Court File and Parties
COURT FILE NO.: CV-08-091546 DATE: 20170322 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ZHIMIN REN, Plaintiff AND: CAN SITE CORPORATION, SIMON LIM also known as JIMMY CHONG also known as JIMMY SIMON CHONG also known as JIMMY SIMON LIM also known as SU EK LIM also known as CHEE WAI LIM also known as ALLY FANG, A1 SOYBEAN ENTERPRISES LTD., PANASIAN GLOBAL INC., A-1 PAN-ASIAN GROUP OF COMPANIES LTD., XIAOYU GUAN also known as XIAO YU GUAN, JEANNETTE TSE also known as JACQUELINE TSE, ERWIN JOHN WEISDORF also known as JOHN WEISDORF, Defendants
BEFORE: The Honourable Madam Justice A.M. Mullins
COUNSEL: Christopher P. Goldson, Counsel for the Plaintiff Roger A. Gosbee, Counsel for the Defendants
HEARD: In-Writing
Endorsement
[1] The plaintiff was successful in resisting the defendants Guan and Lim’s motion to set aside default judgment. The plaintiff seeks costs on a full indemnity basis. The defendants concede that the plaintiff is entitled to costs, but contest the scale requested.
[2] The award of costs is a matter of the Court’s discretion, which discretion is guided by the factors enumerated under rule 57 of the Rules of Civil Procedure and jurisprudence.
[3] Costs on a full indemnity basis, submits the defence are awarded only in exceptional circumstances. Exceptional circumstances have been defined to include reprehensible, scandalous, outrageous, egregious conduct of a party, or extenuating circumstances such as where a motion has been brought unreasonably. Mere lack of success is not evidence of bad faith or unreasonable conduct. There have been no allegations made by the plaintiff that there are any circumstances which fall in to these categories, submit the defendants, citing Docherty v. Melo, 2016 ONSC 7579, Young v. Young, 1993 34 (SCC), and Empire Life Insurance Company v. Krystal Holdings Inc., 2009 11217 (ON SC).
[4] Specific factors warrant the award of costs on a substantial indemnity basis, submits the plaintiff. These are that the plaintiff was entirely successful and the factual record was voluminous, diverse and complex. As to the latter, the plaintiff submits that the issues called for consideration of a number of subjects of fact and law, including the Immigration and Refugee Protections Act, statutes governing corporations, case law regarding unconscionable conduct; liquidated claims; evidence on motions for setting aside of default judgments; and prejudice.
[5] The conduct of the defendants in failing to promptly move for relief and in lengthening the process by requiring cross examination of the plaintiff who was in China are also worthy considerations, say the plaintiffs. Reasonably, submits the plaintiff, both the plaintiff and the defendant ought to have expected that the defendants should pay higher than usual costs given the multiplicity of issues.
[6] The sum sought by the plaintiff is $34,791.30. Of this $23,559.55 are fees. The fees are premised on an hourly rate for counsel called in 1995 of $405.00 and of a clerk at the rate of $180 per hour. The nature of the work done and hours expended are described in a costs outline.
[7] The defendants challenge the amount of time expended by the plaintiffs. The hearing of the motion took two hours and the preceding examinations a half a day. At 90 hours, the time expended by the plaintiff was excessive. The hourly rate for the clerk at $180, substantially exceeds the appropriate rate of $100. Many of the issues identified by the plaintiff as requiring investigation were not relevant to the motion, only to the Statement of Claim.
Disposition
[8] There is no evidence that the defendants’ conduct of the litigation was such as to warrant the award of full indemnity costs. The delay in initiating the motion, in the absence of evidence that demonstrates this, did not of itself serve to increase the costs of litigating the outcome. The materials were voluminous, to be sure, though the merits of the claim were not in issue on the motion, only the merits of a defence and the other criteria by which a motion to set aside a default is to be determined. That said, a number of collateral issues were raised by the defendants including whether affidavits ought to be struck and whether the judgment had been irregularly obtained as a liquidated claim. Here the issues of prejudice and delay did involve a retrospective of the events of many years, not just days or months. The reasonable expectations of the defendant had to have been that the costs of the motion would be proportionate to the time necessarily to be consumed. I am satisfied by the evidence that the hours expended by the plaintiff’s counsel and clerk are reasonable. I accept the defendants’ submission that the hourly rate for the clerk is too high, and I allow it at $100.00. I calculate that two thirds of the substantial indemnity fees claimed ought to be allowed, at $15,446.20, together with HST. The disbursements claimed by the plaintiff were not contested and are allowed at $2,519.01 inclusive of HST. The defendants shall pay these sums to the plaintiff, forthwith.
[9] I do not intend to address the submissions made by counsel as to the terms yet in dispute as to the effect of my rulings on release of the proceeds paid into court by the defendant Lim. This issue was not adjudicated on the merits before me. If a ruling is required counsel should bring a motion, or if applicable take out an appointment to settle an order.