ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-11-3137-00
DATE: 2015 10 16
BETWEEN:
MALCOLM EVANS and CONSTANCE EVANS
L. Murray Eades, for the Plaintiffs
Plaintiffs
- and -
CANUSA AUTOMOTIVE WAREHOUSING INC., ROBERT BENJAMIN JONES, IVOR PAUL JONES, STEPHEN MALCOLM DRAKE, BARRY MITCHELL, DOUGLAS F. HANNAN, DEREK ARTHUR and 2209334 ONTARIO INC. DBA APD ALL PARTS DELIVERY
John H. McNair, for All Defendants except Derek Arthur
Mana Khami, for the Defendant Derek Arthur
Defendants
ENDORSEMENT ON COSTS
EMERY J
[1] The Canusa defendants and the defendant Derek Arthur seek their costs against the plaintiffs, Malcolm Evans and Constance Evans, for the success they achieved on the motion for summary judgment those defendants brought to have the action dismissed.
Positions Taken
[2] The Canusa defendants seek costs on a partial indemnity basis for fees, disbursements and H.S.T. totalling $24,366.25.
[3] The defendant, Derek Arthur, seeks his costs in the total amount of $12,088.98. His claim for costs is less than the claim for costs of the Canusa defendants because Mr. Arthur was initially represented by McKenzie Lake Lawyers LLP in the course of representing the Canusa defendants. Mr. Arthur retained separate counsel shortly before the hearing of the motion. According to the submissions made on Mr. Arthur’s behalf, it was necessary for him to seek independent legal counsel prior to the argument of the motion given the nature of the claims made against him and his relationship with the other defendants.
[4] The plaintiffs request that there be no award of costs made against them because of the economic hardship an award of costs will cause them. Mr. Eades filed an affidavit sworn by Malcolm Evans in support of that request. This affidavit shows the plaintiffs to have accumulated consumer debt and tax liabilities in excess of $260,000.
[5] In the alternative, the plaintiffs request that an order for costs in an appropriate amount be subject to a provision that as long as they pay $100.00 per month towards those costs, no other enforcement steps may be taken against them until the final conclusion of the action commenced by Professional Alliances Inc. The trial of that action is scheduled to take place in January or May, 2016.
[6] The submissions on costs filed on behalf of the plaintiffs also contains paragraph 5, which states as follows:
- The Plaintiffs take no issue with the costs submission of the defendants other than Derek Arthur.
Analysis
[7] An award of costs is subject to the discretion of the presiding judge in a proceeding or in any step of a proceeding under section 131 of the Courts of Justice Act. The general rule regarding costs in Ontario is that costs follow the event, which means that the loser pays costs to the successful party. Costs are awarded in this way to meet three fundamental purposes behind the modern costs rules identified by the Court of Appeal in Fong v. Chan 1999 2052 (ON CA), [1999] O.J. No. 4600:
to indemnify successful litigants for the cost of the litigation;
to encourage settlements; and
to discourage and sanction inappropriate behavior by litigants.
[8] The authorities are divided between those cases where economic hardship is a factor to be considered by the court when deciding costs, and those cases where it is not. In Baksh v. Sun Media (Toronto) Corp., 2003 CarswellOnt 24, Master Dash cites Myers v. Toronto (Metropolitan) Police Force 1995 11086 (ON SCDC), [1995] O.J. No. 1321 (Div. Ct.) where the headnote captured the principle that:
Because of the importance of avoiding a situation in which litigants without means could ignore the rules of the court, the trial judge acted reasonably in refusing to take into account the impecuniosity of the plaintiff.
[9] Later in Baksh, Master Dash stated at paragraph 19 that:
- For orders of the court to have any meaning they must be enforced. I am not satisfied by cogent evidence that the plaintiff is impecunious. Even if I were so satisfied, a party should not be able to set up his own impecuniosity as a shield against costs sanctions. To allow that would mean that a plaintiff could bring, resist, or appeal motions with no fear of consequences, and would emasculate the powers provided in rules 57.03(2) and 60.12…
[10] On the other hand, Justice Perell in Baines v. Linett & Timmis Barristers & Solicitors, 2014 ONSC 3165, upon considering whether to award costs to the successful defendants against Eleanor Denise Baines, as the unsuccessful plaintiff who was self-represented, had this to say:
[7] I see no purpose to be served in the circumstances of this case in making a notional or symbolic costs award that, practically speaking, cannot be paid but gives lip service to the normal rule that the successful party is entitled to costs.
[11] In that case, Justice Perell exercised his discretion to make no order as to costs.
