Court File and Parties
COURT FILE NO.: CV-14-4344 DATE: 2016-05-24 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
TIFFANY CARROLL Plaintiff – and – YVETTE GARNETT Defendant
Counsel: G. Acosta, Counsel for the Plaintiff J. Owen N. Bury, Counsel for the Defendant
HEARD: February 9-12, 2016
RASAIAH J.
DECISION ON COSTS
LAW
[1] The Courts of Justice Act, R.S.O. 1990, c. C.43, at s. 131 (1) states:
- (1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.
[2] Rule 57.01 (1) of the Rules of Civil Procedure, R.R.O. Reg. 194, sets out:
57.01 In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(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.
[3] Rule 57.01 (3) of the Rules of Civil Procedure sets out:
(3) When the court awards costs, it shall fix them in accordance with subrule (1) and the Tariffs. O. Reg. 284/01, s. 15 (1).
[4] Part 1 of the Tariff sets out:
The fee for any step in a proceeding authorized by the Rules of Civil Procedure and the counsel fee for motions, applications, trials, references and appeals shall be determined in accordance with section 131 of the Courts of Justice Act and the factors set out in subrule 57.01 (1).
Where students-at-law or law clerks have provided services of a nature that the Law Society of Upper Canada authorizes them to provide, fees for those services may be allowed.
[5] Rule 49.10 of the Rules of Civil Procedure sets out:
Plaintiff’s Offer
49.10 (1) Where an offer to settle,
(a) is made by a plaintiff at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the defendant,
and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.
Defendant’s Offer
(2) Where an offer to settle,
(a) is made by a defendant at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the plaintiff,
and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.
Burden of Proof
(3) The burden of proving that the judgment is as favourable as the terms of the offer to settle, or more or less favourable, as the case may be, is on the party who claims the benefit of subrule (1) or (2).
[6] Rule 57.01 (4) of the Rules of Civil Procedure sets out:
(4) Nothing in this rule or rules 57.02 to 57.07 affects the authority of the court under section 131 of the Courts of Justice Act ,
(a) to award or refuse costs in respect of a particular issue or part of a proceeding;
(b) to award a percentage of assessed costs or award assessed costs up to or from a particular stage of a proceeding;
(c) to award all or part of the costs on a substantial indemnity basis;
(d) to award costs in an amount that represents full indemnity; or
(e) to award costs to a party acting in person.
PLAINTIFF’S POSITION
[7] The plaintiff seeks costs on a substantial indemnity basis.
[8] The plaintiff submits that she was the successful party at this trial in that the defendant was unsuccessful on the issues of joint ownership of the property 834 Golden Farmer Way, Mississauga, Ontario (“property”) and division of the net proceeds of sale of the property.
[9] The plaintiff submits that she made numerous offers to settle and that all of these offers complied with Rule 49.10 of the Rules of Civil Procedure. She submits that the judgment is more favourable than the offers and as such the plaintiff is entitled to substantial indemnity costs from April 27, 2015, the date of the first two offers to settle provided to the defendant.
[10] The plaintiff also submits that the conduct of the defendant in relation to the entire proceedings was completely unreasonable. The defendant refused to compromise or to cooperate at every turn.
[11] The plaintiff submits that she was forced to incur significant legal cost to realize her entitlement in respect of the property. During the litigation the plaintiff pleaded with the defendant to sell the property but the defendant repeatedly refused despite the financial hardship to the plaintiff.
[12] The plaintiff submits that the conduct surrounding the defendant’s listing of the property for sale January 2016’s conduct that would support an award for costs.
[13] The plaintiff claims that the trial of this matter was lengthened one full day as a result of defendant’s counsel being ill prepared and that this is a factor for consideration on the issue of costs.
