Court File and Parties

Court File No.: FS-14-00019452-0000 Date: 20160725 Ontario Superior Court of Justice

Between: Victoria Chechui, Applicant

• and - Ian Jamieson Nieman, Respondent

Counsel: Harold Niman & Chloe van Wirdum, for the Applicant Valois Ambrosino & Veronica Manski, for the Respondent

Before: Hood J.

Costs Endorsement

[1] Rule 24(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 creates a presumption that the successful party is entitled to costs. Ian argues that since Victoria was only awarded an interest in the Brookdale property and not the joint account, their success was divided and Victoria should not be awarded any costs. Alternatively, he argues that since the Brookdale property issue took up two-thirds of the trial time and the joint account one-third of the trial time, then Victoria should in effect net out one-third of her costs, subtracting one-third from two-thirds. How Ian arrives at these approximations of the trial time is unclear.

[2] While there was divided success on these two issues, Victoria is entitled to costs. Victoria had to go to trial to obtain her interest in the Brookdale property. Ian, as was his right, forced her to proceed to trial. Up until the day before the trial, he took the position that she was not entitled to anything. The day before the trial he served his first offer, an all-inclusive payment of $400,000.

[3] I am not prepared to embark upon a detailed analysis of the issues and the time spent on each in order to arrive at a percentage attributable to the Brookdale properly, as suggested by Ian.

[4] This an impossible task to undertake with any degree of certainty. I also do not accept Ian’s suggestion that the time between the two issues was divided 2/3 and 1/3. The majority of time at trial was spent on the issue of the Brookdale property and the gift letter. Nor do I think it appropriate to subtract the time spent on one issue from the other as that is in my view a double recovery of costs by Ian. Moreover, while the trial covered thirteen calendar days Victoria’s case took less than 1 day in chief. She was cross-examined extensively for almost 2 1/2 days. Much of it was irrelevant. Much of the evidence given by Ian and from the witnesses called by Ian was irrelevant to the two issues to be decided. Victoria’s costs should not be dramatically reduced because Ian turned a short trial into a long one.

[5] Victoria argues that she is entitled to costs on a full recovery basis based upon her offer to settle of December 17, 2015, which remained open until the commencement of trial. While there were earlier offers, they were time-limited and do not specifically engage Rule 18(14) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The difficulty with Victoria’s offer is that it is for a fixed amount of $1,350,000, for her half of the Brookdale property. My order was for a sale and equal division of the net proceeds of sale of the Brookdale property. I am unable to determine whether the offer is as good as or better than the trial outcome. There was no evidence of the current value of the property or of the disposal costs if it was to be sold. While I could speculate, that is inappropriate.

[6] Even if I was to apply Rule 18(14), this would only entitle Victoria to full indemnity costs from December 17, 2015 onwards, whereas the Bill of Costs presented by her is for full indemnity costs throughout, from May 24, 2014 forward. While the offer does not engage Rule 18(14), I may still consider it in deciding whether a party has behaved reasonably or unreasonably.

[7] Of the offers, Victoria’s was more reasonable. Ian’s was too late to be meaningful, and was further from the result than Victoria’s. Not only may I consider the offers under Rule 24, I may also do so under Rule 18(16) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[8] In considering Victoria’s Bill of Costs, the costs associated with the Settlement Conference before Justice Paisley on April 20, 2015 and with the Trial Management Conference before Justice Moore on August 31, 2015 must be removed. Ian argues that their endorsements were silent as to costs. On the basis of Islam v. Rahman, 2007 ONCA 622 at para. 2, a trial judge should not make an order for costs in relation to any earlier step where no costs were ordered or there was silence on the issue. Ian states that the costs claimed for these two steps amount to $8,840 on a full indemnity basis. This amount should be removed.

[9] Victoria’s Bill also asked for $33,450 on a full indemnity basis for an articling student’s time at trial. I find this to be unreasonable considering the fact that Mr. Niman and Ms. van Wirdum were present every day at trial and Ms. van Wirdum docketed considerable hours for both trial preparation and attendance. This amount should be removed.

[10] Having removed these two amounts the full indemnity fees are $252,325. Without going through each line of the Bill of Costs, which I am not prepared to do and which is inappropriate to ask the Court to do in fixing costs, I am unable to determine how much time was spent and fees incurred on the pleadings, documentary disclosure, including the preparation of affidavit of documents, the various conferences (other than those mentioned above, which amounts were calculated by Ian), correspondence, motions, questioning, answering of undertakings, and trial preparation. For the trial itself, Mr. Niman charged $7,500 for a full trial day. Ms. van Wirdum would docket anywhere from $2,850 to $4,650. Thus, for a full day, Victoria’s Bill seeks between $10,350 and $12,150 on a full indemnity basis. If a half day, Mr. Niman would docket his hourly rate of $820. While Mr. Niman’s rate is high it is not inappropriate for senior Toronto counsel with his experience. And while high, his time spent in preparation, as set out in the Bill is less.

[11] Alternatively, Victoria asks for costs on a substantial indemnity basis because Ian alleged that Victoria had committed a breach of trust and breach of fiduciary duty and these allegations were dismissed. I do not believe that Ian’s failure to make out these claims carries the same costs consequences as a failure to prove alleged fraud. As well, there was very little time at trial spent on these allegations. Additionally it is impossible to attribute specific time to them. It is however something to be considered in assessing Ian’s lack of reasonableness.

[12] Costs are designed to foster three purposes – to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants (see Serra v. Serra, 2009 ONCA 395 at para. 8). I am to fix costs taking into account the provisions of Rule 24, offers to settle, the reasonableness of the costs sought by the successful party and to arrive at a figure that is just in all of the circumstances, with the costs being proportional to the issues and the result (see Berta v. Berta, (2015) 2015 ONCA 918, 128 O.R. (3d) 730 at paras. 91 – 94).

[13] The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case. The expectation of the losing or paying party is a relevant factor to consider. The court has 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, [2004] O.J. No. 2634 (Ont C.A.) at para. 26). One typical factor to consider is the losing party’s own Bill of Costs. Ian’s Bill only accounts for a second Trial Management Conference, trial preparation and the trial itself. The fees amount to approximately $145,000 on a substantial indemnity basis. It would appear that while the hourly rates were less more time was expended in preparation. There is no figure provided for Ian’s full indemnity costs for this portion of the matter but presumably, using an 80% calculation of the full indemnity costs to arrive at the substantial indemnity costs would result in a figure of $180,000. This is basically for the preparation for the trial and the trial itself. This figure appears to be close to what the applicant incurred for trial preparation and for the trial even with the student’s time being removed.

[14] If one was to factor in all of the additional time, for all of the time spent prior to trial preparation, not accounted for in Ian’s Bill, Victoria’s Bill starts to move closer to what Ian ought to have reasonably expected.

[15] As to disbursements, I have removed the taxi charges. They are not an appropriate costs item. The copying and scanning charges are somewhat excessive. I reduce the total disbursement amount to $10,000.

[16] In exercising my discretion, in considering the factors listed in Rule 24(11), the directions set out in Rules 24(1), 24(8), 18(14) and 18(16) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the reasonableness of the costs sought by Victoria in relation to the issues and the result, and Ian’s reasonable expectations I fix Victoria’s costs in the amount of $180,000.00 inclusive of HST and disbursements. This amount is to be paid by Ian to Victoria within 30 days of today’s date.

Hood J. Released: July 25, 2016