Court File and Parties

COURT FILE NO.: 17-73065 DATE: 2019/05/29 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

GERALD W. McCLELLAND Plaintiff – and – SARAZEN REALTY INC., COLIN SARAZEN and KEITH SENNETT Defendants

COUNSEL: Christopher McLeod, Shauna Cant, for Plaintiff Steven J. Greenberg, for the Defendants

HEARD: In Writing

COSTS RULING Corthorn J.

Introduction

[1] The defendants were unsuccessful on a motion for summary judgment. They were ordered to pay the plaintiff’s costs of responding to the motion. The parties were unable to agree upon either the scale or quantum of costs. Written submissions with respect to costs were filed.

[2] The plaintiff seeks costs on a substantial indemnity basis in the amount of $43,395.

[3] In his bill of costs, the plaintiff sets out his costs on a partial indemnity basis ($31,970). The plaintiff submits that, if the court concludes that he is not entitled to costs on a substantial indemnity basis, then costs should be paid in an amount between $31,970 and $43,935. In support of that submission, the plaintiff relies on what he says is conduct on the defendants’ part that entitles the plaintiff to something other than partial indemnity costs.

[4] The defendants submit that the plaintiff is entitled to costs on a partial indemnity basis in the amount of $10,000. The defendants say that the costs claimed by the plaintiff include work that relates to (a) matters other than the motion for summary judgment, and (b) the plaintiff’s request for summary judgment in his favour—a request that was abandoned immediately following the hearing of the motion.

[5] The two issues to be determined are the scale upon which costs are payable and the quantum of costs to be paid.

Rules of Civil Procedure

[6] The general principles with respect to fixing costs are set out in r. 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Nothing in r. 57.01 affects the discretion of the court, pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, to award costs on a scale other than partial indemnity (i.e., either substantial or full indemnity: see r. 57.01(4)).

[7] In the circumstances of this case, however, two other rules must be considered. First, in support of his request for costs on a substantial indemnity basis, the plaintiff relies on r. 20.06. That subrule provides that, on a motion for summary judgment, the court may fix costs on a substantial indemnity basis if one or both of two conditions are satisfied. Those conditions are that a party acted “unreasonably by making or responding to the motion” and/or “in bad faith for the purpose for delay” (r. 20.06(a) and (b)).

[8] Second, the defendants point to the plaintiff’s response to the motion for summary judgment; he asked the court to grant summary judgment in his favour. The plaintiff did not abandon that request until after the motion was heard.

[9] The defendants do not refer to r. 37.09 (abandoned motions) in their submissions with respect to costs. It appears that they are, nonetheless, relying on it. Sub-rule 37.09(3) deals with costs of an abandoned motion. It provides that, “[w]here a motion is abandoned or is deemed to have been abandoned, a responding party on whom the notice of motion was served is entitled to the costs of the motion forthwith, unless the court orders otherwise.”

Issue No. 1 – Scale upon which Costs are Payable

[10] The plaintiff submits that he is entitled to his costs of the motion on a substantial indemnity basis because:

• The defendants were entirely unsuccessful on the motion;
• There were numerous shortcomings in the affidavit evidence filed in support of the defendants’ motion; and
• The defendants failed to provide sufficient evidence upon which the court could conclude that there is no genuine issue requiring a trial.

[11] The plaintiff relies on paras. 54-75 of my ruling on the motion for summary judgment, in which I describe numerous deficiencies in the defendants’ evidence in support of the motion (McClelland v. Sarazen Realty Inc., 2019 ONSC 315). I found that it was “patently obvious” that the defendants had fallen short of putting their best foot forward on the motion (at para. 54). I described the deficiencies in the defendants’ evidence as “too numerous and too significant to permit resolution of any issue on this motion” (at para. 55).

[12] The plaintiff also relies on the first of the two, alternative criteria set out in r. 20.06—that the defendants “acted unreasonably by making” their motion for summary judgment. The plaintiff refers to the decision of Kristjanson J. in James Harold Frederick Slade v. Frank Manzo, 2017 ONSC 6793. When addressing the meaning of “unreasonably” in the context of r. 20.06, Kristjanson J. referred to the decisions of (a) Emery J. in Ashim v. Zia, 2015 ONSC 564, 42 C.C.L.I. (5th) 48 and (b) the Ontario Court of Appeal in Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66. From those cases, the following points are relevant to the defendants’ motion for summary judgment.

[13] First, acting “unreasonably” includes relying on evidence that is “clearly insufficient to show facts on which the court could conclude that there [is] no genuine issue requiring a trial” (Ashim, at para. 9).

[14] Second, under r. 20.06 it is not necessary for the court to conclude that the unsuccessful party’s conduct was one or more of egregious, reprehensible, or an abuse of process, to support an order for costs on a substantial indemnity basis (Slade, at para. 36).

[15] Absent any other factors to consider, the plaintiff would be entitled to his costs of the motion on a substantial indemnity basis. There are, however, two other factors to consider: (a) the deficiencies in the plaintiff’s evidence, and (b) the plaintiff’s abandonment of his request for an order for summary judgment in this favour.

