Court File and Parties
COURT FILE NO.: CV-12-4945-00 DATE: 20170530 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: KHATIJA KHATRI, Applicant TALAT KHAN, Respondent
BEFORE: EMERY, J.
COUNSEL: EDWARD L. D’AGOSTINO, for the Applicant, Khatija Khatri ANTHONY M. SPECIALE, for the Respondent, Talat Khan
HEARD: April 7, 2015, October 7, 2015, December 18, 2015 and March 9, 2016
Costs Endorsement
[1] Khatija Khatri commenced an application under the Rules of Civil Procedure on August 14, 2012 to discharge various instruments Talat Khan had registered against title to a property known as Bellwood Farm. Talat Khan had registered those instruments under several orders that were later superseded by steps taken in Ms. Khan’s family litigation against her former spouse, Abdul Khan. Mr. Khan was the former owner who had transferred Bellwood Farm to Ms. Khatri and her husband, Mohammed Munir Subhani, in September 1998.
[2] Khatija Khatri was successful on the application to have those registrations vacated from title to Bellwood Farm. However, in a motion heard within a separate action known as “the Brampton action” to which Mr. Khan and the Khatija/Subhani owners are parties, Ms. Khan was successful in obtaining orders that essentially reinstated a Writ of Seizure and Sale that the lawyers for the Khatija/Subhani owners had wrongfully removed from title in 2004.
[3] Ms. Khatri now seeks her costs of the application. She claims costs on a partial indemnity basis up to September 25, 2012 in the amount of $2,970, and costs on a substantial indemnity basis from that date to judgment in the amount of $47,767.00, for total fees of $50,737.50 plus disbursements of $4,443.19. The total costs claimed with HST add up to $62,289.71.
[4] Ms. Khan resists this claim for costs for various reasons. She submits that Ms. Khatri delayed in bringing her application for twelve years. Ms. Khan also argues that Ms. Khatri should be denied costs because she has been uncooperative and because she failed to take the wrongfully discharged Writ of Seizure and Sale reinstated in the related motion into account. Ms. Khan argues that instead, she should be awarded the costs of the application on a partial indemnity basis in the amount of $55,877, or in the amount of $68,017 on a substantial indemnity scale.
Basic Principles
[5] The discretion of the court to grant costs under section 131(1) of the Courts of Justice Act is subject to any statute or rule of court. In this application, the court is guided by Rule 57.01.
[6] The Court of Appeal confirmed in Fong v. Chan, 46 O.R. (3d) 330 that the objectives of the modern law of costs are to partially indemnify successful litigants for the costs they have incurred, to encourage settlement, and to discourage inappropriate behaviour in the litigation.
[7] Overall, the governing principle for the court to follow is to award costs that are fair and reasonable to the parties. One measure of what is fair and reasonable is to determine what amount would be fair and reasonable for the unsuccessful party to pay: Boucher v. Public Accountants Council of Ontario. Even though the assessment of costs is not a mechanical exercise that begins or ends with the calculation of hours and hourly rates, the rates actually charged and fees billed to the successful litigant are relevant considerations: Stellarbridge Management Inc. v. Magna International Inc. (2004), 71 O.R. (3d) 263 (Ont. C.A.).
Discussion
[8] While Mr. Speciale has made submissions on behalf of Ms. Khan that Ms. Khatri should be denied her costs and that Ms. Khan is the deserving party, I do not see any reason to depart from the customary rule that the successful party is entitled to costs. The application Ms. Khatri commenced was a separate proceeding from the Brampton action in which Ms. Khan brought her motion. Ms. Khatri was the successful party on the application despite Mr. Speciale’s arguments to link them together for the purpose of determining the costs for the application. This is not a situation where either Rule 57.01(2) or the principles discussed in Niagara Structured Steel (St. Catherine’s) v. W.D. LaFlama Ltd. (1987), 58 O.R. (2d) 773 (Ont. C.A.) should be applied.
[9] Ms. Khatri is therefore entitled to costs for her application. Mr. D’Agostino submits on behalf of Ms. Khatri that she should be entitled to those costs on a substantial indemnity basis because of an offer to settle he served as her counsel. He submits that Ms. Khatri was as successful as the terms of that offer to settle and that she should have her costs on a substantial indemnity basis from the time the offer was served under Rule 49.10.
[10] There is no principled reason why the court should not give effect to Ms. Khatri’s offer and to apply Rule 49.10 in these circumstances. Ms. Khatri is entitled to her costs of the application on a substantial indemnity basis.
[11] This leaves the question of quantum to be decided. There are various ways to measure what would be considered a fair and reasonable amount discussed in authorities such as Boucher and Stellarbridge. It is also relevant that Mr. Speciale claims almost as much for costs on a partial indemnity basis for Ms. Khan in this application as Mr. D’Agostino claims for the applicant’s costs on a substantial indemnity level.
[12] In my view, each of the parties has too grand a view of their conduct compared to the other, and the claim for costs is too rich by half.
[13] When I consider the conduct of Ms. Khan having regard to the objective for awarding costs set out in Fong v. Chan, I am reminded that Ms. Khan and her counsel were aggressively litigious throughout the application.
[14] Although Ms. Khan agreed at all times to an order for the deletion from title of the two non-depletion orders granted by Justice Simmons and registered against title in 1993, she was not agreeable to delete the CPL registered in 1999. That was the real reason the application was argued. Ms. Khatri should have her costs to indemnify her for this application for the success achieved on this issue.
[15] Ms. Khatri’s costs should reflect the time and expense that Ms. Khan’s position throughout the application caused. The factors set out in Rule 57.01 are relevant to this assessment. Subrule 57.01(1)(e) in particular applies as a factor because Ms. Khan delayed the application unnecessarily by asking for time to bring the competing motion for a new CPL.
[16] The claim for a new CPL was requested by Ms. Khan from the outset in the event the CPL registered in 1999 was ultimately vacated from title to Bellwood Farm. This relief was initially requested in the responding materials Ms. Khan filed to the application. The process was delayed because Mr. Speciale required the time to bring the motion for that relief in the Brampton action where it was more appropriate place to seek that relief.
[17] Ms. Khatri is not blameless for conduct and pace of the litigation. The non-depletion orders had already been set aside by Justice Snowie in 2002 (see paragraph 98 of the Reasons). The CPL obtained in 1999 had no force or effect after Justice MacKenzie had set aside Justice Seppi’s order granting leave for the CPL to issue in December 2000 (see paragraphs 50, 57, and 67). It should not have taken Ms. Khatri twelve years and eight trips to court to obtain an order to clear those items from title that were already within reach.
[18] Upon considering all of the circumstances and the principles of law applicable to the exercise of my discretion, I award costs on a substantial indemnity basis to Ms. Khatri in the amount of $25,000 for fees, HST of $3,250 and disbursements inclusive of HST in the amount of $4,956.33 for a total of $33,206.33 as a baseline.
[19] I say these costs are awarded as a baseline because the payment of these costs is stayed until the costs of the motion Ms. Khan brought in the Brampton action have been determined as those costs relate to Ms. Khatri. Only when those costs have been added or subtracted from the costs award for the application herein will the sum or difference be payable.