SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: 171/12
DATE: 20121203
RE: 457351 Ontario Inc. and Diana Vacca, Applicants
AND
GolfNorth Properties Inc., Respondent
BEFORE: Lemon J.
COUNSEL:
Suzanne E. Deliscar, for the Applicant, Diana Vacca
Milton Davis, for the Applicant, 457351 Ontario Inc.
Simon Adler for the Respondent, GolfNorth Properties Inc.
HEARD: June 24, 2013
C O S T S E N D O R S E M E N T
[1] I released my reasons in this matter on August 29, 2013. The issue at that time, as I said, was “the parties are not agreed on the amount to be paid to GolfNorth; can the Vaccas re-purchase the property from GolfNorth for $400,000 as they submit ($1,200,000 less the $800,000 mortgage), or $1,200,000 as GolfNorth submits?” In the result, I found that GolfNorth was entitled to $1,200,000. I have now received costs submissions from both parties.
[2] GolfNorth seeks costs in the amount of $32,094.55 on a partial indemnity basis. In response, 457351 Ontario Inc. submits that costs should be fixed in the amount of $10,000 in total to be paid on a joint and several basis by both 457351 Ontario Inc. and Diana Vacca. Finally, Diana Vacca submits that I should make no order for costs.
LEGAL PRINCIPLES
[3] Modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan, 1999 2052 (Ont. C.A.), at para. 22.
[4] Costs awards, at the end of the day, should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”: see Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (Ont. C.A.), at para. 24.
[5] Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the factors that the court may consider:
(a) the result in the proceeding;
(b) any offer to settle made in writing;
(c) the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(d) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(e) the amount claimed and the amount recovered in the proceeding;
(f) the apportionment of liability;
(g) the complexity of the proceeding;
(h) the importance of the issues;
(i) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(j) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(k) a party’s denial of or refusal to admit anything that should have been admitted;
(l) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(m) any other matter relevant to the question of costs.
PRINCIPLES APPLIED
[6] The factors set out at (f), (j), (k) and (l) are not relevant to this determination.
[7] GolfNorth was successful and is entitled to costs. 457351 Ontario Inc. does not dispute that principle.
[8] GolfNorth made an offer to settle that 457351 Ontario Inc. would pay $1,100,000 within 20 days of the offer or that amount plus substantial indemnity costs from the date thereafter. That offer was served June 4, 2012. In response, 457351 Ontario Inc. and Ms. Vacca offered to settle the matter by payment of $600,000 within 20 days of its offer, or that amount plus substantial indemnity costs thereafter. That offer is undated. I am not clear when it was served. However, for the following reasons, that does not matter for my purposes.
[9] This was a very difficult contract interpretation issue and was an “all or nothing” dispute. Both offers were such that they would require the opposite party to capitulate because of a fear that the successful party would have an increased argument for costs based on the offer. That is not the intent of the rules of Offers to Settle. In this case, I find no fault in either party for failing to make a better offer. However, neither offer is such that it would impact my assessment of costs.
[10] Although GolfNorth submits that costs should be based on a partial indemnity basis, it candidly sets out that the actual fees total $35,596. I agree that costs on the basis of partial indemnity are correct but based on the actual fees, the submission is virtually substantial indemnity, and is too high.
[11] In reviewing the detailed account attached to GolfNorth’s Bill of Costs, there were four lawyers and an articling student involved in this matter. Sometimes that is entirely appropriate. However, there are no apparent reasons for it in this case. As well, it is anticipated that when junior counsel are involved, the bulk of the work would fall to their lower rate. Here, however, Mr. Adler has carried out the bulk of the work (64 hours). The articling student did 32.7 hours and the total of the other three lawyers is 36.5 hours. Even at Mr. Adler’s senior rate, he was involved in the drafting of affidavits. If that is his contribution, I fail to see what the need would be for so many other lawyers.
[12] I agree with the submissions of 457351 Ontario Inc. that there is an unreasonably high number of hours claimed. This application was commenced on February 27, 2012. The billing starts in 2011. It includes many entries for the traditional “review file.” My determination is for the costs of and incidental to the proceeding but not the costs of everything remotely done on the file.
[13] In the end result, I find that a fair and reasonable amount of costs that should be paid by 457351 Ontario Inc. is $15,000.
[14] With respect to the applicant, Diana Vacca, she was added simply because her name was on title. Her counsel wisely required no additional work to be carried out by the other parties. The real litigation was between 457351 Ontario Inc. and GolfNorth. The costs set out above should be paid by 457351 Ontario Inc.
Lemon J.
DATE: December 3, 2013
COURT FILE NO.: 171/12
DATE: 20131203
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: 457351 Ontario Inc. and Diana Vacca
AND:
GolfNorth Properties Inc.
BEFORE: Lemon J.
COUNSEL: Suzanne E. Deliscar, for the Applicant, Diana Vacca,
Milton Davis, for the Applicant, 457351 Ontario Inc.,
Simon Adler for the Respondent, GolfNorth Properties Inc.
COSTS ENDORSEMENT
Lemon J.
DATE: December 3, 2013