Court File and Parties

COURT FILE NO.: 15-64526 CP DATE: 2017/06/05 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Sabrina Heyde, Plaintiff – and – Theberge Developments Limited and Joey Theberge, et al, Defendants

COUNSEL: Miriam Vale Peters and Joanie Roy, for the Plaintiff Norman Mizobuchi, for the Defendants

HEARD: September 21, 2016

Decision as to Costs

R. Smith J.

[1] The representative Plaintiff (“Heyde”) seeks costs of $63,826 plus HST plus disbursements of $6,886 inclusive of HST for a successful certification motion in a class proceeding.

[2] The Defendant (“Theberge”) submits that each party should bear their own costs because the Defendant was partially successful in opposing certification on some issues. Alternatively it submits that the Plaintiff’s costs be reduced by the time spent on uncertified issues or that the costs be awarded in the cause.

[3] Finally Mr. Theberge submits that he should be awarded his costs on a substantial indemnity basis, of $51,580.00 as the claim alleging fraud against him was not certified. The Defendant further submits that the Plaintiff unnecessarily increased the time and expense of the proceeding.

Factors

[4] The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure and include in addition to success, the amount claimed and recovered, the complexity and importance of the matter, unreasonable conduct of any party which unduly lengthened the proceeding, scale of costs and any offer to settle, the principle of indemnity, hourly rate claimed the time spent and the principle of proportionality, and the amount that a losing party would reasonably expect to pay.

Success

[5] In Good v. Toronto Police Services Board, 2016 ONCA 250 CA, Hoy J. allowed a cross appeal increasing a Plaintiff’s award of costs even though she was unsuccessful in certifying several issues. The Court of Appeal held that the reduction of the costs awarded based on a partial success was an error in principle and would have a “chilling effect” on the public interest.

[6] In this case, the Plaintiff was substantially successful as the action was certified as a class proceeding on the major issues sought against the Defendant. The Defendant was successful in reducing some of the issues that were certified, including the claim against Mr. Theberge personally. However, the Defendant opposed certification on every criteria and was unsuccessful in opposing certification. Therefore following the Good decision, I find that the Plaintiff was substantially successful on her motion for certification and should be awarded costs of the certification motion.

Complexity and Importance

[7] The matters were very complex as they involved a number of purchases of condominium units, issues of misrepresentations made in the Disclosure statements required for the sale of condominium units, and whether any such misrepresentations survived the closing of the transaction. These issues where combined with the criteria for certifying a class action.

Hourly Rates and Time Spent

[8] The Defendant does not challenge the hourly rates claimed but rather seeks to reduce the amount based on time spent on issues that were not certified. The amount of $63,826 claimed by the Plaintiff for partial indemnity costs for a certification motion that was vigorously opposed and involved complex issues with condominium unit purchases is very reasonable.

Expectations of Unsuccessful Party

[9] The amount sought by the Plaintiff is much less than costs awarded for certification motion in other cases. As a result the amount sought is what the unsuccessful party would reasonably have expected to pay. When the amount claimed is compared to what the Plaintiff seeks of $51,580 as costs only for one of the issues, this make the amount claimed by the Plaintiff very reasonable in the circumstances.

Offers to Settle

[10] The Plaintiff did offer to remove the claim against Mr. Theberge for fraudulent misrepresentation, if the corporate Defendant provided a letter of credit of guarantee the payment. Neither the Plaintiff or Defendant exceeded their offers to settle after the motion and as a result costs will be awarded on a partial indemnity basis.

[11] Costs should be payable forthwith as the Plaintiff was substantially successful on the motion for certification.

G. Theberge’s Claim for Costs

[12] The certification of this proceeding advances the public interest of access to justice, judicial economy and encourages behaviour modification. The fact that the claim against Mr. Theberge personally was not certified was part of the partial success of the Defendant on the certification motion. Following the Good decision of the Court of Appeal, the Defendant’s partial success on this issue is not a valid reason to reduce the Plaintiff’s costs award or to award costs to the Defendant for his success on this issue.

Disposition

[13] Considering all of the above factors, the Defendant is ordered to pay costs of $50,000 plus HST plus disbursements of $6,000 inclusive of HST for the reasons given above.

Justice Robert Smith Released: June 5, 2017