CITATION: Giansante and Giansante v. TD Canada Trust et al., 2015 ONSC 224
COURT FILE NO.: 12-34755
DATE: 2015-01-16
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Filippo Giansante and Dorothy Lynn Giansante
Graydon Sheppard, for the Plaintiffs
Plaintiffs
- and -
TD Canada Trust, Binder Real Estate Inc. (A.K.A. Royal LePage Binder Real Estate) and Goran Todorovic
Nicole Brown Dunbar, for the Defendant, Toronto Dominion Bank (incorrectly described as TD Canada Trust)
Defendants
COSTS RULING
LOFCHIK, J.
[1] On November 28, 2014, I dismissed the plaintiff’s action against the defendant, the Toronto Dominion Bank (incorrectly described as TD Canada Trust) (“TD Bank”), as statute barred upon the hearing of a motion for summary judgment pursuant to Rule 20.01 (3) of the Rules of Civil Procedure. The parties have delivered written submissions with respect to costs pursuant to my instructions at the conclusion of the motion.
Facts
[2] TD Bank sold the plaintiff`s mortgage property under power of sale in December 2008. The male plaintiff immediately made allegations in writing of improvident sale and damage of the property, with a copy to the plaintiffs’ lawyer. The sale transaction closed in March 2009. The plaintiffs commenced an action against the TD Bank, the listing real estate broker and the initial purchaser on May 8, 2012, over three years following the sale under power of sale.
[3] The plaintiffs’ claim against the TD Bank sounded in conspiracy, breach of fiduciary and statutory duties and negligence. The plaintiff alleged, among other things, that TD Bank “wrongfully and maliciously conspired and combined with the defendants,” “failed to act in good faith” and “acted in conflict of interest.”
[4] TD Bank defended that plaintiffs’ claim and expressly pleaded that the plaintiffs’ claim was statute barred, having been commenced beyond the relevant two year limitation period, in its Statement of Defence dated September 20, 2012.
[5] Notwithstanding TD Bank’s limitation period defence, the plaintiffs pursued their claim against TD Bank to the point of setting the action down for trial. At this point, TD Bank brought a motion for summary judgment to dismiss the plaintiffs’ claim as statute barred.
[6] Counsel for the defendant Toronto Dominion Bank are seeking costs on a full indemnity basis, or alternatively on a substantial indemnity basis while counsel for the plaintiffs argues that costs should be on a partial indemnity basis.
[7] Counsel for the plaintiffs suggest in his covering letter of December 15, 2014 that because I struck out the words “on a substantial indemnity basis,” on a draft order which I was asked to approve by the defendant’s counsel dismissing the plaintiffs’ action on their motion for summary judgment, that I intended to order costs on a partial indemnity basis. This is not the case. I struck out those words because the scale of costs was in issue and I wished to receive written submissions on both the scale and quantum of costs before deciding the matter.
[8] The defendant’s counsel argues that under the standard charge terms of the first and collateral third mortgage registered by TD Bank against the plaintiffs’ property, the plaintiffs agreed to pay TD Bank’s expenses, including legal costs as between the solicitor and his own client incurred in, among other things, collecting the amount secured by the mortgage, taking and keeping possession of and managing the property and taking any other proceedings or exercising any of its other rights under the mortgage. On that basis, counsel for TD Bank submits that it is contractually entitled to recover from the plaintiff its solicitor and own client costs of the action as this action arises from its exercise of power of sale under the above noted mortgages.
[9] I disagree. The standard charge terms provide for TD Bank to receive solicitor and client costs for actions necessary to realize on the mortgage security. This does not extend to defending an action brought by the mortgagor alleging defects in the power of sale process. I find that TD Bank is not contractually entitled to solicitor client costs on this basis as submitted by counsel for the defendant.
[10] Defence counsel argues that given the serious and unproven allegations made by the plaintiff against TD Bank in the action that TD Bank is entitled to costs on a full indemnity basis.
[11] Given that this action was dismissed on the basis of a missed limitation period it cannot be said that the allegations were baseless or could not be substantiated if the matter had proceeded.
