ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-35182
DATE: 2013-06-25
B E T W E E N:
Royal Bank of Canada
Nicole Brown Dunbar, for the Plaintiff
Plaintiff
- and -
Ultimate Holographic Reproductions Inc., Salvatore C. Vivona and Leonhard Schuko
Alfred Schorr, for the Defendant Salvatore C. Vivona
Leonhard Schuko, Self-Represented
Defendants
Whitten J.
COSTS JUDGMENT
[1] On March 27, 2013 this court granted summary judgment on a motion by the plaintiff. The judgment concluded with the usual invitation as to either agreement or submissions as to costs. Those submissions have now been received from the plaintiff and counsel or Salvatore C. Vivona. Mr. Schuko who represented himself at the actual hearing within which he piggy-backed on the submissions made by counsel for Mr. Vivona, has not submitted any costs submissions and the time period for so doing has expired.
[2] At the outset it should be noted that pursuant to the terms of the guarantee executed by the two individual defendants, the plaintiff would be entitled to its costs on a substantial indemnity basis. This fact cannot be ignored completely in the determination of costs pursuant to the discretion of a judge established by section 131 of the Courts of Justice Act, exercised with an eye to the principles enunciated in Rule 57.01. That being said the actual costs on a substantial indemnity basis are not immune to scrutiny. The principles of Rule 57.01 with their emphasis on litigation efficiency and party behaviour will be paramount in any evaluation.
[3] In this particular matter prior to the successful summary judgment motion, the defendant Vivona successfully moved before Reid J. September 21, 2012 to compel a representative of RBC to answer certain questions relating to the fact that the original loan by the plaintiff was pursuant to the Canada Small Business Financing Act (CSBFA) and regulations.
[4] Justice Reid recognizing the novelty of the defendant Vivona’s defence with reference to the CSBFA, ordered that the plaintiff pay the defendants’ costs in the amount of $4,500 plus HST. Given the defendants’ success on that occasion, the costs of the plaintiff associated with resisting that application have to be “backed out” of the overall costs with respect to the summary judgment.
[5] In the context of the summary judgment motion, counsel for RBC asserts that the defence by Mr. Vivona “borrowed” as it were by the defendant Schuko were doomed from the outset given the decisions in Toronto Dominion Bank v. 1503345 Ontario Limited (2006) Canley 16373 and ACFND2005 Inc. v. Pizza One Group (2000) 19426, both decisions of the Superior Court of Justice. These precedents it is argued would also alert one as to the futility of the motion to compel answers as successful as it was. In other words, it would become obviously academic.
[6] As an aside, the fact that RBC had to move to have the judgment founded on the decision of this court March 27, 2013 settled, does present as being rather churlish on the part of the defendant Vivona.
[7] The defendant advances that this matter should not have been commenced in Hamilton as the original branch and the defendants reside in York Region. That is an understandable sentiment, but effective July 1, 2004 Rule 13.101(2) provides that a matter may be started anywhere within the province. (There are antidotal stories of actions being commenced in Kenora by 11th hour litigators who seek to capitalize on the time zones). After the commencement of an action, either party as did the defendant, may move to have a matter transferred to “forum conveniens”. In this matter RBC did agree to the transfer if unsuccessful on its motion for judgment.
[8] Counsel for the defendants acknowledges the costs incurred on certain pages of the “fee items” on a substantial indemnity rate. That concession is quite remarkable with respect to one item, namely, the issuing of a statement of claim for $380.00. One assumes that this is the actual preparation of the statement of claim which given the available software and office precedent could be produced in a matter of minutes.
[9] Counsel argues that which he did not acknowledge is patently excessive, inappropriate and irrelevant. This court agrees with these characterizations of 7.4 hours preparation for the cross-examination of the plaintiff’s deponent with respect to the application of the CSBFA and investigations concerning the financial affairs of the defendant Vivona. Furthermore, the court agrees that any activity relating to the appeal of this court’s judgment should be reserved for the outcome of that step.
[10] Counsel for Vivona did not object with respect to the disbursements of $3,879.04.
[11] This court did remark in its judgment as to the sophisticated nature of the personal defendants. They certainly would understand the risk of substantial indemnity costs in the case of default. The contractual obligations of parties cannot be lightly ignored.
[12] An essential costs principle is that of proportionality. In other words, what ratio did the costs bare to that which was achieved. The costs sought here are over half of what was at stake. Having said that, the argument raised by Vivona that the CFBSA and/or its regulations created a Charter of Rights for small business borrowers, did have a certain superficial appeal. This court assessed and reviewed the language of the statute and regulations to realize that this was not a sustainable argument. It was nevertheless creative. Creativity in litigation as long as it is not patently wrong is not to be discouraged by onerous costs consequences. RBC could have advanced this litigation along by conceding that the original loan was made pursuant to the statute and regulations. It would have been “no skin of their noses” to so concede.
[13] Having considered all of the above, fees are fixed at $18,000 which together with disbursements of $3,879.04 makes for a total of $21,879.04. This sum is independent of the sum owed by RBC to the defendant Vivona with respect to the award by Reid J. September 21, 2012.
Original signed by Whitten J.
________________________ Whitten J.
Released: June 25, 2013
COURT FILE NO.: 12-35182
DATE: 2013-06-25
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Royal Bank of Canada
Plaintiff
- and –
Ultimate Holographic Reproductions Inc., Salvatore C. Vivona and Leonhard Schuko
Defendants
REASONS FOR JUDGMENT
Whitten J.
:km
Released: June 25, 2013