COURT FILE NO.: 17-72642 DATE: 20181012 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JOVALYN TUITT and DERIAN TUITT Plaintiffs/Defendants by Counterclaim – and – AHMED ABOU-GABAL and VELIKA REALTY INC. Defendants/Plaintiffs by Counterclaim
Counsel: Craig O’Brien/Ludmilla Jarda, for the Plaintiffs/Defendants by Counterclaim John E. MacDonnell, for the Defendants/Plaintiffs by Counterclaim
HEARD: In writing
COSTS ENDORSEMENT
H.J. WILLIAMS J.
Overview
[1] The defendants had brought an unsuccessful motion for leave to register certificates of pending litigation against two properties on Murray Street in Ottawa.
[2] The plaintiffs are asking for costs of the motion.
The positions of the parties
[3] The plaintiffs are asking for full indemnity or, alternatively, substantial indemnity costs. Although they did not specifically say so in their costs submissions, I assume that they are asking for the costs to be paid within 30 days, in accordance with Rule 57.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[4] The defendants argue that the costs of the motion should be in the cause and fixed by the trial judge. Alternatively, they ask that costs be fixed at $3,000.00.
[5] The plaintiffs and the defendants filed bills of costs at the hearing of the motion. The bills of costs were filed before the parties knew who the successful parties would be.
[6] The full indemnity fees, disbursements and HST in the plaintiffs’ bills of costs added up to $19,174.87. The defendants’ total fees, disbursements and HST totaled $5,001.49.
Relevant factors
[7] The costs of a proceeding or a step in a proceeding are in the discretion of the court (Courts of Justice Act, R.S.O. 1990, c. C. 43, s 131(1)). That discretion must be exercised on a principled basis. (Davies v. Clarington Municipality, 2009 ONCA 722 at para. 40).
[8] The factors which may be considered when awarding costs, in addition to success and any offers to settle, are listed in Rule 57.01 of the Rules of Civil Procedure. The first factor on the list is “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 also the hours spent by that lawyer” (Rule 57.01(1)(0.a)). The second factor is “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” (Rule 57.01(1)(0.b)).
[9] Of the remaining factors listed in Rule 57.01, which include “any other matter relevant to the question of costs”, I consider the complexity and importance of the motion to be relevant factors in this case.
Analysis
[10] The plaintiffs were successful on the motion.
[11] There were no offers to settle.
[12] The motion was not complex. It was, however, of importance to the parties and of particular importance to the plaintiffs because, if the defendants had been successful, the certificates of pending litigation would have restricted the plaintiffs’ ability to sell the Murray Street properties and forced them to continue to incur the properties’ operating costs.
[13] There was no evidence of any conduct of the parties or any other reason that would justify an award of costs other than on a partial indemnity basis. The power to award costs on a scale other than partial indemnity is meant to be exercised only in special and rare cases. (Murano v. Bank of Montreal, (1998), 41 O.R. (3d) 222 (C.A.)).
[14] I am not satisfied that there is any reason not to follow Rule 57.03 by fixing the amount of the costs and ordering them to be payable within 30 days.
[15] The challenge I face in fixing the amount of the costs is that the costs of the successful parties, the plaintiffs, were almost four times the costs of the unsuccessful defendants.
[16] I note that in Boucher v. Public Accountants Council for the Province of Ontario, 71 O.R. (3d) 291 (C.A.), the Court of Appeal said that costs “should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.”
[17] I do not read Boucher as saying that, in awarding costs, the focus should be limited to the reasonable expectations of the losing party. Rule 57.01(1) does not suggest that either; as noted above, it lists both the principle of indemnity and the expectations of the unsuccessful party as factors a court may consider in awarding costs. [1]
[18] I read Boucher as saying simply that a winning party should not be awarded an amount equivalent or relative to its actual costs unless the amount also reflects a fair and reasonable amount for the losing party to pay and, if it doesn’t, the scale should be tipped in favour of what would be fair and reasonable for the loser.
[19] In this case, some scale-tipping is in order. The plaintiffs calculate their partial indemnity costs, inclusive of fees, disbursements and HST at $12,801.28. If the same 66 per cent factor used by the plaintiffs to convert their actual fees to partial indemnity fees is used to convert the defendants’ actual fees, the defendants’ partial indemnity costs would be $3,011.27.
[20] I note that the hourly rates of the lawyers and articling students for the plaintiffs and the defendants were fairly comparable and, I find, reasonable.
[21] That the plaintiffs had devoted more time to the written motion materials was evident from both the quality and the weight of the materials. The two affidavits filed by the plaintiffs were more detailed and of more assistance to me than the affidavit filed by the defendants. That said, while I accept the plaintiffs’ submission that their 66-paragraph factum and 15-tab book of authorities would have been more time-consuming to prepare than the defendants’ shorter factums and three tabs of authorities, for a motion such as this, which the plaintiffs acknowledge was not complex, the additional law was unnecessary and not actually very helpful.
[22] I would not allow the plaintiffs’ requested counsel fee for two lawyers to attend the hearing of the motion.
[23] If I were assessing the plaintiffs’ partial indemnity costs relative to their actual costs without any regard to the reasonable expectations of the defendants, I would reduce the fees by about $2,000.00, a reduction roughly equivalent to the higher of the two counsel fees, five hours of lawyer time and five hours of student time. The result, on a strictly hours spent times hourly rate basis would be partial indemnity costs of about $10,500.00, inclusive of disbursements and HST.
[24] Having assessed the costs that would partially indemnify the plaintiffs, I will consider what the defendants could reasonably expect to pay, bearing in mind that their partial indemnity costs for the same motion were approximately $3,000.00.
[25] Particularly given that the motion was not complex, I do not believe that the defendants reasonably would have expected to be called upon to pay costs of 3.5 times their own costs. It was, however, the defendants who made the choice to bring the motion and I find that they should have expected the plaintiffs to fight hard to oppose it, given its potentially significant financial implications.
Disposition
[26] In these circumstances, I find that the unsuccessful parties, the defendants, reasonably could have expected to pay costs to the successful parties, the plaintiffs, in the amount of $7,500.00.
[27] I fix costs at $7,500.00, an amount which is inclusive of fees, disbursements and HST and order the defendants to pay these costs within 30 days.
H. J. Williams J.
Released: October 12, 2018
[1] Rule 57.01(1) was amended post- Boucher to add both factor (0.a), “the principle of indemnity, including…the rates charged and the hours spent”) and factor (0.b), “the amount of costs that an unsuccessful party could reasonably expect to pay…”