SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-07-325366-0000
DATE: 20150811

RE:

EQUIREX VEHICLE LEASING (2004) INC.

Plaintiff

-AND-

KRISTOPHER INGOGLIA and KRISTOPHER INGOGLIA

OPERATING as “TRUX 2 U”

Defendant

BEFORE: G. Dow, J.

COUNSEL:
Brian Somer, for the Plaintiff

Jonathan Marler, for the Defendant

HEARD: February 2, 3, 4, 5, 2015

COSTS DECISION

[1] Following this four-day non-jury trial (February 2-5, 2015) I released written reasons May 26, 2015 finding in favour of the plaintiff with regard to the defendant having signed a vehicle lease agreement November 24, 2005, to make the requisite payments on a used 1999 yellow Western Star Tractor Unit. The payments were not made, the vehicle was repossessed by the plaintiff and damages were assessed in the amount of $86,423.96 (of the $90,932.73 claimed).

[2] The defendant was assigned into bankruptcy May 15, 2007 which stayed the action commenced January 7, 2007 subject to the claim asserted by the plaintiff under sections 178(1)(d) and (e) of the Bankruptcy and Insolvency Act, R.S.C. 1985 c. B.3 which provided for the debt to survive the bankruptcy if it arose out of fraud or by false pretenses or fraudulent misrepresentation. I concluded the plaintiff failed to prove its case on a balance of probabilities. As a result, the claim was extinguished by the 2007 bankruptcy and the plaintiff’s action was dismissed.

[3] I did not receive costs outline at the conclusion of the trial as required but same were forwarded to me by plaintiff’s counsel under cover of letter February 18, 2015 and by counsel for the defendant under cover of letter March 4, 2015. I requested submissions as to costs in my reasons and received and reviewed the submissions of counsel for the defendant under cover of letter June 24, 2015 and a responding submission by counsel for the plaintiff under cover of letter July 9, 2015.

[4] In my reasons, I indicated costs should be awarded to the defendant subject to unusual circumstances or Rule 49 Offers to Settle. I am advised the latter is of no consequence.

[5] The defendant’s costs outline claims $62,594.34 costs on a partial indemnity basis and $94,036.59 costs on a substantial indemnity basis. The parties agreed these amounts should be reduced to $50,894.34 and $76,486.59 respectively on the basis of a prior costs award in the action with regard to the lifting of the stay of proceedings dealt with in the Order by Registrar Nettie October 29, 2009.

[6] The defendant maintains its claim for substantial indemnity costs on the basis of the plaintiff’s allegation of fraud (or fraudulent misrepresentation) and the plaintiff’s lack of success at trial in proving same. The defendant cites from the decision of Justice Strathy (as he then was) in Nazarinia Holdings v. 2049080 Ontario Inc., 2010 ONSC 2559, [2010] O.J. No. 1810 where he adopts the reasons of Justice Lax in Manning v. Epp, [2006] O.J. No. 4239 (S.C.J.), where, at paragraph nine she states, “The task for the court is to punish and deter unwarranted allegations and egregious conduct, but without discouraging the tenacious pursuit and advancement of serious claims of impropriety in a proper case.”

[7] The plaintiff disagrees with the amount being claimed relying on its own costs outline in the amount of $38,841.54 on a partial indemnity basis and $57,749.54 on a substantial indemnity basis noting, as plaintiff, it called more witnesses and tendered more documents as exhibits with the implication that an equal amount and certainly no greater amount of effort and preparation was required.

[8] The plaintiff also relies on the principles enunciated in r. 57.01(1)(e) which addresses the conduct of any party that tended to shorten or lengthen unnecessarily the duration of proceeding and subparagraph (g) which addresses a party’s denial of or refusal to admit anything that should have been admitted. In this regard, the plaintiff submits the length of the trial could have been reduced had the plaintiff admitted his signature on the vehicle lease agreement approximating it would only have been about 20 to 25 percent of the actual time had that occurred.

[9] I am in agreement with the plaintiff’s position noting at paragraph 26 of the decision my comment, “…I have no doubt the defendant has considerably more knowledge of what and why the lease was entered into than he let on at trial (and to have done so would have undermined his position at trial he did not sign the lease agreement).”

[10] While the defendant was successful and is entitled to costs, this is not an appropriate situation for substantial indemnity costs. The amount claimed by the defendant is excessive in the circumstances and, as part of the Court’s inherent jurisdiction to award and fix the amount of costs under Rule 57, the defendant’s costs payable by the plaintiff are fixed in the amount of $25,000, inclusive of fees, HST and disbursements. This is a fair and reasonable amount and consistent, in my view, with the principles set out in Boucher et al. v. Public Accountants Council for the Province of Ontario et al., 2004 14579 (ON CA), [2004] O.J. No. 2634.

Mr. Justice G. Dow

Date: August 11, 2015