[16] The deficiencies in the plaintiff’s evidence are addressed at paras. 77 to 83 of my reasons on the motion. Addressing those deficiencies, I found that “[t]he defendants are not alone in having presented evidence that falls short of the ‘best foot forward’ standard” (at para. 76). Where the quality of his evidence did not satisfy the criteria for evidence on a motion of this kind, it would be neither fair nor just to award the plaintiff costs on a substantial indemnity basis. This is particularly so when the plaintiff’s evidence was both in response to the defendants’ motion for summary judgment and intended to support the plaintiff’s request for summary judgment in his favour.

[17] The plaintiff did not “make” a motion for summary judgment in the formal sense of the word for the purpose of the Rules of Civil Procedure. The factum filed on behalf of the plaintiff addressed the request for summary judgment in his favour. It was not necessary for the plaintiff to serve a notice of motion for summary judgment in his favour in order to be able to request that relief in response to the defendants’ motion (King Lofts Toronto I Ltd. v. Emmons, 2013 ONSC 6113, 40 R.P.R. (5th) 1, aff’d. 2014 ONCA 215, 40 R.P.R. (5th) 26, at paras. 86-87).

[18] Even though the plaintiff did not “make” a motion in the formal sense, the court is, by way of analogy, entitled to apply r. 37.09(3). I apply that subrule when considering the plaintiff’s abandonment of his request for summary judgment in his favour (r. 1.04(2)) in the context of his request for costs on a substantial indemnity basis and the quantum of costs payable.

[19] Neither the plaintiff nor the defendants have addressed in any way the additional costs incurred by reason of the plaintiff’s request for summary judgment in his favour. The defendants are not requesting costs for the work done by their counsel in that regard.

[20] I find that the deficiencies in the plaintiff’s evidence and his abandonment of the request for summary judgment in his favour are such that the plaintiff is entitled to costs of the defendants’ motion for summary judgment on a partial indemnity basis.

[21] I turn to the second issue—the quantum of costs payable.

Issue No. 2 – Quantum of Costs to be Paid

a) Costs Outlines

[22] Prior to the return of the motion, the parties did not agree upon a quantum for costs payable by the unsuccessful party. As a result, at the conclusion of the hearing, the parties were each required to file with the court a costs outline in accordance with Form 57B (r. 57.01(6)).

[23] Neither the plaintiff nor the defendants filed a document that complies with either of r. 57.01(6) or Form 57B. Some variation from a prescribed form is permitted. Sub-rule 1.06(1) provides that, “[t]he forms prescribed by these rules shall be used where applicable with such variations as the circumstances require.”

[24] On the filing of their respective documents at the conclusion of the hearing, neither the plaintiff nor the defendants informed the court either (a) that they were filing a document other than a costs outline in accordance with Form 57B, or (b) as to any circumstances that “require” them to deviate from the use of Form B.

i) The Plaintiff’s Costs Outline

[25] The document filed on behalf of the plaintiff at the conclusion of the hearing is titled “Bill of Costs”. In that document the actual hourly rate of each of the timekeepers is set out.

[26] The total actual fees incurred are not provided. Only the total for substantial indemnity fees is provided. I note that Form 57B requires a party to set out the totals for fees based on actual hourly rates and those based on the scale(s) upon which costs are claimed. The plaintiff’s bill of costs is therefore deficient.

[27] The plaintiff’s bill of costs is also deficient because it does not address the various factors listed in r. 57.01(1). It does nothing more than set out the calculation, including a total, of costs claimed on a substantial indemnity basis.

[28] As part of his submissions with respect to costs, the plaintiff filed a supplementary bill of costs. The supplementary version of the bill of costs includes a calculation and total of costs claimed on each of a partial and a substantial indemnity basis. Once again, the document itself does not address the factors pursuant to r. 57.01(1). The document is, however, attached to the plaintiff’s costs submissions. Some of the factors listed in r. 57.01(1) are addressed in those submissions.

[29] I have already found that the plaintiff is entitled to costs on a partial indemnity basis. What remains to be determined is the amount of partial indemnity costs to which he is entitled. In his supplementary bill of costs, the plaintiff’s costs on a partial indemnity basis are calculated as follows:

Fees $ 26,286.02 H.S.T. on Fees $ 3,417.18 Disbursements $ 2,002.92 H.S.T. on Disbursements $ 262.67 $ 31,968.79

ii) The Defendants’ Costs Outline

[30] The document filed on behalf of the defendants at the conclusion of the hearing also fails to conform to Form 57B. That document is titled “Bill of Costs”. The only hourly rate identified is the actual hourly rate of counsel for the defendants. The only total provided is of the actual fees charged or to be charged to the clients. No reference is made whatsoever to the costs incurred by the defendants on either a partial or a substantial indemnity basis.

