ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-13-479357
DATE: 20140404
BETWEEN:
NORTHBRIDGE GENERAL INSURANCE CORPORATION,
Plaintiff
– and –
LANGSTON HALL DEVELOPMENT CORPORATION, LANGSTON HALL REAL ESTATE CORP., DEL TERRELONGE, JOHN WEE TOM and NAHEEL SULEMAN,
Defendants
Dominique Michaud, Counsel for the Plaintiff
Ryan Watkins, Counsel for all the Defendants
WRITTEN SUBMISSIONS ON COSTS
ENDORSEMENT: GREER J.:
[1] On February 7, 2014, I delivered Judgment on a Summary Judgment Motion brought on by the Plaintiff, Northbridge General Insurance Corporation (“Northbridge”). I awarded Northbridge damages in the amount of $53,416.73 personally against three of the Defendants in this matter, namely Del Terrelonge, John Wee Tom and Naheel Suleman. In addition, in para. 39 of my Judgment, I granted Northbridge Partial Summary Judgment with respect to additional expenses incurred by Northbridge after August 23, 2013, as per para. 3 of my Judgment. Counsel were ordered to submit to me a Supplementary Judgment on terms as agreed to by them, failing which, Northbridge was to send me copies of all additional expenses paid by them on behalf of the Defendants, to verify the amount now being requested in the Partial Summary Judgment submissions.
[2] I said in para. 30 of my Judgment, that the parties were to send me Written Submissions on Costs on the terms as set out therein, if they were unable to agree on Costs. I have now received those Written Submissions, as the parties were unable to reach any agreement on the quantum of Costs.
[3] Northbridge was totally successful on its Summary Judgment Motion and now asks for its Costs on a substantial indemnity basis, in the amount of $23,160.65, inclusive of HST and disbursements. These Costs relate only to time that was spent after August 23, 2013 in relation to the Summary Judgment Motion itself, and in relation to a preliminary Motion brought on at the opening of it.
The Preliminary Motion
[4] Northbridge moved to allow one of its affiants, Ms. LaLiberte, to serve and file a Second Reply Affidavit in the proceeding. The Defendants asked that the Summary Judgment Motion be adjourned that day, to allow them to cross-examine the affiant on the terms of the new Affidavit. I allowed the Affidavit to be served and filed on certain terms.
[5] I refused to grant the adjournment and gave the parties until December 31 to attend on the cross-examination and to submit short written submissions to me, if necessary, on what was revealed on the cross-examination. I agreed to withhold writing my Endorsement on the Summary Judgment Motion, until any new submissions were before me. It took approximately 1½ hours to hear the Preliminary Motion and for me to produce my hand-written Endorsement on it. I then heard the Summary Judgment Motion. That Endorsement came out on February 7, 2014, as a Judgment in favour of Northbridge.
The Summary Judgment Motion Costs
[6] The Summary Judgment Motion took approximately 2½ hours to be heard. Since Northbridge was totally successful on the Motion, it is entitled to its Costs. The only question is what should be the quantum of those Costs and on what scale. Northbridge seeks Costs on a substantial indemnity basis, given the type of Motion which was heard. It says that such Costs are reasonable in the circumstances of the case, given my findings. I held that the three personal Defendants’ failed to recognize their personal liability under the terms of the Indemnity Agreement which each signed, in relation to the posting of the Tarion Bond. They had entered into a real estate transaction and commercial transaction to build a residential multi-unit condominium project. The Bond had to be posted in connection therewith.
[7] In para. 36 of my Judgment, I found that the Defendants’ Statement of Defence, “…to be without merit.” In addition, I said, “There is no chance of success on the part of the Defendants on going to Trial.” I found that the Indemnity Agreement, signed by them in their personal capacities, was properly executed by them and enforceable against them by Northbridge.
[8] This Motion was not an ordinary interim motion in a proceeding. Northbridge knew what the legal test was if it was going to set down a Summary Judgment Motion to be heard. The Defendants, on the other hand, had to be prepared to put their best feet forward on such a Motion, if they were going to oppose it. Northbridge, therefore, had to be fully prepared, and it was. This preparation is noted in the time dockets it presented with its Bill of Costs.
[9] The Bill of Costs, in the amount of $23,160.65, is comprised of fees of $20,813.47 plus HST of $2,394.47 plus disbursements of $2,347.18 inclusive of $255.42 HST. Almost all of the billable hours are those of Mr. Michaud, a lawyer with 5 years’ experience before the Bar. His billing rate varied over the period in question from $315 per hour to $340 per hour. The Law Clerk spent only 4.9 hours at $125 per hour. The time period extends from August 23, 2012 to November 26, 2013, when the Motion was heard.
[10] On a partial indemnity scale, Northbridge says the Bill of Costs is $16,078.94, inclusive of HST and disbursements and HST.
[11] It is the position of the Defendants that any costs awarded to Northbridge should be on a partial indemnity scale. They say a reasonable amount for the time spent would be $7,500 inclusive of disbursements and HST. The Defendants presented a Bill of Costs for their counsel, Mr. Watkins, who was called to the Bar in 2012. He says he spent only 26.3 hours in total, on a partial scale of $100 per hour. He did not, however, attach any time dockets to show his actual billing rate and what time he had recorded.
