NEWMARKET COURT FILE NO.: CV-11-107449-SR

DATE: 20151230

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

I TZU LAI

Plaintiff

– and –

CHIA-LING TENG and HUSSEIN SORKHABI also known as NICK SORKHABI

Defendants

Jonathan Miller, for the Plaintiff

Colin Brown, for the Defendants

HEARD: By written submissions

REASONS FOR DECISION ON COSTS

DiTOMASO J.

[1] After two days of trial on November 23 and 24, 2015, the plaintiff was successful in obtaining judgment together with prejudgment interest for a total amount of $89,148.06.

[2] She succeeded in obtaining judgment based upon a contract of purchase and sale between herself and the defendants whereby she loaned them $80,000 for the purchase of the goods/contents of 12 Megarry Court, Richmond Hill, Ontario. The defendants paid interest on the loan for four years but refused to pay the full amount of the loan on maturity plus the fifth year of interest when the loan became due and payable.

[3] I have reviewed my reasons for judgment dated November 26, 2015. The parties agreed that costs would be dealt with by way of written submissions.

[4] I have reviewed the written submission of the parties and this is my decision on costs.

POSITION OF THE PARTIES

Position of the Plaintiff Lai

[5] Costs are claimed on a substantial indemnity scale as the defendants had alleged fraud which was unproven. Costs in the amount of $33,654.24 are claimed.

Position of the Defendants Teng and Sorkhabi

[6] The defendants submit that the costs to the plaintiff should be disallowed. It is alleged that plaintiff changed her approach about this case being only about the sale of chattels. The defendants submit that the plaintiff participated in a fraud on a third party and that she greatly and unnecessarily increased the costs of this litigation.

[7] It is submitted that prejudgment interest is excessive because of the plaintiff’s own delay and that costs of this proceeding should not exceed $15,000.

ANALYSIS

[8] I have exercised my discretion in respect of costs pursuant to section 131(1) of the Courts of Justice Act and Rule 57.01(1) of the Rules of Civil Procedure.

[9] Rule 57.01(2) of the said rules provide that even though a party is successful in a proceeding, the court is not prevented from awarding costs against the party in a proper case.

[10] In the case at bar, the defendants do not seek costs awarded against the plaintiff. Rather, the defendants take the position that costs against the plaintiff should be disallowed and she should receive nothing because of her conduct.

[11] For the following the reasons I disagree.

[12] In this case, costs follow the event. The plaintiff is the successful party and she is entitled to costs. She is not disentitled to costs because of her alleged conduct.

[13] The question then becomes one of quantum.

[14] I am not persuaded that the unproven allegation of fraud in this case attracts costs claimed on a substantial indemnity scale. Rather, the plaintiff is entitled to costs on a partial indemnity scale. This case was not presented at trial nor was there any evidence that the plaintiff perpetrated a fraud upon a third party. The submissions made by the defendants on costs do not assist them in this regard. The evidence at trial presented by the plaintiff and accepted by the court was that the defendants had breached their agreement to purchase the contents of the house on an “as is where is” condition after having the use and enjoyment of those goods and after having paid four years’ worth of interest on the loan. Any so called change of approach on behalf of the plaintiff in the presentation of her claim was not before the court. The trial proceeded based on evidence that the loan agreement had been breached by the defendants and the plaintiff was successful in this regard.

[15] The plaintiff also claims, in the alternative, partial indemnity costs as follows:

Partial indemnity fees $19,812

Disbursements $ 5,822.51

Subtotal $25,634.51

HST at 13 percent $ 3,332.49

Total $28,967

[16] I do not agree that costs of the trial however short and focused it was should be no more than $15,000. I note from the plaintiff’s costs submissions that the defendants litigated the action fully notwithstanding that the action was commenced under the simplified procedure. Examinations for discovery were conducted and the defendants served two requests to admit. The defendants made no admissions regarding liability. Although counsel at trial was the third lawyer representing the plaintiff, no charges were included for his reviewing and becoming familiar with the file. There were three motions brought during the action. No costs were claimed for these motions because said costs were determined by the court hearing the motions.

[17] I do not agree with the defendants’ submissions that the pretrial conference was a waste of time and only attracted increased legal fees. There shall be no discount in this regard.

[18] In assessing the amount of costs, I am guided by the overarching principles of fairness, reasonableness and proportionality. See Davies v. Clarington (Municipality), 2009 ONCA 722 at paras. 51-56.

[19] Quantum of costs should reflect an amount that the court considers to be fair and reasonable rather than any exact measure of the actual cost to the successful litigant. See Davies at para. 51.

[20] Further the reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable. See Davies at para. 51.

[21] I find that the unsuccessful defendants would have the reasonable expectation that they would be exposed to pay costs in the amount claimed by the plaintiff given the manner in which this matter was litigated as referred to above. The defendants’ evidence that they were induced to enter into the agreement based upon misrepresentations by Ms. Lai, their Feng Shui consultant, was completely rejected by the court. The evidence regarding the value of the spheres was without merit and of no assistance to the court.

[22] I find that the costs claimed by the plaintiff in the amount of $28,967 all inclusive of fees, disbursements and HST is fair, reasonable and proportional.

DISPOSITION

[23] The plaintiff I Tzu Lai is hereby awarded costs in the amount of $28,967 payable by the defendants Chia-Ling Teng and Hussein Sorkhabi also known as Nick Sorkhabi, jointly and severally.

DiTOMASO J.

Released: December 30, 2015