COURT FILE NO.: C-348-15

DATE: 2018/11/01

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: HENRY KLASSEN, Plaintiff

AND:

ROBERT BEAUSOLEIL and 1117726 ONTARIO INC. o/a ROBERT’S BOXED MEATS, Defendants

BEFORE: Mr. Justice D.A. Broad

COUNSEL: Rohit R. Kumar, for the Plaintiff

J. Sebastian Winny, for the Defendants

COSTS ENDORSEMENT

[1] The parties have been unable to resolve the issue of costs and have now delivered submissions on costs.

[2] The Plaintiff submits that success on the motion was divided, the plaintiff being unsuccessful on the claim for leave to amend the Statement of Claim to plead an alternative claim to a 33.3% interest in 1117726 Ontario Inc. (the “corporation”), but successful on the claims for leave to amend to advance an alternative claim to an oppression remedy as a “creditor” of the corporation and to plead certain recent events. As such, the plaintiff submits that the parties should bear their own costs of the motion.

[3] The defendants submit that they were successful in resisting the plaintiff’s claim for leave to amend the Statement of Claim with respect to the main issue in dispute, being the proposed alternative claim to a 33.3% interest in the corporation. He says that the other two issues were secondary and occupied little of the time required for the motion. The defendants seek costs on a partial indemnity basis in the sum of $12,000, comprised of fees in the sum of $6,500, counsel fee of $2,500, HST of $1,170 and disbursements in the sum of $1,516.69, totalling $11,686.69, with the balance for costs submissions.

Guiding Principles

[4] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid."

[5] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in subrule 57.01(1), including, in particular:

(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;

[6] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan, 1999 CanLII 2052 (ON CA), [1999] O.J. No. 4600 (Ont. C.A.) at para. 24).

[7] Justice Perrell in the case of 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.) reformulated the purposes of the modern costs rules, at para. 10, as follows:

(1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour

by litigants in their conduct of the proceedings; and (5) to encourage settlements.

[8] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579, [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 CanLII 1042, [2005] O.J. No. 160 (Ont. C.A.)).

Analysis

[9] Although success on the motion was divided, in the sense that the plaintiff was granted leave to amend in respect of the second and third issues mentioned above, it is fair to observe that the plaintiff’s request for leave to amend to advance an alternative claim to a 33.3% interest in the corporation was the predominant issue. If that amendment were not sought it is likely that the other two issues would have been resolved and the motion avoided.

[10] Nevertheless, the defendants persisted in opposing the amendments on the two subsidiary issues.

[11] The defendants, having prevailed on the predominant issue, were the more successful parties and should be entitled to costs of the motion on a partial indemnity basis. However, their claim for costs should be reduced to recognize that they failed to consent to the amendments for which the plaintiff was granted leave.

[12] The plaintiff’s partial indemnity costs, as set forth on the Bill of Costs was $14,537.85, comprised of $12,699.30 in fees, $1,650.91 in HST and disbursements of $187.64, which represents a measure of the plaintiff’s reasonable expectations respecting the quantum of costs which might be attributable to the motion.

[13] In all of the circumstances I would allow the defendants 50% of their claimed costs on a partial indemnity basis.

Disposition

[14] The plaintiff shall pay to the defendants costs fixed in the sum of $6,000, within 30 days hereof.

D.A. Broad

Date: November 1, 2018