Sinha v. Shabestari, 2018 ONSC 6171

Court File and Parties

COURT FILE NO.: CV-16-5155

DATE: 2018 10 16

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SIRISH SINHA & IRWATTI SINHA, Plaintiffs

– and –

DAVOOD ZARGAR SHABESTARI & HAKIMEH PAYAMI SHABESTARI, Defendants

DAVOOD ZARGAR SHABESTARI & HAKIMEH PAYAMI SHABESTARI, Plaintiffs by Counterclaim

– and –

SIRISH SINHA, IRWATTI SINHA, JOANNE GLUDISH & ROYAL LEPAGE REAL ESTATE SERVICES, Defendants by Counterclaim

BEFORE: L. Shaw

COUNSEL: Gurcharan Anand, counsel for the Plaintiffs (Defendants by Counterclaim)

Glyn Hotz, counsel for the Defendants (Plaintiffs by Counterclaim)

HEARD: In Writing

COSTS ENDORSEMENT

Introduction

1On January 16, 2018, I released written reasons following a summary judgment motion heard on September 20, 2017. In my reasons I indicated that if the parties could not agree on costs, the plaintiffs were to serve and file written submissions by February 19, 2018. The defendants were to serve their response by March 2, 2018.

2I received written submissions from plaintiffs’ counsel. At the request of defence counsel, I granted an extension to March 21, 2018, to file written submissions.

3On March 22, 2018 Mr. Hotz, counsel for the defendants, emailed my assistant, with a copy sent to Mr. Anand, counsel for the plaintiffs. At the time it was not clear that these were the defendants’ costs submissions as they were not properly filed with the court. In a follow-up email on July 31, 2018, Mr. Hotz informed my assistant that his clients’ position on costs was as set out in his email of March 22, 2018.

4The plaintiffs are seeking costs of $45,676.40 on a substantial indemnity basis. The Bill of Costs also includes an amount of $31,212.40 for costs on a partial indemnity basis. The plaintiffs’ submit that I should consider the following factors in assessing costs:

• The defendants’ unreasonable conduct;

• The defendants’ counterclaim of $500,000, which was discontinued and which the plaintiffs allege was devoid of any merit;

• The defendants’ motion to vary a costs award and to remove plaintiffs’ counsel as solicitor of record, and allegations of abuse of process;

• The defendants’ failure to respond to a request to admit;

• The conduct of defence counsel; and,

• The plaintiffs’ offers to settle.

5The defendants’ position, according to the email from Mr. Hotz dated March 22, 2018, is that there should be no order as to costs.

6For the reasons that follow, I find that the plaintiffs are entitled to their costs of these proceedings fixed in the sum of $25,000, inclusive of disbursements and HST.

Background

7This matter involved an aborted real estate transaction. The defendants offered to purchase the plaintiffs’ home for $1,202,000. The transaction was to close on August 3, 2016. The defendants paid a deposit of $60,000. The defendants could not secure financing, and the transaction did not close.

8The issue before the court was whether the defendants would forfeit the $60,000 deposit paid to the plaintiffs or whether the defendants could seek relief from forfeiture and have the deposit returned to them.

9For the reasons set out in my judgment, I found that the defendants were not entitled to relief from forfeiture and that the deposit of $60,000 would be forfeited and paid to the plaintiffs.

Legal Framework

10Pursuant to s. 131 of the Courts of Justice Act, the costs of a proceeding or a step in a proceeding may be awarded at the discretion of the court.

11Rule 57.01 of the Rules of Civil Procedure sets out the factors the court can consider in exercising its discretion. In addition to considering any offer to settle, the court can consider the following:

57.01 (1) 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.

12In dealing with costs, the Court of Appeal for Ontario in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] 71 O.R. (3d) 291 (C.A.), and Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, held that the overall objective of fixing costs is to determine an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant.