[12] Reference is made in the submissions of counsel to Belvedere v. Brittain Estate, 2009 ONCA 691 in which the Court of Appeal held that in the unfortunate circumstances of that case, having regard to the financial position of Ms. Belvedere and recognizing the unfulfilled but legally unenforceable promise of Mr. Brittain, it was one of those rare cases in which the court should exercise its discretion to make no costs award in respect of the trial.
[13] I also note the authorities discussed in Sutherland v. Manulife Financial, 2011 ONSC 1170. Justice D. M. Brown (as he then was), after reviewing the law with respect to the discretion of the Court to make no award as to costs against an unsuccessful impecunious party, determined that such awards should be “rare”.
[14] I do not find the circumstances of the plaintiffs, combined with the nature of the motion to be one of those rare cases in which the court should consider any economic hardship claimed by the plaintiffs as a factor in the exercise of discretion to award costs or not. In view of the reasons for judgment to dismiss the action, I considered the claims made by the plaintiffs to be ill-conceived and unfounded at law. The plaintiffs portray themselves to be persons relatively sophisticated in business matters. The plaintiff Malcolm Evans owns and controls Professional Alliances Inc. that is proceeding to trial against the same parties with the benefit of counsel in that action. Their financial situation may have taken a recent downturn for one reason or another, but they are not out.
[15] It would appear the Evans are prepared to litigate without regard to costs. To grant either request the plaintiffs have made would be to ignore the first and third purposes set out in Fong v. Chan for what the law of costs seeks to accomplish.
[16] There is no reason to deny any of the defendants their costs for the motion. Apart from the forbearance on any award of costs, the plaintiffs take no issue with the submissions on costs made by the Canusa defendants as to entitlement or quantum. Since I am refusing that request, the Canusa defendants are awarded their costs for the motion on a partial indemnity basis in the amount of $24,366.25, as claimed.
[17] The plaintiffs take issue with the quantum of costs claimed by Mr. Arthur on a partial indemnity basis because he was represented by the same law firm as the Canusa defendants until just before the hearing of the motion for summary judgment. I take that argument to mean that all legal work provided in terms of the preparation of motion material and attendance at all examinations would already be captured by the time the Canusa claimants have claimed for that part of the motion process.
[18] It was appropriate for Ms. Khami to provide separate representation to Derek Arthur because of the nature of the claims made against him in the statement of claim, and his relationship with the other defendants as well as with Professional Alliances Inc. I noted in my reasons that Mr. Arthur is described in the statement of claim as the supervisor of Professional’s compliment of drivers up to August 7, 2009. It was alleged that he had also been the operations manager of the defendant APD since June 12, 2009. The plaintiffs alleged in the statement of claim and on the motion that he therefore held both positions at the same time for approximately two months to place himself in a conflict of interest. Mr. Arthur is therefore entitled to costs for retaining his own counsel on the motion to dismiss the action as against him.
[19] The amount of the costs claimed is an entirely different matter. I cannot determine from the Bill of Costs filed on behalf of Mr. Arthur when Ms. Por and Ms. Khami took over Mr. Arthur’s representation from the McKenzie Lake law firm that had up to that time represented all defendants. I am left with estimating the amount of those costs by what I consider to be a fair and reasonable amount expended for the preparation of facta and for the argument made at the motion on Mr. Arthur’s behalf.
[20] In Zesta Engineering Ltd. v. Cloutier, 2002 25577I, the Court of Appeal spoke of how the costs under consideration in that case should reflect more of what the court would see as a fair and reasonable amount that should be paid, rather than any exact measure of the actual costs incurred by the successful party.
[21] I propose to adopt the same approach in this case. Costs are hereby granted to the defendant Derek Arthur on the motion in the amount of $6,000.00, all inclusive, as an amount I consider to be fair and reasonable under the circumstances.
[22] All costs are payable by Malcolm Evans and Constance Evans jointly and severally within 30 days.
EMERY J
Released: October 16, 2015
COURT FILE NO.: CV-11-3137-00
DATE: 2015 10 16
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MALCOLM EVANS and CONSTANCE EVANS
Plaintiffs
- and -
CANUSA AUTOMOTIVE WAREHOUSING INC., ROBERT BENJAMIN JONES, IVOR PAUL JONES, STEPHEN MALCOLM DRAKE, BARRY MITCHELL, DOUGLAS F. HANNAN, DEREK ARTHUR and 2209334 ONTARIO INC. DBA APD ALL PARTS DELIVERY
Respondent
ENDORSEMENT ON COSTS
EMERY J
Released: October 16, 2015