Court File and Parties

COURT FILE NO.: 31-2303814

ESTATE FILE NO.: 31-2303814

DAT7E: 20190529

ONTARIO

SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

IN BANKRUPTCY AND INSOLVENCY

IN THE MATTER OF THE PROPOSAL OF 1482241 ONTARIO LIMITED, OF THE CITY OF TORONTO, IN THE PROVINCE OF ONTARIO

RE: JAMSHID HUSSAINI AND NEELOFAR AHMADI, Appellants

AND:

CROWE SOBERMAN INC., TRUSTEE ACTING IN THE PROPOSAL OF 1482241 ONTARIO LIMITED (“148”), Respondents

BEFORE: Madam Justice V.R. Chiappetta

COUNSEL: Neil Paris, for the Appellants

David T. Ullmann, counsel for the Respondent 1482241 Ontario Limited

HEARD: In Writing

costs ENDORSEMENT

[1] 1482241 Ontario Limited (148) was the successful party in a trial heard December 4-5, 2018 and January 9, 2019 (Hussaini v. Crowe Soberman Inc., 2019 ONSC 642). 148 now seeks its costs of the trial fixed at $149,076.61 on a substantial indemnity basis or, in the alternative, $100,897.20 on a partial indemnity basis.

[2] I see no reason why the scale of costs awarded should be one of substantial indemnity. The offer to settle relied upon by 148 in this regard was a macro offer designed to settle all outstanding litigation among the parties and related parties. It was not specific to the Appellants’ claims and was withdrawn by 148, in any event, on September 17, 2018. It cannot be said that the Appellants acted in bad faith. The claims were advanced efficiently by way of a hybrid mini-trial process and the reduction of the amount of the litigation claim from $42 million to $4 million was reasonable considering the narrative and arguments presented. Ultimately, the Appellants were unsuccessful as a result of the application of the law of trusts to the evidentiary record. This does not equate to bad faith or unreasonable conduct on behalf of the Appellants.

[3] The Appellants argue that the quantum of costs sought on a partial indemnity basis is grossly excessive. They submit that in failing to provide detailed dockets, 148 is attempting to “insulate its claim from scrutiny” as it appears to the Appellants that substantial time has been claimed in respect of 148’s participation in the Proposal generally, and not on the mini-trial or matters related thereto. In this regard, the Appellants state that a fair and reasonable costs award would be $45,000.

[4] The Court of Appeal directs judges, in exercising their discretion under section 131 of the Courts of Justice Act, R.S.O. 1990, c. C. 43, to “reflect on what the Court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant” (Davies v. Clavington (Municipality) (2009), 2009 ONCA 722, 2009 CarswellOnt 6185, 312 D.L.R. (4^th) 278 (Ont. C.A.), at para. 52). In reflecting on a reasonable amount in the circumstances, I have also considered the factors enumerated at Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[5] The amounts in issue were substantial. The proprietary claims was for 20% of the 6.7M in net proceeds from the sale of the Property in question in the dispute. The additional unsecured claim was for 42M (reduced for the trial to 4M). The result represented a complete success for the Proposal Trustee and 148 as both claims of the Appellants were rejected in their entirety.

[6] The Bill of Costs of 148 certified Feb 22, 2019 reflects a partial indemnity rate of $100,897.20. I find the rates set out therein to be reasonable. In terms of the hours billed, but for one exception at number 4, it is unclear to me whether the hours reflect time billed exclusively for the Appellant’s claims or whether the hours reflect time billed for 148’s participation in the Proposal generally. Further, the hours outlined at number 4 of The Bill of Costs plus the disbursements represent, in my view, a fair and reasonable amount, on a proportional basis, that the Appellants should pay 148 as the successful litigants, considering the issues and evidence presented over the 3 day hybrid trial. Costs are therefore fixed at 79K inclusive and payable by the Appellants to 148 within 30 days.

V.R. Chiappetta J.

Date: May 29, 2019