SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 07-31007
DATE: 20130913

RE: DAVID PROSSER and SYLVIA POTTER, Plaintiffs

AND:

1502754 ONTARIO INC., LONDONDERRY RESIDENTIAL GROUP INC., SHAWN MURRAY, TONY LOCANE, THE CORPORATION OF THE CITY OF HAMILTON and COLLIN POTTER Defendants

BEFORE: The Honourable Robert B. Reid

COUNSEL:
Barry L. Yellin, Counsel, for the Plaintiffs

James Cimba, Counsel, for the Defendants 1502754 Ontario Inc., Londonderry Residential Group Inc., Shawn Murray and Tony Locane

Colleen Robertshaw, Counsel, for the Defendant the Corporation of the City of Hamilton

HEARD: June 25, 2013

COSTS ENDORSEMENT

[1] This action was commenced by the plaintiffs as a result of the allegedly negligent construction and negligent inspection of their home at 39 Lanza Court in Hamilton.

[2] The matter came before me on a status hearing pursuant to rule 48.14. The plaintiff was required to show cause why the action should not be dismissed for delay.

[3] I found that there was a significant period of unexplained delay, and that the plaintiffs failed in their onus to satisfy the court that there was no non-compensable prejudice to the defendants.

[4] As a result, the action was dismissed.

[5] Costs of the contested status hearing were dealt with at the time, and I invited submissions as to costs of the balance of the action.

[6] The City of Hamilton seeks costs in its favor on a partial indemnity basis. The remaining defendants seek costs on a substantial indemnity basis. The plaintiffs acknowledge that a costs award against them is to be expected but challenge the scale and quantum of the costs claimed.

[7] There is no dispute that my discretion as to costs is found in section 131(1) of the Courts of Justice Act, and that I should exercise that discretion in accordance with the general principles set out in rule 57.01 of the Rules of Civil Procedure.

[8] There were no rule 49 offers to settle which could justify an award of substantial indemnity costs.

[9] The defendants other than the City of Hamilton submit that they have suffered prejudice as a result of the action since the plaintiffs failed to prosecute it diligently and allege that the plaintiffs never provided substantiation to their damage claim. They say their reputation has suffered over the prolonged period of the litigation.

[10] I do not find that the plaintiffs conducted the action in such a fashion as to justify an award of substantial indemnity costs which, in the absence of a rule 49 offer, would contain a punitive element. Costs of defending the claim can be compensated appropriately with an award on the partial indemnity scale for all defendants.

[11] As result, the defendants will have their costs payable by the plaintiffs on a partial indemnity basis.

[12] The defendants other than the City of Hamilton have submitted that an appropriate sum for costs on a partial indemnity basis is $21,553.60 inclusive of GST/HST and disbursements. They also seek an amount for the preparation of costs submissions. The suggested substantial indemnity amount is $2,000. The plaintiffs do not dispute the $21,553.60 amount claimed.

[13] The plaintiffs have questioned whether it is appropriate for counsel to have performed the bulk of the work in the matter rather than less expensive clerks and junior lawyers, and have noted that the $250 hourly rate was applied over the entire period of the action. I consider that the $250 hourly rate used by the City is not unreasonable for a partial indemnity rate and I am not prepared to criticize the City for how it has chosen to have its legal work performed.

[14] Counsel for the plaintiffs also submits that an excessive amount of time (being nine hours) is claimed for the preparation of costs submissions, which produces a partial indemnity total of $2,250 plus HST. He notes that the substantial indemnity claim by the remaining defendants was for a total of only $2,000. As well, he notes that a costs claim of $250 is made by the City for services at the status hearing despite the fact that costs of the status hearing were dealt with by me at the time.

[15] The City of Hamilton has submitted a partial indemnity bill of costs totaling $29,796.33 inclusive of GST/HST and disbursements. The plaintiffs respond that the amount claimed is excessive. They submit that their substantial indemnity bill, inclusive of tax and disbursements, is in the range of $24,000 and that the reasonable expectations of the plaintiffs would not contemplate a partial indemnity bill of the magnitude claimed by the City.

[16] Although I am reluctant to enter into the direct comparison of time spent by the parties, it does appear to me that in rough terms, counsel for the City spent approximately 40% more time on the file than either the counsel for the remaining defendants or counsel for the plaintiffs. This disparity does give some weight to the submission that the plaintiffs, even as unsuccessful parties, would not expect to pay costs at that level, and supports the concerns of counsel to which I refer in paragraph 14. Therefore, I am reducing the amount of the City’s partial indemnity claim by $3,796.33.

[17] After considering all the factors set out in rule 57.01(1), I order that the plaintiffs pay costs on a partial indemnity basis as follows:

a. to the defendant, the Corporation of the City of Hamilton, the sum of $26,000, inclusive of GST/HST, and disbursements;

b. to the defendants, 1502754 Ontario Inc., Londonderry Residential Group Inc., Shawn Murray and Tony Locane, the sum of $23,000, inclusive of GST/HST, and disbursements.

Reid J.

Date: September 13, 2013