CITATION: Andreevskaia v. Satanovski et al., 2017 ONSC 6289
COURT FILE NO.: CV-16-1244
DATE: 20171024
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TATIANA ANDREEVSKAIA Plaintiff
– and –
VITALI SATANOVSKI and LYUDMYLA TERESCHENKO Defendants
Mr. R. J. Pyne-Hilton, for the Plaintiff
Mr. A. Jazayeri, for the Defendants
HEARD: By Written Submissions
COSTS RULING
VALLEE J.:
[1] The plaintiff brought a motion for summary judgment on a mortgage action. The facts were complex because the plaintiff had advanced several loans to the defendants. The defendants were behind on their payments. Some of the debt from earlier loans was carried forward to a subsequent loan. I held that the defendants agreed to provide security to the plaintiff for the whole amount of the outstanding debt by a mortgage on their property. The mortgage then went into default. The defendants opposed the plaintiff’s motion for summary judgment. They stated that the amount owing had been repaid in full. They also stated that the plaintiff had fraudulently misrepresented the amount of the debt which was the subject of the mortgage. The plaintiff was successful in her motion for summary judgment.
[2] The plaintiff requests costs of the action on a full indemnity basis. She points to paragraph eight of the applicable set of Standard Charge Terms which states,
Such payments, together with all costs, charges, legal fees (as between solicitor and client) and expenses which may be incurred in taking, recovering and keeping possession of the land... Shall likewise be a charge upon the land in favour of the Chargee. Provided, and it is hereby further agreed, that all amounts paid by the Chargee as aforesaid shall be added to the principal amount secured by the Charge and on default all sums secured by the Charge shall immediately become due and payable at the option of the Chargee and all powers in the Charge conferred shall become exercisable.
[3] The plaintiff also points out that the defendants alleged fraud and were unsuccessful in their position.
[4] The defendants state that costs should be awarded on a partial indemnity basis because the plaintiff failed to make a reasonable settlement offer. The defendants state that the amounts claimed are inflated.
[5] Rule 57.01 sets out certain factors that the court may consider in exercising its discretion under section 131 of the Courts of Justice Act to award costs. These factors include the principal of indemnity, the rates charged and the hours spent by the lawyer.
Rates Charged and Hours Spent
[6] Although the plaintiff may be entitled to all of her costs on a mortgage action, this does not mean that her lawyer can charge excessive fees which the defendants, not the client, will ultimately have to pay.
[7] The plaintiff requests costs on a substantial indemnity basis in the amount of $60,000 including HST. This includes $52,500 for fees.
[8] I agree with the defendants that the fees claimed by the plaintiff are inflated. The bill of costs shows that two lawyers worked on this matter being Mr. R. Pyne, who has 40 years of experience and an hourly rate of $450 and Mr. R.A.J. Pyne-Hilton, who has three years of experience and an hourly rate of $300. These rates are appropriate; however, the time spent on various items is not. For example, Mr. Pyne-Hilton docketed the following:
May 11, 2014 - 1.5 hours for “arrange issuance of claim and deal with process server re: service”.
June 4, 2014 - 1 hour for “receive call from defendants re: statement of defence”.
August 5, 2015 - 1.5 hours for “draft and deliver letter to defendants; delivery affidavit of documents to defendants”.
September 27, 2015 - 2 hours for “receive email correspondence from defendants re: defendants documents; email correspondence with client”.
[9] There are a number of dates on which Mr. Pyne-Hilton either received an email from his client or sent an email to her. He docketed 0.5 hours for each email.
[10] February 3, 2016 - 0.5 hours for “deliver motion materials for filing with court”, although the disbursements show an amount for a process server to do this.
[11] On eight separate dates, Mr. Pyne-Hilton docketed various amounts for delivering documents such as letters, affidavit of documents, and the factum. On May 2, 2016, he docketed 1.5 hours for “arrange for order to be delivered to Toronto for court transfer”. This ought to have been done by a legal assistant. This work would not have required 1.5 hours.
[12] On May 30, 2017, Mr. Pyne-Hilton docketed one hour for “attend to serving and filing [costs] submissions”. These submissions were filed in the Barrie Court office. Serving and filing submissions is work typically carried out by legal assistant who would be unlikely to require one hour to do it and whose hourly rate would be significantly less than Mr. Pyne-Hilton’s rate of $300 per hour. Furthermore, the submissions would have been couriered or mailed.
