COURT FILE NO.: CV-00494386

DATE: 20140617

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sharon Mackay and Tom Cheney, Applicants

AND:

Metropolitan Toronto Condominium Corporation No. 985, Marilyn Snead, John Elwood, Jack Williams, Jacob Howard Switzer, a.k.a. Jay Switzer and Adalsteinn Brown, Respondents

BEFORE: Mr. Justice Graeme Mew

COUNSEL: Natalie Schernitzki, for the Applicants

Jason P. Mangano, for the Respondents

HEARD: In Writing

ENDORSEMENT on costs

[1] In Reasons for Decision dated 12 May 2014 (2014 ONSC 2863), although I decided the trial of an issue in favour of the respondents, I provisionally awarded costs to the applicants on a partial indemnity scale, but invited submissions from the parties in the event that there were circumstances, such as settlement offers, which would warrant a different disposition on costs.

[2] The applicants submit that they should be awarded costs on a substantial indemnity scale and invite me to fix such costs at $64,696.32.

[3] The respondents submit that the appropriate disposition of costs would be to make no award of costs to the applicants, but that if it is deemed appropriate to award costs to the applicants, partial indemnity costs in an amount not exceeding $15,000 should be ordered.

[4] The issues which were tried arose from the migration of cigar smoke into the applicants’ condominium unit, and were:

a. Has the respondent MTCC No. 895 breached its duty to repair the units and common elements after damage in accordance with s. 89 of the Condominium Act?

b. Has MTCC No. 895 breached its duty to maintain the common elements in accordance with s. 90 of the Condominium Act?

c. If (a) or (b), what must MTCC No. 895 do in order to comply with the Act?

d. Are the applicants entitled to costs of this trial of the issues?

[5] The written record of proceedings was substantial and augmented by the oral testimony of three witnesses, all of whom were engineers and two of whom were qualified as experts. The evidentiary portion of the trial took a full day. There were then oral submissions of approximately 90 minutes in duration.

[6] The applicants offer a number of reasons in support of their submission for a more generous scale of costs than the partial indemnity basis which I provisionally indicated. Particular emphasis is placed on the conduct of the respondents in relation to the appellants and on my findings that the corporate defendant failed to act with sufficient dispatch and that a negative attitude towards the applicants coloured the respondents’ decision-making. It is also noted that it was, ultimately, not unreasonable that the applicants resorted to litigation in the face of the ongoing failure of the corporate defendant to resolve the issue of smoke migration into the applicants’ unit.

[7] The respondents point to the applicants’ lack of co-operation with the efforts of the contractors and engineers retained by the respondents to remedy the problems.

[8] Substantial indemnity costs should be reserved for only the “rare and most exceptional” cases where there has been “reprehensible, scandalous or outrageous conduct on the part of one of the parties”: Harvey v Elgin Condominium Corp. No. 3, 2013 ONSC 1866 and Foulis v Robinson, (1978) 1978 1307 (ON CA), 92 D.L.R. (3rd) 134 (ON CA).

[9] The parties’ submissions notwithstanding, I would still exercise my discretion to award costs to the applicants on a partial indemnity scale. To the extent there are exceptional features of this case (and in particular the issues tried), they are already reflected in the fact that costs have been awarded to the unsuccessful party. Furthermore, the conduct which the applicants complain of relates more to the substantive dispute itself than to the conduct of the litigation process.

[10] The total value of the time spent by the fee-earners engaged on this matter amounts to $62,568 (over 200 hours in total). 60% of that sum is claimed to represent an appropriate partial indemnity assessment.

[11] It is noted that the disbursements claimed include amounts for computerised legal research and scanning.

[12] Furthermore, the costs claimed appear to include the application as a whole, to date, rather than just those costs relating to the issues that were tried.

[13] While not doubting that the fee-earners have accurately recorded their time, when determining matters governed by the Rules of Civil Procedure, the court should always have regard to the overarching principle of proportionality: Rule 1.04(1.1). In regard to costs, the court should, in particular, consider the factors set out in rule 57.01(1) and fix an amount that is fair and reasonable to the parties against whom costs are awarded rather than an amount fixed by reference the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council of Ontario, (2004) 2004 14579 (ON CA), 71 O.R. (3d) 291 at para. 26.

[14] Having regard to these principles, a fair and reasonable amount for the costs payable by the respondent Metropolitan Toronto Condominium Corporation No. 985 to the applicants in respect of the trial of the issues heard on 28 and 30 April (including the attendance before Low J. on 18 December 2013 and all steps taken after that date in connection with the issues that were tried) would be $32,500 inclusive of disbursements and applicable H.S.T.

Mew J.

Date: 17 June 2014