CITATION: Feng v. Chen et al., 2017 ONSC 1898

COURT FILE NO.: CV-16-565283

DATE: 20170324

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jing Feng

AND:

Xue Yun Chen, Yao Xiang Chen (also known as Andy Chen), and 2375544 Ontario Inc.

BEFORE: The Honourable Madam Justice J. T. Akbarali

COUNSEL: G. Sidlofsky and R. Kwan, for the Applicant

R. P. Quance, for the Respondents

ENDORSEMENT

[1] On February 28, 2017, I granted the applicant’s application for declaratory relief and declared that she had effectively renewed her lease with the respondent for a period of five years. In this endorsement, I deal with costs of the application.

[2] The applicant seeks substantial indemnity costs, relying on my finding that the respondents sought to take unconscionable advantage of the applicant. She argues that this is conduct deserving of an elevated costs award. She also argues that she did as well as, or better than, an offer she delivered which, though not a r. 49.10 offer, should still be considered under r. 49.13.

[3] The respondents argue partial indemnity costs are appropriate and state that the applicant’s bill of costs is excessive. They state the offer should not affect costs because it was delivered after 8 p.m. on the night before the motion, not in enough time for the respondents to meaningfully consider it.

[4] The applicant is entitled to costs. She was wholly successful on her application.

[5] However, I do not find that this is an appropriate case for substantial indemnity costs. There is no evidence of misconduct in the litigation. My finding that the respondents sought to take unconscionable advantage of the applicant was made in the context of the test for proprietary estoppel. If I were to conclude that this finding alone justified substantial indemnity costs, I would be creating a presumption that substantial indemnity costs are justified in every case where proprietary estoppel is made out. That is inconsistent with the general principle that substantial indemnity costs are reserved for rare cases: McBride Metal Fabricating Corp. v. H & W Sales Co., 2002 CanLII 41899 (ON CA) at para. 38.

[6] Nor do I find that the offer justifies an elevated level of costs, even for the day of the hearing. While I accept I can consider the offer under r. 49.13, it was delivered at almost the very last minute possible, and without enough time for the respondents to properly consider it.

[7] Accordingly, I find that the applicant is entitled to her costs on the partial indemnity scale.

[8] The application before me utilized a hybrid procedure: the parties delivered affidavits and conducted cross examinations out of court. The affidavits were not lengthy, and neither were the cross-examinations. The affidavits were treated as examinations in chief before me. I heard oral cross-examinations of six witnesses plus argument in a single day. This was an efficient process in an application that, at its heart, turned on a question of credibility.

[9] I agree with the respondents that the costs claimed by the applicant are excessive. The material was not voluminous, the cross-examinations were targeted and short, and the legal issues were discrete. Costs must be fair and reasonable. I do not think the respondents could have fairly or reasonably expected to have been exposed to a partial indemnity costs award in the amount of $32,300.72 in an application that proceeded efficiently and with dispatch and that dealt with circumscribed issues.

[10] In my view, costs of $22,500, inclusive of HST and disbursements, are appropriate. The respondents shall pay this amount to the applicant within 30 days.

Madam Justice J. T. Akbarali

Date: March 24, 2017