CITATION: Bayan Construction v. Muslim Girls School, 2016 ONSC 1669
COURT FILE NO.: C-575-08
DATE: 2016-03-08
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Bayan Construction Ltd. and 1198601 Ontario Limited c.o.b. Patra Iron Works & Railings, Plaintiffs
AND:
Muslim Girls School and Syed Adel Qadri, Defendants
BEFORE: The Honourable Mr. Justice R.D. Reilly
COUNSEL: Daniel W. Veinot, Counsel for the Plaintiifs Sulaiman Mangal, Counsel for the Defendants
HEARD: January 28, 2016
COSTS RULING
[1] This action was commenced by statement of claim dated June 18, 2008. A counterclaim was filed by the defendants dated August 12, 2011. Early attempts at resolution by arbitration failed, and the trial began on January 25, 2016. On January 26, 2016 the parties resolved the litigation by minutes of settlement. On January 27, 2016 the court directed judgment in accordance with the minutes of settlement, subject to the court’s ruling on costs and prejudgment interest.
[2] I have now read and considered counsel’s submissions, together with the other material filed on the latter issue, and am prepared to deliver my ruling.
[3] I would first sincerely commend the parties and counsel for resolving this litigation. It is to be regretted that such resolution could not have been achieved at an earlier stage, to avoid, in part the expense of this litigation to all concerned. I have examined the bills of costs submitted by both the plaintiffs and defendants. I find their positions as to quantum of costs expended to get to trial not unreasonable, and it is unfortunate that, at least to some extent, those costs will be borne by the parties. I note that some of the costs claimed by the plaintiffs relate more directly to the failed arbitration, though questionably some of those costs were expended to obtain the settlement which finally resolved this litigation.
[4] The minutes of settlement are essentially favourable to the plaintiffs. I might note that the settlement is slightly more favourable to the plaintiffs than the offers to settle served by the plaintiffs just before the trial began. On January 21, 2016 the plaintiffs offered to settle for the principal sum of $55,000, plus prejudgment interest. The settlement (and now the resulting judgment) provides that the plaintiffs will receive the principal sum of $58,000, plus prejudgment interest and costs. It might be noted that in agreeing to the terms of settlement, the defendants will avoid the possibility of a larger award, which claim has now been abandoned by the plaintiffs.
[5] I need not repeat the principles that govern an award of costs. The successful party or parties are entitled to expect a fair award of costs, and the unsuccessful parties are expected to pay such award, as long as it is fair.
[6] The plaintiffs are claiming costs in the total amount of $70,741.60 for all fees and disbursements. Fees are claimed on a partial indemnity basis. I have carefully considered the plaintiffs’ detailed bill of costs and find it largely reasonable, together with the disbursements claimed.
[7] Rule 57.1 of the Rules of Civil Procedure sets out some of the factors which the court may consider in exercising its discretion to award costs pursuant to s.131 of the Courts of Justice Act. These factors include:
The amount claimed and the amount recovered in the proceeding.
The conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceedings.
Any other matter relevant to the question of costs.
[8] I do take into account the quantum of the settlement ($58,000), which was significantly less than the initial quantum claimed by the plaintiffs. The costs awarded should bear some relation to the quantum awarded by settlement.
[9] I find the plaintiffs’ detailed bill of costs largely reasonable, together with the disbursements claimed, but reduce the fees which the plaintiffs are entitled to claim by some quantum, for the work that was more directly related to the arbitration. I therefore conclude that the defendants should pay plaintiffs for costs of this action the sum of $48,000, inclusive of disbursements and taxes. Costs are payable forthwith, unless the parties agree otherwise.
[10] I might add that I have no real criticism of the defendants’ bill of costs. However, as the unsuccessful parties, they can have no expectation of reimbursement or credit for their costs expended.
[11] The plaintiffs also claim prejudgment interest on the judgment of $58,000. The defendants apparently take no real issue with the plaintiff’s calculations. Based upon interest starting on October 4, 2007 and ending with the settlement dated January 26, 2016, the claim for prejudgment interest is pursuant to ss. 127 and 128 of the Courts of Justice Act. The interest claimed by the plaintiffs is at a rate of 4.8%.
[12] Section 127 defines “prejudgment interest rate” as the “bank rate at the end of the first day of the last month of the quarter preceding the quarter in which the proceeding was commenced …”. Section 128 provides in part that the award should be “calculated from the date the cause of action arose to the date of the order” (the judgment).
[13] Presuming therefore that the proceeding was commenced on June 18, 2008, the interest rate should be the bank rate on March 31, 2008, which was indeed 4.8%. Therefore, if the dates are accurate, the plaintiffs’ calculations are correct.
[14] Therefore, I direct, pursuant to s.128(1) of the Courts of Justice Act that the award by the defendants to the plaintiffs shall include prejudgment interest of $23,156.78.
[15] In the result, the defendants shall pay costs to the plaintiffs of $48,000 and prejudgment interest of $23,156.78.
[16] If any of my calculations are inaccurate, counsel may arrange to address me in writing through the trial coordinator, to finally settle the order.
R.D. Reilly J.
Date: March 8, 2016