Court File and Parties
COURT FILE NO.: 24588/08
DATE: 2013-10-30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE CORPORATION OF THE TOWNSHIP OF ST. JOSEPH
Plaintiff
– and –
PETER ROWE
Defendant
H. MacDonald, for the Plaintiff
Self-represented
HEARD: September 4, 2013
reasons on costs
JUSTICE E. GAREAU
Reasons on Costs
[1] On September 4, 2013, I released a 21-page decision dealing with the issues that proceeded to trial before me that encompassed 12 days from October 1, 2012 to January 8, 2013.
[2] Subsequent to the release of my Reasons, I received and reviewed written submissions from counsel for the plaintiff on the issue of costs. The defendant did not serve and file written submissions dealing with the issue of costs.
[3] The action involved monies owing under a commercial lease entered into by the parties. The plaintiff’s claim in the statement of claim was $30,267.97, although at trial an amendment was obtained increasing the amount claimed to that proven at trial. After the evidence was heard, the plaintiff was seeking the sum of $55,127.54.
[4] The counterclaim of the defendant sought damages of $400,000.00 for intentional interference with economic relations, damages of $125,000.00 for improvements to the plaintiff’s premises and punitive, aggravated and exemplary damages in the amount of $450,000.00. The total amount claimed by the defendant by way of counterclaim was $975,000.00.
[5] As set out in my Reasons for Judgment, the plaintiff was granted judgment in the amount of $35,176.41 plus pre-judgment interest in accordance with the Courts of Justice Act from October 23, 2008. The counterclaim of the defendant was dismissed.
[6] The plaintiff enjoyed the overwhelming preponderance of success in this litigation. The plaintiff established that there was a valid and binding lease between the parties and that it was entitled to damages for various breaches of the lease terms and non-payment by the defendant, Peter Rowe. The defendant failed to prove damages set out in the various heads of damages listed and some of the claims advanced by the defendant were not only unproved at trial, but not allowable in law on the facts of this case.
[7] As set out in s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. 43 costs are in the discretion of the court subject to any provision in the Rules that may assist the court in the exercise of its discretion.
[8] In the exercise of its discretion under s. 131 of the Courts of Justice Act, to award costs the court may consider the result in the proceeding, any offer to settle made in writing and the factors set out in s. 57.01(1) of the Rules of Civil Procedure.
[9] In deciding the issue of costs, it is important for the court to consider written offers made by the parties prior to the trial of this action. A formal offer to settle was made by the plaintiff by way of an offer dated July 12, 2010 made pursuant to Rule 49 of the Rules of Civil Procedure. In that offer, the plaintiff was prepared to accept the sum of $40,000.00 inclusive of interest in full satisfaction of all claims other than costs. The counterclaim would be dismissed and the defendant would pay the partial indemnity costs of the plaintiff as agreed by the parties or as fixed by the court failing agreement.
[10] The defendant, plaintiff by counterclaim, submitted a written offer dated September 20, 2012 proposing to settle all outstanding matters including the counterclaim by payment of $275,000.00 by the plaintiff to the defendant. That offer was open for acceptance until October 1, 2012 after which date it was withdrawn.
[11] It is very clear from a review of the aforementioned offers that the plaintiff’s offer was more realistic and more in line with the ultimate judgment of the court than the offer to settle submitted by the defendant.
[12] The offers exchanged between the parties and the preponderance of success achieved by the plaintiff entitles the plaintiff to its costs. In considering the matter of costs, I have applied my mind to the operation of Rule 76 of the Rules of Civil Procedure. Rule 76 provides for a simplified proceeding for claims up to $25,000.00 (prior to January 1, 2002), claims up to $50,000.00. (prior to January 1, 2010) and claims up to $100,000.00 effective January 1, 2010. The limits are amounts excluding pre-judgment interests and costs.
