COURT FILE NO.: CV-12-454619

DATE: 20140930

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Peter Danos, Grace Danos, and Apricot Catering 2001 Inc., Plaintiffs/Responding Parties

AND:

BMW Group Financial Services Canada, a division of BMW Canada Inc., BMW Canada Inc., Sydney P.H. Robinson, Edward A. Robinson, Eberhard Von Kuenheim, Adam Zimmerman, Town & County Motors (1998) Limited, carrying on business as Town & Country BMW, James H. Cochrane and Roy C. Foss, Defendants/Moving Parties

BEFORE: R. F. Goldstein J.

APPEARANCE: Wayne Laski, for the Plaintiffs/Responding Parties

Ron Aisenberg, for the Defendants/Moving Parties

costs ENDORSEMENT

[1] On April 7 2014 I granted summary judgment to the Defendants: Danos v. BMW Group Financial Services Canada, [2014] O.J. No. 1802, 2014 ONSC 2060 (Sup.Ct.). Briefly, the Danos’s leased a BMW automobile through their business, Apricot Catering. They did not make the lease payments. The car was re-possessed. BMW launched an action in Superior Court in Brampton for the outstanding lease amounts. The Danos’s launched an action in Superior Court in Toronto. They alleged that representatives of BMW had forged their signatures on various credit documents. They said that they were the victims of a fraud. They produced an expert report to buttress the claim of forgery. I gave the expert report no weight. Contrary to the costs submissions of counsel for the Defendants, I rejected the expert’s affidavit because it was appended to someone else’s affidavit: para. 29-30. The fact that the expert report had serious flaws was secondary. I therefore found that there was little or no evidence of forgery or fraud. I also found that the Danos’s had failed to show that they had suffered damages. I dismissed the action. I did not grant leave to file a counterclaim in Brampton.

[2] When assessing costs the over-arching principle is that the court should set an amount that is fair and reasonable in the circumstances: Boucher v. Public Accountants Council for Ontario, 2004 14579 (Ont.C.A.), 71 O.R. (3d) 291, [2004] O.J. No. 2643 (C.A.).

[3] Mr. Aisenberg, counsel for the Defendants argues that substantial indemnity costs are warranted because of an unfounded allegation of fraud. There is no question that there is ample authority for that proposition: A-C-H International Inc. v. Royal Bank of Canada, 2005 17769 (ON CA), [2005] O.J. No. 2048, 254 D.L.R. (4th) 327, 197 O.A.C. 227 (C.A.); CIBC Mortgages Inc. v. Vieira et.al., 2014 ONSC 56.

[4] Mr. Laski, counsel for the Plaintiffs, argues that the behaviour of the Defendants was so offensive that it is they who should be awarded substantial indemnity costs, notwithstanding that they lost the motion and the action was dismissed.

[5] I disagree. The allegations of fraud were not substantiated. One of the two alleged victims of the fraud, Mr. Danos, did not even give evidence on the motion. The evidence of Ms. Danos, the other alleged victim, was equivocal. I find nothing offensive about the behaviour of the Defendants. In fact, I agree with counsel for the Defendants that substantial indemnity costs are warranted. It is the Plaintiffs who chose to make the allegations of fraud and forgery that were not well founded.

[6] This case had one particularly unusual feature. It was first argued on January 23 2014, the morning that Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, 366 D.L.R. (4th) 641, 2014 CarswellOnt 641 was released by the Supreme Court of Canada. We all retired to read the judgment. I then heard argument from the parties. All parties then asked for the opportunity to make further submissions after Hryniak was digested. We returned on February 25 2014.

[7] Mr. Aisenberg submitted a fresh costs outline after this second appearance. He asked for $41,058.12 inclusive of HST and disbursements. This is the total amount incurred in the action.

[8] At the both hearings Mr. Aisenberg represented all of the defendants except James H. Cochrane and Town & Country. Mr. Basman represented James H. Cochrane and Town & Country. On March 8 2014 (after both hearings but prior to the release of my decision on April 7 2014) James H. Cochrane and Town & Country filed a change of solicitors. Mr. Aisenberg now represents all of the Defendants.

[9] Mr. Basman filed a costs outline seeking substantial indemnity costs in the amount of $27,435.00.

[10] Mr. Laski has taken great pains to criticize the Defendant’s bill of costs as over-lawyered. I note, however, that in the Defendants’ original costs outline on the motion (filed prior to the release of my judgment) his substantial indemnity costs, inclusive of disbursements and HST, was $30,537.68. Mr. Aisenberg’s original substantial indemnity costs outline on the motion, including HST and disbursements, was $37,956.27, which was certainly more, but not outrageously more, than Mr. Laski’s. Mr. Laski also argued that Mr. Basman largely piggybacked on Mr. Aisenberg’s submissions.

[11] I note that Mr. Aisenberg, Mr. Laski, and Mr. Basman are all of similar levels of experience.

[12] After examining the costs outlines of both Mr. Aisenberg and Mr. Basman, and comparing them to Mr. Laski’s, I find that there is some merit to Mr. Laski’s point. I agree that there was some minor over-lawyering. Mr. Aisenberg’s firm used the services of two senior lawyers on a file of modest complexity. I also agree that there is some merit to the argument that Mr. Basman piggybacked onto Mr. Aisenberg’s submissions.

[13] Accordingly, I will marginally reduce the amounts sought by the Defendants. In doing so, I take into account the following factors:

• the unsubstantiated allegations of fraud, warranting substantial indemnity costs;

• the reasonable expectations of the parties;

• the time spent on the file and the comparative amounts charged by each lawyer .

[14] Thus, I award a total of $37,000.00 to the parties originally represented by Mr. Aisenberg. I award a total of $25,000.00 to the parties originally represented by Mr. Basman. These awards represent costs on a substantial indemnity basis with the modest reductions that I have mentioned.

R. F. Goldstein J.

Date: September 30, 2014