Court File and Parties

COURT FILE NO.: CV-13-5612-00 DATE: 20170123 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MAQSOOD DIN and FAIZA DIN, Plaintiffs AND: DAVID R. RICHMON and FUTERMAN PARTNERS LLP (Formerly known as Futerman & Futerman), Defendants

BEFORE: EMERY J.

COUNSEL: Hilik Y. Elmaliah and Jeremy Syrtash, for the Plaintiffs Jennifer L. Hunter, for the Defendants

HEARD: In Writing

Costs Endorsement

[1] The defendant solicitors were successful on the two motions argued on August 29, 2016. For reasons released on November 28, 2016, the defendant solicitors obtained an order requiring the plaintiffs to disclose and produce most, but not the entire file held by Sommers & Roth, the subsequent law firm that took the case for their children and themselves to trial. The defendant solicitors were also successful in opposing the plaintiffs’ motion to strike three paragraphs from the statement of defence and counterclaim that pleaded the action was commenced out of time and therefore barred under section 4 of the Limitations Act, 2002.

[2] The defendant solicitors claim costs for each motion based on the success achieved.

The Motion of the Defendant Solicitors

[3] The defendant solicitors seek costs on a partial indemnity basis totalling $20,179.22 made up of fees in the amount of $17,389.40 including HST, $642.69 for an appearance fee to argue the motion, and $2,147.13 inclusive of HST for disbursements. If entitled to costs on a substantial indemnity basis, the defendant solicitors ask for costs totalling $29,195.27, made up of fees in the amount of $26,084.10 including HST, $964.03 for an appearance fee for counsel to argue the motion and $2,147.13 for disbursements inclusive of HST. They make these claims in a costs outline, and address various factors under Rule 57.01(1) of the Rules of Civil Procedure to support the costs claimed.

[4] In particular, the defendant solicitors argue that disclosure of all relevant documents was of the utmost importance to them. They submit that they made multiple requests for proper disclosure that had gone ignored, and allege they were served with the plaintiff’s cross-motion on the Friday afternoon before the defendant’s motion was to be heard after Thanksgiving weekend in 2015. They argue that this conduct delayed their motion for production of the litigation file at Sommers & Roth, and increased time and cost to prepare that motion for hearing.

[5] The defendant solicitors further argue that the plaintiffs ought to have admitted the relevance of the documents contained in the litigation file of the underlying action.

[6] The plaintiffs oppose this claim for costs at either level, arguing that the time claimed is disproportionate to the relief sought. The plaintiffs also submit that the defendant solicitors are not entitled to their costs of the defendant solicitors’ cross-examination of Mr. Hershkop, for which they should bear the cost regardless of the outcome of the motion. The plaintiffs rely on Rule 39.02(4)(b) of the Rules of Civil Procedure and the decision of Master Dash in Araujo v. Jews for Jesus, 2010 ONSC 5820 to support this position.

[7] The plaintiffs also rely upon 38724 Ontario Ltd. v. Quizno’s Canada Restaurant Corp., 2010 ONSC 5390, affirmed by the Divisional Court at 2011 ONSC 859. In 38724, the court refused to award costs of the successful party’s cross-examination, and permitted the offset of those costs against any costs otherwise payable.

[8] The plaintiffs filed a costs outline for the time of three separate lawyers with respect to the cross-examination of Mr. Hershkop. The time and hourly rates claimed on a partial indemnity basis in respect of this cross-examination add up to $4,661.25.

[9] No other costs outline was provided by the plaintiffs for the fees and disbursements related to the motion of the defendant solicitors. I am therefore left with assessing the appropriate costs to award on that motion based on the costs outline of the defendant solicitors, and the plaintiffs’ costs outline for the cross-examination.

[10] Substantial indemnity costs should not be awarded unless the parties seeking costs at that level can satisfy the court that the party against whom costs are sought has behaved in a reprehensible or egregious manner, or in such other manner deserving chastisement. I refer here to those factors the court must consider for awarding costs at a higher level discussed in Mortimer v. Cameron and reviewed with approval by the Court of Appeal in Davies v. Clarington (Municipality of), 2009 ONCA 722. I do not find the conduct of the plaintiffs on this motion to meet this threshold for awarding costs at an elevated level. There were bona fide issues of relevance and about privilege for the court to determine.

[11] I therefore conclude that the defendant solicitors are entitled to their costs of the motion, but only on a partial indemnity basis. The amount to fix for those costs is the next matter to consider.

[12] I have no difficulty with the hourly rate or time claimed for Mr. Boggs as lead counsel at 1.7 hours at $227.50 for a partial indemnity rate, or with Ms. Yermakova’s claim of 3.4 hours at a partial indemnity rate of $108 an hour. Nor do I have any difficulty with the time claimed for students at law and for Ms. Tatler’s time with respect to the hours incurred at their respective hourly rates to prepare much of the material.

