Court File and Parties

COURT FILE NO.: CV-18-595447 DATE: 201905 22 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Marci Cook, Plaintiff AND: Harvey Kalles Real Estate Ltd., Defendant

BEFORE: Nishikawa J.

COUNSEL: Michael Kestenberg, for the Plaintiff Milton Davis and Martine Garland, for the Defendant

HEARD: In writing

Endorsement

Overview and Procedural History

[1] On April 3, 2019, I granted summary judgment to the Plaintiff, Marci Cook, against the Defendant, Harvey Kalles Real Estate Ltd. (“HKRE”) for unpaid commissions in the amount of $193,908.00, plus pre and post-judgment interest: Cook v. Harvey Kalles Real Estate Ltd., 2019 ONSC 2108. I subsequently received the parties’ costs submissions.

[2] Ms. Cook seeks costs on a partial indemnity basis until June 15, 2018 and substantial indemnity costs thereafter, for a total of $77,009.05, including disbursements and HST. On June 15, 2018, Plaintiff’s counsel sent a letter demanding that HKRE pay Ms. Cook the outstanding commission, failing which the Plaintiff would bring a motion for summary judgment. As a result of this letter, HKRE paid Ms. Cook one-half of the outstanding commission, which was not in dispute. On October 18, 2018, Ms. Cook offered to settle the motion for summary judgment for $197,128.50, including interest, and partial indemnity costs of $40,000 plus HST, if the offer was accepted within 21 days. The offer stated that if it was not accepted within 21 days, costs would be on a partial indemnity basis until the date of acceptance. The Plaintiff is not relying on the cost consequences of r. 49.10(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 but, rather, on the factors that the court considers under r. 57.01.

[3] HKRE submits that Ms. Cook should not be entitled to any costs, given that she entered into an illegal contract to share her commission with an unlicensed person, contrary to s. 9 of the Real Estate Business Brokers Act, 2002, c.30, Sched. C. In the alternative, HKRE submits that Ms. Cook is only entitled to costs on a partial indemnity basis. HKRE submits that Ms. Cook’s costs are excessive, and that its own partial indemnity costs are significantly less, at $38,793.64, including disbursements and HST.

[4] In this case, I see no reason to depart from the general principle that the successful party is entitled to their costs. The cases that HKRE relies upon to argue that Ms. Cook should be deprived of her costs involve reprehensible or serious misconduct, or conduct that provoked the litigation. Ms. Cook was compelled to bring the proceeding to obtain the commission to which she was entitled.

[5] At the same time, substantial indemnity costs are not warranted in the circumstances. Ms. Cook’s letter of June 15, 2018 was not an offer to settle but a demand letter with no element of compromise. Moreover, she does not submit that she was more successful than the October 18, 2018 offer. The Plaintiff’s costs on a partial indemnity basis are $62,703.96, including disbursements and HST.

[6] Pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1), the court has broad discretion when determining the issue of costs. The overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (Ont. C.A.), at para. 26.

[7] Rule 57.01(1) of the Rules of Civil Procedure sets out the factors to be considered by the court when determining the costs issue. I have considered the factors set out in r. 57.01(1), as well as the proportionality principle in r. 1.04(1.1) of the Rules of Civil Procedure, while keeping in mind that the court should seek to balance the indemnity principle with the fundamental objective of access to justice. The issue was clearly important to both parties, as evidenced by HKRE’s defence of the claim, even though it claimed no entitlement to the funds. Ms. Cook made efforts toward an early resolution of the dispute and was entirely successful. Neither party prolonged the proceeding or took unnecessary steps. Given the the level of complexity of the matter, which involved a single issue, the hours billed by Plaintiff’s counsel strike me as high. The Plaintiff’s costs outline shows a combined total of 62.5 hours by two senior lawyers (called to the Bar in 1976 and 1990) for “correspondence and meetings.” This is separate from the combined total of 56.1 hours spent on the summary judgment motion, and no further detail or explanation is provided.

[8] Based on the foregoing considerations, I fix total costs on a partial indemnity basis at $48,000.00, inclusive of disbursements and HST. This includes costs incurred in the preparation of the costs submissions.

Nishikawa J.

Date: May 22, 2019