CITATION: Thomas Jeffrey Kearns v. Brayman et al., 2017 ONSC 6078
COURT FILE NO.: 16-68888
DATE: 2017/10/11
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Thomas Jeffrey Kearns
Plaintiff
– and –
Brayman & Associates Incorporated (O/A The Brayman Group), Joel Brayman and Colleen Brayman
Defendants
P. J. Willetts, for the Plaintiff
B. Nicholls & C. Rutherford, for the Defendants
HEARD: June 27, 2017
ENDORSEMENT
AS TO costs
o’bonsawin J.
[1] The parties argued a Motion for Summary Judgment before me on June 27, 2017. On September 5, 2017, I released my Reasons for Decision in which I concluded that there was no employment relationship and no contractual relationship between the Defendants, Brayman & Associates Incorporated (O/A The Brayman Group), Joel Brayman and Colleen Brayman (“TBG”) and Mr. Kearns. Consequently, there was no issue requiring a trial and I granted a Summary Judgment to TBG. In my Reasons for Decision, I invited the parties to make written costs submissions if they could not come to an agreement on the issue of costs. The parties did not come to an agreement and provided me with their Submissions on Costs, Costs Outlines, and case law. This is my Endorsement on the issue of costs.
[2] TBG argues that Mr. Kearns pursued his claim for over eleven million dollars and named his former friends personally, out of vindictiveness and despite the precondition of funding to any employment as pled in his Statement of Claim. Accordingly, Mr. Kearns’ conduct should attract sanctions through costs, as TBG was obligated to proceed through the Summary Judgment Motion and was ultimately successful.
[3] In addition, TBG submits that each of the Defendants had different issues requiring specific investigation, research and development in preparing and pursuing their defence. Given the conduct of Mr. Kearns, having regard for the factors in rule 57 of the Rules of Civil Procedure (“Rules”), R.R.O. 1990, Reg. 194, and the discretion of the Court pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, TBG is entitled to its substantial indemnity costs from September 8, 2016, because TBG made an offer to settle on this date, open for eleven days, to settle this matter on the basis of a dismissal of the action against TBG without costs.
[4] TBG provided me with a Bill of Costs for the complete action. TBG had two counsel assigned to their file, Mr. Christopher Rutherford, called to the bar in 2009, and Ms. Barbara Nicholls, called to the bar in 1987. Mr. Rutherford’s hourly rate in 2016 was $245 and in 2017 was $260. Ms. Nicholls’ hourly rate in 2016 was $455 and in 2017 was $465. Costs are listed at partial fees at $72,033.67, substantial fees partial to September 8, 2017, at $89,840.12 and the entire action at $87,005.49 and full indemnity fees at $107,410.42. Counsel listed a team of eight people, Mr. Rutherford, Ms. Nicholls, three additional lawyers, two articling students, and one clerk.
[5] Mr. Kearns acknowledges that TBG was successful in this action and argues that it is entitled to receive their reasonable costs on a partial indemnity basis. The overriding principle in awarding costs is the reasonable expectation of the unsuccessful party, taking into consideration the factors set out in rule 57 of the Rules and the Court’s inherent discretion as per s. 131 of the Court of Justice Act.
[6] Mr. Kearns further argues that in awarding costs in a fair and reasonable amount, the Court should avoid engaging in an exact measure of the successful party’s actual costs. The question in a costs award is not what is reasonable to bill one’s client, but rather what is reasonable to bill the opponent. In addition, TBG’s fees as set out in their Costs Outline are disproportionate to the scope and complexity of this action.
[7] Mr. Kearns’ counsel, Mr. Willetts, was called to the bar in 2013 and had an hourly rate of $250. He spent 79.2 hours on this matter, incurring partial costs of $14,434.38, substantial indemnity costs of $22,265.28, and full indemnity costs of $24,502.68. Mr. Kearns submits that TBG, on the other hand, incurred fees over four times those of Mr. Kearns. TBG had a team of eight people. Mr. Kearns argues that while such an approach may be appropriate as between the law firm and its own client, parties who adopt this approach cannot reasonably expect the greater costs associated with it to be borne by the unsuccessful party. The hours claimed by TBG strongly suggest that the time spent was unnecessary and involved duplication of work. As of September 8, 2016, TBG incurred fees of $29,855.73. As of this date, the parties had only exchanged pleadings. Lastly, Mr. Kearns urges me to award reasonable costs on a partial indemnity basis calculated at 55%-60% of the reasonable costs which is $21,204.41.
