CITATION: Crina General Construction Ltd. v. Carrington Homes Ltd., 2013 ONSC 7387

COURT FILE NO.: CV-09-390817

DATE: 2013/12/02

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Crina General Construction Ltd.

Plaintiff

• and -

Carrington Homes Ltd., George Fernicola and Robert Fernicola also known as Rob Fernicola

Defendants

Counsel: John Lo Faso, for the Plaintiff Alan B. Dryer, for the Defendants

HEARD: Upon Written Submissions

ENDORSEMENT

Moore J.

[1] The parties look to the court to determine costs issues in a case that they predicted would require only four days of trial time but that they managed to extend through seven trial days. For that fact alone, I am inclined not to reward them for their inability and/or unwillingness to expedite the trial and litigate their dispute in a time and cost effective, responsible fashion.

[2] I directed counsel to exchange costs demands at the outset. I do this not only to empower the decision maker(s) on each side of the potential size and shape of their costs jeopardy but also to assist the court with valuable information at the end of the case on the reasonable expectations of the paying party.

[3] While there is disagreement now as to whether the parties each agreed to accept costs of $62,500 or $80,000 if successful at trial and on whether such numbers should be increased or decreased depending upon how the court views the respective positions of the parties on measures of success, the fact is that each side enjoyed both success and failure upon issues determined in the main action and in the counterclaim, such that the net judgment for Carrington Homes came to $20,894.87, an amount well within the jurisdiction of the Small Claims Court. This outcome is a factor informing my view of reasonable costs to be awarded in this matter.

[4] The court is always tasked with the need to award costs that are reasonable with regard to the fact that its decision resolved both a main action and a counterclaim, thereby engaging the provisions of rule 27.09(3) but also reasonable with regard to the provisions of rule 57.

[5] The fact that the parties have agreed upon a quantum figure for costs to follow success on either or both claim and counterclaim does not bind the court for the over-arching concern that the court must consider is fairness at large. In Boucher[^1], the court stated that the failure to refer to the overriding principle of reasonableness in assessing costs can produce a result that is contrary to the fundamental objective of access to justice. The costs system is incorporated into the Rules of Civil Procedure, which exist to facilitate access to justice. There are obviously cases where the prospect of an award of costs against the losing party will operate as a reality check for the litigant and assist in discouraging frivolous or unnecessary litigation.

[6] In this case, the parties had ample opportunity to perform reality checks as they approached their trial date. Indeed the exchange of costs demands could/should have assisted them in that regard. Their offers to settle, although clearly not provided in a timely fashion so as to trigger the provisions of rule 49, clearly demonstrate that the parties were well aware of the risk of an outcome that would net the successful party a judgment amount within the Small Claims Court jurisdiction. That too afforded an opportunity for a reality check.

[7] The defendants seek a costs award in their favour of $80,000 notwithstanding the modest size of the net recovery of $24,894.87, including damages and interest.

[8] The plaintiffs submit that any entitlement to costs should be offset such that no costs should be awarded. The plaintiff insists that a fair and reasonable view of the outcome of the case compels a finding that both plaintiff and defendants were partially successful in the net final outcome.

[9] The plaintiff further points to the fact that it served a Request to Admit on the Defendants, the Defendants did not. Further, the defendants chose not to admit to facts that were determined in favour of the plaintiff, thereby requiring proof of those facts to be lead at trial which resulted in added trial time.

[10] Rule 51.04 speaks to this situation and allows the court to take the denial into account in exercising its discretion respecting costs. The Request to Admit rule creates yet another opportunity for litigants to make a reality check on the wisdom of proceeding to and through a trial.

[11] Courts have addressed the concerns I point to in these reasons in other claims of modest proportion, notably in Culligan Springs, saying:

Neither counsel nor litigants can afford the luxury of launching a full regular trial when relatively modest amounts are in issue. All parties’ counsel must take steps available to narrow issues and shorten trials. Costs payable by the losing party must be reasonable and proportionate to the amount in dispute.[^2]

[12] All steps available include those involving the reality checks referred to above.

[13] In my view, success upon issues and outcome was mixed in this case. The trial was prolonged, at least in part because the defendants chose not to embrace the spirit and warning of the consequences of Rule 51.04, the net judgment was modest at best and the costs sought are out of proportion to the defendants’ recovery.

[14] In the circumstances, it is fair and reasonable to award no costs of the action to either the defendants or the plaintiff.

Moore J.

DATE: 2 December 2013

[^1]: Boucher v. Public Accountants Council (Canada), (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, (Ont. C.A.) at para. 37 [^2]: Culligan Springs Ltd. v. Dunlop Lift Truck (1994) Inc., 2006 CarswellOnt 2516 at para 25