Court File and Parties
Court File No.: CV-16-566978 Date: 20170523 Superior Court of Justice - Ontario
Re: 2222028 ONTARIO INC., Plaintiff And: Michael Adams, Marianne Nguyen (aka Thuy Thi Nguyen), Steve Bugler, Radiant City Millwork Inc., Evan L. Tingley, Baldwin Sennecke Halman LLP, Canadian Imperial Bank of Commerce (cob as the “CIBC”), Defendants
Before: Lederman J.
Counsel: J. Brad Maher, the Agent for the Plaintiff Charles Sinclair and Louis Century, for the Defendants/Moving Parties, Evan L. Tingley and Baldwin Sennecke Halman LLP
Heard: Written submissions
Cost Endorsement
Scale of Costs
1Having been successful on their motion to strike out the Statement of Claim and having the action dismissed as against them, the “Lawyers” are entitled to their costs of the action.
2They seek costs on a substantial indemnity scale in the amount of $7,412.33, all inclusive. Alternatively, they seek partial indemnity costs of $5,244.12, all inclusive.
3On the motion, it was found that the plaintiff’s allegations of breach of trust against the Lawyers lacked any factual foundation, and further, that the action against them was vexatious and an abuse of process.
4The Lawyers have cited a number of cases wherein courts have awarded costs on a full or substantial indemnity scale in circumstances where a plaintiff has made unsubstantiated allegations of solicitors having knowingly assisted in dishonest acts, perpetrated by their clients.
5One of the cases relied upon is Man-Shield (NWO) Construction Inc. v. Macdonald, 2017 ONSC 684. Of note, is the comment by Shaw RSJ at para. 37:
These allegations, moreover, were made through counsel. They were not the impetuous remarks of an unrepresented party. This, in my view, compounds the seriousness and blameworthiness of the allegations.
6In the instant case, the plaintiff is not represented by a lawyer but rather by an agent and therefore the allegations should not be treated as serious as if made by counsel.
7Further, the plaintiff relied upon the Court of Appeal decision in Rudco Inspection Ltd. v. Toronto Sanitary Inc.. The Court of Appeal in that case did not say one way or the other whether the accountants and lawyers who received payment of their fees out of trust funds could be liable. The Court only held that such payments did not reduce the trust fund obligations of the trustee. Therefore, Mr. Maher, in the instant case, had a good faith basis to allege, by extension of Rudco, that the Lawyers in receiving payments from the trust fund were liable to the plaintiff.
8In these circumstances, it is not appropriate to award costs on a substantial indemnity scale.
Quantum of Costs
9The Lawyers are entitled to partial indemnity costs. In the exercise of discretion in determining quantum, I have considered that the actual rates of counsel are negotiated with Law Pro and are significantly lower than counsel’s ordinary rates, the overall principle of proportionality, the factors set out in Rule 57.01(1) of the Rules of Civil Procedure and in particular what amount an unsuccessful party would reasonably expect to pay in relation to a proceeding of this nature.
10Having regard to these factors, I fix the Lawyers’ costs at $4,000, all inclusive.
Costs Against the Agent
11In addition to costs as against the plaintiff, the Lawyers seek costs as against the plaintiff’s agent, Mr. Brad Maher, pursuant to s. 86(1)(b)(ii) of the Courts of Justice Act on the basis that Mr. Maher “prejudiced or delayed the conduct of the action”. No evidence was adduced to indicate that there was any significant prejudice or delay caused by Mr. Maher. This action was commenced in late 2016 and the motion was heard on April 19, 2017. Accordingly, it cannot be said that it has resulted in the kind of prejudice or delay of the action that would warrant a costs order against Mr. Maher personally.
Disposition
12In the result, the Lawyers will have their costs of the action fixed at $4,000, all inclusive payable by the plaintiff within 30 days.
Lederman J.
Date: May 23, 2017