Superior Court of Justice - Ontario

CITATION: Metro Ontario Real Estate Ltd. v. Hillmond Investments Ltd., 2017 ONSC 7488

COURT FILE NO.: CV-09-375202

DATE: 2017-12-14

RE: Metro Ontario Real Estate Ltd., Plaintiff/Appellant

– and –

Hillmond Investments Ltd. carrying on business as Central Parkway Mall, Defendant/Respondent

BEFORE: Justice E.M. Morgan

COUNSEL: Linda Galessiere, for the Plaintiff/Appellant

James McReynolds, for the Defendant/Respondent

HEARD: Costs submissions in writing

COSTS Endorsement

[1] On June 6, 2017 I released my decision in respect of this appeal of a Master’s motion. The appeal was allowed. By agreement between the parties, the successful Appellant was awarded costs of the appeal in the amount of $7,000.

[2] The one issue that was left outstanding was that of costs of the proceeding below. When they were before the Master, the parties had agreed that the Respondent (i.e. the successful party before the Master) be awarded $32,500 in costs. At the conclusion of my reasons for judgment on appeal, I invited counsel to make written submissions if they wished to re-visit the question of costs before the Master.

[3] Both counsel have made written submissions on costs, and both agree that as a matter of general principle a successful appellant may seek costs of the hearing below. Since the decision of the Master is overturned by my judgment, the question of costs of the Master’s motion is again open. Counsel for the Appellant now seeks $47,735.55 on a partial indemnity basis for the proceeding before the Master, including disbursements and tax. Counsel for the Respondent submits that $25,000 would be a more appropriate level of costs for the Appellant to receive in respect of the Masters motion.

[4] In her costs submissions, counsel for the Appellant indicates that her client incurred actual fees of $46,456.50 (plus disbursements and tax) in the Master’s motion. Her request for costs on a partial indemnity basis comes to 87% of the actual fees incurred. Appellant’s counsel submits that this higher than usual calculation is appropriate under the circumstances as the litigation has been long outstanding due to the delays instigated by the Respondent. By way of background, she points out that the Respondent brought a summary judgment motion several years ago which still has not been argued, and that the present motion and appeal only delayed matters further.

[5] In effect, counsel for the Appellant seeks to punish the Respondent for its conduct of the litigation in a way that is reminiscent of requests for costs on a substantial indemnity scale. She has not, however, characterized her request as a request for substantial indemnity costs, and for good reason. Costs on a substantial indemnity scale would have to be based on some kind of unusually egregious conduct of the opposing party in the motion/appeal before me or before the Master, and there was no such unusual conduct. Counsel for the Respondent conducted the Masters motion and the appeal before me in a proper way. Nothing about the conduct of these proceedings would prompt an order for costs on a substantial indemnity basis. Rather, counsel for the Appellant seeks to address through a higher than usual costs award the Respondent’s conduct of the litigation at large.

[6] I agree with Appellant’s counsel that the Respondent’s approach to this action has bogged it down. This motion was the Respondent’s fourth attempt at amending its pleadings. I will note parenthetically that the Respondent changed counsel several years after the action began, and so Respondent’s present counsel inherited rather than created the situation. That said, the Appellant does deserve to have this action now proceed in an expeditious way.

[7] Despite my agreement with Appellant’s counsel about the unfortunate lack of progress in this action, this costs award is not the place to address those issues. What is before me is the question of costs of the proceedings before the Master, and I must analyze that issue on its own merits without mixing it with other issues in the litigation.

[8] Costs are, of course, discretionary under section 131 of the Courts of Justice Act. Rule 57.01(1)(0.b) of the Rules of Civil Procedure indicates that they are to be awarded with a view to the reasonable expectations of the parties. Generally speaking, partial indemnity costs come to roughly 60% of the actual incurred costs, not 87% as the Appellant requests. I am satisfied that lowering the Appellant’s request to a more standard calculation of partial indemnity costs is fair and just in this case: Boucher v Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 71 OR (3d) 291 (CA). It also matches the amount that the parties had previously agreed was reasonable for the Master’s motion.

[9] The Respondent shall pay the Appellant costs of the proceeding before the Master in the amount of $32,500, inclusive of all fees, HST, and disbursements.

Morgan J.

Date: December 14, 2017