Court File and Parties

Barrie Court File No.: CV-14-0943 Date: 2016-04-08 Superior Court of Justice - Ontario

Re: Mary Lou McGillvray, Plaintiff And: Randal Penman, Debra Penman, Mark Penman and Marjorie Penman, Defendants

Before: The Hon. Madam Justice E.A. Quinlan

Counsel: J.A. Ironside, Counsel for the Plaintiff A.H. McInnis, Counsel, for the Defendant, Debra Penman

Heard: By written submissions

Costs Endorsement

[1] The defendant, Debra Penman, moved for an order to strike the Statement of Claim as against her, without leave to amend, on a number of bases, including its failure to disclose a reasonable cause of action pursuant to Rule 21.01(1)(b) of the Rules of Civil Procedure.

[2] The plaintiff brought a cross-motion to dismiss the defendant’s motion, or in the alternative, for leave to amend her claim under Rule 26.01. The defendant consented to the plaintiff’s cross-motion seeking leave to amend and therefore, the defendant’s motion was argued with reference to the Amended Statement of Claim (Amended Claim). The plaintiff sought a dismissal of the defendant’s motion or leave to further amend her Amended Claim.

[3] I determined that to the extent that the Amended Claim pleaded a cause of action against the defendant, I inferred that the plaintiff intended to sue in her capacity as trustee, and that the trust’s cause of action against the defendant was for unjust enrichment. I granted the plaintiff leave to further amend to sue in her capacity as trustee.

[4] The defendant seeks her costs on a substantial indemnity basis in the amount of $9,613.68. She takes the position that she undertook significant efforts, to which the plaintiff did not respond, to avoid the costs and necessity of bringing her motion. The plaintiff only served her proposed Amended Claim the week before the motion; that Amended Claim remained deficient. As a result of the plaintiff’s failure to make clear her claim of unjust enrichment and to sue in a representative capacity, the defendant incurred the costs of preparing motion materials and arguing the motion. The defendant argues that as a result of the motion, which confined the plaintiff to a cause of action in unjust enrichment, the parties and the court have been saved significant expense.

[5] The plaintiff argues that she was successful in obtaining leave to further amend her Amended Claim. The defendant, on the other hand, did not obtain any of the relief sought in her motion. As a result, the plaintiff seeks her costs on a partial indemnity basis in the amount of $6,201.08. If the court determines that there was mixed success, the plaintiff asks that there be no order as to costs. In the further alternative, if the court determines that the defendant is entitled to her costs, such costs should be fixed at a partial indemnity scale, payable “in the cause” or “in any event of the cause” at the conclusion of the trial and at a lower hourly rate than that sought by the defendant.

The Legal Principles

[6] The award of costs is governed by s. 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43 and by Rule 57.01 of the Rules of Civil Procedure. Section 131 clothes the court with its general discretion to fix costs. Rule 57.01 provides a measure of guidance in the exercise of that discretion by enumerating certain factors that the court may consider when assessing costs: Zandersod Company Limited v. Solmar Development Corp., 2011 ONSC 3874 at para. 11.

[7] In particular, the court may consider any of the following factors:

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer; (0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed; (a) the amount claimed and the amount recovered in the proceeding; (b) the apportionment of liability; (c) the complexity of the proceeding; (d) the importance of the issues; (e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (f) whether any step in the proceeding was, (i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution; (g) a party’s denial of or refusal to admit anything that should have been admitted; (h) whether it is appropriate to award any costs or more than one set of costs where a party, (i) commenced separate proceedings for claims that should have been made in one proceeding, or (ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and (i) any other matter relevant to the question of costs. R.R.O. 1990, Reg. 194, r. 57.01 (1); O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1.

[8] Ultimately, in fixing an amount for costs, the overriding principles are fairness and reasonableness: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.); Moon v. Sher (2004), 246 D.L.R. (4th) 440 (Ont. C.A.).

Analysis

[9] Although the plaintiff was successful in obtaining leave to further amend her Amended Claim and the defendant was unsuccessful in obtaining any of the relief she sought, I find that the motions were only necessary because of the plaintiff’s failure to respond to the defendant’s repeated and reasonable warnings that the Statement of Claim did not disclose a reasonable cause of action. I find that this is relevant to an award of costs under Rule 57.01(1)(e): the plaintiff’s conduct made the motions necessary.

[10] The actions of the defendant prompted the plaintiff to make amendments to her Statement of Claim, although they were only made shortly before the scheduled long motion date. Those amendments gave the plaintiff a viable, albeit ill-defined cause of action. However, the plaintiff still failed not only to clearly articulate a cause of action but to sue in her capacity as trustee. The defendant’s motion was necessary to place the defendant in a position where she could know the case she had to meet.

[11] For these reasons, I accept the defendant’s submission that she should be awarded costs of the motions. I find there is no basis for the award to be other than on the usual partial indemnity scale. I accept the defendants’ submission that the costs should be paid at the conclusion of the trial.

[12] Considering all of the factors relevant to an assessment of costs, I find that a fair and reasonable amount, one that a party could reasonably expect to pay and that is proportionate, is $5,000.00 inclusive of HST and disbursements.

[13] Accordingly, the plaintiff shall pay to the defendant her costs in the amount of $5,000.00 in any event of the cause at the conclusion of the trial.

Quinlan J. Date: April 8, 2016