Court File and Parties

COURT FILE NO.: CV-14-511998 DATE: 20180927 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Qazi Bari, Plaintiff AND: Suman Ahuja, Defendant

BEFORE: Madam Justice Darla A. Wilson

COUNSEL: Michael Simaan, Counsel for the Plaintiff Raj Anand, Counsel for the Defendant

HEARD: By Written Submissions

Endorsement on Costs

[1] This is a negligence claim brought by Mr. Qazi Bari (the “Plaintiff” or “Bari”) against his former solicitor, Ms. Suman Ahuja (the “Defendant” or “Ahuja”) arising from the purchase of properties in Orillia, Ontario in December 2006 and March 2007 and further legal services provided in 2012. The trial proceeded before me over the course of 6 days. I released my decision on December 22, 2017 dismissing the case. I indicated that I would deal with costs if the parties could not agree.

[2] Mr. Anand, counsel for the Defendant, submitted his costs submissions in writing on February 23, 2018. I received no response from Mr. Simaan, counsel for the Plaintiff. I received a letter from Mr. Anand dated April 30, 2018 in which he advised that Mr. Simaan had indicated he would provide the Plaintiff’s submissions by the end of March. I received nothing and wrote to counsel requesting the Plaintiff’s costs submissions by Apr 16. Finally, my assistant followed up with Mr. Simaan and was advised that he was not going to be filing costs submissions on behalf of the Plaintiff. As a result, my endorsement on costs is based on the material submitted by counsel for the Defendant only.

Background

[3] Briefly put, the Plaintiff alleged the Defendant solicitor was negligent in her provision of legal services related to his purchase of properties in Orillia in December, 2006 and March, 2007. Liability (breach of the standard of care), causation and damages were issues at trial.

[4] Mr. Anand requests an order for costs payable by the Plaintiff to the Defendant; specifically, he asked for costs on a partial indemnity scale up to the date of his offer to settle on September 29, 2017 fixed at $89,009.91 plus HST of $11,571.29 plus disbursements of $11,349.00 for a total sum of $111,930.20. He asks for substantial indemnity costs after the offer to settle fixed at $56,815.11 plus HST of $7,385.96 for a total amount of $64,201.07. The amount claimed, therefore, is $176,131.27. Counsel for the Defendant notes that the offers to settle made by the Plaintiff were unreasonably high. The Defendant made offers to settle shortly before trial in the sum of $35,000 all-inclusive which was not accepted. Further, Mr. Anand submits that the Plaintiff failed to co-operate during the course of the litigation by complying with production obligations which increased unnecessarily the amount of time counsel had to spend. Furthermore, the Plaintiff alleged fraud against the Defendant which was not borne out at trial.

The Law on Costs in Ontario

[5] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides as follows:

[6] Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.

[7] Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 identifies the factors a court may consider when exercising its discretion to award costs:

In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs.

[8] Certain principles have been established that serve as a guide when the court is exercising its discretion when fixing 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): Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 75 O.R. (3d) 638 (C.A.).
• 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 ONCA 722, 100 O.R. (3d) 66 (Ont. C.A.) 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 v. Public Accountants Council for the Province of Ontario, 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.), 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.

[9] The Courts of Justice Act gives the court a wide discretion concerning the award of costs, the quantum of costs and the parties that must pay a costs order. Rule 57.01 provides the court with guidance about the various factors that may be considered when exercising its discretion.

[10] Generally, in civil proceedings in Ontario, the rule of thumb is that costs follow the event unless there is a persuasive reason that they should not. 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. [Emphasis added].

[11] Rule 49.10 limits the court’s discretion regarding the fixing of costs in certain circumstances when there has been a qualifying offer to settle. These automatic cost consequences are designed to encourage the parties to take realistic positions and encourage settlement. This Rule provides that:

(1) Where an offer to settle,

(a) is made by a plaintiff 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 defendant,

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

(2) 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 as 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.

[12] Rule 49.13 provides as follows:

Despite rules 49.03, 49.10 and 49.11, the court, in exercising its discretion with respect to costs, may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer [emphasis added].

[13] Mr. Anand asks for costs on a substantial indemnity scale after delivery of the offer to settle served September 29, 2017. He does not cite any cases which provide for this outcome and the provisions of Rule 49.10 do not entitle a successful Defendant to substantial indemnity costs. The presumption is that since the Defendant was successful in obtaining a dismissal of the claim, the Defendant is entitled to partial indemnity costs throughout and I see no reason to depart from this.

[14] I turn now to the quantum of fees that the Defendant is entitled to. Mr. Anand was called to the Bar in 1980 is a very experienced senior counsel. The partial indemnity rate claimed of $231.00 per hour is eminently reasonable as are the hourly rates of the associates and law clerks and students who worked on the file. This was a solicitor’s negligence claim with certain complexities. In my view, given the allegations made against the Defendant as well as the fact that the case proceeded to trial, the hours spent are reasonable and the disbursements are proper.

[15] On a partial indemnity scale, the amount claimed for fees, HST and disbursements is $152,851.50. The allegations asserted against the Defendant particularly those of fraud were serious and of great importance to Ms. Ahuja. Mr. Anand had to address the claims made even though in some instances there was little or no evidence to corroborate them. The Defendant attempted to resolve the case without the necessity of proceeding through a trial but the offer made was rejected. It was the unrealistic expectations of the Plaintiff that drove this matter on to trial. In my view, taking into account the factors enumerated in Rule 57 as well taking into consideration what the losing party could reasonably have expected to pay in costs if unsuccessful at trial, I am of the view the amount claimed by counsel for the Defendant is fair and reasonable in all of the circumstances.

[16] I fix the costs and disbursements in the sum of $152,851.50 inclusive of fees, taxes, and disbursements, payable by the Plaintiff to the Defendant within 60 days.

D.A. Wilson J. Date: September 27, 2018