[12] Plaintiffs’ counsel argued on the motion and points out in the submissions made in his letter of December 15, 2014 that TD Bank’s solicitor misrepresented the nature of the sale to the plaintiffs by saying that “our client investigated your complaints and determined that our client and its agents followed their usual procedure and have acted in a commercially reasonable manner regarding the maintenance, valuation, listing and sale of the property” and that this assertion is at variance with the facts of the case discovered in the course of the action that the property was only listed for about ten days before an offer was accepted and that even though there was no advertising of the property, five offers were made to purchase it in that period of time raising the question of what offers would have been received had the sale been properly advertised. He argues that there can be no question that the actions of the bank were improper and considering the unusual amount of interest shown in the property before it was even advertised, they have contributed to a substantial loss sustained by the plaintiffs on the resale of the property and that this should be reflected in the costs award.
[13] Again, there has been no finding that the actions of the bank caused any loss to the plaintiffs and it is not for me to make any such finding on this issue in the course of an assessment of costs.
[14] However, the procedure exercised by the bank in selling the property was sufficient to cause the plaintiffs concern as to the bona fides of the sale and may be said to have offended the “smell test” so that it was not unreasonable for the plaintiff to bring the action and make the allegations referred to above. Under the circumstances, I do not find the plaintiffs’ allegations to be “reprehensible, scandalous and outrageous” so as to justify an enhanced award of costs in favour of TD Bank.
[15] After examinations for discovery were completed in this matter, TD Bank delivered a time-limited offer to settle the action on a without costs basis dated May 9, 2014. The offer provided for a dismissal of the action against TD Bank on a with prejudice basis without costs together with plaintiffs providing a release to TD Bank of all claims made in the action and all claims which reasonably could have been made in the action by signing and returning a full and final release to be prepared by counsel for TD Bank together with copies of notices of discontinuance with prejudice of any cross-claims against TD Bank. This offer to settle was not accepted by the plaintiffs despite TD Bank’s limitation period defence which was expressly pleaded and fully explored through the plaintiffs’ examination for discovery. I find that the failure to accept this offer to settle does not carry the cost consequences contemplated by Rule 49.10 because it was time limited, however it is still a factor to be considered in assessing costs under Rule 57.01, in particular subrules (e) and (g) and Rule 49.13 of the Rules of Civil Procedure.
[16] In dealing with the issue of scale of costs, I find that costs should be fixed on a partial indemnity scale up to the time of the delivery of the offer to settle and on a substantial indemnity scale thereafter. The offer to settle in the defendant’s brief is dated May 9, 2014. However, the summary of fees in the defendant’s brief indicates that the offer to settle was drafted on May 20, 2014 and on May 22, 2014 time was spent reviewing the offer to settle. I find that the appropriate date for transition from partial indemnity costs to substantial indemnity costs to be May 21, 2014.
[17] As to fixing the quantum of costs, I am mindful of the factors to be considered as set out in Rule 57.01 of the Rules of Civil Procedure, the case law which has held that the fixing of costs is not simply a mechanical exercise that begins and ends with the calculation of hours times rates and that the overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding.
[18] I have concluded that the substantial indemnity rate set out in the defendant’s costs outline are reasonable. I find that a reasonable partial indemnity rate for Mr. Horodyski to be $280.00 and for Ms. Brown Dunbar to be $250.00.
[19] I have reduced the number of hours to be billed taking into account that some of the docketed time involved keeping their client up to date and reviewing the file with the client as well as reviewing the file themselves from time to time.
[20] I have allowed $1,500.00 with respect to Ms. Brown Dunbar’s appearance on the motion.
[21] Applying all of the foregoing factors to the circumstances of this case, I have come to the following cost awards:
Counsel fee - $27,000.00
HST - $3,510.00
Total - $30,510.00
Disbursements - $2,769.28
Total - $33,279.28.
[22] Order to go accordingly.
Lofchik, J.
Released: January 16, 2015
CITATION: Giansante and Giansante v. TD Canada Trust et al., 2015 ONSC 224
COURT FILE NO.: 12-34755
DATE: 2015-01-16
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Filippo Giansante and Dorothy Lynn Giansante
Plaintiffs
- and –
TD Canada Trust, Binder Real Estate Inc. (A.K.A. Royal LePage Binder Real Estate) and Goran Todorovic
Defendants
COSTS RULING
TRL:co
Released: January 16, 2015