SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: C-858-06
DATE: 2013-08-26

RE: 2016637 ONTARIO INC. operating as BALKAN CONSTRUCTION, Plaintiff

AND:

CATAN CANADA INC. and ANTONIO DUSCIO, also known as TONY DUSCIO, Defendant

BEFORE: The Honourable Mr. Justice D. A. BROAD

COUNSEL:
Stephen T. Brogden, for the Plaintiff

Douglas Edward Snider, for the Defendants

costs ENDORSEMENT

[1] The parties have now provided their costs submissions as requested in my Reasons for Judgment released July 12, 2013. The following is my disposition respecting costs.

Plaintiff’s Claim for Costs

[2] The Plaintiff claims entitlement to partial indemnity costs of the action to the date of service of its Offer to Settle on February 24, 2011 and substantial indemnity costs thereafter pursuant to rule 49.10. The Offer to Settle called for payment by the Defendants of $55,000 plus prejudgment interest and costs on a partial indemnity basis. The partial indemnity component of the plaintiff's claim for costs is $11,441.25, inclusive of HST, and the substantial indemnity component is $40,170.38, also inclusive of HST. The total amount claimed is $60,450.31.

Position of the Defendant

[3] The plaintiff was awarded the sum of $82,185.82 a following trial. The Defendant Catan Canada Inc. does not dispute the Plaintiff’s basic entitlement to costs, nor its entitlement to substantial indemnity costs from and after the date of its Offer to Settle. Nor did the defendant take issue with the actual hourly rates charged for lead counsel, being initially Mr. Sloan and thereafter Mr. Brogden. Its position on costs was limited to questioning the involvement of other lawyers shown on the plaintiff's Bill of Costs as being potentially duplicative, suggesting that document production and compliance with undertakings was protracted thereby increasing the costs, pointing to wasted time on the second day of trial due to procedural problems and questioning the amount claimed for preparation for trial and attendance at trial.

Governing Principles

[4] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in subrule 57.01(1), including, the principle of indemnity and the amount of costs that an unsuccessful party could reasonably expect to pay.

[5] The Court of Appeal has observed that modern costs 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 behavior by litigants (see Fong v. Chan (1999) O.J. No. 3707 (CA) at para. 24).

[6] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario) 92004) O.J. No. 2634 (CA) at para. 26 and Coldmatic Refrigerator of Canada Ltd. v. Leveltek Processing LLC 2005 1042 (ON CA), [2005] O.J. No. 160 (CA)).

[7] Justice Turnbull observed in MacDonald-Sauer v. Sauer 2010 ONSC 2052 (SCJ) at para. 45 that comparative information between the costs incurred by each party provides the court with some perspective in applying the "reasonable expectations" analysis called for in Boucher. In keeping with this principle, in my view, where the party which has the obligation to pay costs questions the reasonableness of the successful party’s claim for costs, the better practice would be for that party to provide its own Costs Outline or Bill of Costs for comparison purposes. The absence of such comparative information could entitle the court to draw an adverse inference.

[8] In this case, the defendant put every claim of the plaintiff for payment for extras (with the exception of the claim for the security system admitted in its Statement of Defence even though it sought to withdraw that admission at the commencement of trial) into issue, however small. This approach was taken even with respect to extras in respect of which it was, or should have been, plain and obvious that they were performed by the plaintiff outside of the scope of the contract and should have been paid for immediately and without question. Examples of this included the claims for repair of the drain pipe, supply of a new sump pump, supply of replacement faucets and supply of wallpaper. Given its adoption of this approach, the defendant would have a reasonable expectation that the plaintiff’s claim for costs would be reflective of the time necessarily spent to prove its claim for every one of the extras, however small.

[9] In my view, the objections raised by the Defendant to the Plaintiff's Bill of Costs have been adequately answered, and the Plaintiff's claim for costs as set forth in its Bill of Costs is fair and reasonable.

[10] For the reasons set forth above, it is therefore ordered that the defendant Catan Canada Inc. pay costs to the plaintiff on a partial indemnity basis to February 24, 2011 and on a substantial indemnity basis thereafter, totaling in all $60,450.31.

D. A. Broad J.

Date: August 26, 2013