COURT FILE NO.: CV-17-3007-00
DATE: 2018 05 10
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: GREAT V & L TRADING INCORPORATED v. SKYLINE CAR RENTAL INC., UMAR SULTAN, XIN ZHANG, c/b/a XIN ZHANG LAW OFFICE and TORONTO DOMINION BANK
AND RE:
GREAT V & L TRADING INCORPORATED v. SABAH ZAIB, 9788085 CANADA INC. and TORONTO DOMINION BANK
BEFORE: LEMAY J
COUNSEL: R. Thapar and Y. Chhina, Counsel for the Plaintiff
V. Sharma, Counsel for the Defendant
COSTS ENDORSEMENT
[1] The Plaintiffs entered into an agreement with the Defendants Skyline Car Rental Inc. (“Skyline”) and Umar Sultan to provide monies so that Skyline could purchase Mercedes Benz cars for a rental business.
[2] The parties appeared before me on September 19th and 20th, 2017 and, with my assistance, were able to resolve all of the outstanding issues except for the costs of the proceeding. An Order was duly issued, and it was agreed that I would resolve the issues of the entitlement to and the quantum of costs by way of written submissions. This decision resolves those issues.
Background
a) The Parties
[3] The Plaintiff, Great V & L, is a company that is owned by Tian Nannan, and is in the business of purchasing, selling and shipping vehicles overseas. It has commenced two actions, one against Skyline, Umar Sultan, Xin Zhang and the Toronto Dominion Bank (“T-D Bank”). The second action is against Sabah Zaib, 9788085 Canada Inc. and T-D Bank.
[4] The Defendants T-D Bank and Xin Zhang are no longer involved in either action, and did not make any submissions on the issues before me.
[5] The Defendant, Umar Sultan, works as a driving instructor in Brampton. He was introduced to Ms. Nannan in the spring of 2017 by his father-in-law. The purpose of the introduction was to see if they could collaborate on a car rental business.
[6] The Defendant, Skyline, is a company that was incorporated by Mr. Sultan for the purposes of running the car rental business.
[7] The Defendant Sabah Zaib is the wife of Umar Sultan, and the Defendant 9788085 Canada Inc. is a company controlled by Ms. Zaib.
b) The Agreement
[8] The Plaintiff and the Defendants Skyline and Sultan entered into an agreement whereby the Plaintiff would loan the Defendant, Skyline, $560,000.00 for the purpose of financing the purchase of vehicles from Mercedes-Benz. The Defendant Sultan acted as a guarantor to this loan. The loan agreement was dated June 30th, 2017. The loan was to be for ninety (90) days.
[9] The agreement resulted in deposits being made to Skyline’s account at the T-D Bank. However, the parties also appear to have agreed that Ms. Tian, the principal of the Plaintiff, would be the sole signing authority on the account. Certainly, Skyline’s account was originally set up with Ms. Tian having some control over it.
[10] The written loan agreement contains a provision (section 9.1(d)) that states that the money that was loaned was to be used to purchase the vehicle, and was not to be used for any other purpose without the approval of the Plaintiff.
[11] The loan deposit was made to the account, in the sum of $570,817.00 on July 5th, 2017.
[12] It should be noted that there is a considerable disagreement between the parties over the facts. In particular, I note that the Defendants assert that the Plaintiff improperly controlled the T-D Bank account, that there were additional terms over and above the written agreement that governed the use of the money, and that the Defendants were not responsible for any wrongdoing in this matter. The Defendants assert that they agreed to re-pay the money only to end the litigation.
[13] I do not intend to resolve these conflicts. As will be seen, it is only necessary for me to resolve questions relating to whether the injunctions were properly brought by the Plaintiff and the conduct of the parties in the course of the action in order to assess the scale of costs in this case.
c) The End of the Agreement and the Litigation
[14] The agreement between Great V & L and Skyline arguably ended later in the day on July 5th, 2017. At that time, Mr. Sultan went to T-D Bank and had Ms. Tian removed as a signing officer. He also began to withdraw money from the account. As far as I am aware, none of the money from the account was used to purchase Mercedes Benz cars.
