Court File and Parties
COURT FILE NOs.: CV-17-577158-0000 and CV-17-577158-00A1 (Toronto) MOTIONS HEARD: 2018 07 27
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Mehdi Moradi and Neda Afshar, plaintiffs and Pathik Baxi, Hooshfar Rokni Pezeshkian, Majid Reza Delsouz and Jintao Liu, defendants and Arman Sabet, third party
BEFORE: MASTER R.A. MUIR
COUNSEL: Jonathan Kulathungam for the plaintiff Neda Afshar, moving party Elena Mazinani for the third party Arman Sabet, moving party Fabian Otto for the plaintiff Mehdi Moradi, responding party
SUPPLEMENTARY REASONS FOR DECISION
[1] These supplementary reasons for decision arise from two motions heard by me on July 27, 2018. The plaintiff Neda Afshar (“Ms. Afshar”) and the third party Arman Sabet (“Mr. Sabet”) brought motions seeking an order removing Brian Sherman (“Mr. Sherman”) as lawyer of record for the plaintiff Mehdi Moradi (“Mr. Moradi”). Ms. Afshar also sought an order granting her leave to amend the statement of claim to be added as a defendant. Mr. Sabet also sought an order for production of his file from Mr. Sherman.
[2] I released my reasons for decision on August 2, 2018. I granted all of the relief requested by the moving parties other than the request by Mr. Sabet for the production of his file from Mr. Sherman. I also requested written costs submissions. I have now received and considered those submissions.
[3] Ms. Afshar and Mr. Sabet seek their costs. They take the position that they were the successful parties and that they should be awarded their costs in accordance with the court’s usual practice. Ms. Afshar suggests that costs should be paid on a full indemnity or substantial indemnity basis in view of the alleged conduct of Mr. Moradi and Mr. Sherman in response to these motions. Ms. Afshar asks that any costs award be payable by Mr. Moradi and Mr. Sherman.
[4] Mr. Moradi argues that his opposition to the motions was reasonable in the circumstances and suggests that there be no order for costs or only a nominal costs order.
[5] When dealing with costs, the overall objective for the court is to fix an amount that is fair and reasonable for the unsuccessful party who generally must pay the costs of the successful party. See Zesta Engineering Ltd. v. Cloutier, [2002] OJ No. 4495 (CA) at paragraph 4 and Boucher v. Public Accountants Council for the Province of Ontario, [2004] OJ No. 2634 (CA) at paragraph 26. In Davies v. Clarington (Municipality), 2009 ONCA 722 the Court of Appeal stated as follows at paragraph 52:
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.
[6] Apart from the operation of Rule 49.10 (offers to settle), elevated costs should only be awarded on the basis of a clear finding of reprehensible conduct. See Davies at paragraph 40.
[7] Ms. Afshar and Mr. Sabet were the successful parties on these motions and are entitled to costs. However, I see nothing in the conduct of Mr. Moradi or Mr. Sherman that could be characterized as reprehensible. These were seriously contested motions. The moving parties were seeking a serious form of relief. They asked the court to make an order that would deny Mr. Moradi his choice of counsel. While I ultimately ruled that the moving parties were entitled to such an order, it is perfectly understandable that Mr. Moradi would vigorously oppose these motions. There were a few missteps along the way in terms of the delivery of evidence and scheduling issues. However, there is no compelling evidence to suggest that those actions were deliberate or somehow improper. The actions of Mr. Moradi and Mr. Sherman were not reprehensible. There is no basis for an elevated costs order.
[8] For the same reasons, I see no basis for a costs order against Mr. Sherman personally. There is no indication that he was acting in an improper manner or other than in accordance with his client’s instructions. In my view, it was not unreasonable for Mr. Sherman and Mr. Otto to vigorously oppose these motions on behalf of their client, given the potential consequences for Mr. Moradi. I am mindful that the Court of Appeal has stated that orders requiring a lawyer to pay costs personally must be made with “extreme caution”. See Rand Estate v. Lenton, 2009 ONCA 251 at paragraph 1.
[9] Ms. Afshar seeks partial indemnity costs in the amount of $24,984.51. Mr. Sabet asks for partial indemnity costs of $12,145.54.
[10] As I have stated above, these were seriously contested motions. The facts and law were relatively complex. The materials were voluminous. Cross-examinations took place. Several court attendances were necessary. These were important motions for the moving parties. They had very serious and legitimate concerns about their former lawyer potentially acting against their interests.
[11] I also note that the total number of hours devoted to these motions by counsel for Mr. Moradi is very similar to the hours spent by counsel for Ms. Afshar. The partial indemnity hourly rate of $345.00 for Ms. Afshar’s main counsel is reasonable for a lawyer of his experience and for motions of this level of importance and complexity. In my view, a partial indemnity costs award to Ms. Afshar of $24,000.00 is fair and reasonable in the circumstances of these motions.
[12] I am not prepared to award Mr. Sabet the full amount of the partial indemnity costs he is seeking. It was obvious from the conduct of these motions that Ms. Afshar and her counsel took the lead in advancing these motions. Mr. Sabet’s involvement was limited and he largely adopted and relied upon the evidence and submissions of Ms. Afshar and her counsel. In my view, 50 hours of time and $12,000.00 in costs are excessive given Mr. Sabet’s limited role on these motions. I have therefore concluded that 50% of the amount requested by Mr. Sabet is fair and reasonable.
[13] I am therefore ordering that the plaintiff Mehdi Moradi pay the moving parties’ costs of these motions on a partial indemnity scale fixed in the amount of $24,000.00 to Neda Afshar and $6,000.00 to Arman Sabet. These costs are inclusive of HST and disbursements and shall be paid by November 2, 2018.