SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: 55511/14 (St. Catharines)
DATE: 20151109
RE: Dr. Neeraj Pershad (Plaintiff) v. Margaret Lachan (Defendant)
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL: Stefanie Vescio, for the Plaintiff
Margaret Lachan, the Defendant, on her own behalf
HEARD: By written submissions dated September 17 to October 9, 2015
E N D O R S E M E N T – C O S T S
[1] For reasons given in Reasons for Decision dated August 27, 2015,[^1] I dismissed Margaret Pershad’s motion for summary dismissal of Dr. Neeraj Perhad’s action alleging misappropriation of funds during the course of Ms. Lachan’s employment. I also ordered that Dr. Pershad’s misappropriation action and Ms. Lachan’s constructive dismissal action be tried together or one after the other in the trial judge’s discretion. Costs were left to be determined based on written submissions.
[2] As indicated in my Reasons for Decision, I heard Ms. Lachan’s summary dismissal motion and Dr. Pershad’s consolidation motion one after the other. Counsel provided prior time estimates of two days for the summary dismissal motion and two hours for the consolidation motion. In fact, the hearings lasted a total of six and a half sitting days, with most of the time spent on the summary dismissal motion.
[3] Dr. Pershad through his counsel seeks costs from Ms. Lachan payable on a substantial indemnity basis. His costs outline indicates total substantial indemnity costs for both motions of $43,052, including disbursements of $1,668 and tax. On a partial indemnity basis, Dr. Pershad’s costs would total $22,329, as calculated in his costs outline.
[4] In support of his request for substantial indemnity costs, Dr. Pershad cited the conduct of Ms. Lachan and her counsel in initiating and pursuing the summary dismissal motion. In Dr. Pershad’s submission, Ms. Lachan acted unreasonably in bringing a clearly unmeritorious motion, which justified an award of substantial indemnity costs pursuant to rule 20.06(a) of the Rules of Civil Procedure.[^2] He also argued that the conduct of Ms. Pershad and her counsel in pursuit of the motion caused the proceedings to be unnecessarily time-consuming and arduous, warranting the sanction of substantial indemnity costs.
[5] In response, Ms. Lachan provided written submissions on her own behalf, having parted company with her counsel. In her submission, she relied on her counsel with respect to the bringing and the conduct of her motion and, as a matter of fairness, should not bear a costs penalty based on her counsel’s actions. She also argued that her precarious financial position should be taken into account as a mitigating factor when determining the issue of costs.
[6] Having considered the parties’ submissions, I have concluded that a costs award should be made in Dr. Pershad’s favour, calculated on a partial indemnity basis.
[7] As a general rule, a successful party has a reasonable expectation of being awarded costs in the absence of special circumstances.[^3] I see no sufficient reason for departing from the usual result in this case. There is no doubt that plaintiff’s counsel was acting upon Ms. Lachan’s authority in bringing and pursuing her unsuccessful summary dismissal motion. Having done so, in my view, it is not open to Ms. Lachan in the circumstances of this case to argue that she should avoid the costs consequences of her unsuccessful motion.
[8] With respect to the appropriate scale of costs, as noted by the Ontario Court of Appeal in Foulis v. Robinson[^4] and McBride Metal Fabricating Corp. v. H & W Sales Co.[^5] costs are usually awarded on partial indemnity basis. Only in the “rare and exceptional case” are costs awarded on a substantial indemnity basis, based on egregious or reprehensible conduct that warrants sanction against the offending party.[^6]
[9] In this case, I am not satisfied that it was unreasonable for Ms. Lachan to have brought her summary dismissal motion. While Ms. Lachan was ultimately unsuccessful, certain of the arguments her counsel made, including those relating to the particularity of the Statement of Claim and Dr. Pershad’s responses to the requests to admit, raised challenging issues that merited careful consideration. As well, while I agree that the conduct of the motion caused the proceedings to be unnecessarily protracted through no fault of Dr. Pershad, that conduct, in my view, did not rise to the level of reprehensible conduct that warranted the sanction of an enhanced costs award.
[10] In determining the issue of costs, I also considered Ms. Lachan’s argument that I should take into account her precarious financial position as a mitigating factor. From previous case law, it is clear that the courts have the discretion to take a party’s impecuniosity into account in determining the extent to which costs should be awarded against that party. However, as Master Dash indicated in Burrell v. Peel (Regional Municipality) Police Services Board, impecuniosity, while a relevant consideration, is only one factor. The court must also take into account the interests of other parties to the proceedings.[^7]
[11] In reviewing Dr. Pershad’s costs outline, I found the time spent and amounts charged to be generally reasonable. However, in the fixing of costs, I am not bound by the calculation of hours and time rates.[^8] As well, in order to arrive at a result that is fair and reasonable to all parties, I am entitled to take into account other factors set out in subrule 57.01(1) of the Rules of Civil Procedure, including the reasonable costs expectations of the unsuccessful party.[^9]
[12] In all the circumstances, I am fixing Dr. Pershad’s costs at $20,000, including disbursements and tax, payable by Ms. Lachan within 90 days. In doing so, I have extended the time for payment that would normally apply, taking into account Ms. Lachan’s financial challenges. However, I did not consider it appropriate to reduce the amount of costs awarded because of that factor, taking into account other relevant factors, including fairness to Dr. Pershad as the successful party on the motions.
The Honourable Mr. Justice R.A. Lococo
Released: November 9, 2015
COURT FILE NO.: 55511/14 (St. Catharines)
DATE: 20151109
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN:
Dr. Neeraj Pershad
Plaintiff
- and -
Margaret Lachan
Defendant
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL: Stefanie Vescio, for the Plaintiff
Margaret Lachan, the Defendant, on her own behalf
ENDORSEMENT – COSTS
Lococo J.
Released: November 9, 2015
[^1]: 2015 ONSC 5290, [2015] O.J. No. 4497.
[^2]: R.R.O. 1990, Reg. 194.
[^3]: See Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.) at para. 21.
[^4]: (1978), 1978 1307 (ON CA), 21 O.R. (2d) 769 (C.A.).
[^5]: 2002 41899 (ON CA), [2002] O.J. No. 1536, 59 O.R. (3d) 97 (C.A.).
[^6]: Ibid. at para. 38.
[^7]: [2007] O.J. No. 4232 at para. 54; aff’d [2008] O.J. 5718 (S.C.).
[^8]: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at para 26.
[^9]: Rule 57.01(1)(0.b) of the Rules of Civil Procedure.