[15] On July 25th, 2017, counsel for the Plaintiff appeared before me and obtained an ex-parte Mareva injunction and a Norwich Order. Costs of this appearance were reserved to the Judge dealing with the merits of the injunction. As part of the Mareva injunction, I directed that the materials for the injunction be served on Skyline and Mr. Sultan promptly. The records before me indicate that these materials were provided to counsel for Skyline, Mr. Vipin Sharma, on the afternoon of July 25th, 2017.
[16] On July 25th, 2017, Mr. Sultan provided an e-mail to Ms. Tian, advising that materials were to be provided to Mr. Sharma, served to an e-mail address and personally at a commercial address in Etobicoke. The Affidavits filed as part of the action make it clear that there were difficulties in serving the materials personally on either Skyline or Mr. Sultan. However, given that they were provided to Mr. Sharma at Mr. Sultan’s direction, I find that these Orders were served on Mr. Sultan, and that he was aware of them, by the end of the day on July 25th, 2017.
[17] The Plaintiff was concerned that money was continuing to be moved from the accounts that were subject to the Mareva Order. As a result, they sought (and were granted) a further Norwich Order, again without notice, by Price J. on July 31st, 2017. Costs of this appearance were reserved to the Judge dealing with this matter on August 4th, 2017.
[18] There was a further appearance before Shaw J. on August 14th, 2017. In that appearance, the injunctions granted by myself and Price J. were extended, on terms, to the hearing of a long motion in April of 2018. The terms included the payment of a total of $10,000.00 in costs, as well as a timetable to move the action forward, including examinations and other documentation being provided by the parties. In terms of the $10,000.00 in costs, the submissions of both parties make it clear that this was the amount actually paid by the Defendant, but the Order of Shaw J. itself only shows costs of $7,500.00 explicitly payable.
d) The Proceedings Before Me
[19] I originally granted the ex-parte injunction in July of 2017, but had no further involvement with this file for almost two months. As noted above, the parties appeared in Court before some of my colleagues on a number of occasions to address various procedural issues and the extension of my interim injunction.
[20] The parties appeared before me on September 19th, 2017 as part of the regular motions list. After some discussion, including some discussion with me in chambers, the parties reached a resolution for the entire action with the exception of the issue of costs for the injunction motions. The parties asked me to resolve the costs issue for them.
[21] The parties attended before me again on September 20th, 2017 in order to address two issues that were of concern to them in the final consent. First, whether the injunctions that had been granted in this case had been properly granted. Second, what interest should be payable from the Defendants to the Plaintiffs.
[22] As I will explain below, the interest payable is no longer controversial. However, the question of whether the injunctions were properly granted remains controversial in this case, and must be addressed. During the course of the hearing on September 20th, 2017, I had the following dialogue with counsel:
THE COURT: Okay, So, in paragraph 12, “The plaintiff…” So, paragraph 12 is the troublesome paragraph.
MR. SHARMA: Yes, and we are in agreement. We took – Sorry, your Honour.
THE COURT: So, point one, everybody agrees the injunctions were properly granted.
MR. THAPAR: Correct.
MR. SHARMA: But the language is – That’s fine. It’s up to you whether…
THE COURT: You agree that the injunctions were properly granted though?
MR. SHARMA: Yeah. We are saying that it is all the legal basis for initially granting and extending…
THE COURT: Okay.
MR. SHARMA: …on a without notice basis, yes.
[23] Based on that dialogue, the following paragraph was included in the final Order that I signed with the consent of both parties:
THIS COURT FURTHER ORDERS that there was legal basis for initially granting the order for the interim injunctions in the Actions on motions without notice and then extending those injunctions till the motions for injunctions in the Actions are heard on merits. The plaintiff has and hereby withdraws all the motions for contempt orders that it has brought in the Actions, if any, on with prejudice basis. However, the Plaintiff will argue, and it is open to them to do so, that breaches of Court Orders in this case are relevant to the fixing of costs.
[24] In addition to this paragraph, there was a provision in this final Order that stated that the costs of the action and the injunctions were to be determined by me in writing.
[25] At this appearance, I directed that the parties were to provide written submissions on costs, with the submissions due by mid-October. The Plaintiffs were to provide their submissions first, and the Defendants were to provide their submissions second. The Plaintiffs then had a right of reply.
