Court File and Parties

Court File No.: CV-11-9494-00CL Date: 2013-10-02 Superior Court of Justice – Ontario Commercial List

Re: Lisa Wertheim-Brault, Applicant And: Clive Figueira, Carol Tarback and TDCI Bracebridge Inc., Respondents

Before: L.A. Pattillo J.

Counsel: Kevin W. Fisher, for the Applicant Peter I. Waldmann, for the Respondent Figueira Clifford Cole, and Tanya Rocca, for the Respondents Tarback and TDCI

Costs Endorsement

[1] The Applicant’s summary judgment motion against the Respondents (the “Motion”) was heard by me on December 10, 2012. During the morning break, and before the Applicant’s counsel had concluded his submissions, the parties resolved the Motion by agreement, the terms of which were incorporated into a consent order made by me (the “Order”). The Order provides, among other things, that the Respondent Clive Figueira (“Figueira”) shall pay to the Applicant US $364,884.32 which was the full amount claimed plus interest. A trial of an issue is directed against the remaining Respondents, TDCI Bracebridge Inc. (“TDCI”) and Carol Tarback (“Tarback”).

[2] The Order further provides that Figueira “shall pay the costs of the Application against him to the Applicant.” The costs were to be agreed, failing which they were to be assessed by me. Costs of the Application that day in respect of TDCI and Tarback were reserved to the trial judge.

[3] Needless to say, the Applicant and Figueira have failed to agree on costs. I have received extensive submissions on behalf of not only the Applicant and Figueira but also TDCI and Tarback. The Applicant submits that Figueira should pay all of the costs incurred by her in the Application to the date of the Order on a full indemnity basis, based on the terms of a promissory note he signed and on his conduct throughout the proceedings. On that basis, the Applicant seeks $185,359.90 in full indemnity costs. Figueira, supported by TDCI and Tarback, submits that costs should be awarded against him on a partial indemnity basis. Figueira further submits, given the nature of the Applicant’s claim against him and his response, that those costs should be nominal and proposes $5,000. TDCI and Tarback submit such costs should be in the range of $10,000 to $12,000.

[4] The Application seeks repayment of a US $300,000 loan made by the Applicant. At the date of the Motion, the total amount outstanding on the loan including interest was $364,884.32. In his affidavit in response to the Application, Figueira admitted he owed the loan and interest. He took the position the loan was a personal loan to him. The issue which remained was whether TDCI and or Tarback (Figueira’s wife) were also liable for the loan.

[5] As security for the loan, Figueira provided a promissory note dated February 25, 2010, signed by him, which provided, in part, “the borrower agrees to pay all costs of the collection, including reasonable attorney’s fees, including fees for any appellate proceedings in the event that the principal of this note or any payment on the principal or any interest thereon not paid at the respective maturity thereof or in the event it becomes necessary to protect the security hereof, whether suit be brought or not.”

[6] The Respondents submit that “all costs of the collection, including reasonable attorney’s fees” means partial indemnity costs. I am unable to agree with that submission. The wording in the promissory note is clear in my view – all costs mean all costs. The absence of the words “substantial indemnity” or “full indemnity” is not relevant given the Applicant is from Florida and the note was provided to her in Florida by Figueira. In my view, it is clear when the note is read in its entirety that Figueira agreed to pay full indemnity costs.

[7] I acknowledge that even where there is an agreement between the parties as to costs, costs remain within the discretion of the court even where there is a contractual agreement: Animal House Investments Inc. v. Lisgar Development Ltd., [2009] O.J. No. 4406 (SCJ). That being said, however, I see no reason why Figueira’s agreement to pay all reasonable costs of collection should not apply to the legal costs incurred by the Applicant in collecting the loan from him. He failed to re-pay the loan as agreed and the Applicant has been forced to take steps to collect against him. He has put forward no defence to the claim against him. In light of his agreement to pay “all costs” of collection, in my view, the Applicant is entitled to receive her reasonable full indemnity costs in respect of her claim against Figueira.

[8] Given the resolution of the Motion, I made no findings at that time concerning Figueira’s conduct either before or during the Application. Nor am I in a position to make any findings in that regard at this point given the record before me.