[14] The plaintiff filed a bill of costs. The total costs claimed on a partial indemnity basis is $24,211.38; on a substantial indemnity basis $45,396.34; and on a full indemnity basis $50,440.38. The plaintiff’s costs it appears cover the period September 25, 2014 to May 12, 2016, according to the copies of the accounts attached. Accounts September 25, 2015 for $1,960.75; October 6, 2014 to October 31, 2014 for $5,341.99; November 5, 2014 to January 13, 2015 for $8,475.00 ($11,461.02 before reduction); September 21, 2015 to December 10, 2015 for $1,600.00; January 14, 2016 to February 25, 2016 for $19,324.55; and April 29, 2016 to May 12, 2016 for $2,757.00.
DEFENDANT’S POSITION
[15] The defendant seeks costs.
[16] The defendant submitted that she was successful on her claim for unjust enrichment and that the plaintiff failed in her claim to have the property equally divided and further failed in her claim for punitive damages. She submits therefore that the plaintiff received mixed results.
[17] The defendant submits that the plaintiff’s offers were not more favourable or as favourable as the judgment.
[18] The defendant submits that she made an offer within the range of reasonableness.
[19] The defendant claims that costs were already dealt with up to the order of Justice Bloom dated March 12, 2015 ordering the property sold.
[20] The defendant submits that she explored ways to save trial time and to save costs. The defendant submits that she made several admissions at trial to shorten the proceedings and limit the number of witnesses called. She also incurred the costs of scanning, printing, compiling and binding of the two-volume Joint Exhibit Brief without contribution (although offered) by the plaintiff.
[21] The defendant filed a bill of costs. The total costs claimed on a partial indemnity basis is $20,729.85; and on a full indemnity basis $34,549.75.
ANALYSIS
Issues at Trial
[22] I find that this is an appropriate case to exercise my discretion to award some costs. I have considered Rule 57.01 and the factors set out thereunder. I have also considered Rule 49.
[23] The defendant was claiming that the plaintiff had no interest in the property. The issues were not terribly complex but required evidence of facts that occurred over a significant period of time to determine that issue, and the issue of unjust enrichment.
[24] The plaintiff was successful on the ownership issue, and favourable results were received by her on the issue of unjust enrichment, namely in respect of the claims made with respect to contributions made by the parties to the property and the joint visa. The plaintiff was not successful on the issue of the accounting of the joint line of credit, and some of the minor terms of the conduct of the sale, and punitive damages.
[25] The defendant was unsuccessful on the ownership issue. As for unjust enrichment, at trial, the plaintiff was prepared to account for the various mortgage refinancing funds that were used by her to pay her personal debts along the way, likewise with the defendant. While I appreciate the defendant is suggesting that she was successful on unjust enrichment and is likely referring to the ultimate accounting that was applied in the judgment, the accounting on all but two debts was agreed to and not major issues at trial in my view. In respect of the two debts that were not agreed to, namely the joint visa and line of credit debts, success was divided, the defendant being successful on the joint line of credit debt claim and the plaintiff, the visa. The defendant was not successful on any other of the unjust enrichment claims she made or proceeded with at the trial and as such the measure of success on this issue was very limited in my view. Favourable results were received by her regarding the showing times of the home in respect of the conduct of the same, and on the plaintiff’s punitive damages claim.
[26] Based on the issues that proceeded at trial and the results as I view them based on the above, while there were mixed results, I find that the plaintiff was the more successful party at trial. The crux and major issues at trial were the ownership issues and unjust enrichment claims related to the contributions made to the property by the parties. The punitive damages claim was not in my view a lengthy part of the proceeding or complex in any way with the evidence being limited to a short time frame. That being said, I find that there ought to be some reduction in costs to the plaintiff based on the mixed results.
The Plaintiff’s Offers
[27] The plaintiff made offers to settle.
[28] The Offer to Settle dated April 27, 2015 (“Offer One”), made pursuant to Rule 49, relates to division of the net sale proceeds of the property. The terms of the offer were that the plaintiff and defendant split the net proceeds of the sale; costs would be payable by the party who is required to pay them after the calculation of the split; and the solicitor acting on the real estate transaction shall be directed to pay the share of the net amount and the costs directly to the appropriate party.
[29] The defendant submitted that Offer One lacked compromise or substance and contained circular references to costs.
