Court File and Parties

COURT FILE NO.: C-311-12
DATE: 2012-11-26
SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Gerger Mechanical Ltd., Plaintiff

and

Daniel Kostas Salvarinas and Mary Salvarinas

BEFORE: The Honourable Mr. Justice G.A. Campbell

COUNSEL:
C.D. Clemmer, for the Plaintiff
W. Ribeiro, for the Defendant, Daniel Kostas Salvarinas
R. Y. Moubarak, for the Defendant, Mary Salvarinas

ENDORSEMENT REGARDING COSTS

[ 1 ] There were three motions before me, two by the plaintiff and the other by the defendant, Daniel Kostas Salvarinas. The plaintiff was successful on all three motions and costs were ordered payable to the plaintiff (see s.131(1) of C.J.A. and Rule 57.01 (1) and 57.03.)

[ 2 ] The issue for me to determine after reading counsel’s written submissions is the appropriate quantum of those costs payable by the defendants to the plaintiff.

[ 3 ] I agree with Mr. Clemmer’s overview of the Principle of Indemnity that he asserts:

Traditionally the purpose of an award of costs within our “loser pay” system was to partially or, in some limited circumstances, wholly indemnify the winning party for the legal costs it incurred. However, costs have more recently come to be recognized as an important tool in the hands of the court to influence the way the parties conduct themselves and to prevent abuse of the court’s process. Specifically, the three other recognized purposes of costs awards are to encourage settlement, to deter frivolous actions and defences, and to discourage unnecessary steps that unduly prolong the litigation ( 1465778 Ontario Inc. V. 1122077 Ontario Ltd. (2006), 2006 35819 (ON CA) , 2006 CarswellOnt 6582 (Ont. C.A.) at par. 26

[ 4 ] The defendant, Daniel Kostas Salvarinas did not comply at all with the requirement of SubRule 57.01 (6) for any of the motions, (not even for his own motion) and the defendant, Mary Salvarinas, produced a Cost Outline only for the plaintiff’s motion for a Certificate of Pending Litigation (C.P.L.)

[ 5 ] I accept that the case of Cango Inc. v. D & S Equipment Ltd. (2005), 2006 CarswellOnt 4595 (Ont. Master) at paras. 13 and 14 sets out the law when a litigant ignores Rule 57.01(6):

I note in SubRule 57.01(6) the word “shall” is used. Given the purpose and effect of a Form 57B in the costs process in my view “shall” as used in SubRule 57.01(6) must be treated as mandatory absent some real basis explaining why Form 57B could not have been delivered as required. Here no such basis was tendered. What the successful counsel wanted me to do, is address costs on the basis of oral unsubstantiated submissions. I am of the view that I could not do substantive and procedural justice by fixing costs based on such oral submissions.

The failure to deliver a Form 57B, notwithstanding that the motion in general terms sought costs of the motion works to the prejudice of respondents to the motion. They have no basis upon which to judge what is actually being sought for costs and how much money will be put in issue for costs if they oppose the motion.

For the aforesaid reasons I find that if a party wishes costs of a motion the delivery of a Form 57B is a mandatory condition precedent to enable the court to fix costs. Failure to deliver a Form 57B is fatal absent some real basis justifying such failure ( emphasis added).

[ 6 ] I am influenced somewhat, when considering counsel for Daniel Kostas Salvarinas’ challenge of the plaintiff’s time spent and costs sought, by the reality that Mr. Ribeiro opted not to comply with Rule 57.01(6). Surely, if he had won his client’s Limitation/Summary Judgment argument he would have expected an order of costs in his client’s favour. The Rule is mandatory and unambiguous.

[ 7 ] By his intentional non-compliance Mr. Ribeiro has deprived me of the opportunity of considering factor (0.b) of Rule 57.01(1) namely: the costs that an unsuccessful party could reasonably expect to pay. By refusing to disclose his account to his own client for the preparation for and attendance at the contested Limitation/Summary Judgment motion, I have no context within which to compare the plaintiff’s counsel’s preparation (or over-preparation, as Mr. Ribeiro argues) for any of the three argued motions. It would appear that as a result of the decision not to comply with the Rule, Mr. Ribeiro is “hoist on his own petard”.

