OTTAWA
COURT FILE NO.: CV-09-45078
DATE: 2015/11/16
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Rosaline Trang
Plaintiff
– and –
Ha T. Nguyen and Quoc Dung Tran
Defendants
– and –
Michael S. Hebert, for the Plaintiff
Tamara Sugunasiri, Stephanie Lauriault, Andrew Kinoshita, for the Defendant, Her Majesty the Queen in right of Canada (Canada Revenue Agency)
Canada Revenue Agency
Defendants
HEARD: via written submissions
ENDORSEMENT ON COSTS
Justice Patrick Smith
[1] The plaintiff brought a motion for partial default judgment against the defendants Ha T. Nguyen and Quoc Dung Tran and for partial summary judgment against the defendant, Her Majesty the Queen in right of Canada. The motion was opposed by the Crown.
[2] Both motions were dismissed. In paragraph 57 of my reasons released June 2, 2015 counsel were asked to provide written submissions on the issue of costs. I have now received and reviewed those submissions.
General Principles of Costs
[3] 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.)
[4] 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;
• to discourage and sanction inappropriate behaviour by litigants.
[5] 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.
[6] 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 issues were legally and factually complex)
• the importance of the issues (there was both public and private importance to the issues)
[7] 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:
[8] 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 HMQ
[9] The defendant, Her Majesty the Queen (HMQ) seeks costs on a substantial partial indemnity basis for fees in the amount of $9,825.00 plus disbursements of $66,106.16 for a total of $75,931.16.
[10] The defendant states that the plaintiff’s affidavit evidence contained “a set of bald assertions with no substantial evidence” and fell far short of satisfying the legal test to prove that an equitable mortgage existed and whether the funds used to purchase the Parkdale property were hers.
[11] With respect to the disbursement of $65,235.86 for the preparation of the expert affidavit of Kenneth Paul Froese, the defendant submits that the report was both reasonable and necessary. (see: Item 26, Tariff A; 3664902 Canada Inc. v. Hudson’s Bay Co., (2002) 22 CPC (5th) 102)
The Position of the Plaintiff
[12] With respect to the defendant’s claim for fees the plaintiff notes that little supporting documentation exists, that the rates claimed by Mr. Kinoshita and Ms. Sugunasiri are excessive, that there is duplication regarding the drafting of the affidavits and factum and that the hearing of the motion was delayed by the defendant for several months to allow time to obtain an expert accounting report.
[13] Regarding the disbursements claimed, the plaintiff submits that the affidavit sworn by Mr. Froese was not required as it contained no new analysis that which already existed in the 2007 forensic accounting report prepared for the Crown when prosecuting Quoc Dung Tran. Hence, the plaintiff argues that the disbursement should not be recoverable as it is unreasonable, unnecessary, and excessive.
Discussion
[14] Rule 20.06 of the Rules of Civil Procedure provides that, on the hearing of a summary judgment motion, a court may fix and order costs on a substantial indemnity basis if the party acted unreasonably by bringing or responding to the motion.
[15] I agree with the position of the defendant that the affidavit evidence upon relied upon by the plaintiff lacked the necessary evidence to establish the existence of an equitable mortgage and that the funds to purchase the Parkdale property were hers
[16] In paragraphs 41 and 42 of my reasons I stated:
[41] The essential position of the Plaintiff is that the Agreement is proof of her equitable mortgage for 46 Epworth Avenue.
[42] In my view, the Agreement is deficient in that it fails to establish two essential requirements of an equitable mortgage: the existence of a debt and a charge securing the debt.
[17] Further, the evidence about the source of the plaintiff’s funds came from her brother, Alexander Tran and not directly from the plaintiff herself.
[18] For these reasons, I find that substantial indemnity costs are appropriate.
[19] With respect to the disbursement relating to Mr. Froese’s evidence I find that it is reasonable and necessary and satisfies the factors set out in 495793 Ontario Ltd. v. Barclay, [2015 ONSC 602] including:
the evidence made a significant contribution to the case and was relevant to the issues
the evidence was important and directly related to the issue of whether an equitable mortgage existed by pointing out the deficiencies in the evidence of the plaintiff and demonstrating that a genuine issue existed requiring a trial
the cost of Mr. Froese’s report is not disproportional to the economic value of the central issue - the $250,000 equitable mortgage claim advanced by the plaintiff
the evidence was not a duplication of the 2007 forensic report or of any other evidence. It provided the court with a thorough and helpful analysis of income streams and bank accounts for several family members particularly the flow of funds relating to the purchase of the properties that are the subject of the plaintiff’s claims.
Disposition
[20] Fees fixed in the amount of $8,000.00 plus disbursement of $66,106.16 are awarded in favour of the defendant, HMQ, payable by the plaintiff forthwith.
Justice Patrick Smith
Released: November 16, 2015
OTTAWA COURT FILE NO.: CV-09-45078
DATE: 2015/11/16
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Rosaline Trang
Plaintiff
– and –
Ha T. Nguyen and Quoc Dung Tran
Defendants
– and –
Canada Revenue Agency
Defendants
ENDORSEMENT ON COSTS
P. SMITH J.
Released: November 16, 2015