[30] The division of the proceeds was not order to be divided equally without regard for an accounting regarding mortgages that were placed on the property, which were used by each individual party to pay down or off their respective personal debts. As such, in my view, the judgment is not as favourable as or more favourable than Offer One.
[31] The Offer to Settle dated April 27, 2015 (“Offer Two”), made pursuant to Rule 49, relates to the sale of the property. The terms of the offer include: the property be listed with Mr. Borg at a listing price of $510,000.00 with commission at the rate of 5% plus HST for a duration of four months; the parties would sign a listing at this price; improvements would be arranged and completed by Mr. Borg which improvements were estimated to cost $3,000.00; the improvements would be initially paid for by Mr. Borg; Mr. Borg would be reimbursed for the improvements from the proceeds of the sale of the property; the defendant would cooperate with Mr. Borg in moving and/or removing furnishings and personal possessions in order to ensure that the property shows well; Mr. Borg would have full discretion to direct the removal of furnishings and personal possessions; the defendant would cooperate fully with Mr. Borg with respect to showings, open houses and that same would be arranged by Mr. Borg or the broker at their own discretion from 9 AM to 9 PM; the parties would receive and consider any and all offers and in the event they could not agree would refer same to the court on motion for approval; and the sale of the property would be conducted by Mr. Robert A. Filkin, barrister and solicitor on behalf of both parties. This offer was set to expire one minute after the commencement of the trial of the issue.
[32] The defendant submitted that Offer Two contained a vexatious clause namely providing Mr. Borg with full discretion to direct the removal of furnishings and personal belongings and to show the property during the above said time. Which place Mr. Borg in a partisan light and cause the plaintiff upset. The defendant acknowledged that the plaintiff insisted on Mr. Borg’s representation throughout.
[33] The differences between the judgment and Offer Two are that the listing price of the property was not set and the mechanism for setting that price was different than that a set out in the offer; the judgment did not address removal or moving of furnishings and/or giving Mr. Borg such discretion but did deal with placing the home and show condition; the showings were limited by the judgment in which the defendant was given consideration for the time frames that she did not wish the home to be shown in; and there was no term regarding a barrister and solicitor conducting the sale. As such, there were some limitations not dealt with and the judgment is not as favourable as or more favourable than Offer Two, in my view. Also, combined with Offer One made the same day, the judgment is not as or more favourable.
[34] By email January 14, 2016, the plaintiff offered to settle (“Offer Three”) for receipt of the sum of $80,000 plus $13,000 (plus HST) for costs in full settlement of her claim payable from the net proceeds of sale with all other details of the sale to be in accordance with the plaintiff’s previous offer to settle regarding the conduct of the sale namely, Offer Two or to receive these amounts from a refinance of the property. If the defendant was electing to go with sale, the offer was setting out that the listing would be required to be listed by January 18, 2016 and sold forthwith to close by no later than March 30, with the other details of the sale to be in accordance with, Offer Two. If the defendant was electing to refinance, the offer required that the existing mortgage be refinanced by January 30, 2016.
[35] The evidence at trial was that if the home was renovated per Mr. Borg’s suggestions that the home could potentially sell in the range of $560,000.00-$570,000.00.
[36] The plaintiff’s submissions (paragraph 15) suggest that the property may be listed for or that the parties are looking to list for $550,000.00 without renovations being done. By my calculations, if it sells for $550,000.00 with 5% commission plus H.S.T. ($31,075.00), estimated legal fees of $500.00; payment of the ICSCUL mortgage; and with the accounting adjustments I ordered, the estimated amount that would be payable to the plaintiff would be $60,122,46 ($275,000.00 - $500.00 - $149,169.65 - $15,537.50 - $49,670.39 + $11,147.81). The judgment therefore is not as favourable as or more favourable than Offer Three.
[37] If the renovations are done and the home listed higher and sold at the highest price estimated by Mr. Borg, at $570,000.00 with 5% commission plus H.S.T. ($32,205.00), estimated legal fees of $500.00; payment of the ICSCUL mortgage; reimbursement to Mr. Borg in the amount of $1,500.00; and with the accounting adjustments I ordered, the estimated amount that would be payable to the plaintiff would be $68,057.96 ($285,000.00 - $500.00 - $149,169.65 - $16,102.50 - $1,500.00 - $49,670.39 + $11,147.81). The judgment accordingly is not as favourable as or more favourable than Offer Three.
