CITATION: 2494044 Ontario Inc. v. 2292371 Ontario Inc., 2017 ONSC 6018
COURT FILE NO.: 31/16 (Simcoe)
DATE: 2017-10-12
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: 2494044 ONTARIO INC. (Applicant) v. 2292371 ONTARIO INC., CLEAR SEA LTD., LUPIS FINANCIAL CONSULTING INC. and THE CORPORATION OF NORFOLK COUNTY (Respondents)
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL: Filipe A. Mendes, for the Applicant Jonathan Piccin, for the Respondent, Lupis Financial Consulting Inc. Mark Abradjian, for the Respondent, the Corporation of Norfolk County
HEARD: By written submissions dated August 4 to 14, 2017
ENDORSEMENT – COSTS
[1] As set out in Reasons for Judgment dated July 17, 2017,[^1] I dismissed 2494044 Ontario Inc.’s application for an order directing the Corporation of Norfolk County to register a tax deed in the Applicant’s name with respect to commercial property in Simcoe. The costs of the application were left to be determined based on written submissions.
[2] The parties that responded to the application were Norfolk County and Lupis Financial Consulting Inc., the latter being the current first mortgagee of the subject property. As the successful responding parties, they seek their costs on a partial indemnity basis. In support of its claim for $25,000 in costs, Norfolk County has provided a bill of costs that calculates its total actual fees, disbursements and tax as $39,882. Lupis Financial seeks $14,000 in costs, providing a bill of costs that calculates its total actual fees, disbursements and tax as $23,069.
[3] In its costs submissions, the Applicant did not dispute that costs should be awarded to the successful responding parties on a partial indemnity basis. However, the Applicant argued that the amount awarded should be based on the Applicant’s legal costs in bringing the application. As part of the Applicant’s submissions, Applicant’s counsel provided a bill of costs that calculates the Applicant’s total fees, disbursements and tax as $16,053 on full indemnity basis and $12,623 on a partial indemnity basis.
[4] In support of that position, the Applicant relied on the decision of Nordheimer J. in Hague v. Liberty Mutual Insurance Co. (2005), 2005 13782 (ON SC), 13 C.P.C. (6th) 37 (S.C.), which stated as follows, at para. 15:
The Court of Appeal has said that in fixing costs, the expectation of the parties concerning the amount of costs is a matter to be taken into account - see Boucher v. Public Accountants Council for the Province of Ontario [(2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)], at para. 38. One might fairly ask how the expectation of the parties is to be found out as part of the costs process. In my view, it is not to be obtained directly from the parties through, say, affidavits being filed. Any such affidavit evidence would inevitably be completely self-serving and of no assistance to the court. Rather, it would appear that the expectation of the parties will fall to be determined in one of two ways. It may be determined by the unsuccessful party revealing what his/her/its costs were on the same matter as some measure of what was to be expected…. The other method, and these are not mutually exclusive, is for the court to discern the likely expectation of the parties through the use of the factors to which courts have historically had reference in determining the appropriate amount of costs, some of which factors are set out in rule 57.01(1). These include the nature of the motion, the importance of the issues raised in relation to the overall proceeding, the complexity of the issues, the conduct of the parties, and the actual costs incurred by the successful party.
[5] It is clear from the forgoing passage that when determining the quantum of costs payable to the successful party, it may be useful for the court to consider the costs incurred by the unsuccessful party as some indication of the expectations of the parties. However, as argued by counsel for Norfolk County, that consideration is only one factor that may be taken into account when fixing costs payable to the successful parties. As noted in the Hague decision, it is appropriate for the court to consider the other factors set out in rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which include the principle of indemnity and the importance of the issues raised by the application.
[6] In that regard, I agree with Norfolk County’s counsel that the application as initially framed represented a significant challenge to its Treasurer’s exercise of discretion in cancelling the tax sale, which could have had significant financial consequences for Norfolk County if the application was successful. In the case of Lupis Financial, a successful challenge to the cancellation of the tax sale may have called into question the validity or priority of its charge against the property. Therefore, Norfolk County and Lupis Financial justifiably considered the issues raised by the application to be important from a financial perspective. In my view, the steps their lawyers took in response to the application, as reflected in their respective bills of costs, represented a proportionate response to the issues that the application raised. In these circumstances, I see no justification for limiting the Respondents’ aggregate costs award to the amount of the Applicant’s costs in bringing the application.
[7] In any case, I consider the usefulness of the Applicant’s bill of costs in determining the costs expectations of the parties to be limited by the fact that it was prepared with knowledge of the application’s outcome. In my view, a bill of costs prepared before the outcome was known would have provided a more disinterested indication of the parties’ costs expectations.
[8] In order to determine the amount of partial indemnity costs for each Respondent, I reviewed actual fees and disbursements set out in their respective costs outlines, and found them to be generally reasonable. However, as indicated in Boucher v. Public Accountants Council for the Province of Ontario, at para. 26, when fixing costs, the court is not strictly bound by the calculation of hours and time rates.
[9] In all the circumstances, I fix Norfolk County’s costs at $22,000 and Lupis Financial’s costs at $11,000, in each case including disbursements and tax, payable by the Applicant within 30 days. The amount awarded to Lupis Financial reflects its subordinate role in responding to the application, relying in large measure on Norfolk County’s submissions.
The Honourable Mr. Justice R.A. Lococo
Released: October 12, 2017
2494044 Ontario Inc. v. 2292371 Ontario Inc., 2017 ONSC 6018
COURT FILE NO.: 31/16 (Simcoe)
DATE: 20171012
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN:
2494044 ONTARIO INC. Applicant
- and -
2292371 ONTARIO INC., CLEAR SEA LTD., LUPIS FINANCIAL CONSULTING INC. and THE CORPORATION OF NORFOLK COUNTY Respondents
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL: Filipe A. Mendes, for the Applicant Jonathan Piccin, for the Respondent, Lupis Financial Consulting Inc. Mark Abradjian, for the Respondent, the Corporation of Norfolk County
ENDORSEMENT – COSTS
R.A. Lococo J.
Released: October 12, 2017
[^1]: 2494044 Ontario Inc. v. 2292371 Ontario Inc., 2017 ONSC 4342.