NEWMARKET COURT FILE NO.: CV-09-094072-00

DATE: 20140120

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

GEORGE CHRISS

Plaintiff

– and –

THE TD BANK FINANCIAL GROUP, TD WATERHOUSE CANADA INC., THE CANADA TRUST COMPANY, THE TORONTO DOMINION BANK and TD CANADA TRUST

Defendants

George Chriss, Self-Represented

Scott Gfeller, for the Defendants

HEARD: by written submissions

REASONS ON COSTS

DiTOMASO J.

THE TRIAL PROCEEDINGS

[1] The Plaintiff Mr. Chriss commenced an action against the Defendants. The claim arose from a mortgage loan made by Mr. Chriss as mortgagee to an Arm’s-Length Mortgagor through Mr. Chriss’ Self Directed RSP Account at TD Waterhouse.

[2] Mr. Chriss’ lawyer for the transaction, Paul Caroline, misappropriated Mr. Chriss’ mortgage funds and failed to register a valid mortgage in favour of Mr. Chriss.

[3] Neither in his Statement of Claim nor in his evidence at trial did Mr. Chriss particularize any cause of action against the Defendant The Toronto Dominion Bank. Further, the Defendant identified as “The TD Bank Financial Group” was not a legal entity but rather was a trade name used to refer to TD Bank and its affiliates, who provided deposit, investment, loan, securities, trusts, insurance and other products or services. Mr. Chriss abandoned his claims against The Toronto Dominion Bank and The TD Bank Financial Group at trial. The Defendant The Canada Trust Company was simply the predecessor for TD Canada Trust.

[4] Ultimately, Mr. Chriss sought recovery of his loss from two defendants, namely, TD Waterhouse and TD Canada Trust.

[5] Mr. Chriss sought the return of his investment capital from TD Waterhouse and TD Canada Trust. His position was that there was no duly executed contract for the Mortgage Agreement between the parties. In addition, he submitted that these Defendants breached the applicable Mortgage Agreement and were negligent in the processing and administration of his mortgage investment and should have uncovered the fraud perpetrated by Mr. Caroline. Mr. Chriss alleges that TD Waterhouse and TD Canada Trust breached a fiduciary duty owed to him. Lastly, Mr. Chriss sought a declaration that the fraudulent documents produced by Mr. Caroline as agent for TD Waterhouse and TD Canada Trust be declared invalid. He also claimed punitive damages and interest at the mortgage rate against these Defendants.

[6] At a trial conducted over three days, Mr. Chriss raised seven issues. He was unsuccessful in respect of every issue and his action was dismissed.

[7] My written Reasons for Judgment are dated December 5, 2013.

[8] The parties agreed that costs would be dealt with by way of written submissions.

[9] I have received and reviewed cost submissions from Mr. Chriss and from the Defendants. In addition to considering those written cost submissions, I have reviewed my Reasons for Judgment dated December 5, 2013.

POSITION OF THE PARTIES ON COSTS

Position of Mr. Chriss

[10] Mr. Chriss acknowledges that as a general rule in civil actions, a successful party is entitled to its costs. Further, he acknowledges that the Defendants were successful in all aspects of these proceedings. However, he submits that judges have a great deal of latitude in how costs are to be decided.

[11] While the Defendants had filed a motion for summary judgment to be heard in September 2010, the motion was withdrawn. Mr. Chriss submits that the costs would have been significantly reduced based on the final outcome of the summary judgment motion. Nevertheless, in reviewing the written cost submissions on behalf of the Defendants, no claim is being advanced for any costs in respect of the summary judgment motion.

[12] Mr. Chriss acknowledges that the trial was first scheduled for the Sittings commencing May 13, 2013 but was adjourned at his request due to a scheduling conflict.

[13] He submits that the amount of costs sought by the Defendants in this matter is insignificant compared to their collective earnings over the last three consecutive years, even though they are entitled to costs. To the contrary, Mr. Chriss has suffered greatly because of Mr. Caroline’s fraud and over the same three year period, Mr. Chriss submits he earned an average income of $860.

[14] While Mr. Chriss submitted that he was served with the Defendants’ Offer to Settle on October 31, 2013, he did not accept this Offer and proceeded to trial as a self-represented litigant lacking funds to retain counsel.

[15] He did acknowledge abandoning claims against The Toronto Dominion Bank and the TD Bank Financial Group at trial after re-considering his position.

Position of the Defendants TD Waterhouse and TD Canada Trust

[16] These Defendants submit that as they were wholly successful in defending the action dismissed at trial, they are entitled to costs on a partial indemnity basis up to October 30, 2013 (date of Defendants’ Offer to Settle) and on a substantial indemnity basis from that date forward in the total amount of $78,765.26.

[17] It is submitted that the amount claimed is fair and reasonable, takes into account the reasonable expectations of the parties, the factors enumerated in rule 57.01(1) of the Rules of Civil Procedure and the principles outlined in Boucher v. Public Accountants Council for the Province of Ontario 2004 14579 (ONCA).

[18] Serious allegations were made by Mr. Chriss regarding the competency of the Defendants’ services and purported breaches of fiduciary and other duties, all of which were potentially of high prejudice to the reputation of the Defendants. Ultimately, all of these allegations were found after trial to be without foundation. The Defendants were put to the expense to defend all of the issues raised by the Plaintiff. In the end, all of Mr. Chriss’ claims proved unsuccessful and were dismissed.

[19] The Defendants submit that substantial indemnity costs from October 30, 2013 are warranted given Mr. Chriss’ unreasonable “shotgun” approach to the litigation by naming The TD Bank Financial Group and the Toronto Dominion Bank despite having no relationship to these parties whatsoever. Notwithstanding that the Statement of Defence identified the proper parties, Mr. Chriss did not abandon these claims until trial and only after substantial costs were incurred to defend same.