[38] The Offer to Settle dated February 8, 2016 (“Offer Four”), offers to settle the proceeding on the following terms: the plaintiff would receive $80,000.00 inclusive of legal costs in full settlement of her claim payable from the net sale proceeds based on a selling price of $525,000; should the property be sold for more than $525,000.00 the calculation attached would be used to calculate the plaintiff’s share in the net proceeds of the sale; the property would be listed with Mr. Borg with the commission rate of 5% or lower plus HST to close by no later than April 15, 2016; the listing shall be signed by the parties; improvements would be arranged and completed by Mr. Borg with an estimate of cost between $3000.00-$5000.00; the improvements would be initially paid by Mr. Borg; Mr. Borg would be reimbursed for the improvements from the proceeds of the sale of the property; the defendant would cooperate with Mr. Borg in moving and/or removing furnishings and personal possessions in order to ensure that the property shows well; and the sale of the property would be conducted by Mr. Robert A. Filkin, barrister and solicitor on behalf of both parties. This offer was set to expire one minute after the commencement of the trial of the issue.
[39] Offer Four was not made seven days before commencement of the trial and does not comply with Rule 49.10. It was made the day before commencement. Also some of the conduct of sale terms were not as or more favourable. This being said, this offer was the closest in my view. It was inclusive of costs. By my calculations, on $525,000.00 with 5% commission plus H.S.T. ($29,662.56), estimated legal fees of $500.00; payment of the ICSCUL mortgage; reimbursement to Mr. Borg in the amount of $1,500.00; and with the accounting adjustments I ordered, the estimated amount that will be payable to the plaintiff will be $57,976.52 ($262,500.00 - $500.00 - $149,169.65 - $14,831.25 - $1,500.00 - $49,670.39 + $11,147.81). With the costs ordered by this order, this offer is not as favourable, as the monetary amounts would be under $80,000.00.
[40] It does appear from the offers to settle and information provided about the pre-trials (set out below under the subtitle Conduct) that the plaintiff, until January/February 2016, was looking for and negotiating solely an equal division of the proceeds of the sale of the property without the accounting that she ultimately did not oppose at trial on the mortgage refinancing transactions. That being said, she did not oppose that accounting at trial.
The Defendant’s Offers
[41] The defendant made an Offer to Settle dated January 13, 2016 (“Offer Five”). This offer proposed settlement of the claim on the basis that the defendant would pay the plaintiff $25,000.00 for her right, title and interest in the property and the defendant would remove the plaintiff from the mortgages on title. Each party would bear their own costs to the date of the offer. The offer was set to expire one minute after the commencement of the trial. This offer is far below what was ordered.
[42] The defendant made an Offer to Settle dated January 19, 2016 (“Offer Six”). This offer proposed settlement of the claim on the basis that the defendant would pay the plaintiff $40,000.00 for her right, title and interest in the property and the defendant would remove the plaintiff from the mortgages on title. Each party would bear their own costs to the date of the offer. The offer was set to expire one minute after the commencement of the trial. The defendant states this offer was in the range of reasonableness. I do not agree. Exclusive of costs, which would have been reasonable for the plaintiff to receive at this date, this offer is approximately $20,000.00 less than what the plaintiff is estimated to receive if the home sells at $525,000.00 to $550,000.00.
Conduct
[43] It appears that two pre-trials were conducted with respect to this matter.
[44] The plaintiff submits that at both pre-trials the Justice strongly and unequivocally expressed the view that the property should have been listed for sale from the date of Justice Bloom’s order (March 12, 2015); that the net proceeds of sale should be divided equally after deductions for the sale; and that the plaintiff would succeed at trial.
