Court File and Parties

COURT FILE NO.: C-543-12 DATE: 2016-06-06 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Stan Gidzinski a.k.a. Stanislaw Gidzinski, Plaintiff – and – Tom Sheppard and Sheppard Shalinsky Brown, Defendants

Counsel: Stan Gidzinski, in person James H. Bennett, for the Defendants

Before: The Honourable Mr. Justice G. E. Taylor

Ruling on Costs

[1] This action was dismissed on a motion for summary judgment. The parties have made written submissions with respect to costs.

[2] Although the action was dismissed, the plaintiff seeks costs to be awarded in his favour in the amount of $194,488.34. The plaintiff is not entitled to costs.

[3] The defendants are entitled to costs of the action and the motion for summary judgment. The first issue to be determined is whether the defendants are entitled to be awarded costs on the partial indemnity scale or the substantial indemnity scale.

[4] The defendants offered to consent to a dismissal of the action without costs well in advance of the hearing of the motion for summary judgment. The defendants rely on that offer in support of the submission that substantial indemnity costs should be awarded. In my view an offer by a defendant to consent to a dismissal without costs is not an offer which should attract an award of elevated costs. In Scapilliati v. A. Potvin Construction Limited, [1999] O.J. No. 2187, the Ontario Court of Appeal declined to award a defendant elevated costs when the defendant had offered to consent to a dismissal of the action without costs prior to trial and the action was dismissed at trial.

[5] In Davies v. Clarington (Municipality), 2009 ONCA 722, [2009] O.J. No 4236, the Ontario Court of Appeal stated at paragraph 28:

This court, following the principle established by the Supreme Court, has repeatedly said that elevated costs are warranted in only two circumstances. The first involves the operation of an offer to settle under rule 49.10, where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in behaviour worthy of sanction.

[6] The defendants seek an award of substantial indemnity costs on the basis that the plaintiff’s allegations of intentional torts of conspiracy and inducing breach of contract seriously impugned the integrity and reputation of the individual defendant who is a solicitor. The plaintiff claimed that the individual defendant induced a breach of the unanimous shareholders agreement and conspired with two other shareholders to effect a breach of the unanimous shareholders agreement. In an earlier proceeding between the plaintiff and his co-shareholders in Lake Simcoe Aeropark Inc., Kent J. found that the other shareholders, for whom the defendants acted, refinanced the property of Aeropark without the consent of the plaintiff. This was a breach of the unanimous shareholders agreement. The position of the defendants in this proceeding was that the individual defendant was not aware of the unanimous shareholders agreement at the time he was retained and that he believed that the mortgage financing on which he acted was properly authorized by Aeropark.

[7] In the circumstances, I decline to make a finding that the plaintiff, without any evidence, made a serious and personal attack on the reputation and integrity of the individual defendant. Accordingly, I find that the defendants are entitled to their costs of this action, including the motion for summary judgment, on a partial indemnity basis.

[8] The defendants claim partial indemnity costs of $14,331.06 which includes disbursements and HST. I have reviewed the summary of the time spent by counsel for the defendants as well as the disbursements incurred and they seem reasonable to me. When the plaintiff claims costs of almost $195,000 in relation to his costs, it can hardly be said that he could not reasonably have anticipated that costs in the vicinity of $15,000 would be awarded against him in the event he was unsuccessful.

[9] I therefore order the plaintiff to pay to the defendants their costs of this action, including the motion for summary judgment, on a partial indemnity basis which I fix at $14,331.06 payable forthwith.

G. E. Taylor J. Released: June 6, 2016