CITATION: Ozz Electric Inc. v. Zurich Insurance Company Ltd., 2016 ONSC 6660

COURT FILE NO.: CV-15-525872

DATE: 20161025

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: OZZ ELECTRIC INC., Plaintiff

AND:

ZURICH INSURANCE COMPANY LTD., THE CORPORATION OF THE CITY OF KITCHENER and MAYSTAR GENERAL CONTRACTORS INC.

BEFORE: Mr. Justice M. D. FAIETA

COUNSEL: Emilio Bisceglia, for the Plaintiff, Ozz Electric Inc.

Krista R. Chaytor and Graham R. Brown, for the Defendant, The Corporation of the City of Kitchener

HEARD: September 6, 2016

C O S T S E N D O R S E M E N T

BACKGROUND

[1] For reasons dated October 3, 2016, I dismissed the plaintiff’s motion to amend the Statement of Claim to plead that Ozz: (1)the City is liable to Ozz under the Bond; (2) the City is responsible to Ozz for the actions of the City’s consultants and, as a result, the City is responsible to Ozz for delay; and (3) Ozz may claim contribution and indemnity against the City for Maystar’s claim against Ozz for set-off resulting from Ozz’s alleged deficient workmanship.

[2] The City claims costs on a substantial indemnity basis in the amount of $23,189.30, including disbursements of $529.81.

[3] The City relies upon a provision of the bond which provides that Ozz is liable for all cots, charges, expenses and liabilities incurred by the City where Ozz commences a proceeding against the City to enforce the bond. In my view, it is fair and reasonable to award costs on a partial indemnity basis for the following reasons. First, only one of the three proposed amendments related to the enforcement of the bond. Second, the language of the bond is not determinative in respect of costs: see Bossé v. Mastercraft Group Inc., 1995 CanLII 931 (ON CA), [1995] O.J. No. 884 (C.A.), at para. 65. In my view it would be unduly onerous to award substantial indemnity costs in these circumstances.

[4] I agree with the following statement made by Justice Myers in Fimax Investments v. Grossman, 2015 ONSC 2048, at para.7:

The fixing of costs is a discretionary decision under s.131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c)). Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v Public Accountants Council (Ontario), 2004 CanLII 14579, (2004), 71 O.R. (3d) 291 (Ont. C.A.), at paras 26, 37.

[5] Further, Rule 1.04(1.1) of the Rules of Civil Procedure provides that:

In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

[6] In my view, the principle of proportionality informs the balancing of interests in deciding whether an award of costs is “fair and reasonable”: see Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, at paras. 126-7.

[7] I now turn to assess the various relevant considerations in assessing costs in this matter.

[8] The plaintiff submits that the hourly rates charged were not disclosed in the Costs Outline. In fact, they are stated. The plaintiff submits that the hours claimed by the City are excessive. I do not find that 12.9 hours for preparation and attendance at the hearing of the motion was unreasonable. However, I do find that it was unnecessary for two counsel to attend this motion. The Amount that an Unsuccessful Party could Reasonably Expect to Pay

[9] Typically a comparison of the costs sought by the parties assists in determining what amount was reasonably within the reasonable contemplation of the losing party. Counsel for the Respondent has not provided his Bill of Costs to the Respondent. Accordingly, the reasonable expectations of the Respondent cannot be assessed.

[10] This motion was of moderate complexity. Both parties submitted sizable factums and supporting materials. On other hand, the City did not conduct cross-examinations, delivered its materials electronically and this motion was argued in about 2.5 hours.

[11] The plaintiff submits that an award of $3,000.00 in costs should be made as that would reflect the reasonable expectations of the parties. However, I have no way of knowing the plaintiff’s expectations given that I have not been provided with the plaintiff’s Costs Outline.

Conclusions

[12] Having considered the submissions of the parties and the factors described above, including the principle of proportionality, I find that it is fair and reasonable to award the sum of $12,000.00 in costs, inclusive of taxes and disbursements, to the City payable forthwith by the plaintiff.

Mr. Justice M.D. Faieta

Released: October 25, 2016