[45] I interpreted that the plaintiff’s point in raising the pre-trial opinions as suggesting that even after having received two strong opinions, the defendant pressed on. If this was true, the difficulty with this argument is that I was not provided with any information as to the Justice’s opinions regarding the accounting and adjustments that were ultimately made in the judgment. Further, the defendant does not appear to share the same view of the pre-trial Justice’s opinions and suggests otherwise, namely, that there were recommendations made for the plaintiff to “move” on the unjust enrichment claim”. That being said, the defendant pursued all of her claims, not just the unjust enrichment claim. She did not compromise on the joint ownership issue. This was not reasonable in my view.
[46] The plaintiff submits that the conduct surrounding the defendant’s listing of the property for sale in January 2016’s is a factor for an award for costs. I agree.
[47] The plaintiff claims that the trial of this matter was lengthened one full day as a result of defendant’s counsel being ill prepared and that this is a factor for consideration on the issue of costs. I do not agree. Mr. Bury was relatively new to the file and so informed the court. The defendant through her counsel explored ways to save trial time and to save costs. This is set out in an email from defendant’s counsel to Mr. Brannan dated January 7, 2016. A joint document brief was prepared by the defendant’s counsel’s office which saves trial time and costs. There was agreement at trial to admit the authenticity of documents filed in the joint exhibit brief and further that they may be relied on for the truth of their contents. The motion to amend the plaintiff’s claim was consented to. There was agreement to adopt the evidence as set out in the affidavits that ultimately became the pleadings which saved time in respect of the trial of this matter and costs. There was agreement in respect to further filings and admissions on the issue of the punitive damages claim which resulted in certain witnesses not having to be called. Conduct during and in respect of the trial itself given the foregoing was reasonable.
Bills of Costs
[48] The total costs claimed by the plaintiff on a partial indemnity basis is $24,211.38; on a substantial indemnity basis $45,396.34; and on a full indemnity basis $50,440.38. The bill of costs includes time for David P Brannan who has 36 years of experience and Geraldine Acosta who has one year experience in respect of their respective calls to the Bar. Copies of accounts issued to the plaintiff were also filed. The accounts for the most part set out sufficient particulars in respect of the work completed, the time to complete the work and the amount charged for same. The requisite certificate certifying the hours claimed, rates being correct and disbursements being incurred as claimed was filed.
[49] The defendant filed a bill of costs. The total costs claimed on a partial indemnity basis is $20,729.85; and on a full indemnity basis $34,549.75. The bill of costs includes time for J. Owen N. Bury who has 19 years of experience in respect of his called to the Bar and his assistant Heather Moorcroft. The defendant’s costs commence from November 2015.
[50] I take no real issue with rates, time spent, or the disbursements claimed by either.
Previous Cost Order
[51] The defendant claims that costs were already dealt with up to the order of Justice Bloom dated March 12, 2015 ordering the property sold.
[52] The order is clear. Paragraph 4 states “THIS COURT ORDERS THAT, that the costs of the application, to date, fixed in the amount of $3,000 shall be paid by the Respondent to the Applicant from the Respondent’s share of the proceeds of sale of the subject property”.
[53] Given the above, looking at the Plaintiff’s bill of costs, the total amount on a partial indemnity basis from the date the order was made for fees is $10,968.00 plus H.S.T. of $1,425.84. Disbursements looking at the accounts appear to be $425.98 plus H.S.T. of $38.87 and $140.00 plus H.S.T. of $18.20. On a substantial indemnity basis: fees are $20,565.00 with H.S.T. of $2,673.45 and disbursements are $565.98 plus H.S.T. of $57.07. On a full indemnity basis, fees are $22,850.00 plus H.S.T. of $2,970.50 and disbursements are $565.98 plus H.S.T. of $57.07.
ORDER
[54] Overall, based on Justice Blooms Order, the bills of costs file, the offers made, and the conduct of the defendant that was not reasonable, balancing all of the factors, I order costs payable by the defendant to the plaintiff, in the amount of $15,000.00 plus H.S.T. of $1,950.00 plus disbursements of $565.98 plus H.S.T. of $57.07 for a total of $17,573.05 which shall be paid to the plaintiff from the defendant’s share of the proceeds of the sale of the property 843 Golden Farmer Way, Mississauga, Ontario.