SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 11-30802

DATE: 2011/04/23

RE: Susan Catherine Anne Robinson, Plaintiff

AND

Mark Allen Rutty, Defendants

BEFORE: Turnbull, J.

COUNSEL: Paul Marshall, Counsel, for the Plaintiff

Alan J. Butcher, Counsel, for the Defendant

HEARD: April 18, 2013

COSTS ENDORSEMENT

[1] The defendant seeks the costs of a motion which ultimately resulted in a consent order before the Honourable Mr. Justice Sloan on March 12, 2013.

Background of the matter

[2] At the time the motion was brought before Sloan, J. the defendant was the registered owner of the property known municipally as 35 Littlejohn Road, Dundas, Ontario.

[3] The plaintiff and the defendant were in a personal relationship and resided at the property from about October 2010 until July 2011. The residence had previously been the matrimonial home of the plaintiff and her former spouse. Following their separation the former spouse of the plaintiff transferred his interest in the home to her.

[4] In April 2010 the property was subject to mortgages totalling approximately $188,000 and the first mortgage to the Royal Bank of Canada was in default. The parties worked out an agreement whereby the title to the property would be transferred to the name of the defendant and he would refinance the outstanding mortgages. This was all undertaken and all was well until July 2011 when the relationship between the plaintiff and the defendant was terminated and the defendant left the property. From July 2011 the plaintiff had sole possession of the residence.

[5] The plaintiff initiated this action in October 2011 when the defendant requested the plaintiff vacate the property so that he could sell it. In the action she claimed that the defendant held the property in trust for her from the time the defendant took title to the property. She obtained and registered a certificate of pending litigation.

[6] The defendant acknowledges the trust agreement but maintained it was referable only to an interest in proceeds and did not give the plaintiff a possessory interest in the property. The parties through their respective counsel reached an interim settlement agreement on or about January 4, 2012 (the “first settlement agreement”) which provided that the defendant would carry out certain repairs and renovations to the property, following which the parties would list the property for sale.

[7] The plaintiff has sworn in her affidavit that there was a delay in putting the house on the market because the renovations the defendant undertook were not complete. She stated that the house was finally in adequate marketable condition in August 2012 and that is when it was initially listed at $379,000.

[8] On or about July 4, 2012 the parties reached a “second settlement agreement” which provided for the terms of listing and selling the property. Specifically, the parties agreed to list the property for sale at a price of the plaintiff’s choosing until August 31, 2012, following which Mr. Rutty was entitled to list the property with a realtor of his choosing at a price recommended by that realtor. The parties agreed the plaintiff could remain in the property until closing of any sale provided she cooperated with all listings and showings. It was a term of the second settlement agreement that the parties would execute all documents and consents necessary to effect the sale and that the plaintiff would vacate prior to closing.

[9] The defendant listed the property for sale in late August 2012 on the multiple listing service. After approximately five months on the market, the defendant accepted an offer on January 4, 2013. Prior to that time no other offers had been received the entire time the property was on the market.

[10] On the record before this court, it is clear that counsel for the defendant notified counsel for the plaintiff on or about January 8, 2013 with respect to this sale agreement. Mr. Ruddy swore that despite repeated requests, the plaintiff failed to acknowledge the sale agreement or to acknowledge her willingness to vacate the property prior to the scheduled closing date of March 4, 2013.

[11] As a result, the defendant was forced to exercise an extension clause in the sale agreement which required $1,500 to be paid to the purchaser as compensation for delaying closing until April 4, 2013.

[12] When the defendant did not hear anything from the plaintiff with respect to her willingness to vacate the property, he instructed his counsel to prepare the notice of motion and supporting affidavit which was brought before Sloan, J. That motion sought various forms of relief including an order that the plaintiff vacate the residence and an order that the certificate of pending litigation be vacated.

[13] In her responding affidavit filed on this motion before this court, at paragraph 19, the plaintiff swore that she learned of the offer that the defendant had ultimately accepted a few days after the fact. Despite that knowledge, she failed to communicate her willingness to vacate the property until March 4th by which time the extension clause had to be exercised and the closing delayed to April 4, 2013. Ms. Robinson explained that her former solicitor had not kept her properly informed so she sought out other counsel. She contacted Mr. Marshall during the week of February 11, 2013. When he asked for a copy of the statement of defence, she then went to the court house to requisition a copy from her file and learned, at that time, that her claim had been administratively dismissed.

[14] The plaintiff has sworn that she met with Mr. Marshall for the first time on February 14, 2013. At that time she signed an authorization for her former solicitor to turn the contents of his file over to Mr. Marshall. She swore that Mr. Marshall first introduced his involvement in this matter to the defendant’s lawyer on February 28, 2013.

[15] From a review of the dockets filed by Mr. Butcher, solicitor for the defendant, it is evident that on January 24, 2013 he sent an email to the solicitor for the plaintiff advising him of the deadline he required to be met before commencing court proceedings.

[16] On January 31, 2013 he noted that he received a response from the solicitor for the plaintiff with respect to the agreement of purchase and sale.