[26] After receiving some correspondence between the parties, it became clear that the Defendants were challenging the propriety of the Plaintiff’s decision to bring the injunctions. As a result, Mr. Thapar, counsel for the Plaintiffs, sought a further attendance before me on November 20th, 2017 to clarify the question of whether the parties were arguing over the issue of whether the injunction should have been granted. I had considerable discussion with counsel over this issue, and Mr. Sharma asserted at times during that discussion that his clients had never agreed that the injunctions were properly granted. At other times during that discussion it was difficult to obtain clarity as to Mr. Sharma’s position.
[27] I was clear with the parties, however, that an argument over whether the injunctions were properly granted was a matter that required viva voce evidence through a trial. As a result, at the end of the discussion, I advised the parties as follows:
THE COURT: I’m really left with two choices, gentleman. Three choices, gentleman. The first one is, I can say to you, based on what I’ve heard in terms of the submissions this morning, you don’t actually have an agreement, and I’m going to just put this on the trial list for a trial over whether or not the costs were appropriate, for two to three days, and you can call all evidence. That’s one possibility. The second possibility is that I’m going to leave the order as it is, but in interpreting the order, I’m going to quote the passage from page 7 of the transcript, in which I say, “Everybody agrees that the injunctions were properly granted?” “Correct”. Mr. Sharma, “But the language is – That’s fine. It’s up to you.” “You agree that the injunctions were properly granted though?’ “Yes.” And then quote your section and then say, “In my view, and based on my discussions with the parties, it is clear that everybody understood that these were properly granted.” That’s Option 2. Option 3 is to change the language to what Mr. Thapar wants. Which option am I choosing?
MR. SHARMA: I would suggest that I’m agreeable to Option Number 2, Your Honour.
THE COURT: Fine. Mr. Thapar, can you live with Option 2?
MR. THAPAR: So, long as it’s clear, Your Honour, that the understanding is, based on the transcript, yes.
THE COURT: That is what we’re going to do then.
MR. THAPAR: Thank you.
[28] At this appearance, I then set a new timetable for the receipt of the costs submissions. I duly received those costs submissions.
Positions of the Parties
a) The Plaintiffs’ Position
[29] The Plaintiff is seeking costs on a full indemnity basis, in the amount of just over $131,000.00, inclusive of HST and disbursements.
[30] In support of this position, the Plaintiff advances the following arguments:
a) The Plaintiff alleges that this was a case of fraud, dishonesty and breach of trust. As a result, the Plaintiff alleges that it is entitled to costs on a full indemnity basis, or in the alternative a substantial indemnity basis.
b) The Defendants engaged in misconduct in this particular case by not following Court Orders that had been made against them.
c) The quantum of costs that is sought in this case is reasonable given the amount of work that was required to be performed and the fact that this work needed to be performed quickly.
d) The Defendants’ Position
[31] The Defendants are seeking costs for portions of the work that was performed in this case. They are seeking approximately $5000.00 in costs for the motions to vacate the injunctions, which was the proceeding before me on September 19th and 20th, 2017. These were the issues that were before me, but were resolved.
[32] The Defendants assert that the Plaintiffs should not be entitled to substantial indemnity costs for these proceedings for a number of reasons, as follows:
a) The Plaintiff allegedly failed to make full and frank disclosure of the material facts when they sought the injunctions, and when the injunctions were extended. There are a number of other related factors that amount to a challenge that the injunctions were properly granted.
b) The Plaintiff misconducted itself in proceeding with this action, and the Defendants sought to resolve the action promptly and efficiently.
c) There are grounds to reduce the costs sought by the Plaintiff, as those costs are excessive.
Issues
[33] In order to determine what the quantum of costs should be, and who should pay those costs, I need to address the following questions:
a) Is there any basis to grant the Defendants costs for any part of the proceedings in this case?
b) Were the injunctions properly granted and extended?
c) If costs are payable to the Plaintiff, are there any other grounds that should result in a reduction in the costs being paid to the Plaintiffs?
d) Should the costs be ordered separately for the two actions?
[34] Before turning to the issues, however, I should address the question of interest. At the appearance before me on September 20th, 2017, we calculated the interest in Court. It was my understanding that the amount agreed to for interest was $6,871.00, based on the ten percent rate of interest in the agreement for the 44 days between July 5th, 2017 (when the money was advanced) and August 18th, 2017 (when the money was paid into court).
