Maitland Valley Agri Systems Ltd. v. Colclough, 2015 ONSC 2322
GODERICH COURT FILE NO.: 21/2006
DATE: 20150409
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Maitland Valley Agri Systems Ltd., Plaintiff
AND:
Wayne Joseph Colclough and Deborah Lynne Colclough, Defendants
BEFORE: Carey J.
COUNSEL: David A. Reid, for the Plaintiff
R. Ian Robertson, for the Defendants
HEARD: Written submissions
ENDORSEMENT on costs
[1] By judgment dated October 1, 2014, I awarded the plaintiff $90,000 arising from the non-payment of accounts. As pointed out by both parties, this was a relatively straight-forward matter that consumed a considerable amount of court time. The parties were unable to agree on costs. The plaintiff requests $140,000 in costs and disbursements and HST, as well as prejudgment interest from the beginning of the dispute at 2 percent per month amounting to over $212,000.
[2] The defendants’ position is that the plaintiff has disentitled itself from costs as a result of not complying with the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, that came into effect in 2010, prior to the commencement of the trial in this matter and relates to claims of an aggregate of $100,000 or less. In the alternative, they suggest the costs claimed are disproportionate to the amount at stake and the scale should, at most, be partial indemnity. The defendants dispute the appropriateness of almost $18,000 for the expert report and suggest less than half of that amount is appropriate. The total costs and disbursement figure of $30,000 is suggested by the defendants. As to interest, the defendants rely on a finding made at trial that there was no agreement to the two percent per month set out in the bills that were rendered here and they say that that decision is binding. They submit there is no jurisdiction to readdress the issue of interest. In the alternative, the defendants suggest that if the commencement date of the pre-judgment interest is reopened, the court should consider that the matter did not really start to proceed until 2010.
Analysis
[3] The large gulf between the submissions of the two parties is emblematic of the differences between the parties throughout the trial and lengthened it. These parties and their counsel saw all issues in a way that were diametrically opposed. Both sides continue to point the finger of blame at the other for what is seen as the unreasonableness of the opposite party.
a) Interest
[4] Dealing first with the interest rate, I clearly made a finding that the interest rate set out at the bottom of the accounts submitted by the plaintiff were not agreed to by the defendants. That was a substantive finding of fact in the trial, which cannot be altered at this stage. Were I inclined to have a different view, I still would not alter that finding. As to the submissions otherwise on interest, I am not persuaded, having allowed the plaintiff to make the argument, that the interest rate should be altered from the Courts of Justice Act, R.S.O. 1990, c. C.43, rate nor am I persuaded that the running of prejudgment interest should be other than from the issuance of the claim.
b) Costs
[5] The costs awarded in any proceeding are in the discretion of the court hearing the proceeding or step in the proceeding pursuant to s. 131 of the Courts of Justice Act and with reference to the factors set out in rule 57.01 of the Rules of Civil Procedure. The relevant portions of rule 57.01 read:
GENERAL PRINCIPLES
Factors in Discretion
57.01 (1) In exercising its discretion under section131 of the Courts of Justice Act, to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs. R.R.O. 1990, Reg. 194, r. 57.01 (1); O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1.
Costs Against Successful Party
(2) The fact that a party is successful in a proceeding or a step in a proceeding does not prevent the court from awarding costs against the party in a proper case. R.R.O. 1990, Reg. 194, r. 57.01 (2).
Fixing Costs: Tariffs
(3) When the court awards costs, it shall fix them in accordance with subrule (1) and the Tariffs. O. Reg. 284/01, s. 15 (1).
Assessment in Exceptional Cases
(3.1) Despite subrule (3), in an exceptional case the court may refer costs for assessment under Rule 58. O. Reg. 284/01, s. 15 (1).
Authority of Court
(4) Nothing in this rule or rules 57.02 to 57.07 affects the authority of the court under section 131 of the Courts of Justice Act,
(a) to award or refuse costs in respect of a particular issue or part of a proceeding;
(b) to award a percentage of assessed costs or award assessed costs up to or from a particular stage of a proceeding;
(c) to award all or part of the costs on a substantial indemnity basis;
(d) to award costs in an amount that represents full indemnity; or
(e) to award costs to a party acting in person. R.R.O. 1990, Reg. 194, r. 57.01 (4); O. Reg. 284/01, s. 15 (2); O. Reg. 42/05, s. 4 (2); O. Reg. 8/07, s. 3.
[6] The court must exercise this discretion on proper principles. In Andersen v. St. Jude Medical, Inc., 2006 CanLII 85158 (ON SCDC), [2006] O.J. No. 508, the Divisional Court summarized these principles:
The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher, Moon, 2004 CanLII 39005 (ON CA), [2004] O.J. No. 4651, and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 CanLII 1042 (ON CA), 75 O.R. (3d) 638 (C.A.).
A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.), at para. 4.
The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).
The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano v. Bank of Montreal (1998), 1998 CanLII 5633 (ON CA), 41 O.R. (3d) 222 (C.A.), at p. 249.
The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.
[7] The plaintiff’s argument that costs on a substantial basis are justified here has not persuaded me. I cannot find that either party was more to blame for the time that this matter took. I am not persuaded that the offers made by the plaintiff given the amount and their timing are such that the proportionality principle should be disturbed. At the same time proportionality and reasonableness must prevail in my consideration of costs. I find that the total number of hours requested by counsel for the plaintiff are high, even given the amount of trial time that the matter took. There were some delays and evidence required that could not have been anticipated.
c) Rule 76
[8] This action was set down for trial in 2008 when the Rule 76 limit was $50,000. There is no provision in the rule for a court to order a matter that has been commenced under the ordinary rules be continued under the simplified rules. I am satisfied that the purpose of Rule 76 would not have been satisfied by the matter being converted to the simplified rules procedure. By the time the amount under Rule 76 was raised to $100,000 in 2010, it is clear to me that the case was sufficiently advanced and the evidence too extensive to have been accommodated by the simplified rules. There is no suggestion that the defendants at any time requested that the matter continue under Rule 76. Given the expert evidence that was required and the number of issues that were raised, I find it was reasonable for the action to continue under the ordinary procedure and the plaintiff is not disentitled to costs.
d) Expert
[9] I do agree that the disbursement for the plaintiff’s expert is high for the type of evidence that was required. While the expert was required to testify at length, it is well established that the principle of proportionality is equally applicable to disbursements. While Mr. McNeil’s evidence was relevant and helpful, the cost claimed is disproportionate to the amount of the claim.
Conclusion
[10] Accordingly, I assess the reasonable costs as $40,000, expert fees at $8,000. I accept that given the time it took for the resolution of this trial that it was reasonable for transcripts to be ordered and those costs are allowed in full. There will be the applicable HST on fees and disbursements. There will be no costs ordered for the preparation of submissions on costs.
Original signed by Thomas J. Carey
Thomas J. Carey
Justice
Date: April 9, 2015