[12] The Defendants also object to Mr. Michaud’s partial indemnity billing rate of $210-$225 per hour, saying it should not be more than $175 per hour. They object also to the Law Clerk’s billing rate, and object to the amount of $1,016.50 as a disbursement for the payment of transcripts on the cross-examination on the Second Reply Affidavit. They say too much time was spent by Mr. Michaud, and that the Bill of Costs is out of proportion to the amount of damages awarded of $53,416.73.
[13] I do not find Mr. Michaud’s billing rates, for his years of experience, to be out of the ordinary. Nor is the billing rate of his Law Clerk out of the ordinary. The Judge, hearing the Motion, when setting Costs, must apply the principle of reasonableness, in the circumstances of the case. This is set out in Boucher v. Public Accountants Council (Ontario) 2004 14579 (ON CA), 2004 CarswellOnt 2521, 48 C.P.C. (5th) 56, 188 O.A.C. 201, 71 O.R. (3d) 291, which followed the approach taken in Zesta Engineering Ltd. v. Cloutier (2002), 2002 25577 (ON CA), 21 C.C.E.L (3d) 161 (Ont. C.A.) at para. 4, which said:
In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.
[14] In addition, our Court looks at the circumstances of the case. In this case it was a Summary Judgment Motion, which, if successful, would help to end the litigation. While it was not extremely complex, the issue of the Tarion Bond had to be dealt with as the premiums kept accumulating and the hollow promises by these Defendants to pay them did not come to fruition. While the amount of the Costs seems somewhat out of proportion to the amount of damages, it is a case where the damages are set amounts and not general in nature. There were general commercial principles at stake with respect to the Tarion Bond, which Northbridge had to continue to pay in the face of the Defendants’ default.
[15] Having reviewed all of the time dockets of Northbridge’s counsel, I fix the Costs payable to Northbridge in the amount of $20,427.52inclusive of HST and disbursements and HST on the disbursements. I have reduced the amount of fees, given that there excess time spent preparing for cross-examinations and in redrafting documents. I have allowed the disbursements for the two transcripts produced in the amounts of $486.50 and $530, which total $1,016.50. In the circumstances of this case, I find this to be a reasonable amount of Costs and I order it to be paid jointly and severally by the three Defendants. Post-Judgment interest shall run from the date of this Order at the Courts of Justice Act rate until fully paid.
The Partial Summary Judgment
[16] The Defendants disagree with Northbridge’s calculation of damages, which accrued after the August 23, 2013 date. Northbridge seeks Partial Supplementary Judgment on the new amounts in the amount of $26,050.50 as follows:
$20,932.50 with respect to payments that had to be made by Northbridge on the Tarion Bond, as set out in letters dated December 6, 2013 and January 22, 2014;
$4,604 owing by the Defendants as Indemnitors under the Indemnity Agreement for insurance premiums rendered after August 22, 2013; and
$514 owing as pre-judgment interest on the above amounts at the contractual rate of 18% per annum pursuant to section 33 of the Indemnity Agreement.
In support of its position on these amounts, which were challenged by the Defendants, Northbridge has provided copies of the letters and copies of the Northbridge cheques paying these amounts above in 1. and 2. as noted above, as well as a calculation of the interest owed.
[17] I find the position of the Defendants that Northbridge terminated its agreement with the Defendants, to be without merit and incorrect in its interpretation of their agreement. There is also no evidence which supports the Defendants’ position that the policy has been cancelled for Non-Payment of the premiums.
[18] The Tarion Bond system does not work that way even though the Defendants’ project has been in Receivership since December of 2012. Northbridge’s additional submissions made after Ms. LaLiberte was cross-examined on her Second Reply Affidavit, make this point. It says that section 3(c) of the Tarion Bond contemplates that Northbridge’s obligations will continue until Langston Hall (one of the corporate Defendants) has fulfilled all of its obligation under the Ontario New Home Warranties Plan.
[19] Its obligations continue, says Northbridge, until Tarion returns the Bond to Lombard and only the Defendants can take steps to have the Bond released. It also points out that the Receiver never consented to Northbridge taking steps to have Tarion call in the Tarion Bond on this project.
[20] I find that the Defendants/Indemnitors, jointly and severally, owe the amount of $26,050.50 to Northbridge, and a Judgment shall issue accordingly as amended and signed by me.
Greer J.
Released: April 4, 2014
COURT FILE NO.: CV-13-479357
DATE: 20140404
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NORTHBRIDGE GENERAL INSURANCE CORPORATION,
Plaintiff
– and –
LANGSTON HALL DEVELOPMENT CORPORATION, LANGSTON HALL REAL ESTATE CORP., DEL TERRELONGE, JOHN WEE TOM and NAHEEL SULEMAN,
Defendants
ENDORSEMENT
Greer J.
Released: April 4, 2014