[13] I note that Ms. Hunter, who argued the motion, claims 60.2 hours at the partial indemnity rate of $171 an hour for a total of $10,294.20. Although the defendant solicitors do not expressly state that she attended Mr. Hershkop’s cross-examination, I draw the inference from the submissions made by Mr. Syrtash on behalf of the plaintiffs that Ms. Hunter was counsel for the defendant solicitors at that cross-examination. Based on that inference, I assume that the time and amount claimed by Ms. Hunter in the fee summary attached to the costs outline includes her time and the value of that time with respect to Mr. Hershkop’s cross-examination.

[14] In circumstances where counsel for a successful party has cross-examined an affiant on a motion other than a motion for summary judgment, any claim for costs by that party may be subject to reduction in two respects. First, the amount of time and expense incurred for which costs are claimed should be reduced to account for any time claimed where there is no entitlement to costs under Rule 39.02(4) of the Rules of Civil Procedure. Second, partial indemnity costs for the cross-examination payable to the adverse party under Rule 39.02(4) may be offset against the costs otherwise payable to the successful party on the motion, regardless of the outcome, unless the court orders otherwise.

[15] I have considered the contents of the costs outline provided by the plaintiffs for the cross-examination of Mr. Hershkop. I accept the five hours claimed for Mr. Elmaliah to attend the cross-examination on April 7, 2016, and his partial indemnity rate of $300 an hour for counsel called in 1997. However, I am reducing the time claimed by Mr. Hershkop to prepare for his cross-examination and to attend that cross-examination to two hours and five hours respectively. I cannot determine the nature of the time spent by Mr. Syrtash to prepare for the cross-examination as the costs outline contains no description of what that preparation involved, and in view of the fact that Mr. Elmaliah attended the cross-examination as counsel. I am therefore allowing the costs of the cross-examination to the plaintiffs in the amount of $2,725.

[16] To give weight to the plaintiffs’ objections that the time claimed by Ms. Hunter is excessive, I am deducting the amount claimed by the plaintiffs in the amount of $2,725 for the time Ms. Hunter has claimed with respect to that cross-examination. This deduction takes away from the amount claimed by the defendant solicitors overall.

[17] I subtract that amount yet again for partial indemnity costs in respect of the cross-examination of Mr. Hershkop as a set off to which the plaintiffs are entitled as a matter of costs, regardless of the outcome of the motion under Rule 39.02(4) of the Rules of Civil Procedure. As little, if any reference was made to Mr. Hershkop’s evidence taken at his cross-examination, I see no reason to make an order contrary to the rule.

[18] The defendant solicitors shall therefore have their costs in the amount of $11,000 for fees inclusive of HST, $642 for the counsel fee to argue the motion and $965 for disbursements exclusive of those payments to the examiner’s office related to the cross-examination. These costs total $12,607, and are payable by the plaintiffs within 30 days.

The Plaintiffs’ Cross Motion

[19] The defendant solicitors also seek their costs on a partial indemnity basis in the amount of $3,695.95 for fees including HST, $642.69 for a lawyer’s appearance fee including HST and disbursements including HST of $200.12 for a total of $4,538.77 on the cross-motion. They submit that the determination of the court to preserve the limitation defence in their pleading was of utmost importance. They argue that the plaintiffs knew or ought to have known that the challenge to the limitation period defence necessarily required the court to consider the doctrine of discoverability. They state that as discoverability required a factual determination, the motion was not appropriate to bring under Rule 21 of the Rules of Civil Procedure.

[20] The plaintiffs submit that the motion was appropriate to bring under Rule 21 of the Rules of Civil Procedure, as the authorities have made it clear that the determination of a limitation period that does not depend on disputed facts is a question of law and proper question to raise under Rule 21. They submit that they relied only on undisputed facts that were contained in the pleadings for the motion. The plaintiffs ask the court to note that the motion under Rule 21 was brought only in response to the motion of the defendant solicitors, and as an alternative argument.

[21] I am awarding costs for the plaintiffs’ cross motion based on the propriety of bringing that motion under Rule 21, and not on any other assertions made by the defendant solicitors about their request for disclosure and allegations about the late delivery of motion material.

[22] In respect of the plaintiffs’ motion under Rule 21, the plaintiffs have not provided me with a costs outline to give me an estimate of the costs they could reasonably expect to pay as the unsuccessful party.

[23] Having regard to the factors under Rule 57.01 of the Rules of Civil Procedure and the overarching principle that such costs must be fair and reasonable to the unsuccessful party, I award costs in the amount of $2,500 inclusive of the fees to prepare for the motion, the counsel fee for the appearance in court, and $200.12 for disbursements. Ms. Hunter was already before the court to argue the motion for production of the Sommers & Roth file. To award a greater amount for partial indemnity costs on this motion would be to risk the duplication of costs for the same time in court.

[24] The defendant solicitors are therefore awarded a total of $2,700.12 plus applicable HST for the costs to successfully oppose the cross motion. These costs are payable by the plaintiffs within 30 days.

Summary

[25] In summary, the defendant solicitors David R. Richmon and Futerman Partners LLP are awarded $12,607 for the costs of their motion, and $2,700.12 plus applicable HST for the costs on the plaintiffs’ cross motion.

EMERY J. Date: January 23, 2017