Court File and Parties
CITATION: Sax v. Aurora, 2017 ONSC 7107
COURT FILE NO.: CV-14-498414
DATE: 2017-11-29
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Adam Sax, Plaintiff
AND:
Rick Aurora, 2349336 Ontario Ltd. o/a The Condo Mall, Royal LePage West Realty Group Ltd., Jessica Lenouvel (Leung), Jaswinder Aurora and Pritina Bhavsar, Defendants
BEFORE: J. E. Ferguson J.
COUNSEL: Danny Kastner and Gregory Ko, for Adam Sax Katrina Marciniak, for Royal LePage West Realty Group Ltd.
HEARD: In-Writing
COSTS ENDORSEMENT
[1] Adam Sax (“Sax”) seeks substantial indemnity costs of $36,733.95 plus HST of $2,118.14 and disbursements. Sax points to Royal LePage West Realty Group Ltd.’s (“Royal LePage”) unreasonable conduct and further to Sax’s offers to settle which essentially mirrored the relief granted to him in seeking this order and amount for costs.
[2] I note in reviewing Sax’s offers to settle, that the second one merely added a term that the issue of the retroactivity of the order would be left to the trial judge (which relief I also granted).
[3] Royal LePage submits that Sax’s costs are excessive and totally disproportionate. It disputes that the court should rely on the plaintiff's offers to settle. It submits that the second offer added a term which voided the first offer and that the second offer was not made in time so as to trigger cost consequences. Royal LePage submits that costs be fixed in the amount of $8,000.00.
[4] I disagree and agree with some of the points raised by Royal LePage:
i. I find that the motion was of exceptional importance to Sax and that the motion was complex;
ii. I agree that proportionality must be kept in mind when considering the issue of costs; and
iii. further, costs must be fair and reasonable.
Law of Costs
[5] In Chandra v. CBC, 2015 ONSC 6519 the court set out the following applicable principles for dealing with costs at paras. 15-17:
- The general principles to be applied in fixing costs are conveniently articulated in Agius v. Home Depot Holdings Inc., 2011 ONSC 5272, at paras. 10-12, as follows:
Cumming J. in DUCA Financial Services Credit Union Ltd. v. Bozzo, 2010 ONSC 4601 at para. 5, described the “normative approach” to an application for costs:
Costs are in the discretion of the Court: s. 131, Courts of Justice Act, R.S.O. 1990, c. C.43 and Rule 57.01 of the Rules of Civil Procedure. In Ontario, the normative approach is first, that costs follow the event, premised upon a two-way, or loser pay, costs approach; second, that costs are awarded on a partial indemnity basis; and third, that costs are payable forthwith, i.e. within 30 days. Discretion can, of course, be exercised in exceptional circumstances to depart from any one or more of these norms.
Fixing of costs is not merely a mechanical exercise in reviewing the receiving party’s Cost Outline. In Andersen v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557, the Divisional Court set out several principles to be considered in making an award of costs:
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): Boucher [Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291], Moon [Moon v. Sher (2004), 2004 39005 (ON CA), 246 D.L.R. (4th) 440], and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.).
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: Boucher. 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: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.), at para. 4.
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)(0.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”: Murano v. Bank of Montreal (1998), 1998 5633 (ON CA), 41 O.R. (3d) 222 (C.A.), at p. 249.
The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.
The Court of Appeal has identified the overriding principle to be that the amount of costs awarded be reasonable in the circumstances. In Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 Epstein J.A. stated at paras. 51-52:
As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher, this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at para. 37, where Armstrong J.A. said “[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice.”
- As Mark Orkin in The Law of Costs, 2nd ed., loose-leaf (Aurora, Ont.: Canada Law Book, 2010) reminds us (at para. 201) awarding costs is an exercise in balancing two principles:
…One, that a successful party to litigation who is free of blame should not be required to bear the costs of either prosecuting or defending the action, and two, that citizens will be unduly hesitant to assert or defend their rights in court if an unsuccessful party is required to bear all of the costs of a successful one.
- The principle of indemnification is no longer the only purpose of costs awards. There is recognition that modern costs awards may encourage settlement, prevent (or at least discourage) frivolous or vexatious litigation, or sanction behaviour that increases the expense of litigation.
[6] I am mindful of the plaintiff’s offers to settle, but proportionality and reasonableness in this case trump. The reasonable amount that should be paid by Royal LePage is not close to the amount being requested, even after taking the offers into account.
[7] In applying the above law to this case, fees are fixed in the amount of $15,000 plus HST, together with $2,000.00 towards the disbursements. In reviewing Sax’s bill of costs, there are a lot of extensive duplications of time with a total of 120 hours claimed. This motion did not merit such extensive time. I have reduced the fees as a result.
J. E. Ferguson J.
Date: November 29, 2017