CITATION: Sgromo v. Bail Hotline Bail Bonds, Inc., 2017 ONSC 5322
COURT FILE NO.: CV-16-0566-SR
DATE: 2017-09-12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
PIETRO, PASQUALE-ANTONIO SGROMO (PETER, ANTHONY SGROMO)
Unrepresented
Plaintiff (Responding Party)
- and -
BAIL HOTLINE BAIL BONDS, INC.
J. Lester, for the Defendant (Moving Party)
Defendant (Moving Party)
HEARD: Via Written Submissions
Mr. Justice D. C. Shaw
Decision on Costs
Background
[1] This is a decision on the costs of a motion brought by the defendant to dismiss this action for want of jurisdiction.
[2] I granted the motion and dismissed the action. Costs of the motion to dismiss were reserved, pending receipt of written submissions. Those submissions have been received and reviewed.
[3] My reasons on this costs decision are similar to those released this date in actions CV-16-0529-FW and CV-16-0565-SR. Mr. Sgromo was also a plaintiff in those actions and those actions were also dismissed for want of jurisdiction. Mr. Sgromo’s costs submissions were the same in all three actions.
[4] The facts leading up to the motion to dismiss are set out in my decision reported at 2017 ONSC 2522.
[5] I will not repeat the facts here.
[6] The defendant seeks costs on a substantial indemnity basis in the amount of $9,249.15 for fees, plus HST and disbursements. In the alternative, the defendant seeks partial indemnity fees of $6,166.25, plus HST and disbursements.
[7] The plaintiff’s position is that there should be no order of costs against him.
[8] The plaintiff submits, first, that the costs claimed by the defendant are excessive. Second, the plaintiff submits that he is impecunious and that he will be denied access to justice if costs are awarded to the defendant. The bulk of the plaintiff’s submissions do not deal with the question of costs. Rather, they are a reiteration of his arguments on the merits of the motion to dismiss. I will not address these latter submissions.
Discussion
[9] I will deal first with the entitlement of the defendant to costs. In my view, there is no basis to depart from the normal rule that a successful party on a motion is entitled to costs.
[10] The cases referred to by the plaintiff in his submission on impecuniosity deal with the issue of security for costs. It is in that context that the courts in those cases considered whether an order for costs could impair the ability of a plaintiff to proceed with his action.
[11] In the present case, I expressly determined that the plaintiff should not be allowed to proceed with his action because of a want of jurisdiction. The plaintiff cannot now maintain that his ability to proceed with that action will be impaired by a costs order. This action has been dismissed.
[12] Although a court may properly take into consideration a party’s financial situation in the exercise of its discretion on costs, that is not a factor that carries much weight in this case where the plaintiff compelled the defendant to incur costs to respond to an action that should not have been brought. To hold otherwise, would give license to impecunious parties to bring baseless actions with impunity.
[13] The second issue is the scale of costs to which the defendant is entitled. Should they be substantial indemnity costs, as the defendant requests, or partial indemnity costs?
[14] There are generally only two circumstances where costs on the elevated scale of substantial indemnity are warranted. The first pertains to an offer to settle under rule 49.10, where substantial indemnity costs are explicitly authorized. The second is reserved for the rare and exceptional case where the losing party has engaged in reprehensible conduct or there are other special circumstances that justify costs on the higher scale.
[15] In Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, McLachlin J. described the circumstances when elevated costs are warranted as:
…only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.
[16] In Bond v. Brookfield Asset Management Inc., [2011] O. J. No. 2760 (S.C.J.), the defendants submitted that substantial indemnity costs should be awarded because there was no basis on which the plaintiff could reasonably assert that Ontario had jurisdiction simpliciter and no basis for the plaintiff to refute that Ontario was a forum non conveniens. Perell J. held at para. 6:
In my opinion, it would not be a proper exercise of the court’s discretion to order costs on a substantial indemnity basis simply because a party has a weak case or even a very weak case.
[17] I have determined that costs should be awarded in this case on a partial indemnity basis. The plaintiff’s conduct, in my opinion, did not rise to the threshold as set out in Young v. Young to warrant the sanction of substantial indemnity costs. That does not mean, however, that I cannot take the plaintiff’s conduct into account in fixing partial indemnity costs. A party’s conduct is expressly referred to in Rule 51.01(e) (f) (g) as a factor that the court may consider.