[17] Mr. Butcher’s dockets of February 21 and 22, show that he began drafting the notice of motion and the supporting affidavit which contains numerous exhibits.

[18] He attended with his client on February 28, 2013 to have his client’s affidavit executed and to send the documents out for printing and binding.

[19] The plaintiff vacated the property on or about March 4, 2013 but by that time the notice of motion and supporting affidavit had been served with the motion returnable March 12, 2013.

[20] Mr. Marshall served a notice of change of solicitor on behalf of his client on March 8, 2013.

[21] Both counsel attended at court before Justice Sloan and his consent order granted the essential relief sought by the defendant, namely that the plaintiff fully cooperate in executing all necessary documents to permit the closing of the sale and that the certificate of pending litigation be vacated. The parties agreed that the proceeds of sale would be held in trust pending further order of the court. The parties further agreed that the costs of extending the closing date under the sale agreement in the amount of $1,500 would be paid from the net proceeds of sale and will be attributed to the plaintiff’s share of the net proceeds of sale.

[22] The parties were not able to agree on the costs of the motions and that matter was reserved to this date.

The Law

[23] In Fong v. Chang (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330 (C.A.), the court stated the following:

Modern cost rules are designed to foster three fundamental purposes:

1. To indemnify successful litigants for the cost of litigation;

2. To encourage settlements; and

3. To discourage and sanction inappropriate behaviour by litigants.

[24] A corollary to the indemnification principle can be added. In assessing damages, the court must always be mindful to award a quantum of costs which is fair and reasonable to the unsuccessful party who must pay them and which takes into account the expectations of the parties concerning the quantum of a costs award. Atlantic Financial Corporation v. Henderson (2007), 2007 19791 (ON SC), 86 O.R.(3d) 121 (S.C.J.).

[25] If a general idea of the costs exposure facing a litigant cannot be estimated by his/her counsel, the uncertainty of possible costs awards can negate efforts of the parties to settle litigation. Put another way, parties to litigation need to be able to assess their total financial exposure with some degree of accuracy before making decisions to litigate or settle.

[26] Rule 57.01 of the Rules of Practice specify matters which the court must take into account in order to effect the above principles.

Analysis under Rule 57.01

[27] In my view the defendant had no choice but to bring this motion before the court when there was a breakdown in communication from the plaintiff to the defendant. Had Mr. Rutty not brought the motion to seek the appropriate orders, he arguably could have been held liable for damages for breach of contract. In those circumstances he would have been subject to a claim by the plaintiff for failing to mitigate the damages by bringing the very motion that he was required to bring.

[28] If counsel for the defendant had not advised his client to bring the motion before Sloan J., he arguably would have been negligent and subject to an action by his client.

[29] After the order of March 12, 2013 was signed, the transaction closed March 15, 2013 and the net proceeds remain in trust to this time.

[30] In my view, the defendant should be entitled to his costs on a partial indemnity basis. In assessing costs, the court is to consider the factors listed in Rule 57.01.

[31] While the amount recovered in the proceeding is not significant, the matter was somewhat complex. The matter also was of great importance to the parties. In my view the conduct of the plaintiff tended to lengthen unnecessarily the duration of these proceedings and necessitated the bringing of the motion. I do not find that the bringing of the motion was improper, vexatious, or unnecessary or excessively cautious.

[32] The plaintiff refused to acknowledge in a timely way that she would fully cooperate with the defendant in the sale of the home and to vacate the premises prior to the date scheduled for closing. The recognition of her failure to comply in that respect is recognized by her agreement in the order of Sloan, J. to pay the $1,500 penalty which had to be paid to obtain an extension of the agreement of purchase and sale.

[33] Mr. Butcher has provided a costs outline. He was called to the bar in 1991 and claims a partial indemnity rate of $300 and an actual (full indemnity) rate of $350. I find those rates to be reasonable for a counsel of his experience.

[34] Pursuant to the Rules, partial indemnity fees are approximately 2/3 of actual fees. I therefore award partial indemnity costs to the defendant in the amount of $6,300, plus H.S.T., plus assessable disbursements.

[35] The defendant was also successful in the argument of this costs motion and I assess those costs on a partial indemnity of $1,000.

[36] I would be inclined to have awarded full indemnity costs with respect to this motion but, in my view, such costs should only be awarded when there has been outrageous or offensive conduct on the part of a party. The plaintiff’s affidavit indicates that she did have some difficulty, due to the lack of communication from her first solicitor, and the time required for Mr. Marshall to obtain the prior solicitor’s file and become aware of the issues in this matter.

Conclusion

[37] The defendant shall have his costs of the motion before Sloan, J. and the motion argued today on a partial indemnity basis fixed in the sum of $7,350 plus H.S.T., plus assessable disbursements of $492.27.

[38] It is ordered that the costs awarded herein shall be paid to the defendant from the net proceeds of sale and shall be attributed to the plaintiff’s net proceeds of sale.

Turnbull, J.

Date: April 23, 2013