SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-12-2622-00
DATE: 2015-10-27
RE: Sandy Scamurra v. Sandy Scamurra & Sons Limited, Sandy Scamurra Contracting Ltd., 726127 Ontario Inc., Albert Scamurra, Felix Scamurra, AFJ Disposal Inc., Td Canada Trust And Royal Bank Of Canada
BEFORE: Lemon J.
COUNSEL: Albert Campea, for the Applicant
Michael N. Freeman, for the Respondents
COSTS ENDORSEMENT
The Issue
[1] On August 7, 2015, I released my reasons in this matter. There, I granted judgment against the respondents, Albert Scamurra and Felix Scamurra, in the terms of a Share Purchase and Sale Agreement, dated September 6, 2013.
[2] I also endorsed:
If the parties cannot agree upon costs, written submissions may be made to me. Those submissions shall be no more than ten pages each, not including any bills of costs or offers to settle. The Applicant shall provide his costs submissions within 20 days and the Respondents shall respond within 20 days, thereafter. Any reply shall be within ten days of that date.
Given the complexity of the costs to be ordered pursuant to the share purchase agreement and this motion, if the parties jointly wish, I may be contacted by joint conference call to consider a different format for determining those costs.
[3] The parties requested a delay in providing submissions so that they could attempt to resolve the outstanding issue. Those discussions were apparently not successful; I have now received the costs submissions from both parties.
Positions of the Parties
[4] Sandy Scamurra seeks costs in the amount of $26,578.04. He wishes these costs on a “full or substantial indemnity” basis.
[5] In response, Albert and Felix Scamurra submit that there should be no costs because success was divided, or, alternatively, the costs should be substantially reduced. Albert and Felix Scamurra do not specify what costs should be ordered.
Legal Principles
[6] 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;
(h) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding.
[7] 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), 1999 2052 (ON CA), 46 O.R. (3d) 330, at para. 22.
[8] 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), 2004 14579 (ON CA), 71 O.R. (3d) 291, at para. 24.
Analysis
[9] Albert and Felix submit that success was divided. However, their arguments were rejected. They were required to pay on a judgment that they submitted should not be paid. They clearly were unsuccessful.
[10] Justice Pazaratz dealt with this issue in a more colorful fashion in Scipione v. Scipione, 2015 ONSC 5982:
Why do written costs submissions frequently try to lead us into some sort of parallel universe where losers are actually winners?
If you lost, don’t re-write the facts to argue that you won. It only makes the judge go back – repeatedly – to see if we’re talking about the same case.
And if the best you got was a mixed result on one of the issues, don’t claim you were right to relentlessly pursue all of the issues. Especially when you ignored repeated opportunities to pursue only the claims which might have had some merit.
Ruled 18 and 24 of the Family Law Rules set out many important and complex considerations in dealing with costs. In making submissions, counsel would be remiss if they didn’t vigorously advance every potential argument on behalf of their client. Because in determining costs, fairness to both the winner and the loser is paramount.
But the starting point – determination of success – shouldn’t be so muddy.
Who got what they asked for?
That question shouldn’t be so complicated.
[11] Although Sandy Scamurra was unsuccessful on his primary argument, he was successful on his alternate argument. He obtained judgment in his favour. There is no doubt that he was successful. He is entitled to his costs.
[12] There is an issue between the parties as to whether I should determine costs of this proceeding pursuant to the Rules or assess costs according to the parties’ Share Pledge Agreement.
[13] The Share Pledge Agreement sets out that if there is a breach of the agreement, then Albert and Felix were liable to Sandy “for all costs, charges and legal fees and expenses (all on a solicitor and on his own client basis) (collectively called “Expenses”) suffered or incurred by [Sandy] in respect of any exercise by [Sandy] of [his] rights and remedies hereunder or at law in the event of default by [Albert and Felix] in any of their obligations secured hereunder…”.
[14] Pursuant to s. 131(1) of the Courts of Justice Act, “the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court.” From the submissions given by Albert and Felix Scamurra, it is clear that they do not consent to me assessing the costs pursuant to the Share Pledge Agreement. Barring such a consent, my role is to simply assess the costs of the proceeding.
[15] Sandy Scamurra seeks costs on a full or substantial basis. Albert and Felix have been found to have breached the contract. They have been unsuccessful in this proceeding. They will, therefore, have to pay costs both pursuant to this endorsement and pursuant to the agreement. They have not, however, taken any steps within the litigation that would support a finding of full or substantial indemnity case basis. Accordingly, I ought not find the costs on a full or substantial basis.
[16] There were no offers to settle.
[17] There were extensive materials and factums. The matter was argued at a long motion. There were not, however, any cross-examinations. Mr. Campea’s rate is reasonable and the time spent was equally reasonable. However, he appears to seek costs for work done well in advance of the proceeding. I find that some of that time was not related to the proceeding or incidental to it.
[18] Albert and Felix Scamurra have provided their own bill of costs that they intended to use if they were successful. It shows a partial indemnity rate of $12,314.74. It would, therefore, have been reasonable for them to expect to pay something in the same range if they were unsuccessful.
[19] Both parties have made submissions with respect to who was responsible for various adjournments. I cannot make that determination on these materials. What is acknowledged, however, is that both were told by a previous motions judge that the matter could only be dealt with at a long motion; the delays leading up to that date were simply part of the litigation.
[20] This was detailed commercial litigation with experienced and sophisticated counsel. The original share purchase agreement was for the sum of $450,000. The litigation appears to have come to an end with this judgment.
[21] Taking all of those factors into consideration, I fix costs in the amount of $20,000 inclusive of disbursements and HST. Those costs are to be paid by Felix and Albert Scamurra jointly and severally.
Lemon J
DATE: October 27, 2015
COURT FILE NO.: CV-12-2622-00
DATE: 2015-10-27
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Sandy Scamurra v. Sandy Scamurra & Sons Limited, Sandy Scamurra Contracting Ltd., 726127 Ontario Inc., Albert Scamurra, Felix Scamurra, AFJ Disposal Inc., Td Canada Trust And Royal Bank Of Canada
BEFORE: Lemon J.
COUNSEL: Albert Campea, For The Applicant
Michael N. Freeman, For The Respondents
COSTS ENDORSEMENT
LEMON J.
DATE: October 27, 2015