Schembri v. Mediterranean Social Club, 2015 ONSC 2037
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FRANCESCA SCHEMBRI and GIUSEPPE SCHEMBRI
Applicants
– and –
MEDITERRANEAN SOCIAL CLUB, SEBASTIANO MUCCIO, CORRADO CALDARELLA, SALVATORE CRETTO and SALVATORE MONCADA
Respondents
Kevin S. Klayman for the Applicants
Niklas Holmberg for the Respondents
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - Costs
1The Applicants Francesca and Giuseppe Schembri brought an action against the Mediterranean Social Club, Sebastiano Muccio, Corrado Caldarella, Salvatore Cretto and Salvatore Moncada.
2By Order dated March 24, 2014, I struck out the Statement of Claim with leave to commence an application and or to deliver a Fresh Statement of Claim failing which the action would be dismissed. I awarded the Respondents costs of $5,000.
3The Schembris then commenced an application, and the Respondents moved to have that application struck for failure to disclose a reasonable cause of action. I granted that motion, and dismissed the action and the application with costs to be determined.
4The Respondents now seek costs on a substantial indemnity basis of $22,162.96, all inclusive, or in the alternative they seek costs of $20,996.81, all inclusive.
5In my opinion, there is no basis for an award of substantial indemnity costs in the circumstances of this case, but as the successful party, the Respondents are entitled to costs on a partial indemnity basis, which costs I fix at $17,500, all inclusive.
6The principal reason that the Respondents claim substantial indemnity costs is that the Schembris made allegations that impugned their integrity and good reputation.
7Subject to the costs consequences provisions of the offer to settle rule, only in exceptional cases are costs awarded on a substantial indemnity scale: Foulis v. Robinson (1978), 1978 CanLII 1307 (ON CA), 21 O.R. (2d) 769 (C.A.). Costs on a substantial indemnity scale or full indemnity scale are reserved for rare and exceptional cases, where the conduct of the party against whom costs is ordered is reprehensible or where there are other special circumstances that justify costs on the higher scale: St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, supp. reasons 2010 ONCA 479; McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), 2002 CanLII 41899 (ON CA), 59 O.R. (3d) 97 (C.A.); Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.).
8Costs may be awarded on a substantial indemnity basis where a party pleads but fails to prove that his or her opponent perpetrated a fraud or committed a criminal act or engaged in other dishonest or reprehensible conduct or makes unfounded allegations that impugn the integrity or good reputation of his or her foes: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303 (S.C.C.); Toronto-Dominion Bank v. Leigh Instruments Ltd. (Trustee of) (1999), 1999 CanLII 3778 (ON CA), 45 O.R. (3d) 417 (C.A.), leave to appeal refused 188 D.L.R. (4th) vi (S.C.C.).
9In the case at bar, while the Schembris have pleaded reprehensible conduct by the Respondents, there has been no determination of the merits of those allegations. The action and the application are being dismissed without any determination of the truth or falsity of the allegations and so it cannot be said that the Schembris have failed to prove the allegations.
10The Respondents claim for costs should be addressed in the normal fashion on a partial indemnity basis.
11The Schembris submit that the Respondents’ claim for costs is excessive. The Schembris point to the fact that the Respondents received only $5,000 for the first motion. This submission, however, ignores the fact that the first award was just for the motion, and now costs are being claimed for a motion and for the dismissal of the action and the application.
12Having reviewed the bill of costs and the hourly rates and the usual factors including the complexity of the matter and its importance to the parties, I conclude that the appropriate award in this case is $17,500, all inclusive.
Perell, J.
Released: March 30, 2015
CITATION: Schembri v. Mediterranean Social Club, 2015 ONSC 2037
COURT FILE NO.: CV-14-503751
DATE: 20150330
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FRANCESCA SCHEMBRI and GIUSEPPE SCHEMBRI
Applicants
– and –
MEDITERRANEAN SOCIAL CLUB, SEBASTIANO MUCCIO, CORRADO CALDARELLA, SALVATORE CRETTO and SALVATORE MONCADA
Respondents
REASONS FOR DECISION – COSTS
PERELL J.
Released: March 30, 2015