ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-440167

DATE: 20140711

BETWEEN:

DIANA ZABANAH
Plaintiff

– and –

CAPITAL DIRECT LENDING CORP. AND CHICAGO TITLE INSURANCE COMPANY
Defendants

Antonio Conte, for the Plaintiff/Respondent

Anthony Cole, for the Defendant/Moving Party, Capital Direct Lending Corp.

Ted Evangelidis, for the Defendant/Moving Party, Chicago Title Insurance Company

himel j.

REASONS ON COSTS

[1] The defendant Capital Direct Lending Corp. (“Capital Direct” or “the defendant”) in this action moved for summary judgment dismissing the claim of Diana Zabanah (“Zabanah” or “the plaintiff”) as having been brought outside the two year limitation period. The co-defendant Chicago Title Insurance Company (“CTIC” or “the co-defendant”) moved for summary judgment on the basis that the title insurance issued on the subject property did not insure against the type of loss claimed by Zabanah. For reasons delivered on April 22, 2014, I ruled that summary judgment was appropriate and dismissed the action against both defendants. I also ordered that if the parties were unable to agree on the issue of costs, they could file written submissions according to a timetable. I have now received and considered the submissions filed and provide my decision on costs below.

Positions of the Parties

[2] Capital Direct seeks an order of costs for the entire action on a partial indemnity scale for the work performed prior to the offer to settle made pursuant to Rule 49, and on the substantial indemnity scale for costs incurred after the offer to settle was made. The total amount on this split basis would be $43,774.55. In the alternative, it seeks costs on the partial indemnity scale for the entire action in the amount of $37,226.77. It argues that costs should be awarded on this basis because of the factors outlined in Rule 57.01(1), including that the plaintiff’s claim for $82,000 plus interest was dismissed, that no liability was apportioned to the defendant, that the legal issues were numerous and complex, that the issue was important to Capital Direct, that the plaintiff had been advised the action was statute barred but refused to accept this, that she was given a written offer to settle by the defendants jointly of $10,000 on May 8, 2012 which she rejected, and that the co-defendant Chicago Title made a joint Rule 49 offer of $20,000 on August 9, 2012 which was also rejected.

[3] Chicago Title seeks an order of costs of $13,015.71 for the summary judgment motion on a substantial indemnity basis, $14,027.04 for the costs of the action on a substantial indemnity basis, plus an additional $525 for preparation of the costs submissions. The total award on this basis would be $27,567.75. It takes the position that it was completely successful on the motion since the action dismissed and the result obtained was better than the offer to settle of $20,000 inclusive of interest and costs made on August 9, 2012, which remained open for acceptance at the time of the motion. The co-defendant points out that the plaintiff’s own costs outline submitted at the day of the hearing for the motion for summary judgment included a claim of costs in the amount of $16,594.50. Chicago Title also argues that the issues were complex, that they were important to the parties, that the plaintiff should have accepted the offer to settle but, instead, put the parties to the expense of preparing documents and arguing the motion for summary judgment.

[4] The plaintiff argues that the defendants’ arguments were technical ones, that the plaintiff responded to the offers to settle by a counter-offer of $60,000 in total, or separate settlements with each party of $20,000, an offer of mediation but received no response to this counter-offer. Counsel for the plaintiff argues that the defendants are asking that she be punished with a costs order and that the amount of $10,000 she had submitted to the court as an appropriate costs award was meant to cover the entire award of costs, not costs individually for each defendant. Further, this is a simplified procedure action involving only $82,000 and the court should consider proportionality and that the matter could have been settled if the parties had agreed to mediation.

The Law

[5] The jurisdiction of this court to award costs is found in s. 131(1) of the Courts of Justice Act Justice Act, R.S.O. 1990, c. C.43 which provides:

131.(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[6] Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 sets out the factors the court may consider in making an award of costs:

57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs.

