Court File and Parties
Court File No.: CV-17-574957 Date: 2018-10-11 Superior Court of Justice - Ontario
Re: Dr. Sharifa Himidan, Plaintiff And: 2546579 Ontario Inc., Hooman Fazlollahi and Hanieh Rezaie, Defendants
Before: Schreck J.
Counsel: T.A. Pagliaroli, for the Plaintiff J.D. Farber and M.S.W. Garland, for the Defendants
Heard: In writing.
Costs Endorsement
[1] This action involves a dispute over a property line. On June 6, 2018, I dismissed the defendant’s motion for summary judgment: Himidan v. 2546579 Ontario Inc., 2018 ONSC 3537. The plaintiff now seeks costs on a substantial indemnity basis in the amount of $100,065.04. She says that she is entitled to this based on Rule 20.06 of the Rules of Civil Procedure, which states that substantial indemnity costs can be ordered where a party acts unreasonably in bringing a motion. She is apparently of the view that her success on the motion was such an obvious foregone conclusion that the defendants should have known that the motion would fail.
[2] The defendants takes the position that no costs should be ordered on the motion. Rather, costs should be determined by the trial judge. In the alternative, they submit that costs should be awarded on a partial indemnity basis in an amount far less than claimed by the plaintiff.
[3] For the reasons that follow, I have concluded that the plaintiff is entitled to her costs on the motion, but not on a substantial indemnity basis and not in an amount that is anything close to what she has claimed. I do not agree that the defendants acted unreasonably in bringing their summary judgment motion. While the motion was ultimately unsuccessful, I cannot say that the defendants’ position was not arguable. While the plaintiff was successful in resisting the motion, her success at trial is by no means guaranteed.
A. Should there be an Order for Costs in the Cause?
[4] As the defendant points out, it is open to this court to leave the issue of costs to be determined by the trial judge. This is usually done in cases where the work done to prepare for the summary judgment motion would have had to be done in preparation for the trial and where it is difficult to determine how much of that preparation can be attributable solely to the motion: Sofina Foods Inc. v. Meyn Canada Inc., 2018 ONSC 981, at para. 21; 2383431 Ontario Inc. v. Rose of Sharon (Ontario) Retirement Community, 2017 ONSC 3372, at para. 9. Another relevant circumstance is whether the decision to dismiss the motion was a “close call”: Masales v. Cole, 2016 ONSC 1814, at para. 11; Marini v. Muller, at para. 6.
[5] As explained below, I believe that the preparation attributable to the motion can be distinguished from preparation which would have had to be done in any event. With respect to whether the result of the summary judgment motion was a “close call”, as I stated in my reasons dismissing the motion, it is my view that the resolution of the issues raised in this action require a trial in order to determine the credibility and reliability of the witnesses’ evidence. In this sense, the outcome of the motion was not a “close call”. Whether the outcome of the trial will be a “close call” is another matter. While I dismissed the defendant’s summary judgment motion, the plaintiff’s success at trial is by no means assured. As I noted in my reasons on the motion, there is considerable conflicting evidence on some of the key issues and at trial, the onus will be on the plaintiff to establish her claim.
[6] In all the circumstances, I have concluded that departure from the usual rule that costs should follow the event is not warranted: Urbanski v. Corporation of the Township of Ramara, 2016 ONSC 1799, at para. 10.
B. Is the Plaintiff Entitled to Substantial Indemnity Costs?
[7] In support of her position that there should be substantial indemnity costs, the plaintiff relies on Ashim v. Zia, 2015 ONSC 564, at paras. 9-10, where the court held that it is not necessary to find that a party “acted egregiously, or in a reprehensible manner” in order to find that the party acted “unreasonably” within the meaning of Rule 20.06. The court held that such a finding could be made in the following circumstances (at para. 9):
- the evidence on the motion was clearly insufficient to show facts on which the court could conclude that there was no genuine issue requiring a trial;
- the legal basis for the motion was wrong or clearly insufficient for the court to conclude that there was no genuine issue requiring a trial;
- the evidence and legal principles when applied to the issues on the motion did not engage the economies that Hryniak contemplated as a proportionate, timely and affordable procedure to justify bringing the motion having regard to the nature of the action or prevailing circumstances in the litigation; or
- no meaningful order is made by the court under Rule 20.05 to assist with the trial management process for the action or that part of the action for which the motion for summary judgment was refused.
[8] While these factors may be relevant in determining whether a party acted unreasonably, in my view they should be applied with considerable caution. The nature of litigation is such that the outcome is rarely obvious and it is not the court’s role to play “Monday morning quarterback.” In determining whether a party acted unreasonably in bringing a motion for summary judgment, the “omniscience of hindsight” should play no role in the analysis: R. v. G.(D.M.), 2011 ONCA 343, 105 O.R. (3d) 481, at para.107.
[9] As well, in this case the defendant sought and obtained leave to bring the summary judgment motion, over the plaintiff’s objection. In an endorsement dated September 29, 2017, Koehnen J. stated: “On the face of it, summary judgment may be the most efficient and cost effective way of dealing with the issue”. Koehnen J. expressly left it open to the plaintiff to renew her objection after having received the defendant’s materials. She does not appear to have done so. In these circumstances, it would hardly be fair to conclude that the defendant’s decision to bring the motion was unreasonable.
[10] Summary judgment motions can provide proportionate and expeditious determinations of legal disputes: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 2-5, 30-34. For this reason, their use is to be encouraged. However, not every motion for summary judgment will be successful. A party contemplating bringing such a motion must weigh the risks in doing so, including the risk that she will be liable for costs if the motion fails. If parties face the risk of having substantial indemnity costs awarded against them whenever a court concludes, with the benefit of hindsight, that the motion was unlikely to succeed, parties will be less likely to bring such motions, even in cases where they are arguable. The overall effect of this will not enhance the “culture shift” which the Court in Hryniak concluded is needed in the civil justice system.
[11] While resort to Rule 20.06 may not require a finding that a party acted “egregiously” or in a “reprehensible manner”, in my view it does require some finding of improper conduct. The heading in the Civil Procedure Rules under which Rule 20.06 is found is entitled “Costs sanctions for improper use of rule.” In my view, Rule 20.06 should be employed only in “exceptional circumstances” where a party has behaved improperly: 1095909 Ontario Inc. v. Westmount-Keele Ltd., 2016 ONSC 3507, at para. 10. Such circumstances do not exist in this case. While the plaintiff is entitled to her costs, this should be on a partial indemnity basis.
C. Quantum
[12] On a partial indemnity basis, the plaintiff seeks costs in the amount of $76,290.98. In my view, this is excessive. As noted earlier, much of the work mentioned in the plaintiff’s costs outline would have had to be done to prepare for the trial in this matter even if the defendant had not brought a motion for summary judgment. For example, the cross-examinations that have taken place will undoubtedly shorten the trial and the legal research performed with respect to the various legal issues that arose would have had to be done in any event.
[13] If I award the plaintiff her costs at this stage for work that would have been done in any event, there is a real risk that the costs award at the end of the trial will be unfair if the defendant is ultimately successful, which is a distinct possibility.
[14] Having deducted, as best as I can, those portions of the fees and disbursements which I believe would have been incurred in any event, and having considered the factors set out in Rule 57.01(1), I award the plaintiff partial indemnity costs on this motion in the amount of $25,000, inclusive of taxes and disbursements, payable within 30 days.
Schreck J. Date: October 11, 2018.