[8] A successful party is presumptively entitled to costs in a reasonable amount (Boucher v. Public Accountants Council for the Province of Ontario, 71 O.R. (3d) 291, 2004 14579 (C.A.) [Boucher]). The amount awarded is intended to be fair and reasonable for the unsuccessful party, but not fixed by the actual costs incurred by the successful party (Boucher, at paras. 24, 26).
[9] The court has discretion to award costs pursuant to s. 131 of the Courts of Justice Act, and rule 57.01 of the Rules (Goldman v. Weinberg, 2017 ONSC 4743, at para. 4 (citing Chandra v. CBC, 2015 ONSC 6519)). Rule 57.01(1) sets out a number of factors to be considered in determining costs.
[10] Parties often argue that costs should follow the event. This was confirmed in Schreiber v. Mulroney, 160 A.C.W.S. (3d) 53, 2007 31754 (Ont. S.C.), at para. 2. Substantial indemnity costs are the exception to the rule.
[11] TBG refers me to S & A Strasser Ltd. v. Richmond Hill (Town), 1990 6856 (ON CA), 1 O.R. (3d) 243, [1990] O.J. No. 2321, where the Court of Appeal for Ontario saw a reason for a bonus in making an offer and resulted in the dismissal of the action. “[The] bonus should be related to the offer and its date and, based upon the general principles enunciated in rule 57.01, I would award solicitor-and-client costs to the defendant following the date of the offer and party-and-party costs up to that date” (at p. 6).
[12] Mr. Kearns refers me to Bombardier Inc. v. AS Estonian Air, 2012 ONSC 4209. In paragraph 10, Morgan J. quotes from Zesta Engineering Ltd. v. Clo, 2002 25577: “costs award should reflect what the court views as fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs of the successful litigant.” In addition, he states that a relevant factor to consider is the expectations of the parties regarding the amount of a costs award (para. 11).
[13] In City Front Developments Inc. v. Toronto District School Board, 285 D.L.R. (4th) 187, 2007 21595, (Ont. S.C.), at para. 9, Belobaba J. concludes that
Comparing the costs incurred by the parties is not a determinative factor because the burden of preparation on one party is often very different from what is required of the other party…However, such comparisons, when available, are certainly helpful in determining what costs award falls within the reasonable expectations of the parties…This can be a useful yardstick by which to measure the dimensions of what constitutes a reasonable costs award in this matter.
[14] In Huang v. Fraser Hillary’s Limited, 2017 ONSC 5313, Roger J. finds that “substantial indemnity costs are generally limited to circumstances where either an offer to settle under rule 49.10 is applicable or where a party has engaged in behaviour worthy of sanction (usually involving reprehensible, scandalous or outrageous conduct)” (para. 7).
[15] I have taken into consideration the factors in rule 57.01(1), for example, the matter was not complex, the issues were important to Mr. Kearns, the fact that I did not conclude that the parties acted inappropriately and the offer to settle under rule 49.10 on September 8, 2016. I have also considered the caselaw provided to me by the parties. I conclude that the costs sought by TBG are disproportionate as compared to those of Mr. Kearns. It is also to be noted that this matter was dismissed at a Motion for Summary Judgment and TBG chose to have eight people assigned to this matter. Consequently, I exercise my discretion and order that Mr. Kearns pay TBG the fair and reasonable amount of $30,000.00 inclusive of disbursements and HST. This amount is to be paid within 30 days of this Endorsement.
Justice M. O’Bonsawin
Released: October 11, 2017
CITATION: Thomas Jeffrey Kearns v. Brayman et al. 2017 ONSC 6078
COURT FILE NO.: 16-68888
DATE: 2017/10/11
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Thomas Jeffrey Kearns
Plaintiff
– and –
Brayman & Associates Incorporated (O/A The Brayman Group), Joel Brayman and Colleen Brayman
Defendants
ENDORSEMENT
AS TO COSTS
O’Bonsawin J.
Released: October 11, 2017