Court File and Parties

COURT FILE NO.: CV-17-585228

DATE: 20180621

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TMJ HYGIENE SERVICE CORPORATION, Applicant

AND:

ACES CAPITAL INC., DANIEL SECA and MLSE PARTNER, INC., Respondents

BEFORE: P. J. Monahan J.

COUNSEL: Mark A. Ross and Sarah Walker, for the Applicant

Gerard C. Borean for the Respondents

HEARD: June 21, 2018

COSTS ENDORSEMENT

[1] On April 3, 2018, I found that the applicant TMJ Hygiene Service Corporation (“TMJ” or the “Applicant”) was entitled to a declaration that its agreement to purchase two ‘seat licenses’ from Aces Capital Inc. (“Aces”) was rescinded. I further found that TMJ was entitled to a refund of the purchase price of $107,350, plus its costs of the application. The parties were unable to resolve the quantum of costs payable by Aces to TMJ and have made written costs submissions.

[2] TMJ was entirely successful on the application. As outlined in my earlier reasons, there was no doubt that Daniel Seca, the President of Aces, had misrepresented the location of the seats and that this misrepresentation was material to the contract. Aces’ main defence was that Seca honestly believed that he had correctly described the location of the seats. But TMJ was not required to prove that Seca deliberately or fraudulently misrepresented the location of the seats in order to succeed on its application. All that was necessary was that the location of the seats had in fact been misrepresented and that this misrepresentation was material to the contract. These facts were clearly established and, accordingly, the position of Aces was entirely without merit.

[3] TMJ seeks costs from Aces on the higher end of the partial indemnity scale, in the sum of $30,000 (which is comprised of fees of approximately $23,740, with the balance being taxes and disbursements.) TMJ argues that since the application was entirely unnecessary, it was forced to incur substantial legal costs by Aces, for which is entitled to be reimbursed.

[4] Aces argues that the amount of costs incurred by the unsuccessful party is largely determinative of the reasonable expectation of the costs to be awarded to the successful party. It has submitted a bill of costs on a partial indemnity scale of $7621, and argues that this would be an appropriate costs award in this case. Aces also suggests that TMJ was only partially successful on its application in that I did not determine the issue of the personal liability of Seca for the misrepresentation and, instead, ordered a mini-trial on this issue. Aces also notes that the relevant facts and the legal issues involved were relatively simple.

[5] I agree that the issue of proportionality, as well as the reasonable expectations of the unsuccessful party, are the central considerations in fixing an appropriate award of costs. That said, I find the costs outline submitted by the Respondent to be unreasonably low given that this proceeding required application materials, cross examinations, a factum and a hearing. I also note that Aces calculates partial indemnity costs at just 40% of the actual costs incurred, as opposed to the normal 60%.

[6] I accept TMJ’s submission that costs should be awarded on the higher end of the partial indemnity scale, namely, at 70% of actual costs incurred, given that Aces’ position was entirely without merit. However, having reviewed the costs outline of the Applicant, I note that counsel is claiming for approximately 94 hours of time on this file. Given the fact that the matters involved were relatively straightforward, I find that this amount of time was excessive and should be reduced by 30%. This results in a fees award of approximately $16,620, HST of $2160, and disbursements of $3168.35. Accordingly I fix costs on an all-inclusive basis at $21,948.35, payable by Aces to TMJ within 30 days.

P. J. Monahan J.

Date: June 21, 2018