Court File and Parties

COURT FILE NO.: CV-08-355524 MOTION HEARD: 2018-12-11 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Daniel Molinari, Plaintiff AND: Giancarlo Aloe et al., Defendants

BEFORE: Master P. Tamara Sugunasiri

COUNSEL: R. Lachmansingh, Counsel for the Plaintiff M. Greenglass for Gerry DiLuca, Nick DiLuca, Mr. James re: 121 Evans Avenue

HEARD: December 11, 2018

Endorsement on Costs

Overview:

[1] Further to my decision released in this matter on October 5, 2018, the parties appeared before me to resolve the issue of costs. The DiLucas are seeking substantial indemnity costs of $52,126.09 for succeeding in the motion. Alternatively, they seek $36,404.96 as partial indemnity costs. The time spent by Mr. Greenglass is roughly the same as the time spent by Mr. Lachmansingh. Mr. Greenglass is very senior counsel and has a reasonable hourly rate. The Plaintiff does not suggest that costs should not follow the event as is the norm. Rather, he contests quantum.

[2] Mr. Lachmansingh argues that an award of $20,000 in costs to the DiLucas is appropriate. First, he suggests that the DiLucas caused delay by first failing to advise the Plaintiff that they wished to participate in all of the examinations related to this motion. Having so advised, Mr. Lachmansingh attempted to resolve it by suggesting that the DiLuca cross-examination proceed first, after which the DiLucas could attend all examinations. Ultimately they required a court resolution of the issue which I decided in favour of the DiLucas. However, Mr. Lachmansingh asserts that in the end, the DiLuca cross-examination occurred first anyway, thereby wasting all of the costs spent on the issue.

[3] Second, the Plaintiff contends that it was his motion and that it inherently involves more work than a responding party. As such, he believes the hours spent by Mr. Greenglass to be excessive.

[4] Neither counsel provided me with case law addressing the awarding of costs to the non-parties.

Analysis:

[5] In applying Rule 1.04 and 57.01 of the Rules of Civil Procedure and Section 131 of the Courts of Justice Act, I award substantial indemnity costs to the DiLucas. In my decision, it was my view that the DiLucas’ were unnecessarily dragged into this litigation. They were not made parties when they could have been, and then jolted from the solace of non-party status into a document intensive, 2-day motion.

[6] The rules of procedure were amended in 2010 to incorporate the principle of proportionality and curb the discovery process. In Warman v National Post, the Court made it clear that “the time has come to recognize that the ‘broad and liberal’ default rule of discovery has outlived its useful purpose.”[^1] The principle of proportionality is the overriding principle in the discovery process. The principle is to be applied by litigants and “actively manage[d] by the courts.”[^2]

[7] I extend these comments to apply equally to a party’s consideration of whether or not to seek to examine a non-party for discovery. In my view, such examination should only be sought if it is critical to a material issue in the litigation, keeping in mind the cost of the motion and the value of the issue being explored. In the present case, the Plaintiff’s unyielding pursuit of the non-parties with respect to a property that may have a value of no more than $6,000 is a relevant consideration in fixing costs. Further, I held that the information was available through other sources and that the motion to discover the DiLucas was at the very least premature since discovery of the parties had not yet concluded.

[8] Generally, the purpose of limiting costs to a partial indemnity scale is to strike a balance between the burden of costs which would be borne by the “winner” without putting litigation beyond the reach of the “loser”.[^3] This principle has, however, developed with parties to the litigation in mind. Non-parties are on a different footing than parties for the purposes of costs recovery. Where non-parties are forced to incur significant legal cost to successfully defend exposing their private financial affairs to a host of individuals in an action, it is appropriate in some cases to award substantial indemnity costs. This approach is in line with the five purposes of a costs award:

a. To partially, or in some limited circumstances, wholly indemnify the winning party for the legal costs incurred;

b. To encourage settlement;

c. To deter frivolous, actions and defences;

d. To discourage unnecessary steps; and

e. To promote access to justice.[^4]

[9] While historically, substantial indemnity costs are reserved for rare instances of “reprehensible, scandalous or outrageous conduct”, modern litigation requires such conduct to be evaluated through the lens of access to justice and the goal of promoting efficient, cost-effective litigation. A total disregard for proportionality and consideration for a non-party ought to be regarded, in some cases, as reprehensible, scandalous or outrageous conduct.

[10] In the present case, Mr. Greenglass and his clients were strangers to the litigation. Significant time was spent learning the file and its extensive history in order to successfully resist the motion. It is not surprising at all that Mr. Greenglass spent as much time responding to the motion as Mr. Lachmansingh spent preparing it. This is the downside of dragging non-parties into litigation and why such steps should be rarely taken.

Disposition:

[11] Given the foregoing and my review of the respective costs outlines and submissions therein, I order the Plaintiff to pay substantial indemnity costs to the DiLucas in the all-inclusive amount of $52,126.09 payable within 60 days of today’s date.

Original signed

Master P. T. Sugunasiri

[^1]: Warman v National Post Co, 2010 ONSC 3670 at para. 59. [^2]: Hryniak v Mauldin, 2014 SCC 7 at para. 32. [^3]: Foulis v Robinson, 1978 CanLII 1307 (ON CA), [1978] OJ No 3596 (CA). [^4]: 1465778 Ontario Inc v 1122077 Ontario Ltd, 2006 CanLII 35819 (ON CA), [2006] OJ No 4248 (CA).