[18] In Finn Way General Contractors Inc. v. S. Ward Construction Inc., 2014 ONSC 4071, I set out the principles and factors that should guide a discussion on costs:
[19] In Serra v. Serra (2009), 2009 ONCA 395, 66 R.F.L. (6th) 40 (Ont. C.A.), at p. 42, the Court of Appeal reiterated the fundamental purposes which modern costs rules are designed to foster, as set out in Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330 (Ont. C.A.), at para. 22:
(1) to partially indemnify successful litigants for the costs of litigation;
(2) to encourage settlement; and
(3) to discourage and sanction inappropriate behaviour.
[20] In Anderson v. St. Jude Medical Inc., 2006 85158 (ON SCDC), [2006] O. J. No. 508 (Ont. Div. Ct.), at para. 22, the Divisional Court set out the principles to be applied by the court in exercising its discretion (citations omitted):
The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in Rule 57.01(1).
A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant.
The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: Rule 57.01(1)(O.b).
The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases [if they can be found], should conclude with like substantive results.”
The court should seek to balance the indemnity principle with the fundamental objective of access to justice.
[21] The Court of Appeal has made it clear that in assessing costs the overriding principle is one of reasonableness and that the failure to follow that principle can produce a result that is contrary to the fundamental objective of access to justice (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), at p. 302.
[22] In Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), [2002] O.J. No. 4495 (Ont. C.A.), at para. 4 the Court of Appeal did not make a specific finding with respect to the amount of time spent or the rates charged by counsel, and stated:
“In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.”
[23] Rule 57.01(1) of the Rules of Civil Procedure provides:
57.01 (1) Factors in discretion - In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding; or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different solicitor; and
(i) any other matter relevant to the question of costs.
[24] Rule 1.04 (1.1) of the Rules of Civil Procedure provides:
1.04 (1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
[19] The Rules define substantial indemnity costs as an amount 1.5 times what would otherwise be awarded in accordance with Part I of Tariff A. Partial indemnity costs are defined as costs awarded in accordance with Part I in Tariff A. A substantial indemnity rate would approach 90% of the actual solicitor – client rate. See Riddell v. Conservative Party of Canada, [2007] O.J. No. 2577 (S.C.J.). A partial indemnity rate would be, by definition, approximately ⅔ of substantial indemnity costs.
[20] The defendant was represented by Mr. Jordan Lester. He was called to the bar in 2013. His actual hourly rate is $265. His substantial hourly rate is shown in the defendant’s Bill of Costs at $238.50. His partial indemnity rate set out in the defendant’s Bill of Costs is $159 per hour. His partial indemnity fees are shown as $3,287.95, based on 18.5 hours of docketed time. Mr. Lester was assisted by Mr. Warren Mouck, who was called to the bar in 2016. His actual hourly rate is $200. His substantial hourly rate is shown in the defendant’s Bill of Costs at $180. His partial indemnity rate is $120 per hour, and his partial indemnity fees are shown as $1,654.30 for 12.2 hours. The Bill of Costs also shows clerk time billed at a partial indemnity rate of $114 per hour, for a total of $1,223.80, for 9.5 hours.
[21] The hourly rates shown for the solicitors are reasonable. The partial indemnity hourly rate for the clerk is, in my view, too high, particularly for a clerk with four years’ experience.
[22] The time spent on the file was increased somewhat by the fact that the motion was heard at the same time as motions to dismiss in file CV-16-0529 which were brought by other unrelated defendants. Mr. Sgromo was a plaintiff in file CV-16-0529. Those other motions involved a significantly more complex statement of claim and significantly more complex motion material. Counsel on the motions in file CV-16-0529 took the lead in arguing the law applicable not only to file CV-16-0529 but to this file as well.
[23] There appears to be some overlap in time docketed by Mr. Lester and Mr. Mouck. Some of the clerk’s time appears to be of an administrative nature and therefore not compensable.
[24] Disbursements are shown at $427.30, inclusive of HST. These disbursements appear to be reasonable.
[25] Having regard to the factors and principles discussed above, I am of the opinion that it is fair and reasonable to award the defendant partial indemnity costs of the motion to dismiss in the sum of $5,000.00 for fees, plus HST of $650, and disbursements of $427.30, inclusive of HST, and an order shall go accordingly.
__“original signed by”
The Honourable Justice D. C. Shaw
Released: September 12, 2017
CITATION: Sgromo v. Bail Hotline Bail Bonds, Inc., 2017 ONSC 5322
COURT FILE NO.: CV-16-0566-SR
DATE: 2017-09-12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
PIETRO, PASQUALE-ANTONIO SGROMO (PETER, ANTHONY SGROMO)
Plaintiff (Responding Party)
- and -
BAIL HOTLINE BAIL BONDS, INC.
Defendant (Moving Party)
DECISION ON COSTS
Shaw J.
Released: September 12, 2017
/lvp