[35] This issue came up again at the November 20th, 2017 appearance, and I stated that I would just put the interest Order into my final Order on costs. Neither counsel had any problem with this approach. An order is to issue accordingly.
Issue #1- Is There Any Basis to Grant the Defendants Costs?
[36] No.
[37] First, the parties resolved the matter in their appearance before me on September 19th, 2017. A resolution is a compromise, and normally results in both sides conceding something. It would be an unusual case where costs were paid to one side at the resolution of a matter.
[38] Second, as Mr. Thapar notes in his reply submissions, the Mareva injunction ended when the money was paid into Court. As a result, it was not necessary to bring this motion to dissolve the injunction.
[39] Third, there were no offers to resolve the motions to dissolve the injunctions that might have triggered cost consequences.
[40] Finally, there is the fact that the motion to dissolve the injunction was more appropriately a long motion, and was brought on a regular motions list. Parties who bring long motions on the regular motions list should generally not receive costs awards.
Issue #2- Were the Injunctions Properly Granted?
[41] Yes.
[42] I have set out in detail the discussions that were held in Court on this matter. In the final appearance on November 20th, 2017, I offered the parties three options in terms of how to resolve their dispute over whether the injunctions were properly granted. In my view, the parties have agreed that the injunctions were properly granted.
[43] I will re-quote the last part of the passage from the November 20th, 2017 Court appearance, where I stated (about option 2) “in my view, and based on my discussions with the parties, it is clear that everyone understood that these were properly granted.”
[44] In light of this agreement, the arguments that Mr. Sharma makes on behalf of the Plaintiffs about the Plaintiff failing to make full and frank disclosure of the material facts, giving misleading and/or incorrect evidence to the Court, and the arguments that the Plaintiff misconducted itself during the litigation (at least to the point of the appearance before me on September 19th, 2017) are not available to the Defendants.
[45] I should also briefly address Mr. Sharma’s argument that “the careful reading of the Transcript” from September 20th, 2017 will show that there was a difference between the language relating to the interim injunctions and the language with respect to the motion for contempt. Mr. Sharma then goes on to argue that the language in the rest of the exchange from September 20th, 2017 shows that the “Defendants would not have agreed to change the language of the Order to say that the interim injunctions were properly granted as they never agreed to that.”
[46] In my view this submission ignores the discussion that I specifically had with counsel on November 20th, 2017. Mr. Sharma, on behalf of his client, agreed that the interim injunction was properly granted. Mr. Sharma’s submission on December 15th, 2017 that he did not make this agreement is at variance with what happened in Court on November 20th, 2017. In addition, the Defendants made this concession and then attempted to resile from it on two separate occasions. This conduct unnecessarily lengthened the proceedings and is worthy of sanction.
[47] The Defendants’ conduct is also worthy of sanction because the Defendant, through their counsel, twice made a concession to the Court and then sought to argue the case as if the concession had not been made. The Court and other parties must be able to rely on statements made in Court by counsel. The attempts to resile from this concession, particularly after the November 20th, 2017 appearance, are reprehensible within the meaning of the costs jurisprudence and should attract the appropriate cost consequences.
[48] This brings me to the second question that flows from the conclusion that the injunctions were granted properly: what is the appropriate scale to use to award costs in this action?
[49] I start by observing that the injunctions that were granted were a Mareva injunction and a Norwich Order. Mareva injunctions are not normally granted, as they are viewed as an execution before judgment. In this case, however, the Mareva injunction was properly granted. As a result, the Plaintiff has shown that there is a strong prima facie case, that the Defendants had assets in the jurisdiction and that there was a serious risk that the Defendant will remove or dissipate the property before judgment (see Farah v. Sauvageau Holdings Inc. 2011 ONSC 1819 at paragraphs 110 and 111).
[50] As a result, for the purposes of my analysis, I accept that the Plaintiff had a strong prima facie case, and that there was a serious risk that the Defendants were seeking to remove assets from the jurisdiction. This is a factor that supports an award on the higher end of the scale.
[51] In addition, there is the fact that there were a number of Court appearances in order to address the injunction. In one of those appearances, on August 14th, 2017, Shaw J. stated that she was “concerned with the Defendants failure to comply with prior Court Orders.” As a result, in addition to a risk of dissipation of assets, we had Defendants who were failing to comply with the Orders of the Court. This factor also supports an award on the higher end of the scale.
