COURT FILE AND PARTIES

COURT FILE NO.: CV-12-455714

DATE: 20140724

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Anne Opfermann, Plaintiff

AND:

Anthony Richard Taylor, Taylor Made Construction Group Inc., and Scotty Eisemann, also known as Scott Eisemann, Defendant

BEFORE: Mr. Justice Graeme Mew

COUNSEL: Cameron R.B. Fiske, for the Plaintiff

Rolf M. Piehler, for the Defendants

HEARD: In Writing

ENDORSEMENT on costs

[1] Following a six day trial, the plaintiff was awarded damages of $157,206 (of which $25,000 represented aggravated damages). All of the defendants except Anthony Taylor were found to be jointly and severally liable for the entire amount of the judgment. Mr. Taylor’s personal liability to pay damages was held to be for 50% of the total award, namely $78,603.

[2] The plaintiff succeeded in establishing civil fraud on the part of the defendants (in the case of Mr. Taylor it was found that while he did not have a dishonest intent to deceive the plaintiff, there came a point where his continued failure to apprehend and address the defendant Scott Eisemann’s activities rendered him an accessory to and facilitator of Mr. Eisemann’s deceitful conduct).

[3] The plaintiff seeks costs of $66,891.40 (inclusive of disbursements and HST) jointly and severally against all defendants on a substantial indemnity basis or, alternatively, of $46,001.41 (all inclusive) on a partial indemnity basis.

[4] The trial was conducted by counsel with courtesy and civility.

[5] There are no material offers of settlement made in the action that would bear on the issue of costs.

General Principles

[6] When determining matters governed by the Rules of Civil Procedure, including costs, the court should always have regard to the overarching principle of proportionality: Rule 1.04(1.1).

[7] In regard to costs, the court should 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 (C.A.) at para. 26.

Scale of Costs

[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; Foulis v Robinson (1978), 1978 1307 (ON CA), 92 D.L.R. (3rd) 134 (ON CA); Mackay v MTCC 2014 ONSC 3681.

[9] In Mortimer v Cameron (1993), 1994 10998 (ON CA), 17 O.R. (3d) 1, 1993 568, at p. 37 (), the Court of Appeal approved an earlier statement that conduct giving rise to an award of substantial indemnity costs (then known as “solicitor and client” costs) could derive from the “circumstances giving rise to the cause of action” or a party’s conduct “in the proceedings”. However the court also cautioned against departing from the usual scale of costs (now known as partial indemnity costs) by, in effect, making costs orders by way of damages.

[10] To the extent that there were concerns about the conduct of the parties in the litigation, they would include:

a. The formal prosecution of a counterclaim against the plaintiff until closing argument at trial;

b. The departure of Mr. Eisemann during the course of his cross-examination (he never returned to court to complete his evidence).

[11] The plaintiff also points to the findings at trial that the conduct of the defendants giving rise to the cause of action was unconscionable and exploitative of the plaintiff, thus supporting an award of substantial indemnity costs.

[12] In my view this is one of those rare cases where the conduct of Mr. Eisemann relating to the “circumstances giving rise to the cause of action”, as well as his failure to attend court for the completion of his cross-examination, was sufficiently reprehensible to warrant an exercise of my discretion to award substantial indemnity costs against him and his de facto employer, the corporate defendant. In a nutshell, these defendants deceived the plaintiff into paying for $138,686 worth of unnecessary work on her house under circumstances that exploited the plaintiff’s vulnerabilities arising from her age and infirmity.

[13] The circumstances do not, in my view, warrant a costs order against Mr. Taylor on a substantial indemnity basis. Although culpable, his actions lacked the dishonest attempt to deceive that was a feature of Mr. Eisemann’s conduct.

Quantum of Costs

[14] A review of the time summary prepared on the plaintiff’s indicates a number of routine tasks undertaken by a senior lawyer that might more reasonably have been carried out by a less well-qualified fee-earner. I do, however, note that the bill of costs does not include time spent between October 2013 and March 2014, a time when the file was being transitioned from one lawyer to another.

[15] The plaintiff’s costs submissions reference the hourly rates charged by the fee-earners who worked on the case. Using these rates as the basis for determining costs would result in a full indemnity. As pointed out by Lax J. in Manning v Epp 2006 35631 (ON SC) at paras. 4-6, there is a distinction between full and substantial indemnity costs:

Historically, solicitor and client costs [now known as substantial indemnity costs] approached full indemnity and depending on a solicitor’s actual billing rate, they may still coincide. As billing rates to clients have increased and risen to hourly rates in excess of $600.00, the gap between an award of costs that provides full indemnity and one that provides substantial indemnity has widened.

[16] There are also disbursements paid to an investigator for asset investigation that are post-judgment costs which appear to relate to the anticipated execution of the judgment and which should not, accordingly, form part of the costs of the action awarded at trial.

[17] Having regard to all of the foregoing, I would fix the plaintiff’s costs on a substantial indemnity scale at $50,000 inclusive of disbursements and HST. I fix the costs payable on a partial indemnity basis at $32,500 inclusive of disbursements and HST.

Apportionment of Costs between Defendants

[18] All of the defendants should be jointly and severally responsible for the partial indemnity costs of the plaintiff. Despite Mr. Taylor’s lesser culpability, he was nevertheless Mr. Eisemann’s enabler and, thus, should share responsibility for the costs of the action with the other defendants. Only Taylor Made Construction Group and Mr. Eisemann are liable, on a joint and several basis, for the amount of $17,500 which represents the difference between the partial indemnity and substantial indemnity costs assessments.

Graeme Mew J.

Date: 24 July 2014