Court File and Parties

Court File No.: cv-15-54444 Date: 2016-06-20 Superior Court of Justice - Ontario

Re: DAVID STEVENS, Plaintiff And: CASEY VANDEPUTTE, Defendant

Before: The Honourable Justice D.A. Broad

Counsel: Matthew P. Maurer, for the Plaintiff Samuel Nash, for the Defendant

Costs Endorsement

Background

[1] The parties have not been able to settle the issue of costs and have delivered their written costs submissions in respect of the defendant’s unsuccessful motion for a stay of the proceeding.

[2] The plaintiff seeks costs in the sum of $29,073.51, comprised of partial indemnity fees in respect of prior interlocutory motions in the sum of $3,917.94, partial indemnity fees on the defendant’s stay motion to March 21, 2016 (being the date prior to service of the plaintiff’s Offer to Settle) in the sum of $6,035.00, HST on those partial indemnity fees in the sum of $784.55, substantial indemnity fees from and after March 22, 2016 in the sum of $10,567.20, HST on the substantial indemnity fees in the sum of $1,373.74, disbursements in the sum of $1,547.38, substantial indemnity fees for preparation and attendance on the stay motion in the sum of $2,739.00, HST on those fees in the sum of $356.07, substantial indemnity fees for preparing costs submission in the sum of $1,551.00 and HST on those fees in the sum of $201.63.

[3] The plaintiff refers to his Offer to Settle dated March 22, 2016 in which he offered to make available his practice records that were in the possession of the Law Society, the defendant’s motion for a stay would be withdrawn, and both sides would bear their own costs of the motion. The plaintiff argues that there is no reason to deviate from the presumption that substantial indemnity costs are to be awarded from the date of his Offer to Settle forward.

[4] Moreover, the plaintiff submits that the amount being claimed for costs was within the reasonable expectation of the defendant. The total time spent by plaintiff’s counsel was 60.4 hours, whereas the total time spent by defendant’s counsel was 72.5 hours.

[5] The plaintiff submits that, following the dismissal of both procedural motions (the plaintiff’s motion for production of records by the defendant and the defendant’s motion to quash a summons), counsel for the plaintiff elected to have the costs of the motions put into the cause of the stay motion, which he says is what Justice Reid endorsed.

[6] The defendant argues that the costs claimed by the plaintiff are excessive, and have been increased from that which was set forth in his Costs Outline at the time of argument after he learned of his success on the motion. The defendant argues that, although there was mixed success on the prior interlocutory motions, the majority of the success on them was enjoyed by him. He therefore argues that any award of costs ought to provide a credit to the defendant in the amount of $2,000.00.

[7] The defendant makes no submissions with respect to the effect of the plaintiff’s Offer to Settle nor with respect to the disbursements claimed. He submits that $10,000.00 is an appropriate amount to be awarded to the plaintiff for costs in the circumstances.

Guiding Principles

[8] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "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."

[9] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in sub-rule 57.01(1) of the Rules of Civil Procedure. Included in the list of factors are: (0.a) the principle of indemnity, including, the experience of the lawyer for the party entitled to costs as well as the rates charged and the hours spent by that lawyer, and (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 the costs are being fixed.

[10] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan (1999) O.J. No. 3707 (CA) at para. 24). More recently Perell, J., in the case of 394 Lakeshore Oakville Holdings Inc. v. Misek 2010 ONSC 7238, [2010] O.J. No. 5692 (S.C.J.), at para. 10, expanded the list to include five purposes, as follows:

(1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements:

[11] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, [2005] O.J. No. 160 (Ont. C.A.)).

[12] The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson [2002] CarswellOnt 1007 (Ont. C.A.) and Macfie v. Cater, [1920] O.J. No. 71 (Ont. H.C.) at para 28).

Analysis

[13] The plaintiff was successful in opposing the defendant’s motion to stay the proceeding. No reason has been advanced that the usual rule that costs follow the event should not apply in this case. The plaintiff is therefore entitled to costs in respect of the motion.

[14] I would not give effect to the plaintiff’s submission that his Offer to Settle should give rise to an award of substantial indemnity costs from the date of the offer. In my view, in order to be considered for this purpose, an offer to settle must represent a compromise of the issues on the motion. The terms of the offer providing for withdrawal of the motion and that each side bear his own costs are not to be considered for this purpose. The term that the defendant would be given access to the plaintiff’s records in the possession of the Law Society does not represent a compromise on a substantive issue, in my view. There is no evidence that the plaintiff’s consent to this access was required at the time of the offer or, if it was, that the plaintiff would be justified in withholding his consent in any event. During submissions I was advised that the Law Society had advised both parties in correspondence that it would make the records in its possession available to them.

[15] The plaintiff is therefore entitled to costs of the motion on a partial indemnity scale.

[16] With respect to the costs of the prior motions, it is not clear that Justice Reid ordered that those costs would be “in the cause.” His endorsement provided that “costs of the motions reserved to the court hearing the stay motion.” The parties disagree on which of them enjoyed more success from the dismissal of both procedural motions. I have not been provided with sufficient information to make that determination. In the circumstances of the dismissal of both motions there should be no costs in respect of them.

[17] With respect to the quantum of the plaintiff’s costs of the stay motion, the court’s objective is to fix an amount that is fair and reasonable for the defendant to pay in the particular circumstances of the case, having regard to what he could have expected the costs to be. The amount of time spent by the defendant, as disclosed in his Costs Outline, provides insight into his reasonable expectations but in my view is not binding on the court’s determination. One of the objectives of the costs rules, as set forth above, is to facilitate access to justice. Keeping costs awards for interlocutory motions within a reasonable range is important in achieving this objective.

[18] Both parties characterized the complexity of the motion as “moderate” in their respective Costs Outlines. The plaintiff’s lawyers spent 54.3 hours, not including argument of the motion (2.7 for senior counsel and 51.6 for junior counsel) whereas the defendant’s lawyer spent 43.5 hours, as well as 27.50 hours of student’s time. Each party also utilized a law clerk’s time.

[19] In my view, although the expenditure of this amount of time may be justified in the context of each lawyer’s relationship with his own client, it does not necessarily give rise to entitlement to costs from the other side.

[20] In my view a costs award of $10,000.00 in respect of fees, HST on the fees in the sum of $1,300.00 and disbursements in the sum of $1,547.38, inclusive of HST thereon, totalling $12,847.38 would be considered reasonable in all of the circumstances of the case.

Disposition

[21] It is ordered that the defendant pay to the plaintiff the sum of $12,847.38 in respect of costs within 30 days hereof.

D.A. Broad J. Date: June 20, 2016