SUPERIOR COURT OF JUSTICE - ONTARIO
DATE: 2015/11/16
RE: Kenia Perez Xardo et al., Applicants
AND:
2409027 Ontario Inc. et al, Respondents
BEFORE: Justice Patrick
COUNSEL: Rodrigue Escayola, Counsel, for the Applicants
Heather Williams and Julia Werneburg, Counsel, for the Respondents
HEARD: via written submissions
ENDORSEMENT ON COSTS
Overview
[1] The applicants brought a motion before the court to enforce a settlement agreement based upon the applicants’ acceptance of a settlement proposal advanced by the respondents on November 6, 2014.
[2] The facts of the case are fully described in my reasons released July 2, 2015 and need not be repeated here.
[3] The application was dismissed. In paragraphs 15 and 16 of my reasons I held that the email of November 6, 2014 was not a Rule 49 offer and alternatively, it is was, it was impliedly withdrawn.
[4] In paragraph 24 of my reasons Counsel were asked to provide written submissions on the issue of costs of the application should they not be able to resolve the issue themselves. I have now received and reviewed the submissions of both the applicants and the respondents.
General Principles of Costs
[5] The general rule is that costs should follow the event. As stated in Orkin, The Law of Costs:
In general, it can be said that when a motion is properly brought costs should be awarded to the moving party, if successful, otherwise to the responding party subject always to the discretion of the judge of judicial officer. (Mark Orkin, The Law of Costs, 2nd ed., vol. II, Canada Law Book, Section 402 at page 4-1.)
[6] In Fong et al v. Chan et al, (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330, the Ontario Court of Appeal set out three fundamental purposes of modern cost rules:
• to indemnify successful litigants for the cost of litigation;
• to encourage settlements; and
• to discourage and sanction inappropriate behaviour by litigants.
[7] Rule 57 of the Rules of Civil Procedure sets out the factors to be considered by a court when exercising its discretion under s. 131 of the Courts of Justice Act. The rule places emphasis on the result in the proceeding and any written offer to settle when considering the other factors enumerated in the rule.
[8] The text of rule 57.01(1) provides as follows:
57.01 (1) Factors in discretion - In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle, various factors including the following which are relevant in this case:
• the complexity of the proceeding;
• the importance of the issues;
• any other matter relevant to the question of costs.
[9] An award of costs is a matter in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act, which provides:
[10] Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in the proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.
The Positions of the Parties
The Position of the Applicants
[11] The applicants have made four submissions:
there should be no costs awarded because they sought to enforce what was reasonably believed to be an open offer made confusing by the way it was worded by the respondents
costs should be in the cause because a favourable conclusion to the motion would have resolved the litigation at an early and less costly stage on terms proposed by the respondents and because the parties are now “back to square one”
costs should be fixed in the amount of $4,350.00 which was the figure presented by the respondents in their original costs outline exchanged at the hearing prior to my decision being released
the respondents’ revised costs outline seeking full indemnity costs of $17,186.00 is excessive, inflated and contains significant duplication.
The Position of the Respondents
[12] The respondents propose that costs should be fixed in the amount of $11,600.00 on a partial indemnity scale which is approximately two-thirds of their actual costs of $17,186.04. They rely upon the decision on the Ontario Court of Appeal in 790668 Ontario Inc. v. D’Andrea Management Inc., [2015 ONCA 557].
[13] The respondents state that the factors set out in Rule 57.01(1) of the Rules of Civil Procedure that are relevant include: the amount claimed and recovered, the complexity of the proceeding, the importance of the issues and the principle of indemnity.
Disposition
[14] The respondents were completely successful and there is no reason why they should not be awarded costs on a partial indemnity basis.
[15] There was some complexity and importance to the issue of the revocability of offers containing alternative options as well as the question of whether an offer made by a lawyer not yet on the record could be construed as a Rule 49 offer.
[16] I have reviewed the Bill of Costs submitted by the respondents. It contains a degree of duplication. Four different lawyers from three different firms responded to what was essentially a fairly simple motion.
[17] The billing rates of the respondents’ lawyers and clerk are reasonable based upon their years of experience.
[18] Costs are fixed in the amount of $8,000.00 in favour of the respondents, payable forthwith.
Justice Patrick Smith
Date: November 16, 2015