Court File and Parties

CITATION: Midland Plaza Inc. v. Midland Medical Services Inc., 2016 ONSC 1375

COURT FILE NO.: CV-14-511091

DATE: 20160226

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Midland Plaza Inc., Plaintiff

AND:

Midland Medical Services Inc., Midland Health Centre Inc., Abudulhafid Ali, Anthony Alsa Alsayed, Abdulrahman Eddeb aka Abdulrahman Ali Eddeb, Abu Baker, Abu Roghba, Magdy Kamar aka Mejdi Kamar aka Magdy Kumar and Mansour Bendago, Defendants

BEFORE: S. F. Dunphy, J.

COUNSEL: S. Sopic and R. Malen, for the Plaintiff/Moving Party

S. Secter, for the Defendants/Responding Parties Ali & Bendago

M. Arnold for the Defendant/Responding Party Kamar

D. Markovitch for the Defendant/Responding Party Eddeb

HEARD: November 17, 2015

COSTS ENDORSEMENT

[1] I have reviewed the costs submissions of the plaintiff and those of Mr. Kamar. No submissions were received on behalf of the other parties who have apparently reached separate settlement arrangements with the plaintiff. The plaintiff has not disclosed the terms of those settlement arrangements beyond covenanting not to collect more than it is entitled to and, of course, the cross-claims as between the defendants remain undisposed of.

[2] I am here asked to deal with costs and I shall restrict myself to that. If, as and when Mr. Kamar is actually asked to pay more than his pro rata share of the judgment or of costs, he may have reason to protest the closed lips of the plaintiff. He has of yet not done so and I see no reason to anticipate issues that may never arise.

[3] The plaintiff claims full indemnity costs of $58,030 or, in the alternative, partial indemnity costs of $44,753.32. In claiming full indemnity costs, the plaintiff relies upon a provision of the Lease allowing it to claim such costs to enforce the tenant’s obligation to pay rent or other obligations. The plaintiff says that “other obligations” of the tenant include the obligation to pay damages arising upon the termination of the lease. The plaintiff claims the landlord is thus entitled to full indemnity costs of enforcement from the landlord and is therefore also entitled to full indemnity costs from the indemnitors.

[4] Mr. Kamar argues that the covenant to pay for enforcement costs of the tenant’s obligations is enforceable as against the tenant alone and not as against the indemnitors.

[5] I agree. The motion decided by me was in an action against the indemnitors to enforce the indemnity. No costs of enforcement as against the tenant have been identified to me. Had there been evidence of such costs being incurred as regards the tenant, I would be generally disposed to accept the plaintiff’s argument. The tenant in this case has slipped quietly beneath the waves and did not defend the action. No agreement for full indemnity costs for enforcement of the indemnity agreement has been pleaded or proved. All of the costs claimed are in respect of the indemnity agreements with the indemnitors. There is no basis to claim other than partial indemnity costs as against the indemnitors for the cost of proceeding against them.

[6] There is a second reason I decline the plaintiff’s request. Full indemnity costs cannot exceed more than the amount actually paid. The principal’s of the plaintiff landlord are partners in the law firm representing the plaintiff. The dockets presented include significant matters blacked out without explanation leaving me in considerable doubt as to whether this case was done at a discounted rate or what the terms of the retainer were. I would in any event have been reluctant to award full indemnity costs in relation to an Outline of Costs that left me with as many unanswered questions as this one did.

[7] I find that partial indemnity costs alone should be awarded in this case.

[8] The amount of partial indemnity costs claimed by the plaintiff is $23,499 plus HST and disbursements. Mr. Kamar takes issue with two counsel fees being charged for the attendance at the motion (a partner and an associate) where the associate alone argued. The associate, Ms. Sopic, did an impressive job of presenting the case on her own. While I would not in any way discourage a law firm from sending senior partners to guide and advise associates as they develop their skills, such expenses cannot reasonably be expected to be paid by the losing party. I will allow a discount of $1,470 to remove the attendance cost of Mr. Malen at the hearing. I will not remove the balance of his supervisory time which seems reasonable to me. I find the balance of the time charges and partial indemnity rates to be reasonable in the circumstances and therefore allow the plaintiff total fees of $22,029 plus HST for a total of $24,892.77 in fees.

[9] The plaintiff claimed disbursements of $4,922.51 for disbursements including HST. The list of disbursements was objected to by Mr. Kamar as being excessive. It is also lacks enough particularity to enable me to track it to allowable disbursements in the tariff. I have reduced the claim by $1,000 accordingly as my best estimate of what the claimable amount should have been had the tariff on disbursements been more closely adhered to. The burden being upon the claimant, I have likely rounded down where in doubt. The total allowed disbursements is thus $3,922.51.

[10] I am therefore fixing the total fees of the plaintiff at $28,815.28 ($24,892.77+$3,922.51)including HST.

[11] Each of the indemnitors had the same obligation. Costs were incurred by the plaintiff for the entire action and motion and cannot reasonably be broken down on a several basis except, at the limit, for a small amount of disbursements. The defendants are adequately protected by having their cross-claims and indemnity rights as against each other and by the fact that the plaintiff cannot collect more than the judgment amount from the indemnitors nor can the plaintiff collect more than the costs amount from each. As noted, if Mr. Kamar finds himself paying more than his pro-rata share, he has remedies available to him. I will not try to solve problems that haven’t yet arisen.

S. F. Dunphy, J.

Date: February 26, 2016