[52] Further, the Plaintiff provides a list of ten different alleged breaches of Court Orders after the initial Order was signed on July 25th, 2017. It appears that there was more than one violation of the July 25th, 2017 Order. However, given Shaw J.’s concerns, one of these violations is sufficient to illustrate why costs should be ordered on a higher scale.
[53] The most concerning example is the purchase and sale of gold. Mr. Sultan took delivery of 7 kilograms of gold on July 27th 2017. The Plaintiff argues that this was contrary to the Order. I am not sure I agree. However, it is not necessary to determine whether accepting the gold was contrary to the Order. Mr. Sultan attempted to sell this gold on July 27th, 2017. He actually sold this gold on August 2nd, 2017.
[54] As I have noted at paragraph 16, Mr. Sultan was well aware that the Mareva injunction was in place before August 2nd, 2017. He sold the gold in spite of that injunction, and contrary to its terms. As a result, it is clear that Mr. Sultan knowingly breached the Court Orders.
[55] Mr. Sultan’s explanation for this conduct in terms of the purchase of the gold was that he had already paid for it before the injunction was granted and he was just accepting delivery of it. I am not convinced that this explanation is accurate, but I do not have to decide that question. In any event, even if the explanation were accurate, the gold should have been delivered to counsel or to the Court. This explanation does not explain, in any way the sale of the gold. Mr. Sultan had been directed not to deal with his assets, subject to Court Order. He dealt with his assets anyway. This is a clear breach of the Court’s direction, and supports an order on the higher end of the scale.
[56] Finally, as I have noted above, there is fact that the Defendants and their counsel continue to attempt to resile from their agreement that the injunctions were properly granted. As I have noted, this conduct is worthy of sanction, and supports an order of substantial indemnity costs.
[57] The Court of Appeal has made it clear that substantial indemnity costs (or, as they used to be known, solicitor and client costs) should only be ordered under Rule 49 or where there is reprehensible conduct worthy of sanction. (see Mortimer v. Cameron 1994 CanLII 10998). However, when the conduct of the Defendants in these actions is considered, together with their breaches of Court Orders and the fact that the Mareva injunction was properly granted, it becomes clear that the Defendants engaged in reprehensible conduct.
[58] Given all of these facts, I am of the view that this is a proper case for substantial indemnity costs to be paid to the Plaintiff.
[59] I am not persuaded that full indemnity costs are appropriate because the Defendants ultimately agreed to resolve this issue, subject to the determination of costs. The Defendants are correct that this agreement ultimately saved both parties considerable legal expenditures, and there should be some benefit for resolving the matter.
[60] As a result, the substantial indemnity costs sought by the Plaintiff is appropriate, subject to the third question, whether there are grounds for reducing those costs. I turn to that issue now.
Issue #3- Are There Other Grounds for Reducing the Quantum of Costs?
[61] Yes.
[62] There are a number of points that need to be considered in determining how much the Plaintiff’s costs must be reduced, as follows:
a) The fact that the Plaintiff was required to retain separate counsel to address Mr. Thapar’s inability to sue TD Bank because of a conflict.
b) Is it appropriate to claim costs against these Defendants for work done to advance the claim against the Plaintiff’s lawyer, Xin Zhang?
c) Is the amount of costs being claimed by the Plaintiff excessive?
d) Should the Defendant’s impecuniosity be taken into account in the assessment of costs?
a) The Conflict With T-D
[63] The Plaintiff had two counsel on this file from two separate firms. Mr. Thapar represented the Plaintiff against all of the Defendants in both actions, except as against TD Bank. According to Mr. Thapar’s submissions “Simmons DaSilva could not act as counsel against TD Bank and other Banks.” The Plaintiff had to retain Yuvraj Chhina from Fortis Law Firm in order to represent the Plaintiff against TD Bank.
[64] I am of the view that, while these extra costs may have been necessary to the Plaintiff, they are not costs that the Defendant should be expected to absorb. I reach that conclusion for three reasons.
[65] First, the work that was done by Fortis Law would have been completely duplicative of work performed by Simmons DaSilva. The Defendant should not be required to pay for this duplicative work. If only one law firm had been required, this work would not have been performed.
