CITATION: 7250118 CANADA INC. v. 2308095 ONTARIO INC., 2016 ONSC 1015
COURT FILE NO.: 12-54461
DATE: 20150209
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
7250118 CANADA INC.
o/a KANATA RENOVATIONS
Margot L. Pomerleau, Counsel for the Plaintiff
Plaintiff
- and -
2308095 ONTARIO INC.
Defendant
Paul D’Angelo, Counsel for the Defendant
HEARD: June 3, 4, and 5, 2015
mcnamara R.S.J.
DECISION ON COSTS
[1] This simplified procedure matter pursuant to Rule 76 was tried before myself over the course of three days, June 3, 4, and 5 of 2015. In written Reasons released on July 2, 2015 I dismissed the plaintiff’s claim against the defendant and since no evidence was presented nor submissions made in furtherance of the counterclaim, it was also dismissed.
[2] I assessed the plaintiff’s damages, had there been liability, at $30,000.
[3] In my Reasons I indicated to the parties that if they were unable to agree on costs, they might make brief written submissions. They have now done so.
[4] As usual the issues herein are entitlement, scale of costs, and quantum of those costs. I turn first to entitlement.
[5] The Court’s general discretion to determine by whom and to what extent costs shall be paid is set forth in s. 131(1) of the Courts of Justice Act. There is no real dispute as between the parties that there is a general presumption that a successful party is entitled to costs. The plaintiff argues that that presumption does not apply in this case because, in actual fact, success at trial was divided, and as such there should be no order as to costs. The defendant argues that it was largely successful on this trial and as such, subject to arguments as to scale and quantum, the defendant is entitled to a cost award.
[6] I am of the view that the defendant is entitled to an award of costs.
[7] They were successful in defending the plaintiff’s claim in its entirety. While the counterclaim was there in name, it was not actually pursued. As indicated earlier, no evidence was called or argument made in support of it. There is no evidence that the plaintiff incurred any additional costs or disbursement that specifically relate to the counterclaim.
[8] In all of the circumstances I am satisfied that the defendant was the successful party and is entitled to some costs.
[9] I turn now to the proper scale of costs.
[10] It is the defendant’s position that it is entitled to costs on a reduced partial indemnity basis from commencement of the claim to the date of its Rule 49 offer, and then substantial indemnity costs thereafter. The plaintiff argues that there is no basis in law, within the context of the facts of this case, that would justify an elevated costs award.
[11] The case law that has developed on costs has repeatedly stated that elevated costs (full or substantial indemnity) are warranted in two circumstances. The first involves the operation of an offer to settle under Rule 49.10 where substantial indemnity costs are authorized. The other is where the losing party has engaged in behaviour worthy of sanction.
[12] Neither of those alternatives exist in this case.
[13] First, with relation to the defendant’s offer to settle, it is dated May 27, 2015 and offers to settle the case on the basis that the plaintiff dismiss its claim against the defendant and file an order with the Court confirming that dismissal, without costs. The offer was open until one minute after the commencement of the trial. The trial started on June 3rd. There is a very real issue in those circumstances vis à vis whether the defendant has complied with the time requirements for making the offer as required by Rule 49.03 in order to warrant consideration of an order for elevated costs.
[14] Furthermore, and significantly in my view, the offer is of no assistance because it is silent as to what is to become of the counterclaim, making it difficult for the plaintiff to consider accepting.
[15] In terms of the other basis upon which elevated costs can be awarded, there was nothing about the behaviour of either party worthy of sanction.
[16] Costs will be awarded then on a reduced partial indemnity basis. I turn now to quantum.
[17] In exercising my discretion under s. 131 of the Courts of Justice Act to award costs, I must take into account the factors set forth at Rule 57.01 (1) of the Rules, and I must be guided by over-riding principles of reasonableness and fairness, and in deciding what is fair and reasonable the expectation of the parties is a relevant fact. I must also have regard to principles of proportionality.
[18] Further, looking at the principle of proportionality, it must be remembered that this is a case under the simplified procedure. It is common ground that a series of reported decisions have held that costs awarded under the simplified procedure are typically significantly lower than would be the case under the ordinary procedure. This is so, of course, because the objective of the simplified procedure is to promote affordable access to justice in cases involving modest amounts.
[19] The trial itself took only three days. The evidence and the issues were uncomplicated. Essentially credibility was the key issue to be determined. In simplified procedure cases the parties can reasonably expect that, even if they are successful, they will recover a significantly reduced amount for costs.
[20] The principle was clearly stated by Lederman J. of this Court in Glenny v. Del Management Solutions (2004) O.J. No. 3904 where he stated at paragraph 7:
Such costs must be in proportion to the nature of the type of action brought as opposed to the formal amount sought in the statement of claim. Furthermore, the costs should not be so crushing as to create a sense of injustice to the unsuccessful litigant by being out of proportion to the relatively simple issues before the court.
[21] In my view, taking into account all of the circumstances of this case, I fix the defendant’s costs at $15,000, including all taxes and disbursements.
[22] In my view, approaching costs on this basis is reasonable and fair, has regard to principles of proportionality, and is within the reasonable expectation of the parties.
Mr. Justice James E. McNamara
Released: February 9, 2016
CITATION: 7250118 CANADA INC. v. 2308095 ONTARIO INC., 2016 ONSC 1015
COURT FILE NO.: 12-54461
DATE: 20150209
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
7250118 CANADA INC.
o/a KANATA RENOVATIONS
Plaintiff
- and -
2308095 ONTARIO INC.
Defendant
DECISION ON COSTS
McNAMARA R.S.J.
Released: February 9, 2016