SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-12-450979
DATE: 20140327

RE: MARIA SOTIROPOULOU and APOSTOLOS PAPATOLIKAS, Plaintiffs

AND:

GILLES BEAUDIN and MARIE HERSA PIERRE-LOUIS, Defendants

BEFORE: Stinson J.

COUNSEL:
William Ribeiro, for the plaintiffs

Karey Anne Dhirani, for the defendants

HEARD: By written submissions

ENDORSEMENT AS TO COSTS

[1] In my endorsement released September 30, 2013, I granted the defendants’ motion for summary judgment, dismissed the plaintiffs’ action and discharged the certificate of pending litigation. Both sides had brought motions for summary judgment: the plaintiffs to enforce and the defendants to resist the enforcement of an alleged agreement of purchase and sale for a vacant residential building lot. In finding for the defendants, I concluded that no enforceable agreement ever came into existence as a matter of fact or law, and as a result the defendants were never obliged to sell the lot to the plaintiffs. On this basis I dismissed the action. This endorsement is based on the parties’ subsequent written submissions as to costs.

Liability for costs

[2] The defendants were entirely successful on the motion for summary judgment and in defending the action. There are no circumstances in the present case that would justify departing from the usual practice of awarding costs to the successful party payable by the unsuccessful party. I therefore conclude that the defendants are entitled to an award of costs payable by the plaintiffs for both the action and the motion. Given that a single bill of costs was filed on behalf of the defendants, I propose to assess all costs together.

Scale of costs

[3] Defendants seek an award of costs on a full indemnity basis throughout or in the alternative on a partial indemnity basis through to their offer to settle, and substantial indemnity costs thereafter or in the further alternative on a partial indemnity basis throughout.

[4] Leaving aside the potential impact of an offer to settle, an award of substantial indemnity costs is a rare and exceptional one. Generally speaking, such costs awards are restricted to cases where there has been active misconduct by a party during the course of the proceedings (or the underlying conduct that gave rise to the proceedings) or unsubstantiated allegations of misconduct by the opposite party, such that a punitive award of costs is warranted. In my view, neither situation applies in the present case.

[5] After commencing the action, the plaintiffs proceeded to obtain a certificate of pending litigation. Although I ultimately concluded that the action should be dismissed, it is accurate to say that the plaintiffs’ interest in the land in question was in issue in the proceeding. The registration of the certificate of pending litigation was therefore warranted and cannot form the basis of an award of substantial indemnity costs. There is no suggestion that there were any improper allegations that would warrant an award of substantial indemnity costs. Finally, having considered the submissions of both sides on the issue, I do not accept that there was any material non-disclosure on the part of the plaintiffs when they applied for leave to obtain and register the certificate of pending litigation. The mere fact that the court ultimately concluded that the claim was without merit and the CPL should be discharged is not a proper basis for a punitive damages award.

[6] The defendants’ alternative claim for enhanced costs is based on an offer to settle served by them on August 29, 2013. That offer contemplated, among other things, a consent dismissal of the action and an order discharging the certificate of pending litigation.

[7] This was an action in which the plaintiff’s claim was dismissed. As was observed by the Court of Appeal in S. & A. Strasser Ltd. v Richmond Hill (Town) (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243, rule 49.10 has no application where the plaintiff fails to recover any judgment. In that case, a modest offer by the defendants to pay some amount to the plaintiff on account of a grossly excessive claim, was considered by the Court of Appeal as a reason for awarding the defendants a costs “bonus” in the form of substantial indemnity costs following the date of the offer. In my view that case is distinguishable on its facts and I decline to apply it in the present case.

[8] I therefore conclude that the costs of the defendants should be assessed on a partial indemnity basis.

Quantum

[9] The defendants seek partial indemnity fees of $16,461.50 based on a total of 78.2 hours of professional work. That sum is largely comprised of 58.8 hours at $225 an hour for the defendants’ principal counsel, a 2001 call. I consider that hourly rate suitable in the circumstances. The real issue is whether the total time spent can be justified.

[10] The defendants originally represented themselves. For a period of time they retained a lawyer who briefly went on the record, but who did not become actively engaged apart from minor correspondence and conversations with counsel opposite. The defendants subsequently retained counsel for purposes of preparing for and arguing the motion for summary judgment. In my view it would be duplicative to require the plaintiffs to pay the expense of two separate counsel “getting up to speed” in the same matter, or for the expense incurred in the second lawyer reviewing the previous lawyer’s file.

[11] The principal argument advanced by the plaintiffs is that their counsel spent significantly less hours to prepare and argue their side of the case.

[12] Apart from my comments above, I am not prepared to be too critical of the amount of time spent by counsel for the defendants. This was a matter of some importance to the defendants, involving as it did an assertion by the plaintiffs that the defendants were legally obliged to convey to them a parcel of land worth close to $200,000. The defendants wanted to build their own house on the lot. Counsel for the defendants prepared accordingly, as the plaintiffs should have expected she would. The motion was hard fought, and of moderate complexity, involving multiple affidavits, cross-examinations and a detailed factum. Some modest extra time was spent by counsel for the defendants arising from the fact that it was necessary for her to prepare amended or supplementary materials to backstop the materials that the defendants had prepared themselves.

[13] Taking into account the foregoing and the basic principle of indemnity, I would reduce the partial indemnity fees claimed by the defendants from $16,461.50, to $14,000. To that sum must be added HST $1,820 and disbursements (inclusive of HST) of $3,698.20.

CONCLUSION AND DISPOSITION

[14] In the result, I fix the costs of the defendants at the all-inclusive sum of $19,518.20. That sum is payable to them by the plaintiffs, forthwith.

Stinson J.

Date: March 27, 2014