[31] The defendants’ bill of costs does not in any way address the factors listed in r. 57.01(1). The defendants’ bill of costs has the appearance of a computer-generated pre-bill, upon which lawyers rely for the purpose of delivering solicitor-client accounts. The entries are, in any event, minimally descriptive and replete with typographical errors.

[32] The total actual fees incurred by the defendants are $37,800 (excluding H.S.T.). The disbursements incurred by the defendants total $1,190.58, plus a non-taxable filing fee of $335.00. The bill of costs makes no reference to H.S.T. on either fees or disbursements. Assuming the fees and all disbursements other than the filing fee are subject to H.S.T., I calculate the defendants’ actual costs as follows:

Fees $ 37,800.00 H.S.T. on Fees $ 4,914.00 Disbursements $ 1,190.58 H.S.T. on Disbursements $ 154.78 Filing Fee $ 335.00 $ 44,394.36

[33] The defendants submit that the plaintiff’s costs on a partial indemnity basis be fixed at $10,000 all-inclusive.

b) Fixing Costs

i) Fees

[34] I start with the hourly rates upon which the plaintiff’s costs on a partial indemnity basis are calculated. I find that an actual hourly rate of $325 for senior counsel with 10 years’ experience (at the date of hearing) is high. I find that $300 is a reasonable actual hourly rate for counsel of that vintage. For associate counsel, both of whom were called to the bar in 2017, I find that the actual hourly rate proposed of $165 is reasonable.

[35] The partial indemnity rates set out in the plaintiff’s supplementary bill of costs are based on 66 per cent of the actual hourly rate. The appropriate percentage is 60.

[36] The time included in the supplementary bill of costs related to affidavits of documents is excluded from costs of the motion. That time is properly claimed as costs of the action. By excluding (from costs of the motion) costs related to documentary discovery, I eliminate the potential for double recovery of costs for that portion of the work on behalf of the plaintiff.

[37] I am concerned that there is duplication of effort or an excess of lawyer hours (a) by having both senior and associate counsel attend at cross-examinations, and (b) with over 130 hours of lawyer time devoted to the motion for summary judgment.

[38] The change in senior counsel’s hourly rate (from $325 to $300), the use of 60 per cent (not 65 per cent) of the actual hourly rate, and the elimination of time related to affidavits of documents results in a reduction, from $26,285 to $22,570, of the partial indemnity fees claimed.

[39] Taking into consideration concerns about potential duplication of effort and/or excessive time, I fix the plaintiff’s partial indemnity fees at $18,000 (exclusive of H.S.T.).

[40] I am satisfied that when the factors pursuant to r. 57.01(1) are considered, $18,000 is a fair and just amount for partial indemnity fees. Addressing those factors in a summary way:

• The fees awarded are well within the range the defendants could reasonably expect to pay (r. 57.01(1)(0.b.));
• The amount claimed in the proceeding is $950,000. The $18,000 in partial indemnity fees is entirely proportional to the amount claimed (r. 57.01(1)(a));
• The proceeding was somewhat complex given that the plaintiff’s claim is based on a number of causes of action, numerous affidavits were exchanged, and the deficiencies in the defendants’ respective and joint affidavits contributed to additional work in responding to the motion (r. 57.01(1)(c)); and
• The numerous affidavits served on behalf of the defendants, and the manner in which they attempted to set out their respective and collective evidence also added to the duration of the proceeding (r. 57.01(1)(d)).

[41] Lastly, I turn to the disbursements claimed.

ii) Disbursements

[42] The disbursements claimed total approximately $2,000. They include small amounts for each of Uber ($8.15) and parking ($5.31), which I disallow. By far the largest items are photocopying ($1,050.20) and transcripts ($923.50).

[43] The plaintiff does not explain why the photocopying charges claimed are in excess of $1,000. The rate per page of copying and the number of pages copied are not provided. Without that information, I am unable to conclude that the amount claimed for photocopying is reasonable. I reduce the amount for photocopying by roughly 50 per cent—to $500.

[44] I draw an inference and find that the transcripts ordered were those from cross-examinations and not from discoveries (the latter as described in the bill of costs). Given the number of affidavits upon which the defendants relied and the manner in which their evidence was presented, it is not surprising that the transcripts from cross-examination of two affiants resulted in a transcript expense of the amount claimed.

[45] In summary, I fix disbursements as follows:

Photocopying $ 500.00 Fax charge $ 1.25 * Transcripts $ 923.50 Courier $ 14.51 * $ 1,439.26 H.S.T. on Disbursements $ 187.10 Total $ 1,626.36 (*Amount as claimed)

Summary

[46] The defendants shall pay to the plaintiff his costs of the summary judgment motion, on a partial indemnity basis, in the amount of $21,966.36. That amount is calculated as follows:

Fees $ 18,000.00 H.S.T. on Fees $ 2,340.00 Disbursements $ 1,439.26 H.S.T. on Disbursements $ 187.10 $ 21,966.36

[47] In light of the deficiencies in the materials filed by all parties with respect to costs, there shall be no costs payable with respect to costs submissions.

Madam Justice Sylvia Corthorn Released: May 29, 2019