plaintiff's costs outline is lacking in particulars and sufficient detail.

[13] The summary judgment motions were moderately complex and involved substantial documentary evidence and multiple causes of action and related defences.

[14] Counsel for the Moving Defendants did not submit a costs outline with respect to the time spent and disbursements incurred on behalf of the Moving Defendants. While it is not required that costs outlines be filed by all parties, it has been held that the court may reasonably conclude that the party opposite devoted as much time and expense to the proceeding as did the party seeking costs.

[15] This is not determinative of the question of what is a fair and proper amount for costs, but is simply one factor that may be taken into account: Risorto v. State Farm Mutual Automobile Insurance Co., 2003 43566 (ON SC) .

[16] Having considered the full motion record, it is evident that the Moving Defendants spent a substantial amount of time and expense on the summary judgment motions and there is, as well, a significant amount at stake in this litigation.

[17] Having examined the considerations outlined above, including the time spent by counsel for the plaintiff, I conclude that a fair and reasonable sum for costs on a partial indemnity scale would be in the sum of $30,000, plus HST.

[18] As to the disbursements claimed by the plaintiff, several of the items represent expenses that would be incurred in any event in the action, namely with respect to the issuance and service of the statement of claim, transcript fees, and the cost of obtaining building drawings.

[19] I conclude that the proper sum for disbursements incurred by the plaintiff related to the summary judgment motion would be in the sum of $4,000 plus HST.

[20] The defendant Morgulis has submitted a costs outline including partial indemnity costs in the total sum of $ $29,075.15.

[21] Counsel for the defendant Morgulis by far played a secondary role on the arguing of the summary judgment motions. While he was present in court and made submissions on behalf of his client, the fundamental factual and legal issues involved in these motions were dealt with by counsel for the Moving Defendants and for the plaintiff.

[22] The issue considered on the summary judgment motion brought against the defendant Morgulis was far more narrower.

[23] I agree with the submission by counsel on behalf of the Moving Defendants that the partial indemnity hourly rates put forward by counsel for the defendant Morgulis are excessive in that they represent 85% of the actual rates. As such, the hourly rates charged by the two principal lawyers involved in representing the defendant Morgulis must be adjusted to an hourly rate of two thirds of the actual rate charged.

[24] Having examined the factors outlined above and the costs outline submitted on behalf of the defendant Morgulis, I conclude that a fair and reasonable sum for costs on a partial indemnity basis is in the amount of $15,000, plus HST. No issue is taken with the disbursements claimed in the sum of $1,060.75, inclusive of HST and as such that sum is fixed.

[25] In the result I have determined and fixed the costs of the plaintiff and the defendant Morgulis, on a partial indemnity basis, payable to those parties in the cause, as between those parties and the Moving Defendants.

Daley J.

DATE: October 11, 2012

GUELPH COURT FILE NO.: 846/06
DATE: 20121011

SUPERIOR COURT OF JUSTICE - ONTARIO RE: Wellington Standard Condominium Corporation No. 124 v. Fergus Mill Inc., Murray Koebel, Altus Group Limited, Bank of Montreal, Ian Milroy, The Corporation of the Township of Centre Wellington, Robert Foster, Anatoly Morgulis, Construction Control Inc., Israel Katzenberg, RN Design Group Inc., Emcad Consulting Engineers (1995) Inc., and Ridley Windows & Doors Inc. BEFORE: Daley J. COUNSEL: R. Dowhan, for the plaintiff I. Marks, for the defendants, Altus Group Limited, Bank of Montreal and Ian Milroy J. Bennett, for the defendants, The Corporation of the Township of Centre Wellington and Robert Foster C. Simcoe, for the defendant Anatoly Morgulis COSTS ENDORSEMENT Daley J.

DATE: October 11, 2012