ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-4151-00
DATE: 20150630
B E T W E E N:
ICECORP LOGISTICS INC. and THE COMMERCE TRADE SHOW & LOGISTICS GROUP LTD.
Plaintiffs
- and -
SHALVA TSITLISHVILLI and GRACE D’ALESSANDRA
Defendants
AND BETWEEN:
ZAZA TSITLISHVILLI and PASQUALE D’ALLESANDRO
Plaintiffs by counterclaim
Wojtek Jaskiewicz, for the Moving Party-Alan J. Barnes
- and -
ICECORP LOGISTICS INC; THE COMMERCE TRADE SHOW & LOGISTICS GROUP LTD. AND ALAN J. BARNES
Defendants to the Counterclaim
Asha James, for the Respondents
HEARD: June 9, 2015.
ENDORSEMENT
COROZA J.:
[1] Alan Barnes seeks an order requiring the plaintiffs by counterclaim to pay litigation expenses incurred as a result of being named in a lawsuit that arose out of an agreed purchase and sale.
[2] On September 19, 2013, the Plaintiffs, Icecorp and Commerce commenced an action against Shalva Tsitlishvilli and Grace D’Alessandra.
[3] On October 8, 2013 Shalva and Grace defended the action and a counter claim was launched by Zaza Tsitlishvilli and Pasquale D’Allesandro against Icecorp, Commerce and Alan Barnes personally.
[4] On February 6, 2014 Icecorp, Commerce and Barnes served a reply and defence to the counterclaim.
[5] Examinations for discovery were held on November 10, 12 and December 11, 2014.
[6] On April 13, 2015, Zaza and Pasquale discontinued the action as against Barnes.
[7] Icecorp, Commerce and Barnes were represented by one lawyer (Mr. Jaskiewicz) and as of April 13, 2014 they have incurred fees totalling $21,071.31 on a partial indemnity basis. The action continues against Icecorp and Commerce.
[8] Barnes submits that he is entitled to his costs of the action up to April 13. He submits that since the action continues against Icecorp and Commerce, I should apportion about 1/3 in litigation costs to him in the amount of $7,000.
The Law
[9] Brown J. (as he then was) summarized the applicable legal principles relating to the entitlement to costs for a discontinued action in Carriere Industrial Supply Limited v. 2026227 Ontario Inc. 2013 ONSC 1016. I have reviewed this decision and applied the principles set out by Brown J. in that case.
[10] The entitlement of a defendant to costs for a discontinued action requires the bringing of a motion under the Rules of Civil Procedure. Under Rule 23.05(1) if all or part of an action is discontinued, any party to the action may make a motion respecting the costs of the action within thirty days after the action is discontinued.
[11] The court has a complete discretion to fashion a costs award that is in the interests of justice. The test to be applied by the court in the exercise of its discretion under this rule is the justified action test. That test sets out that the plaintiff must satisfy the court on a balance of probabilities that it had a bona fide cause of action, that it was not frivolous or vexatious and that there was some justification for commencement of the claim.
[12] Whether or not a defendant should be awarded costs on the discontinuance of an action will require a very fact-specific analysis of the circumstances giving rise to the initiation of the action and its discontinuance. (See also: Blair v. Toronto Community Housing Corporation, 2014 ONSC 2292 at para.23).
Analysis
[13] I have no difficulty in accepting the submission of Barnes that the Respondents have not discharged their burden on this motion.
[14] Ms. James argues that the Respondents acted reasonably after having commenced the claim. She argues that after conducting the discoveries the parties were able to assess their position and they decided to discontinue the action against Barnes. At page five of her factum, Ms. James asserts that the action was justified because Barnes made certain representations about consideration that would be provided to the Respondents and about his ability to provide the consideration. She relies on the Statement of Defence and Counterclaim as support for the contention that the Respondents have met the justified action test.
[15] I am not persuaded by the argument put forward by the Respondents. I have reviewed the materials filed on this motion. The respondent chose to file no affidavit or any other evidence that demonstrates that the respondent had a bona fide cause of action, that it was not frivolous or vexatious and that there was some justification for commencement of the claim. Given the absence of this evidence, I am satisfied that there is a basis for ordering costs against the Respondents.
Quantum of Costs
[16] Ms. James argues that even if I am satisfied that costs should be awarded, there is a live issue as to the quantum of costs actually incurred by Barnes. She argues that Barnes has not identified any steps in the proceeding that were taken solely to respond to the allegation of misrepresentation against Barnes.
[17] The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure.
[18] Overall, I am required to consider what is “fair and reasonable” in fixing costs, with a view to balancing compensation of the successful party with the goal of fostering access to justice. (See: Boucher v Public Accountants Council (Ontario), (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291).
[19] There is considerable merit to Ms. James submission that that Bill of Costs provided by Barnes does not set out with any degree of precision the work done solely to Barnes. After reviewing the Bill of Costs filed by Mr. Jaskiewicz, I agree with her that I do not have a precise and itemized breakdown as to what litigation expenses Barnes has actually incurred. The exception may be found in paragraph 5 of the Bill of Costs where 2.6 hours is claimed for discussions and correspondence specifically with Barnes relating to the discontinuance of the action against him.
[20] I also do not accept Mr. Jaskiewicz’s submission that I should simply apportion about 1/3 of the costs incurred by all of the Respondents to date. That seems to me to be unfair and unjust. Mr. Jaskiewicz candidly acknowledged that he could find no previous authority for the submission that costs should be divided and a 1/3 percent apportioned to Barnes upon discontinuation against him.
[21] In this case Icecorp, Commerce and Barnes were represented by one counsel. The reality is that retaining one counsel could keep litigation expenses down by limiting the expenses to one set of costs. However, this arrangement means that there is always the chance that certain steps to the action would have been taken regardless of whether or not Barnes was named as a defendant and that is a factor I must take into account.
[22] After reviewing the Bill of Costs, I do accept Barnes has incurred some litigation costs as a result of being named as a defendant to the action. However, I agree with Ms. James that $7,000 in costs is unreasonable and not supported by the Bill of Costs. I am of the view that an award of costs in the amount of $1,000 is reasonable.
[23] I am cognizant that my decision to award $1,000 is not based on a precise accounting. However, the purpose of this award is to fashion a costs award against the Respondents that is reasonable and just. The Respondents should have had every expectation that costs would follow the discontinuance and the purpose of this Rule is that parties will be held accountable if they do not satisfy a court that their action was justified.
Conclusion
[24] I award Barnes $1,000 all-inclusive of costs, disbursements and taxes payable forthwith.
[25] If the parties cannot agree about the costs of this motion, they may make submission in writing beginning with Barnes’ submissions within 15 days of the release of this endorsement followed by the Respondents’ submissions within a further 15 days.
Coroza J.
Released: June 30, 2015
COURT FILE NO.: CV-12-4151-00
DATE: 20150630
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Icecorp Logistics Inc. v. Tsitlishvilli
BEFORE: Coroza, J
COUNSEL: Wojtek Jaskiewicz, for the Moving Party-Alan J. Barnes
Asha James, for the Respondents
ENDORSEMENT
Coroza, J
DATE: June 30, 2015