[13] It is very unlikely that Mr. Pyne-Hilton required half an hour to either send or receive and review and email. It is unreasonable to expect the defendants to pay for Mr. Pyne-Hilton’s time to deliver documents at $300 per hour when he could have used a courier or he might have sent staff member at less expense. As seen above, on May 2, 2016, Mr. Pyne-Hilton made arrangements for an order to be delivered, presumably from his office on Bloor Street West to the Toronto Court office. It is unlikely that he required two hours to make these arrangements.
[14] There is some duplication of time recorded. For example, on June 4, 2015, Mr. Pyne-Hilton docketed 1.5 hours for “receive statement of defence, review and forward to client”. On June 8, 2015, Mr. Pyne docketed 1.5 hours for the very same thing.
[15] Mr. Pyne-Hilton spent a considerable amount of time preparing for the motion. I note that he prepared seven charts showing the four loans, the consolidation of loan three and four into the $150,000 loan, the $150,000 mortgage and the related payment history showing the default. These charts were very helpful to the court and in fact were attached as Schedule A to the Reasons for Decision.
Disbursements
[16] Despite Form 57A which states that copies of invoices or other evidence are to be attached in support of a claim for disbursements, the plaintiff did not provide copies of any receipts or other evidence. This omission causes the court some difficulty in assessing the disbursements as will be seen below.
[17] The disbursements show charges from a process server to issue the claim, pay the filing fee and serve the claim. These charges are appropriate.
[18] Another disbursement listed is $254.00 for “motion filing fee x 2”. The cost to file a motion is $160. There is no explanation as to why two filing fees were paid or why the amount exceeds $120. The amount allowed is $160.
[19] One item charged as a disbursement is $2,750 for “Legal Fees: Notice of Sale and admin costs”. No doubt these steps were taken; however, there are no dockets for the work. There is no account attached showing that this amount was charged to the client. This disbursement is not allowed because there is no evidence attached to show that plaintiff’s counsel did the work.
[20] “Cross-examination rental” is listed as a $553.70 disbursement. Perhaps this was to rent a room for the cross-examinations? A copy of the receipt would have clarified it. Because the nature of the charge is unclear, it is not allowed.
[21] Two other filing fees are listed, $118.65 to file the motion record and other related documents, and $39.55 to “file submissions re: caselaw”. These amounts do not resemble listed court filing fees. Perhaps they are accounts from a process server who filed the documents but that is not how they are described nor are there any supporting invoices. Accordingly, they are not allowed.
[22] HST has been charged on all of the disbursements listed. Many of them likely already include HST such as the process server’s accounts, costs of transcripts and courier charges. Copies of receipts would have shown this. Court filing fees include HST.
[23] Given the above, disbursements of $3,327.90 are allowed. No HST is allowed on the disbursements
Importance to the Parties
[24] This matter was very important to the plaintiff. The mortgage was registered on August 10, 2010. By June 18, 2012, the defendants were in arrears of payment in the amount of $14,020. Only two payments were made in 2013 totaling $5,000 and only two payments were made in 2014 totaling $12,500. As of the date of the motion, the debt totalled $344,548.64.
Denial or Refusal to Admit
[25] Another Rule 57.01 factor, which the court may take into account in awarding costs, is a party’s denial of or refusal to admit anything that should have been admitted. The defendants refused to admit that interest was payable on the various loans, even though the history of the amounts paid showed that the defendants paid interest on all of them. I found that there was no air of reality to the defendant’s position that the plaintiff lent them $240,000 between 2008 and 2009 with no interest payable.
No Offer to Settle
[26] The defendants state that in fixing costs, the court should consider that the plaintiff did not make a reasonable offer to settle. The defendants were in default on their mortgage. There was no reason for the plaintiff to offer to accept less than the amount owing. The plaintiff was contractually entitled to costs. The fact that the plaintiff did not make an offer to settle is irrelevant.
Conclusion
[27] Ultimately, in fixing an amount for costs, the overriding principles are fairness and reasonableness. See Boucher v. Public Accountants 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291. After considering all of the above, in my view, $40,956.90 ($33,300 for fees, $4,329 for HST and $3,327.90 for disbursements) is a fair, reasonable and proportionate costs award for this motion. The defendants shall pay these costs to the plaintiff forthwith.
M.E. Vallee J.
Released: October 24, 2017