Court File and Parties

COURT FILE NO.: 14-49340 DATE: 2016-09-06 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Royal Bank of Canada Plaintiff – and – Gloria Galant and Samuel Slutsky Defendants

Counsel: Robert Dunford, for the Plaintiff Matthew Valitutti, for the Defendants

HEARD: June 21, 2016

the honourable mr. justice G. E. taylor

Ruling on Costs

[1] The plaintiff was granted judgment against the defendants on a motion for summary judgment for nonpayment of mortgage loans made by the plaintiff to the defendants and for judgment on a Visa credit card issued by the plaintiff to the defendants. The plaintiff seeks an award of costs in its favour on a substantial indemnity basis in the amount of $73,882.20, inclusive of disbursements and HST.

[2] I am satisfied that the plaintiff is entitled to its costs on a substantial indemnity basis because of the provisions of the Standard Charge Terms of the mortgage and the terms of the guarantee. The defendants submit that the plaintiff should be awarded costs on the partial indemnity scale because to order costs on a substantial indemnity basis would be “unfair or unduly onerous”. The defendants rely on the case of Fradell Construction Corp. v. Iori, [2007] O.J. No. 3305. In making this submission, the defendants rely on the same factual basis that they did in resisting the motion for judgment. In essence I found that the “facts” relied on by the defendants were fanciful. In my view the facts of this case do not justify a conclusion that the provision in the lending documents for payment of substantial indemnity should be ignored.

[3] The general principle is that a mortgagee is entitled to be indemnified for the costs that are incurred to respond to a default by a mortgagee. But the costs claimed must be reasonably and properly incurred. (Chong v. Kaur, 2013 ONSC 6252, [2013] O.J. No. 4531)

[4] The motion for summary judgment was brought before affidavits of documents were exchanged or examinations for discovery held. There were no cross examinations on the affidavits in support of the motion. Costs of interlocutory proceedings in advance of the motion for summary judgment were dealt with by the judges dealing with those matters. I do not accept that defendants defending a mortgage action, even though the amount an issue exceeded $4 million, would reasonably expect to be required to pay substantial indemnity costs of more than $70,000, following a successful motion for summary judgment brought shortly after the close of pleadings.

[5] My role is not to assess costs. Taking into consideration, the time expended by the solicitors for the plaintiff, the hourly rates charged and the amount at issue, I find that a reasonable amount for costs of this proceeding to be paid by the defendants is $40,000 plus HST.

[6] The defendants are therefore ordered to pay to the plaintiff as costs of this action, including the motion for summary judgment, the sum of the $40,000 plus HST.

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