Court File and Parties

COURT FILE NO.: CV-11-440420 DATE: 2016-07-05 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: DOBARA PROPERTIES LIMITED and EZZAT F. GINDI (Plaintiffs) AND: GINO ARNONE, ERICKSON & PARTNERS, BARBARA HICKS, SELWYN HICKS and HICKS & HICKS PROFESSIONAL CORPORATION (Defendants)

BEFORE: M.D. FAIETA J. HEARD: In writing

COUNSEL:

• Ezzat F. Gindi, for himself and Dobara Properties Limited
• Arnie Herschorn and Jane Yoo, for the Defendants Barbara Hicks, Selwyn Hicks and Hicks & Hicks Professional Corporation

Endorsement

[1] Following a one day trial the Plaintiffs were awarded Judgment against the Hicks Defendants in the amount of $57,712.31 plus pre-judgment interest from July 1, 2011.

[2] The Plaintiffs claim costs of $64,325.00 comprised of $24,325 that they have incurred in hiring lawyers to assist them in this action. Gindi claims $40,000 as costs of representing himself and Dobara.

[3] The Defendant claims substantial indemnity costs of $42,236.16 from the date of their offer to settle made on March 23, 2015 (“2015 Offer”).

[4] There were many offers to settle exchanged by the parties.

[5] The most recent offer to settle was made by the Plaintiffs on May 18, 2016. It expressly superseded any previous offer made by the Plaintiffs and was open until 5 minutes after the commencement of trial. It required payment of $151,000 inclusive of costs and prejudgment interest.

[6] The 2015 Offer made by the Hicks Defendants offered to pay the Plaintiffs the sum of $56,712.31 plus interest and costs as agreed or assessed. It also provided that the Hicks Defendants would not require the Plaintiffs to pay them costs in the amount of $5,000.00 as ordered by Justice Lederman. This Offer to Settle offered that LawPRO would also pay costs of $20,000.00 ordered by Justice Lederman in respect of the Arnone Defendants in the event that LawPRO required payment. This amount was in error as it should have referred to a costs award of $15,000.00 rather than $20,000.00.

[7] The Hicks Defendants made a further offer to settle dated April 18, 2016 (“2016 Offer”). It offered to settle this action for $100,000.00, inclusive of interests and costs. It also provided that the same terms as the 2015 offer regarding payment of costs ordered by Justice Lederman albeit with the correct amounts.

[8] All of the above offers were made pursuant to Rule 49 of the Rules of Civil Procedure.

[9] Under section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, the Court has a broad discretion to determine by whom, and to what extent, costs of a proceeding shall be paid. However, this discretion is subject to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[10] Rule 57.01(1) states that the following factors may be considered by the Court when exercising its discretion to award costs: (1) the result in the proceeding; (2) any offer to settle or to contribute made in writing; (3) 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; (4) 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; (5) the amount claimed and the amount recovered in the proceeding; (6) the apportionment of liability; (7) the complexity of the proceeding; (8) the importance of the issues; (9) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (10) whether any step in the proceeding was, (i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution; (11) a party’s denial of or refusal to admit anything that should have been admitted; (12) 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 (13) any other matter relevant to the question of costs.

[11] Traditionally the purpose of an award of costs was to indemnify a successful party for its legal costs. While the result in the proceeding and the principle of indemnity continue to govern the award of costs under Rule 57.01(1), many other considerations have been introduced in the Rules of Civil Procedure that inform whether the interests of justice are served by an award of costs.

[12] Rule 49.10 provides that where an offer to settle is: (1) made by a Defendant at least seven days before the commencement of the hearing; (2) not withdrawn and does not expire before the commencement of the hearing; and (3) 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.

[13] Another consideration under Rule 57.01(1) is that the amount of costs awarded should reflect what an unsuccessful party could reasonably expect to pay rather than the exact amount of costs actually incurred by the successful party. See: Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52.

[14] Another relevant consideration is proportionality. Rule 1.04(1.1) of the Rules of Civil Procedure provides that in applying the Rules of Civil Procedure the Court shall make orders that are proportionate to the importance and complexity of the issues, and to the amount of money involved, in the proceeding.

Hicks Defendant’s Costs

[15] The Hicks Defendants seek costs on a substantial indemnity basis. However, Rule 49.10 provides for partial indemnity costs for a defendant whose offer to settle is more favourable than the judgment at trial. Further, there was nothing about the Plaintiffs’ conduct which would attract substantial indemnity costs.

[16] The Hicks Defendants seek partial indemnity costs from the time of their 2015 Offer. However, I refuse to do so for the following reasons: (1) In my view the 2015 Offer was rescinded by the issuance of the 2016 Offer as a matter of contract law; (2) The 2015 Offer contained a material error and accordingly was not capable of acceptance.

[17] In my view the Hicks Defendants are entitled to their partial indemnity costs, inclusive of disbursements and taxes, from May 12, 2016 which was the date that the 2016 Offer was made. I fix that amount at $10,000.00.

Plaintiffs’ Costs

[18] Gindi claims $40,000.00 for the cost of representing himself and Dobara. He calculates this amount on the basis of $10,000 per year, although he did not keep track of how much time he spent working on the matter. Gindi states that he would have been looking for work had he not been involved in this proceeding. It is clear from the materials provided that he spent a great deal of time and effort in advancing this claim. I accept that there was an opportunity cost to Gindi. In my view, it is appropriate to award Gindi his costs until May 12, 2016. I award Gindi the sum of $7,500.00.

[19] The Plaintiffs also seek costs of $24,325 for legal fees they incurred in this action. The Plaintiffs were charged a total of $15,382.54 by the law firm Koch Thornton LLP primarily to draft the Statement of Claim and an amended Statement of Claim. Dobara paid $1,117.00 to the law firm Snider Litigation for litigation advice. Dobara also paid a further $2,000.00 to WeirFoulds LLP for litigation services, which primarily addressed the issue of the expiry of the limitation period. In my view, it is reasonable to require that the Hicks Defendants pay the sum of $11,000.00 in respect of these legal accounts, inclusive of disbursements and taxes.

Conclusions

[20] In Boucher v. Public Accountants Council for the Province of Ontario et al (2004), 71 O.R. (3d) 291 the Ontario Court of Appeal stated that “… the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the proceeding …”.

[21] Offsetting the costs awards described above, and having regard to the various considerations described above, I find that it is fair and reasonable for the Hicks Defendants to pay the sum of $8,500.00, inclusive of disbursements and HST, to the Plaintiffs within 30 days.

M.D. FAIETA J. Released: July 5, 2016