KHAN v. LAYDEN et al, 2015 ONSC 146

COURT FILE NO.: C-615-13

DATE: 2015/01/08

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ASHLEY KHAN, Plaintiff

AND:

JEREMY LAYDEN, GARY LAYDEN, JAMIE BACCHUS, INTACT INSURANCE COMPANY and TRADERS GENERAL INSURANCE COMPANY Defendants

BEFORE: The Honourable Justice D.A. Broad

COUNSEL: Brian Smith, for the Defendant Jamie Bacchus

John D. Dean, for the Defendants Jeremy Layden and Gary Layden

Grant E. Black, for the Defendant Scottish & York Insurance Co. (improperly named Traders General Insurance Company)

costs ENDORSEMENT

[1] The defendant Jamie Bacchus (Bacchus) has made costs submissions as against the moving defendants Jeremy and Gary Layden (the Laydens) and Scottish & York Insurance Co. (Scottish & York). The Laydens have provided their responding submissions, as has Scottish & York. Counsel for the Laydens has advised that the costs of the plaintiff have been settled and are not in issue.

Positions of the Parties

[2] Bacchus claims costs of responding to the motions brought by the Laydens and Scottish & York in the sum of $2,627.00 in respect of fees plus HST thereon for a total of $2,968.51. She submits that her involvement in the motion, while minor, was significant on the basis that she is the only individual defendant resident in Ontario and that the relief sought by the moving defendants would have directly impacted her. She says that her limited involvement, by means of preparing and delivering a responding affidavit and appearing on the motion, was appropriate in light of the importance of the issues.

[3] The Laydens submit that there should be no order as to costs in favour of Bacchus as her involvement in the motion was unnecessary. They say that the affidavit filed on her behalf in response to the motion only referred to uncontested facts, namely that she was a resident of Ontario and had no intention of moving from Ontario. They say further that the involvement of counsel for Bacchus on the return of the motion was unnecessary as the Laydens took no issue with the fact that Bacchus was resident in Ontario or that the court had jurisdiction over her. Furthermore, they also say that the time referred to Bacchus’ costs submissions is excessive in the circumstances.

[4] Scottish and York submits that no order for costs against it should be made in favour of Bacchus as its motion was for a stay of the plaintiff’s action against it and did not involve Bacchus. The plaintiff’s action against Scottish & York is based on a contract between them, to which Bacchus is not a party. In any event, it says that the time involvement of counsel for Bacchus as disclosed in the costs outline is excessive and that the time should be limited to 8 hours.

Guiding Principles

[5] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that “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 cost shall be paid."

[6] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in subrule 57.01(1), including the principle of indemnity and the amount of costs that an unsuccessful party could reasonably expect to pay.

[7] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan (1999) O.J. No. 3707 (CA) at para. 24).

[8] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario) (2004) 2004 ONCA 14579 (ON CA), O.J. No. 2634 (CA) at para. 26 and Coldmatic Refrigerator of Canada Ltd. v. Leveltek Processing LLC 2005 ONCA 1042 (ON CA), [2005] O.J. No. 160 (CA)).

[9] The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson 2002 ONCA 41469 (Ont. C.A.) and Macfie v. Cater 1920 ON SC 401 (ON SC), [1920] O.J. No. 71 (H.C.J.) at para 28).

Analysis

[10] In my view, it was reasonable for Bacchus to respond to the motion brought by the Laydens by delivery of a responding affidavit and attendance on the return of the motion. The relief sought in the Laydens’ motion had a high degree of importance to Bacchus and affected her vital interests. It should also have been within the Laydens’ reasonable expectation, in bringing their motion, that Bacchus would oppose the motion by delivery of a responding affidavit and by attending on argument of the motion. It was not incumbent on Bacchus to accept any risk which would be associated with not responding proportionately to the motion.

[11] I see no good reason why costs should not follow the event such that Bacchus should recover costs as against the Laydens. However, I do accept the submission of Scottish & York that costs should not be awarded against it in favour of Bacchus. Scottish & York sought a stay of the plaintiff’s action against it. Scottish & York and the plaintiff are contracting parties. Scottish & York has no legal relationship with Bacchus.

[12] With respect to the amount of the costs sought, applying the principle of proportionality, I find the involvement of three counsel for a total of 16.3 hours to be excessive in the circumstances. Moreover, in my view, travel time should not be claimed at the lawyer’s full hourly rate in the circumstances of this case. Fifty percent of the lawyer’s hourly rate would be more appropriate

[13] In my view, 10 hours at the partial indemnity rate of Ms. Chapman, being $170.00/hour, would be considered reasonable and within the reasonable expectation of the Laydens.

Disposition

[14] It is therefore ordered that the Laydens pay costs to the defendant Bacchus fixed in the sum of $1,921.00 inclusive of HST.

D.A. Broad

Date: January 8, 2015