SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: 07-CV-336058PD3
DATE: 2013/02/08

RE: Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, Jeffrey Kerbel, 2001251 Ontario Inc. and First Elgin Developments Inc.

BEFORE: MASTER GRAHAM

HEARD: October 4, 2012

COUNSEL:
R. Das for Romandale Farms Limited (moving party)
S.Erskine for the plaintiff
M. Henderson for the defendants Kerbel, 2001251 Ontario Inc. and First Elgin Developments Inc. (“the Kerbel defendants”)

ENDORSEMENT

(Costs of motion argued October 4, 2012)

[1] The defendant Romandale’s motion was argued on October 4, 2012 and I released my decision dismissing the motion on December 21, 2012. In my endorsement, I ordered that if the parties could not agree to the disposition of the costs of the motion, they could make written submissions. I subsequently received correspondence dated January 18, 2013 from both counsel for the plaintiff and for the Kerbel defendants along with those parties’ costs outlines and correspondence dated January 31, 2013 from counsel for the moving defendant Romandale containing that party’s costs submissions.

[2] The responding parties were completely successful in opposing the motion and they should be awarded costs. Although the Kerbel defendants suggest that a strong argument could be made for substantial indemnity costs on the basis that the part of the motion in which the moving party was seeking costs had already been decided by Spence J., those defendants ultimately acknowledge that they are seeking partial indemnity costs. The plaintiff does not make any request for substantial indemnity costs. I will assess and award the costs of the motion on a partial indemnity basis.

[3] The plaintiff has submitted a costs outline seeking total costs of $3,409.78 including $129.95 for disbursements and $377.33 for HST.

[4] The Kerbel defendants have submitted a costs outline seeking total costs of $20,078.22, including costs for preparing material of $15,000.00, costs for the appearances in excess of $4,500.00 and disbursements of $303.97.

[5] For comparison purposes, it should be noted that at the conclusion of the hearing, the moving defendant Romandale submitted a costs outline setting out total costs of $4,498.70 including fees of $3,940.00 for preparation of material and the appearance and disbursements of $144.00.

[6] With respect to the costs claimed by the Kerbel defendants, Romandale submits that the fact that Kerbel’s counsel failed to bring a costs outline to the hearing of the motion is sufficient to deprive those defendants of costs. Romandale further submits that the costs claimed by the Kerbel defendants, in excess of $20,000.00, are grossly excessive.

[7] The rule with respect to costs outlines is as follows:

57.01(6) Unless the parties have agreed on the costs that it would be appropriate to award for a step in a proceeding, every party who intends to seek costs for that step shall give to every other party involved in the same step, and bring to the hearing, a costs outline (Form 57B) not exceeding three pages in length.

[8] Romandale relies on the ruling of Master Polika in Cango v. D&S Equipment, [2006] O.J. No. 3046, to the effect that failure to deliver a costs outline in accordance with rule 57.01(6) is fatal to a party’s claim for costs absent some real basis justifying such failure.

[9] Romandale also relies on Master Dash’s decision in Garten v. Kruk, [2009] O.J. No. 2143, in which he cited Cango, supra, and denied costs to the successful party on a motion. However, Master Dash based his decision not only on the party’s failure to deliver a costs outline in accordance with rule 57.01(6), but also on the fact that that party had breached a very clear order to provide such an outline, and had taken default proceedings against a defendant without informing the defendant’s counsel of his intention to do so. The absence of a costs outline was only one of a number of factors considered by Master Dash and Garten should not be interpreted as authority for the proposition that the failure to deliver a costs outline precludes a party from being awarded costs.

[10] Finally, Romandale relies on Terracap Investments Inc. v. 2811 Development Corporation, 2010 ONSC 4568 and Sealed Air (Canada) Co. V. ABB Inc., 2012 ONSC 1746, both decisions in which the court refused to award costs to a party that failed to bring a costs outline to the hearing of a motion. While both decisions refer to rule 57.01(6), the rulings essentially consist of bald statements that because the parties seeking costs did not provide costs outlines, they would not be awarded costs. Neither decision contains any analysis of the rule or any case law on the issue, or considers whether C.J.A. s. 131(1) provides the court with some overriding discretion in the matter.

[11] While I agree that the failure of a party otherwise entitled to costs to deliver a costs outline in a timely manner is one factor that the court may consider in deciding whether to award costs and in assessing the amount of costs, I respectfully disagree with the suggestion that the failure to provide a costs outline absolutely precludes an award of costs. The Courts of Justice Act, R.S.O. 1990 c. C.43, s. 131(1) places the costs of a proceeding or a step in a proceeding in the discretion of the court. Rule 57.01(6) does not provide a sanction for failure to deliver a costs outline, and therefore does not eliminate the discretion conferred upon the court by the statute.

[12] I conclude that a party’s failure to provide a costs outline is but one factor for the court to consider in exercising its discretion with respect to the issue of costs. Counsel for the Kerbel defendants clearly did some compensable work in preparing for and arguing the motion. The costs recoverable may be reduced because no costs outline was provided at the hearing, but the failure to provide the costs outline does not mean that those defendants should be completely deprived of any costs.

[13] I do accept Romandale’s submission that the costs sought by the Kerbel defendants are grossly excessive. The Kerbel defendants did not deliver their costs outline until after they knew they had succeeded on the motion, so their submission would not have been moderated by the possibility that the amount claimed might turn out to be the amount that they would have to pay. Further, the assessment of costs is not to be based solely on a mathematical calculation (hours x hourly rate) but rather should be based on what the unsuccessful party might reasonably expect to pay in all the circumstances. (See: Boucher v. Public Accountants Council (2004), 2004 14579 (ON CA), 71 O.R.(3d) 291 (C.A.)).

[14] I assess Kerbel’s costs based on the amount that Romandale would have sought if successful (approximately $4,500.00), reduced to take into account Romandale’s costs for preparing its costs submissions in the face of costs submissions that were clearly excessive ($500.00). Romandale shall pay Kerbel’s costs of the motion fixed at $4,000.00 payable within 30 days.

[15] With respect to the costs claimed by the plaintiff, the defendant Romandale, while acknowledging that plaintiff’s counsel’s hourly rate is appropriate for her year of call, submits that the plaintiff’s costs should be reduced to $2,500.00 to take into account the fact that it took the same position on the motion as the Kerbel defendants.

[16] While it was reasonable for the plaintiff to have counsel appear on the motion, the legal argument advanced by the plaintiff in its factum was essentially identical to that advanced by the Kerbel defendants. The plaintiff’s factum was not delivered until September 27, 2012, approximately three months after the Kerbel defendants’ factum, and really did not add anything further to the legal argument.

[17] I accept Romandale’s submission with respect to the plaintiff’s costs and accordingly, Romandale shall pay the plaintiff’s costs of the motion fixed at $2,500.00 payable within 30 days.

MASTER GRAHAM

DATE: February 8, 2013