[9] The Applicant submits that Figueira’s agreement to pay all costs of collection means that he is responsible for paying all of the costs incurred in the Application including those relating to her claim against TDCI and Tarback. As noted, the Order provides that Figueira “shall pay the costs of the Application against him to the Applicant.” [Emphasis added.] The parties further agreed that the costs of the Motion in respect of TDCI and Tarback were reserved to the trial judge. In my view, based on the wording of the Order as agreed to by the parties, Figueira is not responsible at this stage of the Application for the Applicant’s costs incurred in advancing the claim against TDCI and Tarback. He is only responsible for the Applicant’s costs of the Application against him.

[10] In support of their position that the Applicant is entitled to only nominal costs, the Respondents submit that because Figueira admitted liability at the outset, the Applicant could have easily obtained a consent judgment against him some time ago without incurring significant costs. Given the nature of the issues raised in the Application, I do not consider that was a realistic option open to the Applicant. Figueira had legal representation from the outset. Rather than file a consent to judgment which would have stopped costs being incurred against him, he elected to remain in the Application up to the Motion. He is accordingly responsible for costs incurred against him up to and including the Motion.

[11] Nor do I accept that the claim against Figueira was straight forward given his admission of liability and it was unreasonable to cross-examine him. Given the claims asserted by the Applicant and the position taken by Figueira in the Application that the loan was personal to him, the Applicant was entitled to continue her claim against him and to cross-examine him.

[12] The difficult issue to resolve is the amount of the Applicants’ costs in respect of her claim against Figueira. The Applicant’s Bill of Costs lists all time spent to and including the Motion. The Applicant’s counsel have made no attempt to break out or estimate the time spent in relation to the claim against Figueira as distinct from the claim against TDCI and Tarback. While I recognise the difficulty of such task, it is better done by them than by me.

[13] The Applicant’s claim for costs encompasses the Application through to the Motion. As broken out in the Applicant’s Bill of Costs, those costs relate to commencing the Application, reviewing responding materials and responding thereto, all Commercial List attendances, the cross-examinations, the undertaking and refusal motions and the preparation for and attendance on the Motion. As I stated, Figueira cannot be held responsible for all those costs. As well, based on the Applicant’s materials for the Motion and the argument advanced before me by counsel for the Applicant, it was clear that the Applicant’s main focus of the Motion was directed to the liability of TDCI and Tarback. In the Bill of Costs, preparation and attendance on the Motion accounts for 35% of the total full indemnity fees claimed.

[14] In the absence of a breakdown of the Applicant’s costs between Figueira and the other Respondents, in my view, the fair and reasonable way to approach the determination of costs in respect of the claim against Figueira is to first apportion the total costs incurred by the Applicant on the basis one-third between each of the Respondents and then reduce Figueira’s allocation to reflect that the claim against Figueira was not the main focus of the Motion. Further, any cost award against Figueira must take into account the $2,500 partial indemnity costs order made against him on October 23, 2012 in respect of an undertakings and refusals motion. Figueira should not have to pay those costs twice.

[15] I have reviewed the Applicant’s Bill of Costs. In my view, having regard to the issues raised, the work done, the lawyers involved and their actual hourly rates, total fees of $185,359.90, inclusive of taxes and disbursements is reasonable for fees for the Application through the Motion. A one-third apportionment of those costs results in an allocation of $61,786.63 to each Respondent ($185,359.90 divided by 3).

[16] For the reasons discussed, the amount of $61,786.63 for full indemnity costs attributable to Figueira is in my view too high given the issues raised and the claim against him.

[17] As a result, therefore, taking into account the above noted issues together with the amount in issue, the amount recovered against Figueira, the issues in the Application and the work done by counsel for the Applicant, I have concluded that a reasonable amount for the Applicants’ full indemnity costs of the Application against Figueira is $39,500.

[18] Accordingly, Figueira shall pay the Applicant forthwith her costs of the Application against him assessed in the amount of $39,500, inclusive of disbursements and HST. The Applicant is entitled to interest thereon in accordance with the Courts of Justice Act from December 10, 2012.

L. A. Pattillo J.

Released: October 2, 2013