CITATION: Colterjohn-Guy v. Stitt et al. 2017 ONSC 964

COURT FILE NO.: CV-14-0427

DATE: 20170209

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: KATHRYN COLTERJOHN-GUY, aka SHAENIE COLTERJOHN Plaintiff/Responding Party

AND:

HEATHER STITT, RE/MAX FOUR SEASONS REALTY LTD., KAREN WILLISON and ROYAL LEPAGE ALL REAL ESTATE SERVICES LTD., Defendants/Moving Party

BEFORE: THE HONOURABLE MR. JUSTICE G. M. MULLIGAN

COUNSEL: Conor D. O’Hare, Counsel, for the Plaintiff/Responding Party

Aaron Postelnik, Counsel, for the Defendants/Moving Party

HEARD: November 10, 2016

costs ENDORSEMENT

[1] The Defendants, Heather Stitt and Re/Max Four Seasons Realty Limited (the Defendants) bought a motion for summary judgment dismissing the Plaintiff’s claim against them. The Defendants were successful. Summary judgment was granted dismissing the action for reasons issued November 10, 2016. The Defendants seek costs on a partial indemnity basis until an offer was served, and on a substantial indemnity basis thereafter. The costs sought by the Defendants are for the entire action. The total costs sought including disbursements and HST is $30,451.44.

The history of this action

[2] It is not necessary to review the entire history of this action but a few points should be noted. The Plaintiff commenced her action, April 9, 2014. The Defendants were her agents with respect to residential real property she purchased in 2010. Pleadings were exchanged and the Defendants advanced a defence that the action was statute barred by reason of the Limitations Act, 2002, S.O. 2002, c. 24. Examinations for discovery were conducted and a judicial pre-trial took place March 3, 2016.

[3] There were two offers to settle. The first Rule 49 offer was dated March 18, 2015. The Defendants offered to consent to the dismissal of the action on a without costs basis. That offer to settle was not accepted.

[4] A second offer to settle was made on March 31, 2016. The Defendants offered to pay $27,500.00 in exchange for a dismissal of the action and a full and final release. Shortly thereafter the Plaintiff rejected this offer. The Defendants submit that they are entitled to substantial indemnity costs thereafter.

Position of the Plaintiff

[5] The Plaintiff does not dispute the hours spent by counsel for the Defendants but takes issue with the hourly rates claimed. Further, the Plaintiff submits that this is not an appropriate case for costs on a substantial indemnity basis given the Defendants’ delay in bringing this summary judgment motion.

[6] As the Plaintiff states in submissions:

“the evidence required in order to bring the summary judgment motion to dismiss the Plaintiff’s action was known to the Defendants from the day the Statement of Claim was reviewed by counsel…yet, the Defendants did not bring the motion for summary judgment until November 10, 2016 or two and a half years after they pleaded that the Plaintiff’s action was statute barred pursuant to s. 4 and 5 of the Limitations Act. It is therefore submitted by the Plaintiff that the Defendants unnecessarily pursued their defence of the action, only to bring it to an end two and a half years after it was commenced for grounds known to them from the commencement of the proceeding.”

[7] The Plaintiffs also seek to limit the recovery of costs further and submit:

“any recovery of costs should be limited to the Defendant’s partial indemnity costs relating to the preparation of the statement of defence and any initial meetings with counsel during which counsel was fully advised of the evidence supporting a summary judgment motion”.

Analysis

[8] Section 131 of the Courts of Justice Act, R.S.O. 1990, Chapter c. 43 provides considerable judicial discression when fixing costs. The principal set out in Rule 57.01 of the Rules of Civil Procedure also give guidance to the court.

The Plaintiffs did not submit her own bill of costs for comparison purposes. In determining the expectation of the parties, it is always helpful to the court if the losing party indicates what their costs were with respect to the same matter: Workprice v. Mariner’s Haven Inc., [2004] O.J. No 5528, para. 13.

[9] Rule 49.10(2) of the Rules of Civil Procedure speaks to the issue of costs consequences of a defendant’s offer:

49.10 (2) DEFENDANT’S OFFER - Where an offer to settle,

(a) is made by a defendant at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the plaintiff,

and the plaintiff obtains a judgment as favourable or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.

Does the rule provide substantial indemnity costs for a defendant?

[10] In The Law of Civil Procedure in Ontario, 1st Edition (LexisNexis Canada Inc., 2010 Toronto) the authors provide the following commentary at p. 576:

Case law has addressed the situation not covered expressly by the offer to settle rule that arises. If the defendant makes an unaccepted offer and the plaintiff’s action is dismissed. If the plaintiff’s action is dismissed – which means that the plaintiff “does not obtain” a judgment – the circumstances are outside the language of Rule 49.

[11] In S.A. Strasser Ltd., v. Richmond Hill (Town), 1990 CanLII 6856 (ON CA), [1990] O.J. No 2321 (ONCA), a defendant did achieve substantial indemnity costs involving egregious behaviour by a plaintiff.

[12] In Davies v. Clarington Municipality, 2009 ONCA 722, [2009] 312 D.L.R. 4th 278 (ONCA), the court limited its earlier decision as to when defendants may be entitled to substantial indemnity costs.

[13] In Saint Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, [2010] O.J. No 1515, the court provided the following guidance with respect to this issue at para. 90:

Rule 49 sets out the costs consequence of an offer to settle. Pursuant to Rule 49.10(1) where a plaintiff offers to settle, obtains judgment at least as favourable as the offer to settle and meets other procedural requirements, it is entitled to substantial indemnity costs from the date of the offer unless the court orders otherwise. However, there is no corresponding provision entitling a defendant to substantial indemnity costs where it makes an offer to settle that is greater than the amount ultimately awarded.

[14] In my view there is no basis in law or the facts here which would entitle the Defendants to an award of substantial indemnity costs.

Conclusion

[15] A motion for summary judgment provides a quick and cost efficient way to obtain a judicial determination in appropriate cases. Bringing a motion early in the action when all facts are known has a potential to reduce the costs exposure for both plaintiffs and defendants. Here the Defendants waited a substantial period of time after delivering a statement of defence to bring a summary judgment motion. I therefore consider this as a factor in determining an appropriate level of partial indemnity costs to be awarded to the Defendants.

[16] The Defendants total claim on a partial indemnity basis for fees and disbursement is $26,788.00 plus HST. I’m satisfied that the Defendants as the successful parties are entitled to costs on a partial indemnity basis. However, reasonableness enters into the equation. As Epstein J. A. stated in Clarington (Municipality) v. Blue Circle Canada Inc., [2009] O.J. No 2436, at para. 52

As can be seen from, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engaging in a purely mathematical exercise, the judge when awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party, rather than the exact measure of the costs of the successful litigant.

[17] I am satisfied that an award of costs for fees, disbursements and HST in the amount of $15,000.00 is fair and reasonable under the circumstances. Costs of $15,000.00 are therefore payable by the Plaintiff to the Defendants forthwith.

MULLIGAN J.

Date: February 9, 2017