[7] Generally, costs follow the event and the successful party is entitled to its costs incurred in bringing or defending the action: see Bell Canada v. Olympia and York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.). The fixing of costs is not a mechanical exercise based solely upon a calculation of hours and rates. It involves a consideration of a number of factors set out in Rule 57.01 to determine what is appropriate in the circumstances. The objective is to fix costs in an amount that the court considers fair and reasonable for the unsuccessful party to pay in a particular proceeding, rather than to fully indemnify a successful litigant for their actual costs incurred: see Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); Zesta Engineering Ltd. v. Cloutier (2002), 2002 45084 (ON CA), 164 O.A.C. 234 (C.A.); Moon v. Sher, (2004), 2004 39005 (ON CA), 246 D.L.R. (4th) 440 (C.A.).

The appropriate scale of costs

[8] In determining the appropriate scale of costs to be awarded, I note that the partial indemnity scale is intended to provide indemnification for costs reasonably incurred in the course of an action. In the usual circumstances, an award of costs on a partial indemnity basis is the appropriate award to impose on the unsuccessful party: see Foulis et al. v. Robinson; Gore Mutual Ins. Co., Third Party (1978), 1978 1307 (ON CA), 21 O.R. (2d) 769 (C.A.); Mortimer et al. v. Cameron et al. (1994), 1994 10998 (ON CA), 17 O.R. (3d) 1 (C.A.). In Wasserman, Arsenault Ltd. v. Sone (2002), 2002 45099 (ON CA), 164 O.A.C. 195 (C.A.) at para. 4, the court wrote that “[p]artial indemnity means just that – indemnification for only a part, or a proportion, of the expense of the litigation.”

[9] Costs on the substantial indemnity scale are usually reserved for those “rare and exceptional” cases, where the conduct of the party against whom costs is ordered may be considered reprehensible or where there are other special circumstances such as an offer to settle within the meaning of Rule 49.10 that justifies costs on the higher scale: see McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), 2002 41899 (ON CA), 59 O.R. (3d) 97 (C.A.), at paras. 38-39.

Decision

[10] The summary judgment motion is an effective tool for the efficient resolution of disputes. Motions for summary judgment take time to prepare and argue and the costs are not insignificant. In this case, the defendants were each successful on their motions for different reasons outlined in the reasons for judgment. I have considered the circumstances of this case including the nature of the claim made, the amount claimed, the results obtained, the complexity and importance of the matter to the parties, and the conduct of the litigation. I see nothing in the conduct of the plaintiff that would have justified costs on the higher scale nor do I see that there was conduct by the plaintiff that resulted in unnecessary proceedings or delay. The defendants considered it necessary to bring their respective motions and the plaintiff disagreed with the positions they took. I concluded that there were no genuine issues requiring a trial. There was nothing in the circumstances of the case or the conduct of the plaintiff that would justify an award of costs on the higher scale. Despite this finding, I must consider that the defendants made written offers to settle which they submit were open at the time for the motion. The plaintiff argues that she made a counter-offer but never received a response. The defendants beat these offers at trial since their summary judgment motions were granted.

[11] As for the quantum of costs claimed, I am of the view that the time spent was not excessive for the motion for summary judgment and for the entire action. I consider the importance of the matter to the parties, the complexity of the case, the conduct of the parties, the nature of the issues raised, the work performed, and the result achieved. I also consider the principle of proportionality. For these reasons, I exercise my discretion and consider that it would be fair and reasonable in the circumstances of this case to fix costs as follows: the plaintiff shall pay costs of the defendant Capital Direct for the entire action including the motion for summary judgment in the amount of $30,000 inclusive of disbursements and HST within 60 days and of the defendant Chicago Title in the amount of $18,000 for fees inclusive of disbursements and HST payable by the plaintiff within 60 days.

Himel J.

Released: July 11, 2014

COURT FILE NO.: CV-11-440167

DATE: 20140711

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DIANA ZABANAH
Plaintiff

– and –

CAPITAL DIRECT LENDING CORP. AND CHICAGO TITLE INSURANCE COMPANY
Defendants

REASONS ON COSTS

Himel J.

Released: July 11, 2014