citation: "Khan v. Mwakijale, 2018 ONSC 7486" parties: "Shamim Rana Khan v. Richard Mwakijale, Pauline Oyugi, Alice Mwakijale and Rosemary Njomvu" party_moving: "Shamim Rana Khan" party_responding: "Richard Mwakijale, Pauline Oyugi, Alice Mwakijale and Rosemary Njomvu" court: "Superior Court of Justice" court_abbreviation: "ONSC" jurisdiction: "Ontario" case_type: "costs" date_judgement: "2018-12-13" date_heard: "2018-10-04" applicant:

• "Shamim Rana Khan" applicant_counsel:
• "Olubunmi Ogunniyi" respondent:
• "Richard Mwakijale"
• "Pauline Oyugi"
• "Alice Mwakijale"
• "Rosemary Njomvu" respondent_counsel:
• "Julius Omware" judge:
• "Conlan" summary: > The Plaintiff, having successfully obtained summary judgment for $75,000 due to the Defendants' failure to close a property transaction, sought substantial indemnity costs of $42,272.20. The court reviewed the Defendants' pleadings and found no unsubstantiated allegations of fraud against the Plaintiff, which was the basis for the substantial indemnity request. Applying the principles of costs under Rule 57.01(1), the court declined to award substantial indemnity. Instead, it exercised its discretion to award partial indemnity costs of $28,000, representing approximately two-thirds of the amount claimed, finding the claimed amount to be closer to full recovery rather than substantial indemnity. interesting_citations_summary: > This decision clarifies the threshold for awarding substantial indemnity costs, emphasizing that such an award requires serious and totally unfounded allegations that impugn the honesty, integrity, and reputation of the other side, as distinguished from general questions about the legitimacy of a subsequent sale. It reinforces that costs awards are discretionary, should be fair, just, and reasonable, and bear a proportionate connection to the result, while also serving to partially indemnify successful litigants and discourage inappropriate conduct. The court applied Rule 57.01(1) factors in determining the quantum of costs. final_judgement: "The Defendants shall pay to Shamim Rana Khan costs in the total sum of $28,000.00, all-inclusive, within thirty days of the date of this Endorsement." winning_degree_applicant: 2 winning_degree_respondent: 4 judge_bias_applicant: 0 judge_bias_respondent: 0 year: 2018 decision_number: 7486 file_number: "3314/17" source: "https://www.canlii.org/en/on/onsc/doc/2018/2018onsc7486/2018onsc7486.html" cited_cases: legislation:
  • title: "Rules of Civil Procedure, R.R.O. 1990, Reg. 194" url: "https://www.ontario.ca/laws/regulation/900194" case_law:
  • title: "Catalyst Capital Group Inc. v. Moyse, 2018 ONCA 283" url: "https://www.canlii.org/en/on/onca/doc/2018/2018onca283/2018onca283.html" keywords:
• Costs
• Substantial indemnity
• Summary judgment
• Rules of Civil Procedure
• Rule 57.01(1)
• Fraud allegations
• Real estate transaction
• Failed closing areas_of_law:
• Civil Procedure
• Costs
• Real Estate Law

Court File and Parties

COURT FILE NO.: 3314/17 DATE: 2018 12 13 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Shamim Rana Khan, Plaintiff AND: Richard Mwakijale, Pauline Oyugi, Alice Mwakijale and Rosemary Njomvu, Defendants

BEFORE: Conlan J.

COUNSEL: Olubunmi Ogunniyi, Counsel for the Plaintiff Julius Omware, Counsel for the Defendants

Endorsement on Costs

I. Introduction

[1] The Plaintiff, Shamim Rana Khan (“Khan”), brought a motion for summary judgment against the Defendants, Richard Mwakijale, Pauline Oyugi, Alice Mwakijale, and Rosemary Njomvu.

[2] The Defendants had agreed to purchase a property in Toronto from Khan. There was a signed Agreement of Purchase and Sale (“Agreement”). The Defendants failed to close the transaction. Although Khan was able to later sell the property to someone else, she lost $75,000.00 in sale proceeds.

[3] The Defendants, in their pleading, did not deny that they failed to close the transaction as per the signed and valid Agreement. In a nutshell, they blamed the failed transaction on their real estate agent and his employer in, for example, permitting them to waive the financing condition, and the Defendants commenced a Third Party Claim accordingly.

[4] Khan’s Motion was heard on October 4, 2018. Extensive materials had been filed by Khan. Nothing had been filed by the Defendants. The Defendants requested yet another adjournment of the Motion, which request was denied for written reasons delivered by this Court on that day. Khan’s Motion was granted, for oral reasons delivered at Court on October 4th. Judgment was granted in favour of Khan in the principal amount requested, $75,000.00.

[5] This Court ordered that written submissions on costs could be filed, and deadlines were outlined for the parties. Khan has filed her submissions on costs. The Defendants have filed nothing.

II. Khan’s Position on Costs

[6] Khan requests costs on a “substantial indemnity” basis in the total amount of $42,272.20.

[7] She focusses on the Defendants’ unsubstantiated allegations of fraud on the part of Khan as the reason for an award of costs on a substantial indemnity scale.

III. Basic Legal Principles on Costs

[8] I must keep these things in mind in making the decision on costs:

(i) the Plaintiff, as the successful party, is presumed to be entitled to some costs; (ii) quantum of costs is largely discretionary; (iii) the objective is to make an award that is fair, just and reasonable in all of the circumstances, including the prudent expectations of the losing side; (iv) costs should generally bear some proportionate connection to the result achieved; (v) cost awards are designed to partially indemnify successful litigants, encourage settlement, and discourage or sanction inappropriate conduct by litigants; and (vi) in determining the quantum of costs, I should consider the various factors outlined in Rule 57.01(1) of the Rules of Civil Procedure.

IV. Decision

[9] I have reviewed the Defendants’ pleadings that are contained in the Motion Record that was before this Court on October 4, 2018. There is nothing contained therein with regard to allegations of fraud against Khan.

[10] I do recall the issue of the legitimacy of the ultimate sale of the property by Khan to a third party having been raised by the Defendants during the course of the litigation. But that does not bring this case within the four corners of the decision relied upon by Khan, Catalyst Capital Group Inc. v. Moyse, 2018 ONCA 283, [2018] O.J. No. 1523 (C.A.).

[11] In that case, unlike ours, there were very serious and totally unfounded allegations pleaded and maintained throughout the litigation which sought to impugn the honesty, integrity, and reputation of the other side.

[12] Thus, I decline to award to Khan her costs on a substantial indemnity scale.

[13] Seeing nothing excessive about the time spent or the hourly rate charged by Khan’s counsel, and seeing nothing unreasonable contained in the Costs Outline filed, this Court exercises its discretion to reduce the award of costs in favour of Khan from the $42,272.20 claimed to an even $28,000.00, all-inclusive.

[14] I note from a careful review of the Costs Outline that the $42,272.20 figure, although it is described in Khan’s costs submissions as being recovery on a “substantial indemnity” scale, appears really to be full recovery. That is further reason to discount the award to something in the neighbourhood of two-thirds recovery, which the $28,000.00 figure represents.

[15] This Court orders that the Defendants shall pay to Khan costs in the total sum of $28,000.00, within thirty days of the date of this Endorsement.

Conlan J. Date: December 13, 2018