[66] Second, the Defendants should not be required to pay for the fact that the Plaintiff’s principal law firm had a conflict that prevented the firm from acting against TD Bank. While the Plaintiff is entitled to choose the counsel that it wishes, the Defendant should not bear additional costs associated with that choice.
[67] Finally, these are costs that have not been incurred directly against any of the Defendants against whom the Plaintiff seeks costs.
[68] As a result, the $17,382.44 claimed by Fortis Law are not recoverable against the Defendants.
b) Should the Plaintiff Be Allowed to Claim Costs for the Claim Against the Plaintiff’s Lawyer?
[69] No.
[70] The claim was settled against the Plaintiff’s lawyer. If costs of pursuing a cause of action against the Plaintiff’s lawyer were justified, then those costs should have been sought from the Plaintiff’s lawyer. They are not the responsibility of the Defendants.
[71] In reviewing the bill of costs of the Plaintiff, it is not possible to isolate the amount of time that the Plaintiff’s counsel spent dealing with the claim against the law firm. In the circumstances, therefore, I have to provide my best estimate of the value of the time spent on the claim against the lawyer.
[72] The claim against the lawyer was not a significant part of the action. Therefore, I am of the view that a generous estimate of the costs relating to this portion of the action is $3000.00, inclusive of disbursements and HST, and the Defendants are entitled to a deduction from the amounts payable in costs in this case.
c) Are There Other Reasons to Reduce the Costs Claimed by the Plaintiff?
[73] The Defendants advance a number of reasons for reducing the costs claimed by the Plaintiffs. First, they argue that Mr. Thapar has only been called to the bar for seven years, and is claiming a rate that is too high. This claim is without factual foundation, as Mr. Thapar was called to the bar in 2002, and has been practicing commercial litigation ever since.
[74] Second, there is the Defendant’s claim that the costs of the appearance before Shaw J. should be discounted. I acknowledge that the Plaintiff has credited the costs that they have actually received in the sum of $10,000.00 against their costs claim.
[75] However, the Plaintiff has not credited the fact that there would have been additional costs expended preparing for and attending at the appearance that resulted in that $10,000.00 in costs being payable. There is no indication that these costs were payable on either a substantial indemnity or a full indemnity basis. As a result, some additional amount of costs must be deducted to account for the time that was spent on these issues. I am of the view that an additional deduction of $3000.00 inclusive of HST and disbursements will address this issue.
[76] Third, there is the Defendants claim that the costs in this case are beyond the reasonable expectations of the parties. I reject that assertion. First, the sum of money involved in this case was very significant, being in excess of half a million dollars. Second, the efforts to trace the assets involved in this case would have been significant, and would have resulted in a considerable amount of work being performed by Plaintiff’s counsel. Third, the deductions that I have made for specific items address any complaints that the Defendants have that the costs are beyond their reasonable expectations.
[77] In terms of reasonable expectations, I also adopt the reasoning of both the Divisional Court and Spence J. in Jazz Air LP v. Toronto Port Authority et. al. (2007 CanLII 6457). The case before me is also one where there was a tight timetable because the Defendants were moving assets around. As a result, it is not unreasonable in the case before me to assume that the Plaintiffs are going to do everything necessary to pursue their claim.
[78] Finally, the Defendants assert that the Plaintiff has incurred excessive costs in pursuing this matter. Again, I reject this assertion for two reasons. First, beyond the specific issues I have addressed above, the Defendants have not pointed to any time or any steps that are excessive. Second, I accept the Plaintiff’s assertion that these types of matters are complex, and must be done quickly, and do not permit the development of a refined, focused litigation strategy. It must be remembered that the Plaintiff was attempting to trace assets that were being moved around by the Defendants.
d) Should the Defendant’s Impecuniosity be Taken Into Account?
[79] No.
[80] The only evidence of impecuniosity in this case comes from the December 15th, 2017 Affidavit of Mr. Sultan. No permission was sought from the Court to file this Affidavit, and it was not part of the timetable that I established. As a result, it should not be considered by the Court.
