2015 ONSC 4101
COURT FILE NO.: CV-14-146-00
DATE: 2015-06-24
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JIAKANG WU
Applicant
And
PEEL CONDOMINIUM CORPORATION NO. 245
Respondent
BEFORE: LEMON J.
COUNSEL: Ms. Megan Mackey, for the Applicant
Mr. Mark Willis-O’Connor, for the Respondent
COSTS ENDORSEMENT
The Issue
[1] On May 6, 2015, I found that Ms. Wu had been oppressed by the respondent, Peel. Among other orders, I also required Peel to pay $30,000 in general damages. I completed my judgment as follows:
If the parties cannot otherwise agree on costs, written submissions may be made to me. Ms. Wu shall make her submissions within the next 15 days. Peel shall provide its response within 15 days thereafter. Each submission shall be no more than 5 pages not including any offers to settle or bills of costs.
[2] I have now received those submissions from both parties. Ms. Wu seeks costs in amounts ranging from $41,413.28 for full indemnity costs to $34,138.90 for partial indemnity costs. In response, Peel submits that costs should be fixed on a partial indemnity basis in the amount of $10,000.
Legal Principles
[3] Rule 57.01 of our Rules of Civil Procedure sets out the factors that the court may consider when determining costs. The relevant factors that I should consider here are:
(a) the result in the proceeding;
(b) 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;
(d) 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;
(e) the amount claimed and the amount recovered in the proceeding;
(f) the complexity of the proceeding;
(g) the importance of the issues; and
(h) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding.
[4] Modern costs rules are designed to foster three fundamental purposes:
(1) to partially indemnify successful litigants for the cost of litigation;
(2) to encourage settlement; and
(3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan, [1999] O.J. No. 4600, 46 O.R. (3d) 330 (Ont. C.A.) at para. 22.
[5] Costs awards, at the end of the day, should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”: see Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634, 71 O.R. (3d) 291 (Ont. C.A.) at para. 24.
Analysis
[6] There is no doubt that Ms. Wu has been successful on the most significant issue; she wanted Peel to acknowledge and fix her noise problems.
[7] Despite some serious errors in judgment set out below, Ms. Wu’s counsel showed a great deal of expertise in an area that required it.
[8] Except as set out below, I am satisfied that the rates charged and the time spent are reasonable. This required more than a day to argue, the materials made up more than a banker’s box, there were cross examinations and lengthy factums. But for the hard work of counsel, this could easily have been a three or four day trial, rather than a long motion. While expensive, it was much cheaper than a trial and counsel should be given credit for that.
[9] While I found Peel to have oppressed Ms. Wu and I ordered general damages against Peel, those were the issues for my determination. The fact that Peel was unsuccessful on those issues cannot form the basis of increased costs. (See: Hunt v. TD Securities Inc. (c.o.b. TD Evergreen), [2003] O.J. No. 3245, 175 O.A.C. 19 (C.A.). It appears that Peel took a variety of steps that Ms. Wu finds objectionable. Peel has already been ordered to pay costs for those steps. I am not to penalize them again in this costs order.
[10] There is nothing in this litigation that would present the rare outrageous conduct required to take it out of the partial indemnity range.(See: Drewlo Holdings Inc. v. Kitchener (City), [2007] O.J. No. 2706, 158 A.C.W.S. (3d) 889, 2007 CarswellOnt 4361 (Ont. Sup. Ct.).
[11] I am to determine “the costs of or incidental to a proceeding or a step in a proceeding”. The costs of steps incurred prior to the commencement of the application are not to be included. Meetings and mediations before the commencement of the application are not incidental to, or a step in, the proceeding.
[12] Ms. Wu’s counsel submits that I should reconsider and increase two interim costs orders against Peel. Those decisions have been completed and cannot be revisited.
[13] The respondent has filed its own bill of costs that it would have filed if it had been successful; that too should be encouraged. (See: Portuguese Canadian Credit Union Ltd. v. CUMIS General Insurance Co., 2010 ONSC 6701, 67 A.C.W.S. (3d) 348). That bill of costs outlines partial indemnity costs of $17,670.71 through to full indemnity costs of $29,361.92. Although less than what Ms. Wu is seeking, it is clear that Peel could reasonably expect to pay the costs now in issue.
[14] Despite the success set out above, Ms. Wu unsuccessfully claimed $150,000 annually for general damages “going forward”. In her offer to settle, she proposed that Peel would pay $150,000 compensation within 60 days and $60,000 a year until the problems were resolved along with reimbursement of alternate living arrangements for Ms. Wu and her family. Only at the hearing was this claim reduced to $150,000 in total. With respect to that part of her claim, Ms. Wu was certainly unsuccessful.
[15] In her costs submissions, Ms. Wu’s counsel submits that while the general damage recovery “is less than what Ms. Wu was asking for, that is the highest damage award for oppression by a condominium corporation that counsel is aware of.” In short, counsel is admitting that the general damages claim put forward had very little, if any, legal basis. Her costs submissions are similarly barren of authority to support them. That conduct should be discouraged.
[16] It should be noted however that there was also very little in evidence to support the damage claim. A claim put forward with little evidence and less law would not add much to the legal expense of either party.
[17] Ms. Wu was also unsuccessful on two other minor issues.
[18] This was a very complex proceeding and was a difficult decision to determine. The issues were exceedingly important to both sides.
[19] Ms. Wu, in her costs submissions, complains of the conduct of Peel that has already been dealt with in my determination. She seeks to have me make credibility findings that I have already explicitly declined to make.
[20] Both parties made offers to settle. The terms of each are such that they do not trigger any costs consequences. However, as can be seen above, Ms. Wu’s offer was an offer that Peel capitulate rather than an effort to compromise in an effort to settle the case. That conduct should be discouraged.
[21] My endorsement was clear in my request for five pages of costs submissions. Instead, from Ms. Wu, I received 11. That conduct should be discouraged. Some judges have quit reading at the ordered length (See: Kalkanis v. Kalkanis, 2014 ONSC 205, Brown v. Baum, 2015 ONSC 2483). Some judges have simply torn off the offending pages. (See: Elieff v. Elieff ONSC, [2007] O.J. No. 1802, 157 A.C.W.S. (3d) 130, [2007] W.D.F.L. 4291 (Ont. Sup. Ct.) [Elieff]. Some judges have ordered a penalty to be paid by the offending party. (See: Elieff). Generally speaking, when faced with this disregard for my ruling, I presume that counsel has overworked the file as much as they have the costs submissions and I assess the costs accordingly.
[22] There did not appear to be any issues with respect to the disbursements.
[23] As a member of the corporation, Ms. Wu will effectively have to pay some part of the costs through her fees.
[24] Taking all of that into consideration, Peel shall pay costs fixed in the amount of $20,000 all-inclusive.
Lemon J
DATE: June 24, 2015
2015 ONSC 4101
COURT FILE NO.: CV-14-146-00
DATE: 2015-06-24
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JIAKANG WU
And
PEEL CONDOMINIUM CORPORATION NO. 245
BEFORE: LEMON J.
COUNSEL: Ms. Megan Mackey, for the Applicant
Mr. Mark Willis-O’Connor, for the Respondent
ENDORSEMENT
LEMON J
DATE: June 24, 2015