History of the Litigation

13Before the summary judgment motion, the parties attended court numerous times on various interlocutory matters. The first attendance was on January 12, 2017, when a timetable was set for the summary judgment motion and the date set for the hearing on September 20, 2017. The timetable set dates for the parties to attend for cross-examinations and file factums.

14The plaintiffs then brought a motion for security for costs. The matter was before the court on January 31, 2017. Justice Barnes ordered the defendants to pay costs of $600 and ordered that the parties fix a timetable for the motion.

15The parties were before the court again on February 24, 2017. Justice Price ordered that the defendants pay the costs as ordered by Justice Barnes. He also ordered a timetable for the motion for security for costs.

16The parties were before Justice Bloom on March 9, 2017, who ordered a further timetable.

17On April 13, 2017, the parties were before Justice Andre. He made an order with respect to when the parties were to attend for cross-examination on their affidavits.

18The defendants did not attend for cross-examinations and the parties were again back in court before Justice Trimble on July 20, 2017. Justice Trimble wrote a lengthy endorsement setting out the brief but intense history of the litigation. He commented: “This motion is replete with sharp practice”. He described the conduct of both counsel, which included interrupting the other and making statements of facts that were not in the record before him. He noted that the affidavit material was extremely conflicting and hostile in tone. The final disposition was another date set for cross-examinations.

19The motion for security for costs was before Justice McSweeney on August 16, 2017. The motion did not proceed as counsel for the defendants informed the court that his clients would not be pursuing the counterclaim for $500,000 but were only seeking payment of the $60,000 deposit.

20The defendants were never cross-examined on their affidavits and the summary judgment proceeded before me on September 20, 2017.

Analysis

21The conduct of this litigation and the volume and content of the affidavits filed in support of, and in response, to various motions was disproportionate to the central issue in dispute, which involved a deposit of $60,000. Counsel for both parties made allegations against the other that were personal in nature and neither necessary nor in the best interests of their clients, who should have access to justice in a timely and cost-effective manner. I am not prepared to make findings on one counsel’s conduct in a vacuum. Both counsel, at times, lacked decorum and civility.

22The defendants’ counterclaim for $500,000 was the cause of the motion for security for costs, which triggered the avalanche of affidavits. That claim was withdrawn, after eight months of litigation, when the security for costs motion was to proceed. The counterclaim may have had little merit. I have considered that as a factor in assessing costs.

Offers to Settle

23The plaintiffs made four offers to settle this matter. I consider that the most important factor, together with their ultimate success. The first offer, dated December 6, 2016, was for the $60,000 deposit to be paid to the plaintiffs and the defendants would pay the plaintiffs’ costs of $5,000.

24The second offer was dated July 27, 2017. Again it offered that the $60,000 deposit, plus any incurred interest, would be paid to the plaintiffs and that the defendants pay costs of $1,500 and the claim and counterclaim would be dismissed.

25On September 19, 2017, the plaintiffs made another offer to settle. The deposit of $60,000 would be paid to the plaintiffs and the defendants would pay to the plaintiffs their costs of the summary judgment motion of $5,000. That offer was open for acceptance until 10:00 a.m. on September 20, 2017.

26The defendants did not accept any of these offers. I was not provided with any offers or counter-offers from the defendants to consider.

27These offers clearly indicate attempts by the plaintiffs to resolve this matter very early on in the litigation. Parties should be encouraged to engage in settlement discussions at the earliest possible time. The issues in dispute were not complex. The quantum was not significant. The defendants ought to have responded to the offers. Both parties should have focused on settlement discussions rather than on the exchange of affidavits that only served to unnecessarily enflame emotions and possibly cloud judgment.

Conclusion

28I have considered the plaintiffs’ cost submissions together with their costs outline. I have also taken into account the factors enumerated under Rule 57, including the time spent, the result achieved, and the complexity of the matters, as well as the principle of proportionality.

29Given the results obtained in the summary judgment motion and taking into account the previous offers to settle, the defendants are to pay the plaintiffs costs in the sum of $25,000.

L. Shaw J.