CITATION: Copperfin Credit Union v 2427087 Ontario Inc., et al, 2017 ONSC 6347
COURT FILE NO.: CV-15-532
DATE: 2017-10-23
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Copperfin Credit Union Limited
Mr. J. Lester, for the Plaintiff
Plaintiff
- and -
2427087 Ontario Inc., Melissa Harrison and Rosalba Cupello
Mr. M. Cupello, for the defendant
Defendant
HEARD: Written submissions
Mr. Justice J.S. Fregeau
Endorsement on Costs
INTRODUCTION
[1] I have received the written submissions of the parties regarding costs of this motion.
[2] This was a motion for summary judgment brought by the plaintiff on a personal guarantee Rosalba Cupello signed in favour of the plaintiff. The plaintiff was wholly successful on the motion. The plaintiff seeks costs of the motion on a substantial indemnity basis in the amount of $20,882.50. In the alternative, the plaintiff seeks costs on a partial indemnity basis up to May 5, 2017, in the amount of $11,704.30, together with costs thereafter on a substantial indemnity basis in the amount of $3,973.70.
[3] The plaintiff’s Rule 57 analysis of the relevant factors as to costs is as follows:
The principle of indemnity: The plaintiff was successful on the motion and should recover costs reasonably incurred in bringing the motion;
The amount claimed and recovered: The plaintiff obtained on the motion the amount it sought in the Notice of Motion and on its Statement of Claim;
Complexity of the proceeding: The issues were not particularly complex:
The importance of the issues: The plaintiff is a small member-based credit union in northwestern Ontario. Recovery of the amount owing under the guarantee was important to the membership:
A party’s refusal to admit anything that should have been admitted: Ms. Cupello’s guarantee was unambiguous. Denying its validity and enforceability was unreasonable.
[4] The plaintiff further submits that both the guarantee and loan agreement provided that, in the event of default, the borrower agrees to pay all legal fees and expenses incurred by the plaintiff in recovering their money. The plaintiff further cites Rule 20.06 in support of its claim for costs of the motion on a substantial indemnity basis. Rule 20.06 states that the court may order payment of costs on a summary judgment motion on a substantial indemnity basis if a party acted unreasonably by responding to the motion.
[5] The plaintiff submits that Ms. Cupello’s defence of the action was without merit. It is submitted that Ms. Cupello advanced no evidence on the summary judgment motion in support of her position beyond a self-serving affidavit attempting to establish that some sort of collateral agreement existed between the parties.
[6] The plaintiff submits that Rule 49.10(1) provides yet another basis on which costs they are asking for may be awarded. Rule 49.10(1) provides that where an offer to settle is made by a plaintiff at least seven days before the commencement of the hearing and is not withdrawn and is not accepted by the defendant and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer, the plaintiff is entitled to partial indemnity costs to the date the offer was served and substantial indemnity costs from that date, unless the court orders otherwise.
[7] The plaintiff submits that their offer to settle dated May 5, 2017 was not accepted by Ms. Cupello and that the decision on the motion was more favourable to them than the terms of the offer.
[8] Ms. Cupello submits that an award of costs is, at the end of the day, in the discretion of the court and subject to the overriding principle of reasonableness as applied to the facts of the case. Ms. Cupello submits that the amounts claimed for costs by the plaintiff are grossly excessive and that a fair and reasonable amount would be calculated in accordance with the following:
Preparation for and attendance on the examination of Mr. Monk, employee of the plaintiff – 8 hours;
Preparation for drafting of the motion record, supporting affidavit and factum – 8 hours;
Preparation for and argument of the motion – 8 hours.
[9] Ms. Cupello submits that a fair and reasonable award of costs for the plaintiff on this motion would be $5,000 plus 1/3 of the total disbursements of $1,181.70.
[10] The principles and factors to be applied in awarding costs are as follows.
[11] 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. Cham (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (Ont. C.A.), at para. 22:
to partially indemnify successful litigants for the costs of litigation;
to encourage settlement; and
to discourage and sanction inappropriate behavior.
[12] In Anderson v. St. Judge Medical Inc., 2006 CanLII 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.
[13] The Court of Appeal has made it clear that in assessing costs the overrriding 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 Accounts Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 OR. (3d) 291 (Ont. C.A.), at p.302.
[14] In Zesta Engineering Ltd. V. Cloutier, 2002 CanLII 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.”
[15] Rule 57.01(a) 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 on 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.”
[16] 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.
[17] This was not a complex motion, either factually or legally. Ms. Cupello and her partner entered into a commercial loan agreement and each personally guaranteed $100,000 of the loan amount. Default occurred almost immediately after the loan was advanced. Demand was made on the guarantees. No payment was forthcoming. An action was brought to recover on the guarantee. A Statement of Defence was filed alleging a collateral agreement between Ms. Cupello and the plaintiff which Ms. Cupello alleged precluded the plaintiff recovering on the guarantee. No substantive evidence of the alleged collateral agreement was forthcoming. The plaintiff served their motion for summary judgment and Ms. Cupello advanced the same defence when responding to the motion. I found Ms. Cupello’s argument to be without merit and granted judgment to the plaintiff.
[18] Given these facts and circumstances, the plaintiff is entitled to recover their costs of the motion. The issue is what is a fair and reasonable award of costs in all of the circumstances? As noted, the motion was not complex. Nevertheless, a lengthy and substantive affidavit in support was required, together with a factum and book of authorities. The motion took approximately four hours to argue. Ms. Cupello chose to defend the motion when, in my opinion, she had no substantive legal basis to do so. She also declined to accept an offer to settle the motion that was more favourable to her than the result of the motion.
[19] In all of these circumstances, and bearing in mind the costs claimed by the plaintiff, I am of the opinion that a fair and reasonable award of costs to be paid by Ms. Cupello to the plaintiff for this motion is $12,500, inclusive of fees, disbursements and HST.
The Hon. Mr. Justice J.S. Fregeau
Released: October 23, 2017
CITATION: Copperfin Credit Union v. 2427087 Ontario Inc., et al 2017 ONSC 6347
COURT FILE NO.: CV-15-532
DATE: 2017-10-23
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Copperfin Credit Union Limited
Plaintiff
- and –
2427087 Ontario Inc., Melissa Harrison and Rosalba Cupello
Defendant
ENDORSEMENT ON COSTS
Fregeau J.
Released: October 23, 2017