ANALYSIS

Entitlement

[20] The Defendants TD Waterhouse and TD Canada Trust were entirely successful at trial. They were successful on every issue raised. Mr. Chriss’ action was dismissed.

[21] As the successful party, TD Waterhouse and TD Canada Trust are entitled to their costs. I have considered the Defendants’ Offer to Settle dated October 30, 2013. That Offer can be found at Tab 4 of the Defendants’ Written Submissions. By that Offer, the Defendants offered to pay Mr. Chriss the total sum of $50,000 inclusive of principle, interest and costs, together with other terms. Lastly, the Offer to Settle was open for acceptance until the commencement of trial of the action, unless earlier revoked in writing. The Offer was not revoked prior to trial and was not accepted by Mr. Chriss.

[22] It is clear that the Defendants achieved a much better result at trial than the outcome proposed by the Offer to Settle. Rule 49 of the Rules of Civil Procedure applies. Therefore, I find that the Defendants TD Waterhouse and TD Canada Trust are entitled to costs on a partial indemnity scale from the outset of these proceedings to October 30, 2013 and costs on a substantial indemnity scale thereafter. The Offer was very reasonable and far more favourable than Mr. Chriss’ result at trial.

[23] Further, substantial indemnity costs from October 30, 2013 are warranted in this case given Mr. Chriss’ “shotgun” approach to the litigation naming as many TD entities as he possibly could. The TD Bank Financial Group and the Toronto Dominion Bank were named despite having no relationship to these parties in the context giving rise to this litigation.

[24] In the face of the approach taken by Mr. Chriss, it was necessary to defend claims against all TD named entities notwithstanding that the Statement of Defence identified the proper parties. It was only during the trial that Mr. Chriss decided to abandon his unfounded claims against The Toronto Dominion Bank and The TD Bank Financial Group.

Quantum

[25] While Mr. Chriss in his written submissions makes no specific allegations as to the quantum of costs other than what I have recited in his Position, I have reviewed the Bill of Costs presented on behalf of the Defendants, submitted on a partial indemnity basis to October 30, 2013 and a substantial indemnity basis thereafter. In doing so, I have considered rule 57.01(1) factors, and what is fair, reasonable and proportional in all the circumstances in the exercise of my discretion to fix costs. In doing so, I have reviewed the fees claimed by the Defendants prior to and subsequent to October 30, 2013.

(a) Partial Indemnity Fees to October 30, 2013

[26] The total partial indemnity costs claimed is in the amount of $21,392. These fees represent time spent in respect of different stages of the proceedings including pleadings, documentary discovery, examinations for discovery of the parties, attendance at trial scheduling court, pretrial conference, mediation and Offer to Settle up to October 30, 2013. While I have no doubt that the time was spent and the billable rate on a partial indemnity scale was appropriate, I am concerned that there exists an element of duplication involving services provided by a senior lawyer, an associate who eventually took the matter to trial and a law clerk. I have reviewed the time spent in respect of each of the headings referred to in the Bill of Costs, and would reduce the fees claimed by $5,392. I fix partial indemnity costs in the amount of $16,000.

(b) Substantial Indemnity Fees from October 31, 2013 and thereafter

[27] Substantial indemnity fees are claimed in the amount of $42,835. Fees claimed for trial preparation are in the amount of $34,580, attendance at trial in the amount of $7,000, and reviewing judgment and preparation of cost submissions in the amount of $1,255.

[28] I find these fees again to be the subject of duplication.

[29] In respect of trial preparation, while I do not have a concern regarding the substantial indemnity rates per hour, I note three lawyers and a law clerk participated in trial preparation. The trial preparation by three lawyers was 165.4 hours. The law clerk time was 31 hours. The total trial preparation time spent was 196.4 hours.

[30] While I appreciate that Defendants were compelled to deal with all of the issues raised by Mr. Chriss, I question the totality of the time spent for trial preparation. I do note that the trial preparation does breakdown the time spent both on a partial indemnity and substantial indemnity scale. Nevertheless, the sum of $34,580 is too high. I question whether all of the time spent was necessary by three lawyers and one law clerk. Although Mr. Chriss sought a last minute adjournment in respect of the May 2013 trial sittings, much of the trial preparation would have been done in anticipation of trial at the May 2013 Sittings. I appreciate that the last minute adjournment at Mr. Chriss’ request required some duplication to prepare for trial at the November 2013 Sittings. Nevertheless, trial preparation in the amount of $34,580 is excessive. I would reduce the amount claimed for trial preparation fees in the amount of $7,580. I fix trial preparation fees in the amount of $27,000. I would not disturb the fees claimed for trial attendance in the amount of $7,000. I would reduce judgment and cost submissions from $1,255 to the sum of $1,000.

[31] Accordingly, I fix fees in the amount of $51,000 with HST in the amount of $6,000 (rounded) for a total of $57,000 for all fees on a partial indemnity and substantial indemnity scale.

[32] I have considered the disbursements set out at Part 2 of the Bill of Costs and would fix disbursements in the amount of $6,000 inclusive of HST.

[33] I find the total fees and disbursements inclusive of HST are fixed at $63,000. I find this total amount to be fair, reasonable and proportional, giving effect to the overarching and guiding principles found in Boucher, supra, and Davies v. Clarington (Municipality) 2009 ONCA 722 at paras. 50 and following.

CONCLUSION

[34] For the reasons given, Mr. Chriss shall pay to the Defendants TD Waterhouse Canada Inc. and TD Canada Trust costs in the amount of $63,000.

DiTOMASO J.

Released: January 20, 2014