Court File and Parties

COURT FILE NO.: CV-17-981-00 DATE: 2018 11 19 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Maxjoyce Express Inc., Plaintiff and: Sheng Tzu Chang aka Emma Chang aka Emma McFarland, Defendant

BEFORE: Justice G.D. Lemon

COUNSEL: Dennis Van Sickle, Counsel for the Plaintiff John Russo, Counsel for the Defendant

HEARD: In Writing

Costs Endorsement

The Issue

[1] On September 25, 2018, I set aside a Mareva injunction against Ms. Chang as I had found that the plaintiff, Maxjoyce, through its principal, Mr. Deng, had failed to make full, fair and frank disclosure.

[2] Ms. Chang now seeks costs in the amount of $35,847.81 on a substantial indemnity basis or $25,653.96 on a partial indemnity basis. She asks that the costs be paid jointly and severally by Maxjoyce and Mr. Deng, the principal of Maxjoyce. In response, Maxjoyce submits that costs should be payable by the company only in the amount of approximately $5,000.00 to $7,500.00.

Authorities

[3] Rule 57.01 of our Rules of Civil Procedure sets out the factors that the court may consider when determining costs. The relevant factors that I should consider here are:

(a) the result in the proceeding, (b) 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; (c) 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; (d) the amount claimed and the amount recovered in the proceeding; (e) the complexity of the proceeding; (f) the importance of the issues; (g) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding.

[4] Modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan, (1999), 46 O.R. (3d) 330, at para. 22.

[5] Costs awards, at the end of the day, should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”: see Boucher v. Public Accountants Council for the Province of Ontario, (2004), 71 O.R. (3d) 291, at para. 24.

[6] In 1318847 Ontario Ltd. v. Laval Tool & Mould Ltd., 2017 ONCA 184, Chief Justice Strathy of the Ontario Court of Appeal wrote (para 77):

Costs against non-parties who are directors, shareholders or principals or corporations may be ordered in exceptional circumstances if the non-party commits an abuse of process…such circumstances may include fraud or gross misconduct in the instigation or conduct of the litigation.

Analysis

[7] Ms. Chang was successful and is therefore presumed to be entitled to her costs. This was an important issue for both parties. Injunction motions almost always involve thick materials produced on an emergency basis. They are, by their nature, expensive.

[8] In its submissions, Maxjoyce’s own Bill of Costs amounts to $17,128.15. It would know the cost of being unsuccessful.

[9] Maxjoyce points out that Ms. Chang was not successful on all aspects of the motion and that success was therefore divided. I do not accept that being not entirely successful is the same as divided success. Ms. Chang was successful on this important issue argued before me.

[10] The basis of dismissing the motion was because of inappropriate behaviour by Mr. Deng – he failed to live up to his obligations in such a motion. Further, Ms. Chang is a minority shareholder in Maxjoyce. If Maxjoyce is to pay the costs, the order would effectively have Ms. Chang paying part of this order. Given Mr. Deng’s conduct, this would, of course, be unreasonable.

[11] The figure put forward by Ms. Chang appears to be unreasonable. Her Bill of Costs shows that a total of 7 lawyers worked on the file. I agree with counsel for Maxjoyce that this would suggest duplication in work. The total of the bill would also suggest that.

[12] Taking all of those factors into consideration, I order costs fixed in the amount of $20,000.00 to be payable jointly and severally by Maxjoyce and Mr. Deng.

Justice G.D. Lemon Date : November 19, 2018

Released: November 19, 2018