Court File and Parties

Court File No.: CV-11-441460
Date: 2014-06-13
Superior Court of Justice – Ontario

Re: BURTON RETAIL MEATS INC, Plaintiff

-and-

IGLOO REFRIGERATION LTD. c.o.b. as IGLOO FOOD EQUIPMENT, Defendant

Before: Stinson J.

Counsel:
Bohdan H. Bodnaruk, for the plaintiff
Joseph Malmazada, for the defendant

Heard: by written submissions

COSTS ENDORSEMENT

[1] In my reasons for judgment released December 17, 2013, I granted judgment for the plaintiff for the return of its deposit, in the amount of $22,000, plus prejudgment interest. I dismissed the counterclaim. Taking into account the award of pre-judgment interest, the plaintiff’s net recovery was in the order of $23,000. The parties subsequently made written submission as to costs. This endorsement addresses those submissions.

Liability for costs.

[2] The standard approach in civil litigation is that the successful party is entitled to recover costs from the unsuccessful party. Ordinarily, therefore, the plaintiff would be entitled to an award of costs as against the defendant. The amount recovered by the plaintiff, however (slightly less than $23,000) is within the monetary jurisdiction of the Small Claims Court ($25,000). The defendant therefore submits that, pursuant to rule 57.05(1) I should order that the plaintiff not recover any costs.

[3] The denial of costs to a successful plaintiff under rule 57.05(1) is not automatic: see, for example, Hunt v. TD Securities Inc. 2003 48369 (ON CA), [2003] O.J. No. 4868 (C.A.). Despite the fact that the plaintiff recovers an amount less than $25,000, the court retains the discretion to make an award of costs. This has been done in light of the complexities of the case (see Greenland v. Ogunkoya, 2009 29198 (S.C.J.)) or where to deprive a successful plaintiff of an award of costs for a multi-day trial would be a draconian result (see Blow v. Brethet, 2010 ONSC 6332 (S.C.J.).

[4] In my view, this is a suitable case in which to exercise my discretion in favour of the plaintiff. I found at trial that the defendant wrongly refused to deliver goods for which the plaintiff had paid a substantial deposit. The intransigence of the defendant was the cause of the breakdown of the parties’ relationship. As a consequence of the defendant’s actions, the plaintiff purchased replacement goods at greater expense elsewhere, spurning the opportunity to mitigate its loss by agreeing to the defendant’s demand for full payment upfront. Although I concluded that this amounted to a failure by the plaintiff to mitigate its damages, the fact remains that the principal wrongdoer who caused the litigation was the defendant.

[5] The case was not without its complexities. It consumed over four days of court time, with multiple witnesses, issues of credibility, factual disputes and questions of contractual interpretation. I found against the defendant on virtually all issues, save mitigation. To adopt the language of MacIsaac J in Blow, supra, to deprive the plaintiff of any recovery for costs through the application of rule 57.05(1) would be “draconian”.

[6] I therefore conclude that the plaintiff should recover an award of costs from the defendant.

Scale of costs

[7] The plaintiff seeks costs from the defendant on a partial indemnity basis. The defendant does not dispute that any costs awarded to the plaintiff should be on a partial indemnity scale.

Quantum of costs

[8] The plaintiff seeks partial indemnity costs of $41,340.30, including fees, disbursements and GST.

[9] I observe at the outset that the amount of costs sought by the plaintiff is almost twice the amount of its recovery. While an award of costs greater than a party’s underlying claim is not prohibited, where (as here) the amount in issue throughout was below the costs incurred, the principle of proportionality should come into play.

[10] Turning to some of the other factors enumerated under rule 57.01, I note as follows:

a) The costs claim is based on indemnity since, based on the bill of costs, the actual amounts claimed for fees and disbursements are indeed less than those actually incurred by the plaintiff and accurately reflect the hours spent and rates charged by the lawyers involved.

b) I believe that the costs are somewhat higher than an unsuccessful party would reasonably expect to pay in relation to this action, given the amount in dispute.

c) The amount recovered, as noted, was less than $23,000, which militates in favor of a lower award of costs.

d) In relation to apportionment of liability, while the plaintiff was successful in recovering its deposit, it lost the issue of mitigation, which represented approximately 25% of its claim. The net result was within the Small Claims Court monetary jurisdiction.

e) As I have noted, the case was somewhat complex having regard to the factual and contractual issues presented.

Conclusion and disposition

[11] Taking into account the foregoing factors and in particular the amount recovered and the divided success of the parties I fix the plaintiff’s costs at the all-inclusive sum of $27,500.

Stinson J.

Date: June 13, 2014