Court File and Parties

COURT FILE NO.: 16-69706 DATE: 2019/06/20 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MOHAMED ISSA, Plaintiff AND SAMI EL KESSERWANI, Defendant

BEFORE: Justice Sylvia Corthorn

COUNSEL: Ryan M. Naimark, Counsel for the Plaintiff Douglas Treilhard, Counsel for the Defendant

HEARD: In Writing

Costs Endorsement

Introduction

[1] This endorsement follows my substantive decision on the defendant’s motion for relief with respect to the oral and documentary discovery process (Issa v Kesserwani 2019 ONSC 981, and “the Decision”).

[2] In the earlier sections of the Decision I highlighted the conduct of plaintiff’s counsel in failing, until days and weeks prior to the return of the defendant’s motion, to address the oral and documentary discovery issues arising from (a) the plaintiff’s affidavit of documents, (b) undertakings given at the examination for discovery of the plaintiff, and (c) questions the plaintiff refused to answer during that examination. At the conclusion of the Decision, I reviewed the steps taken by defendant’s counsel in an effort to resolve the discovery issues without having to resort to a motion.

[3] By reason of (a) documents and information received from counsel for the plaintiff in the days and weeks prior to the return of the motion, and (b) the rulings made on the motion, the defendant was successful in obtaining virtually all of the relief requested. The only issue on which the defendant was not successful was with respect to one question the plaintiff had refused to answer on examination.

[4] The conduct of the plaintiff, the failure (as found) of the plaintiff to fulfill his discovery obligations, and the success achieved by the defendant on the motion, were such that the plaintiff was ordered to pay the defendant’s costs of the motion. The Decision provides that the plaintiff shall pay the defendant’s costs of the motion in any event of the cause. The costs are payable following resolution of the action at trial or through a negotiated settlement.

[5] The parties were invited to resolve both the scale and quantum of costs. They were unable to resolve either issue; written submissions were delivered.

Positions of the Parties

[6] The defendant seeks costs of the motion on a partial indemnity basis, in the amount of $3,816.92. He asks the court to reconsider the ‘delayed’ payment of costs. The defendant submits that the court should consider information or evidence not before it when the costs award was made.

[7] The ‘new’ information or evidence includes that, in December 2018, the plaintiff settled his claim for statutory accident benefits (“SABS”) for $700,000. The defendant submits that the plaintiff is capable of paying costs forthwith.

[8] The plaintiff’s position is that despite the defendant having been awarded costs of the motion, the costs payable should be nil. In support of that position, the plaintiff submits that:

• He was subject to unfairness on the motion because the defendant was granted leave to file and rely on an affidavit that was served subsequent to the deadline prescribed by the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for a reply affidavit;
• The defendant’s lack of success with respect to the one refused question is relevant to the quantum of costs payable; and
• The plaintiff will be prejudiced with respect to his ability to achieve maximum medical recovery if he is required to use funds from his SABS settlement to pay the defendant’s costs of this motion.

[9] The plaintiff also relies on the third bulleted point in support of his position that if he is to pay costs, they should remain payable in accordance with the Decision (i.e., on resolution of the action).

The Issues

[10] With the defendant seeking costs on a partial indemnity basis, the scale upon which costs are payable is not an issue.

[11] The two issues to be determined with respect to costs are:

1. What is the quantum of costs payable?
2. Are the terms upon which costs are payable to be varied?

Issue No. 1 – Quantum of Costs

[12] The defendant seeks costs of $3,816.92, on a partial indemnity basis. That amount is broken down as follows:

Fees                       $ 3,101.70
Counsel fee for motion     $   114.00
Sub-total (fees)           $ 3,215.70
H.S.T. on Fees             $   403.22
Disbursements (incl. HST)  $   198.00
                           $ 3,816.92

[13] There appears to be an arithmetic error in the figures set out in the defendant’s costs submission. First, the total of the fees and the counsel fee for the motion is $3,215.70. By my calculation, the HST on that amount is $418.04 ($3,215.70 x 13 %). If the correct amount for HST on fees were used, then the total of the costs claimed would be $3,831.74.

[14] It appears that defendant’s counsel did not include HST on the counsel fee of $114. The HST on that amount ($14.82) is the difference between $418.04 and $403.22. The arithmetic error made by defendant’s counsel is not so significant that it warrants correction.

[15] The plaintiff made no submissions with respect to the quantum of costs sought by the defendant. The plaintiff did not include a costs outline or bill of costs in his submissions.

