Court File and Parties

Citation: Demeke v. Bekele, 2015 ONSC 2512 Court File No.: CV-12-462175 Date: 2015-04-16 Superior Court of Justice – Ontario

Re: Meserat Demeke, Plaintiff and defendant to the counterclaim And: Kifle Bekele, Defendant and plaintiff by counterclaim

Before: Stinson J.

Counsel: Meserat Demeke, acting in person Andrew Lewis, for the Defendant and plaintiff by counterclaim

Heard at Toronto: in writing

Endorsement As To Costs

[1] In my reasons for judgment released January 20, 2015, I dismissed the plaintiff’s claim to collect on two promissory notes that had been provided in respect of the balance of the purchase price for a restaurant business. I also dismissed the defendant’s counterclaim for misrepresentations allegedly made to induce him to enter into the transaction. The parties subsequently made written submissions as to costs. This ruling addresses those submissions.

Liability for costs

[2] The first question to address is whether either side should recover a costs award. Both sides advanced a claim against the other at trial, and both were unsuccessful. In some circumstances, the lack of success on both sides might warrant a decision that neither party should recover an award of costs.

[3] In the present case, however, this litigation was instigated by the plaintiff; had she not done so, I very much expect the defendant would not have pursued the complaints that came to be pleaded in his counterclaim. Thus the fact that the defendant pleaded a counterclaim that did not succeed, should not negate the usual proposition that an unsuccessful plaintiff should pay costs to a successful defendant. At most, the lack of success of the counterclaim may be a factor that should be considered when assessing the amount of the costs award.

Scale of Costs

[4] In the defendant’s written submissions he seeks costs on a partial indemnity scale. In the circumstances, I will assess costs on that basis and not a higher scale.

Quantum

[5] The defendant seeks fees of $13,780, disbursements of $989.20 and HST, for total fees, disbursements and HST claimed of $16,651.76. This was a one day trial. There were no examinations for discovery. There was, however, a preservation hearing, a mediation and a pretrial conference, all of which required participation and time spent by defendant’s counsel.

[6] Overall, however, the matter was not complex. It was largely factual, with only one legal issue, that of the question of piercing the corporate veil. Only two witnesses testified at the trial, being the plaintiff and the defendant.

[7] Viewed from the perspective of the relative simplicity of the case, and the fact that the trial consumed only a day, a bill of costs seeking over $16,000 in fees, disbursements and tax seems somewhat high. The defendant counters, however, that the plaintiff sought damages of $1 million. As assessed by me, however, plaintiff’s loss was $40,000 and the counterclaim as proven was under $30,000. Viewed in the context of the true amounts in issue, therefore, a cost claim in excess of $16,000 is, in my view, excessive and out of proportion to the amounts in issue.

[8] The fundamental premise of an award of costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances: see Boucher v. Public Accountants Council (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). In light of the fact that the plaintiff chose to initiate these proceedings and to claim an unrealistic sum of money ($1 million) from the defendant, in my view it is neither unfair nor unreasonable for the plaintiff to be ordered to pay a significant portion of the defendant’s legal costs. I have already expressed the view that the amount claimed is too high and disproportionate. In addition to the considerations previously discussed, I would also note that the defendant’s counterclaim was unsuccessful. That said, it consumed only a very minor portion of the trial.

[9] Bearing in mind all of the foregoing, I would fix the costs payable by the plaintiff to the defendant at the sum of $12,000 inclusive of disbursements and applicable taxes. I order the plaintiff to pay that sum to the defendant within 30 days.

Stinson J.

Date: April 16, 2015