[ 8 ] Mr. Ribeiro’s suggestion that a mere two hours preparation time for each motion argued (including research!) is specious and entirely unpersuasive.

[ 9 ] It is both relevant and helpful to note that the defendant, Mary Salvarinas’ Cost Outline for the C.P.L. motion (for which she filed one brief affidavit, a “Me Too” factum, no research or Case Brief of substance) would have sought costs of $3,893.26, had the defendants won that motion, almost $500 more than sought by the plaintiff, who, Mr. Ribeiro grouses “unnecessarily prepared two affidavits and two factums” (for the two separate motions that were based upon entirely different legislation and case law) that were “unnecessarily voluminous and not directly on point”.

[ 10 ] I also do not accept Mr. Ribeiro’s proposed averaging of counsel’s hourly fee rates to $125/hr. The plaintiff’s senior lawyer supervised the drafting of the important documents and junior counsel did the majority of the research, drafting and attended to present the argument.

[ 11 ] I commend plaintiff’s law firm for efficiently, effectively and responsibly allocating appropriate staff to bring these matters before the court as inexpensively as possible.

[ 12 ] The amounts sought by counsel for the plaintiff for these complex, important and significant motions (e.g. if Mr. Ribeiro was successful for his client’s motion, the plaintiff would have effectively been rendered “out-of-court”) are extremely reasonable. I do not accept that either defendant, having lost these motions, expected to pay anything less than what is sought by the plaintiff. Indeed, I venture that in comparison, they expected more.

[ 13 ] Mr. Ribeiro wants it both ways. He argues that the costs sought are too much but refuses to disclose what he charged the defendant, Daniel Kostas Salvarinas, for his own preparation, research and attendance on the motions. His colleague, Mr. Moubarak followed the Rules and by having done so deflates Mr. Ribeiro’s argument.

[ 14 ] I accept Mr. Clemmer’s submission that to shorten or eliminate the need for the lengthy argument on the C.P.L. motion, the defendants would have been better advised to consent to a C.P.L., pending the success or otherwise of the Limitation/Summary Judgment motion. Instead, they vigorously resisted that aspect of the process, thus unnecessarily lengthening the day and caused significant expenditure of time, effort and money by all the parties to prepare for and attend to argue that motion.

[ 15 ] As mentioned, the issues were critically important and quite complex. I agree with Mr. Clemmer’s submission in part V. on page 8 of his Brief.

The Summary Judgment Motion and the CPL Motion were of critical importance to the parties. Had the Plaintiff failed in opposing the Defendant Daniel’s motion, the action would have been dismissed as being statute-barred. Conversely, if the Defendants were unsuccessful on their motion, a trial on the merits was imminent. Had the Plaintiffs not brought the CPL Motion, there would have been nothing stopping the Defendant Mary from encumbering or alienating the subject property and the herein action would be useless. The Reply Motion was less critical to the Plaintiff, but represented an important step in framing the issues through the Pleadings and abandoning certain relief sought.

[ 16 ] I have considered what a fair and reasonable amount of costs should be ordered rather than the exact measure of the actual costs to the plaintiff (see Zestra Engineering Ltd. v. Cloutier , 2002 25577 (ON CA) , [2002] O.J. 4495 (C.A.). I have also recognized that the costs order should reflect some degree of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Pagnotta v. Brown 2002 CarswellOnt 2666 (Sup. Ct.) .

[ 17 ] I have considered and rejected Mr. Ribeiro’s submission that the costs order for these three motions only apply to the defendant, Mary Salvarinas, with regard to the C.P.L. motion. The most important, significant and lengthy argument was by far the Limitation/Summary Judgment argument. The degree of success of that motion effects the defendant, Mary Salvarinas, at least as much, or more (since the only asset remaining is registered to her) than the defendant, Daniel Kostas Salvarinas. Thus, the costs awarded should impact her as well as her husband.

[ 18 ] Accordingly, this costs order applies to both defendants jointly and severally.

[ 19 ] I order that the defendants shall forthwith, within 60 days of this date, pay to the plaintiff costs set in the amount of $8,000.00, which amount includes disbursements and H.S.T.

G.A. Campbell J.

Released: November 26, 2012