Plaintiff Requests that Costs be NIL

[16] I reject the plaintiff’s argument that the costs payable should be nil. The plaintiff’s submissions in that regard demonstrate a disregard for findings already made. For example, the plaintiff argues that he was unfairly treated because the defendant ‘late-served’ an affidavit, leaving the plaintiff unable to properly prepare arguments to address the contents of that affidavit.

[17] That argument flies in the fact of the finding made at paras 36-7 of the Decision. In summary, the defendant was granted leave to file the affidavit (although late-served) because (a) his counsel had done the work that plaintiff’s counsel was required by the Rules, but had failed, to do, and (b) the plaintiff would have been prejudiced on the motion had the evidence in the late-served affidavit not been before the court.

Redacted Dockets

[18] The defendant’s submissions include dockets for work said to be related to the motion. A number of the dockets are either partially or wholly redacted. The redactions are said to relate to matters that are subject to either solicitor-client or litigation privilege.

[19] Of the 27.8 hours docketed, all but 1.5 hours of time was docketed by defendant’s counsel. The 1.5 hours is student time, for preparation of a costs outline provided to plaintiff’s counsel prior to the return of the motion.

[20] As a result of the redactions, it is not possible to know whether the full amount of the relevant dockets is exclusively related to the motion. For example, counsel’s docket for October 21, 2018 is for five hours and appears to be entirely redacted. Yet, the five hours of time docketed for that date are included in counsel’s total of 26.3 hours (27.8 – 1.5). It appears that counsel’s docket for 0.3 hours on August 26, 2108 has also been entirely redacted, without being subtracted from the number of hours for which fees are claimed.

[21] I do not allow fees for time for which the work done is not identified. I am satisfied that the balance of the time docketed for the motion is reasonable. The partial indemnity fees allowed are therefore based on 21 hours for counsel and 1.5 hours for the student.

Hourly Rates

[22] I am satisfied that the actual hourly rate claimed of $190 for counsel (2014 call) is reasonable. I reduce the actual hourly rate upon which the student’s fees are based from $115 to $90. The partial indemnity fees allowed are calculated at 60 percent of the actual hourly rates: $114 and $54 for counsel and the student, respectively.

[23] The fee portion of costs payable is therefore $2,475 ((21 x $114) + (1.5 x $54)). The applicable HST is $321.75.

Disbursements

[24] The disbursements, including applicable HST (if any) total $198. They include the $160 filing fee for the motion record and two charges of $16 each for the services of a process server. The defendant appears to have relied on the process server to file the original motion and to attempt to file the affidavit that was ‘late-served’. The attempt to file the latter document was not unreasonable.

[25] I find the disbursements are reasonable and I allow the $198 claimed.

Summary

[26] The costs payable by the plaintiff are in the amount of $2995 ($2,994.75 = $2,475 + $321.75 + $198).

Issue No. 2 – Timing of Payment

[27] There is no evidence before the court as to the timing or the quantum of the plaintiff’s SABS settlement. The plaintiff does not, however, dispute the defendant’s assertion that the settlement is in the all-inclusive amount of $700,000.

[28] I am not prepared to revisit the timing of payment of costs. The costs payable bear interest pursuant to s. 129 of the Courts of Justice Act, R.S.O. 1990, c. C.43. If the plaintiff wishes to avoid paying interest on costs, it is open to him to pay the amount ordered prior to a resolution of this action. If he chooses to pay the costs upon a resolution of the action, the defendant will be entitled to interest.

[29] A settlement inherently represents a compromise from a party’s maximum potential outcome as a dispute. I take judicial notice of the fact that to reach a settlement of a SABS claim the claimant is frequently required to accept something less than the full amount of his or her benefits entitlement.

[30] I accept the assertion in the plaintiff’s reply submissions on costs that the net settlement funds received by the plaintiff were less than $700,000. The plaintiff paid fees, disbursements, and applicable HST to counsel for their work on the SABS claim and settlement.

[31] The costs awarded on the motion are in a small amount relative to what is likely a net six-figure amount received by the plaintiff from the settlement of his SABS claim. Regardless, I am not prepared to erode the net settlement funds paid to the plaintiff. I leave it to the plaintiff to choose when to pay the costs awarded including, if applicable, interest.

Disposition

[32] I order as follows with respect to the costs of the motion:

1. The plaintiff shall pay the defendant his costs of the motion on a partial indemnity basis fixed in the amount of $2,995.
2. The costs shall be payable, in any event of the cause and only upon a final resolution of the action by way of a negotiated settlement or trial.
3. The costs awarded bear interest in accordance with s. 129 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

Madam Justice Sylvia Corthorn Date: June 20, 2019.