[13] Rule 76 specifically sets out costs consequences for judgment awards of money $50,000.00 or less and, in particular, Rule 76.13(3) provides that the plaintiff not recover its costs unless the action proceeded under the Simplified Rules or the court is satisfied that it was reasonable for the plaintiff to have proceeded with the action with the ordinary procedure rather than the simplified procedure.
[14] Had it not been for the counterclaim advanced by the defendant, Peter Rowe, Rule 76.13(3) may have operated to deny the plaintiff its costs in this matter. However, the counterclaim advanced by Mr. Rowe in which he claimed total damages in the amount of $975,000.00 took this action outside of the simplified procedure contemplated by Rule 76 and created a layer of issues and complexity that required the action to proceed by way of an ordinary trial.
[15] Accordingly, the application of Rule 76 will not deny the plaintiff its costs of this action. The plaintiff is entitled to costs based on the offer to settle made by it and the preponderance of success enjoyed by the plaintiff in the litigation. A large part of the trial revolved around whether or not there was a valid commercial lease between the parties. Despite the position advanced by the defendant, the court held that a valid lease existed and as a result certain obligations and responsibilities flowed to the parties pursuant to the provisions contained in the lease. Damages flowed to the plaintiff when these provisions in the lease had been breached by the defendant, Peter Rowe.
[16] As to the scale of costs to the plaintiff, I am of the view that the appropriate scale is partial indemnity costs. Although the defendant had an unrealistic assessment of his case and the merits of his counterclaim, I cannot conclude that the defendant was guilty of “reprehensible conduct” or “malicious conduct” or conduct of such a negative nature that would attract substantial indemnity costs. As noted by McLachlin, J. (as she then was) for a majority of the court in Young v. Young 1993 34 (SCC), [1993] 4 S.C.R. 3 at page 134 of that decision, solicitor and client costs “are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.” The defendant was misguided but not malicious. Furthermore, although the offer made by the plaintiff on July 12, 2010 was close to the award made by the court, the offer of $40,000.00 inclusive of interest was technically less than the ultimate award of the court after trial, which was $37,288.80.
[17] The plaintiff submitted a bill of costs which totals $60,823.75 on a partial indemnity scale plus HST of $7,907.09 and disbursements of $2,611.06 plus HST on the disbursements of $253.38 for a grand total of $71,595.28.
[18] In considering the costs requested on a partial indemnity scale of $68,730.84, the court must keep in mind the judgment recovered of $37,288.80, inclusive of interest, and the principle of proportionality. Rule 1.04(1.1) of the Rules of Civil Procedure provides that “in applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved in the proceeding.” This provision of proportionality also applies to a claim for costs. I find that the amount of costs sought ($68,730.84 inclusive of HST) including the time spent was more than would be proportionate to the amount involved in this proceeding, including the amount ultimately recovered, and the complexity and the importance of the matter.
[19] In reviewing the bill of costs submitted by the plaintiff and the appropriate quantum of costs, I am guided by Rule 57.01(1) of the Rules of Civil Procedure. Although this was not a factually or legally complex matter, undoubtedly it was lengthened and made more difficult by the numerous issues raised by the defendant and the unrealistic assessment he made of the plaintiff’s claim and the counterclaim advanced by him.
[20] In attempting to arrive at a fair and reasonable amount for costs, I have considered the factors set out in Rule 57.01(1); the complexity of the matter; the conduct of the parties; the hourly rates and time spent as set out in the bill of costs of the plaintiff; the amount recovered; and the principle of proportionately. In considering these factors, I am of the view that the appropriate amount of costs to be awarded to the plaintiff in this action is $40,000.00 inclusive of HST and disbursements.
[21] Therefore, there shall be an order that the defendant pay to the plaintiff costs of this action which are fixed at $40,000.00, payable forthwith.
Justice E. Gareau
Released: October 30, 2013
Court File
COURT FILE NO.: 24588/08
DATE: 2013-10-30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE CORPORATION OF THE TOWNSHIP OF ST. JOSEPH
and
PETER ROWE
REASONS FOR JUDGMENT
Justice E. Gareau
Released: October 30, 2013