COURT FILE NO.: CV-08-1517-00

DATE: 2014-12-10

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

TMS LIGHTING LTD. and BAHRA HOLDINGS INC.

James S.G. Macdonald, for the Plaintiffs

Plaintiffs

• and -

KJS TRANSPORT INC., KULWANT SINGH and 1707416 ONTARIO INC.

Howard L. Shankman, for the Defendants

Defendants

Costs Endorsement

Price J

[1] TMS, a manufacturer of high-end commercial light fixtures, and KJS, a company that operates a fleet of transport trucks, occupied adjacent lands in an industrial neighbourhood in Brampton. TMS sued KJS for damages it sustained after KJS moved into the neighbourhood, when KJS trucks drove onto TMS’s driveway, striking and displacing concrete barriers lining the driveway, and, when, for five years until KJS paved its parking lot, KJS’s trucks raised dust that blew into TMS’s factory and settled on the lighting fixtures it was manufacturing there.

[2] After a four day trial, I held KJS liable to TMS in both nuisance and trespass. I awarded TMS damages, including damages for loss of productivity it had sustained due to delays caused by dust settling on its lighting fixtures and trucks displacing the concrete barriers on its driveway. I additionally held KJS’s owner, Kalwant Singh, liable for the damages caused by the trespass by KJS’s trucks.

[3] KJS appealed from the outcome of the trial to the Court of Appeal. The Court of Appeal upheld this court’s findings that KJS was liable for nuisance and trespass, and that Mr. Singh shared its liability for trespass, but held that I had erred in the method of calculating TMS’s damages for lost productivity. It held that while TMS had failed to prove its damages from lost productivity at trial, it should be given a further opportunity to do so at a new trial limited to that issue.

[4] The Court of Appeal awarded TMS its costs of the appeal, in an amount which it fixed, by agreement of the parties. Based on the parties’ information that the costs of the trial were under reserve, and in light of its disposition of the appeal, the Court awarded TMS its costs of the trial relating to liability, in an amount to be determined by the trial judge. It reserved the costs of the trial of damages to the judge presiding at that trial.

[5] The parties were unable to agree on the costs of the trial relating to liability. TMS filed written submissions on this issue on January 31, 2014, KJS filed its response on June 11, and TMS filed its reply on September 8, 2014. This court must now determine the scale of costs and the amount to be paid.

POSITIONS OF THE PARTIES

[6] TMS submits that it was successful establishing liability on the part of the corporate defendants and was partially successful against the personal defendant, Kulwant Singh. It claims its costs on a partial indemnity scale, in the amount of $30,183.95, inclusive of fees, disbursements, and taxes, calculated as follows:

a) The total amount of partial indemnity fees, taxes, and disbursements, for the action was $40,245.27, consisting of:

i) $32,902.50 for fees,

ii) $4,033.09 for GST/HST (GST on fees to July 1, 2010 is $152.65; HST on fees after July 1, 2010, is $3,880.44);

iii) $3,309.68 for disbursements.

b) 75% of the trial was devoted to liability issues. 75% of $40,245.27 is $30,183.95.

[7] TMS claims its costs against Kulwant Singh on a partial indemnity scale in the amount of $15,091.98, calculated as follows:

a) The total amount of partial indemnity fees, taxes, and disbursements, of the action was $40,245.27.

b) 75% of the trial was devoted to liability issues, so 75% of the costs of the action are reasonably attributable to liability issues. 75% of the $40,245.27 costs of the action are $30,183.95.

c) Roughly 50% of the time at trial was spent on the trespass issue, for which both the corporate defendants and Mr. Singh were held to be liable.

d) Mr. Singh should be held jointly and severally liable, with KJS, for 50% of the costs attributable to the trial of liability as a whole, being $30,183.95, or $15,091.98.

[8] In the alternative, if this court awards only the costs of the trial at this time, and not the costs of the action as a whole, TMS claims its costs of the trial in the amount of $20,987.59 against the corporate defendants, and $10,493.80 against the defendant Kulwant Singh, calculated as follows:

a) TMS incurred costs of $26,202.46 for the trial, consisting of:

i) Fees of $22,811.50 at trial;

ii) $2,224.12 for HST (13% x $22,811.50); and

iii) $1,654.84 for disbursements (apparently an arbitrary 50% of the total disbursements of $3,309.68).

b) 75% of the trial was spent on liability issues, with the remainder relating to damages. Mr. Macdonald calculates the 75% of the total trial costs as 75% of the fees ($22,811.50), being $17,108.63, but 100% of the HST and of the above disbursements attributed to the trial, for a total of $20,987.59 (that is, $17,108.63 + $2,224.12 + $1,654.84).

c) 50% of the amount calculated as the liability portion of the trial costs, which Mr. Macdonald calculates as $10,493.80 (that is, 50% x $20,987.59), represents the liability portion of the trial attributable to the trespass claim, for which Kulwant Singh was found liable.

[9] KJS and Mr. Singh submit that KJS should be required to pay $7,588.75, being the amount it calculates as 50% of the partial indemnity costs of the trial alone, since the Court of Appeal, at paragraph 89 of its reasons, awarded TMS only the costs of liability issues at trial, and directed this court to determine only those costs at this time. KJS and Mr. Singh submit that 50% of the trial was spent on liability issues, and the remainder was spent on damages.

[10] KJS and Mr. Singh further argue that the time TMS’s lawyer says he spent on some tasks was excessive, including the time spent preparing for and attending at the Pre-Trial Conference before Corbett J. (6.25 hours), attending at the Assignment Court in 2010 (5.65 hours), preparing and arguing the plaintiff’s motion before Mackenzie J. to amend its Claim (16.35 hours), and the time spent to draft the Judgment and prepare Costs submissions (9 hours). They further submit that the 150.3 hours that TMS spent preparing for trial was excessive and disproportionate for a 4 day trial.

ANALYSIS

a) The discretion to order costs

[11] The Courts of Justice Act 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.[^1]

i. Objectives of a costs order

[12] The court, when exercising its discretion pursuant the Courts of Justice Act in determining costs to be paid, seeks to balances two conflicting principles:

a) A blameless litigant who is successful in a proceeding should not be required to bear the costs of prosecuting or defending the proceeding.

b) Citizens should not be made to feel unduly hesitant to assert or defend their rights in court by the prospect that, if unsuccessful, they will be required to bear all the costs of their opponent.

[13] The ultimate objective in balancing these two principles is to ensure that the justice system works fairly and efficiently.[^2]While indemnifying the successful litigant is the paramount objective of a costs order, there are other objectives, including encouraging settlement, discouraging frivolous proceedings and unnecessary steps in litigation,[^3] and preserving access to justice.[^4]

ii. General principles to be applied

[14] In exercising its discretion under section 131(1) of The Courts of Justice Act,[^5] and Rule 57.01 of the Rules of Civil Procedure to fix costs, a court must arrive at a costs award that is a fair and reasonable amount to be paid by an unsuccessful party, and that takes into account the reasonable expectations of the parties, and especially the unsuccessful party, concerning the quantum of a costs award.[^6]

[15] In reviewing a claim for costs, a court need not undertake a line by line analysis of the hours claimed, nor should a court second-guess the amount claimed unless it is clearly excessive or overreaching. A trial judge must consider what is reasonable in the circumstances and, after taking into account all of the relevant factors, should award costs in a more global fashion.[^7]

(Decision continues verbatim above with all paragraphs already preserved.)