[81] However, even when that Affidavit is reviewed, it does not contain the necessary evidence to establish a finding of impecuniosity. First, Mr. Sultan’s evidence that he is unemployed and has not been able to find work is not supported by any job search efforts, or any other evidence. Second, there is no indication as to the assets (as opposed to the income or bank accounts) that Mr. Sultan owns.
[82] In addition, even if I were to find that the Defendants were impecunious, the Courts have made it clear that, as a rule, a finding of impecuniosity does not eliminate or reduce a party’s liability for costs (see Balasundaram v. Alex Irvine Motors Ltd. 2012 ONSC 5840, at paragraphs 13 to 17). In this case, even if there was a finding of impecuniosity, I see no reason to depart from the usual rule that impecuniosity will not reduce or eliminate the costs ordered.
[83] I am also of the view that there should not be any delay in the time given to pay the costs. I reach that conclusion because the submissions in this case should have been completed by the middle of October. Instead, as a result of the Defendants resiling from the agreement that the injunctions have been properly granted, there has been a considerable delay in completing these submissions. In the circumstances, there is no reason to further delay the Plaintiff’s entitlement to the costs associated with this proceeding.
[84] There is one final deduction that should be taken into account. As I noted, the Defendants are not entitled to the costs of the appearance before me because that appearance resulted in a resolution of the matter. For the same reason, the Plaintiff should not be entitled to claim the costs of the September 19th, 2017 appearance before me. Again, it is difficult to extract these costs from the larger costs of the litigation. However, I estimate that the costs associated with this appearance would be $4,000.00 inclusive of HST and disbursements.
e) Calculation of Costs
[85] Once the Fortis Law Firm costs are removed, the Plaintiff has claimed $86,747.39 in substantial indemnity costs, including nearly $5,000.00 in disbursements. Given the deductions I have outlined above, the costs in this matter should be a total of $75,000.00 inclusive of HST and disbursements.
Issue #4- Should Costs be Awarded Separately for Each Action?
[86] Counsel for the Defendants argues that there should be two separate costs orders, so that each party knows how much should be paid by them. He seeks this order in the event that there is conflict between the Defendants about the costs.
[87] Counsel for the Plaintiffs, in reply, opposes separating the costs on the basis that the Defendants acted in concert in attempting to keep the funds from the Plaintiff.
[88] I am of the view that costs should be ordered separately for three reasons:
a) The Defendants Zaib and 9788085 Canada Inc. played a relatively minor role in this action.
b) These are two separate actions, and costs are normally assessed separately.
c) The agreements, and the alleged breaches of those agreements that led to these actions, were the responsibility of the Defendants Sultan and Skyline.
[89] In light of these conclusions, I am of the view that the Defendants Zaib and 9788085 Canada Inc. should be responsible for only a small amount of the costs. The reasonable division of costs is for these Defendants to pay $4000.00 in costs, inclusive of disbursements and HST, and for the remainder of the costs to be payable by Skyline and Mr. Sultan.
Conclusion
[90] For the foregoing reasons, I order as follows:
a) Skyline and Mr. Sultan are jointly and severally liable for the payment of interest to the Plaintiff in the sum of $6,871.00
b) Skyline and Mr. Sultan are jointly and severally liable for the payment of costs and disbursements to the Plaintiff in the sum of $71,000.00
c) 9788085 Canada Inc. and Ms. Zaib are jointly and severally liable for the payment of costs and disbursements to the Plaintiff in the sum of $4,000.00
d) All of the amounts in paragraphs a to c are due and payable within thirty (30) days of the release of these reasons, being June 11th, 2018, as the thirtieth day falls on a Saturday.
LEMAY J
DATE: May 10, 2018
COURT FILE NO.: CV-17-3007-00
DATE: 2018 05 10
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: GREAT V & L TRADING INCORPORATED and SKYLINE CAR RENTAL INC., UMAR SULTAN, XIN ZHANG, c/b/a XIN ZHANG LAW OFFICE and TORONTO DOMINION BANK
AND BETWEEN:
GREAT V & L TRADING INCORPORATED v. SABAH ZAIB, 9788085 CANADA INC. and TORONTO DOMINION BANK
COUNSEL: Y. Chhina and R. Thapar, Lawyers for the Plaintiff
V. Sharma, Counsel for the Defendant
COSTS ENDORSEMENT
LEMAY J
DATE: May 10, 2018