SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 10-21821
DATE: 2012-12-11

RE: Royal Bank of Canada, Plaintiff

AND:

Priyadarshini Sampathkumar, Defendant

AND:

Kumar Sriskanda and Kanagaranjan Kandiah, Third Parties

BEFORE: The Honourable Mr. Justice C.S. Glithero

COUNSEL:
Leigh Ann Sheather, Counsel for the Plaintiff

Martin P. Zarnett, Counsel for the Defendant

Antonios T. Antoniou, Counsel for Kumar Sriskanda

RULING ON COSTS

[ 1 ] For written reasons released September 28, 2012, I dismissed the plaintiff’s motion for summary judgment and invited written submissions on costs.

[ 2 ] The defendant seeks costs in the total amount of $18,572.10, made up of fees totalling $17,940, plus HST and disbursements of $632.10, plus HST. The defendant submits that the plaintiff did not act reasonably in pursuing the motion for summary judgment given the issues raised in the pleadings, as the plaintiff ought to have realized that a trial would be necessary to adjudicate on the issues raised. The defendant submits further that it became even more unreasonable for the plaintiff to pursue the motion for summary judgment when the motion materials were exchanged.

[ 3 ] Rule 20.06 enables the court to order costs on a substantial indemnity basis if a party has acted unreasonably in making the summary judgement motion. Here the defendant’s costs outline shows an hourly rate on a partial indemnity scale but improperly neglects to advise of the rate being charged to the client, as required to appear in the right hand column of Form 57 B. As a result of the specific reference to rule 20.06 in the costs submissions, but the failure to differentiate as between partial or substantial indemnity hourly rates, I am not sure the scale upon which the amount claimed is claimed.

[ 4 ] The hourly rate sought is $ 325.00. Some 55.2 hours are claimed as having been spent by defence counsel, four of which are the time actually spent arguing the motion.

[ 5 ] In terms of the factors enumerated in Rule 57.01(1), the defendant points only to the amount in issue, $129,538.10, and the assertion that the proceeding was of medium complexity.

[ 6 ] As to the quantum of those costs, I take into account the amount of time spent by counsel for the unsuccessful plaintiff, totalling 39.5 hours, inclusive of the time of more junior lawyers. That, in my estimation, is a more realistic amount of time to spend on a motion requiring only four hours to argue. I do not question that counsel for the defendant spent the time claimed, but my function goes beyond simply checking the arithmetic.

[ 7 ] I need not repeat what I said in my earlier reasons, but in terms of costs I was initially inclined to award costs to the successful defendant, although not in the full amount claimed. I would have fixed costs in the amount of $12,000 for fees and $562.50 for disbursements, plus applicable HST.

[ 8 ] On behalf of the unsuccessful plaintiff, the usual submissions are made that it is the trial judge who would be in the best position to determine the real merits of the action. That, of course, can be said in most situations involving unsuccessful motions for summary judgment. The plaintiff cites Rogers Cable TV Ltd. v. 373041 Ontario Ltd. , [1994] O.J. No. 1087 as authority for the submission that an order for costs in the cause would be appropriate. Alternatively, the plaintiff relies on North American Life Insurance v. Heathcliffe Developments Ltd. , 1999 CarswellONT 1627 as authority for the submission that it would alternatively be appropriate to simply reserve costs of the motion to the trial judge.

[ 9 ] The plaintiff’s submissions also raise another consideration that I think to be important. After the summary judgment motion had been commenced, plaintiff’s counsel had regard to the Ontario Court of Appeal decision in Combined Air Mechanical Services Inc. v. Flesch (2011), 2011 ONCA 764 , 108 O.R. (3d) 1 and in particular paragraph 58. There, the Court of Appeal pointed out that the nature and complexity of the issues may demand that the normal discovery process of document production and oral examinations be completed before a summary judgment motion proceeds. The court makes it clear that the bar has an obligation to see that appropriate litigation strategy is used and summary judgment motion should not be pursued where more efficiency is achieved by exhausting the discovery process first.

[ 10 ] Here, plaintiff’s counsel wrote counsel for the defendant some five months before the summary judgment motion was heard indicating that the plaintiff wished to conduct examinations for discovery, in order to determine whether it was advisable to proceed with the summary judgment motion. Counsel for the defendant responded acknowledging the plaintiff’s position but indicating the defendant disagreed and wished to proceed with the motion for summary judgment and was opposed to proceeding with discoveries first.

[ 11 ] The upshot is that while the defendant claims that the motion for summary judgment was unreasonably initiated and pursued, the fact of the matter is that counsel for the plaintiff sought to delay the motion in favour of pursuing the discovery process first so as to have a better appreciation of whether the motion ought to be pursued. The defendant opposed that sensible suggestion. In my opinion it was unreasonable to take that stance, and all the more unreasonable to then seek costs on the argument that it was unreasonable for the plaintiff to pursue the motion. That in my view disentitles the defendant to costs of the motion, at this stage.

[ 12 ] Counsel for the third party, Mr. Sriskanda, has advised that he client does not seek costs and confirms that neither the plaintiff nor the defendant seek costs against him. Accordingly there will be no costs order in relation to Mr. Sriskanda.

[ 13 ] In all of the circumstances, costs of the motion are reserved to the trial judge as the individual who will be in the best position to determine the merits of each position in the context of this unusual set of factual circumstances.

C. Stephen Glithero

Released: December 11, 2012