Court File and Parties

BARRIE COURT FILE NO.: CV-17-1359 DATE: 20190116 CORRECTED DATE: 20190910

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Ronald Kenneth Beattie, Plaintiff AND: John MacKenzie Beattie and John Beattie Farms Limited, Defendants

BEFORE: The Hon. Madam Justice A.A. Casullo

COUNSEL: William J. Leslie, Q.C. and Marnie K. Goodman, counsel for the Plaintiff Charles C. Chang, counsel for the Defendants

HEARD: By written submissions

Corrected Endorsement: The text of the original Endorsement was Corrected on September 10, 2019 and the description of the correction is appended.

COSTS ENDORSEMENT

[1] This action arises out of a transfer of property from the plaintiff, Ronald Beattie, to the defendants, John Beattie and John Beattie Farms Limited, by way of a Declaration and Deed of Gift. The plaintiff claims that the Declaration and Deed of Gift was only one part of the agreement, and that before the Declaration and Deed of Gift was drafted, he and the defendant, John Beattie, had an oral agreement whereby the plaintiff would sell the property to him for $700,000. Pursuant to this oral agreement, the defendants would pay the plaintiff $100,000 per annum, with 5% interest to be charged each year on the outstanding balance.

[2] In his action, the plaintiff seeks to set aside both the Declaration and Deed of Gift and the subsequent transfer of the property, and a declaration that he sold the property to the defendants by way of an oral agreement.

[3] The defendants brought a motion for summary judgment seeking to dismiss the claim against them. The matter was initially scheduled to be heard on November 2, 2018. This motion was adjourned on consent, with the defendants’ undertaking to pay the plaintiff’s costs thrown away in the amount of $5,000. The motion was heard November 28 and 29, 2018. The defendants were unsuccessful, and I invited written costs submissions.

Parties’ Positions

[4] The plaintiff seeks recovery for costs in the sum of $37,358.51, broken down as follows:

• Partial Indemnity Costs to November 19, 2018: $19,188.74
• Substantial Indemnity Costs from November 19, 2018: $5,281.25
• HST on fees: $2,904.84
• Assessable Disbursements: $1,760.65
• HST on assessable disbursements: $200.28
• Costs thrown away/adjournment: $5,000.00
• Preparation of Costs Submissions & HST: $565.00
• Supplementary Costs [1]: $2,457.75

[5] The plaintiff delivered a r. 49 Offer to Settle on November 19, 2018, the terms of which were that the motion was to be dismissed, and the defendants were to pay the plaintiff’s costs on a partial indemnity basis, together with costs and applicable HST. Because the plaintiff did as well as the Offer, he submits his costs from November 19, 2018 to the conclusion of the motion are payable on a substantial indemnity basis.

[6] The defendants fairly concede that costs follow the event. However, they state that the cost consequences in r. 49 do not support the claimed scale of costs, and that the amounts claimed are grossly excessive and disproportional. I agree.

[7] The Offer to Settle did not contain any true element of compromise. It simply provided for a dismissal of the defendants’ motion, with costs. Costs were not broken out. It is difficult to see how the plaintiff beat his offer in this respect, given that the quantum of costs had not yet been determined. Accordingly, the r. 49 Offer does not attract the costs consequences anticipated by the plaintiff, and I award costs on a partial indemnity scale.

[8] If I am wrong in this regard, the quantum of costs at partial versus substantial is negligible, and would not have had a bearing on my final costs determination.

[9] The Costs Outline submitted on behalf of the plaintiff indicates that over 76 hours were docketed in preparation for the motion: 40.5 hours for Mr. Leslie, 30 hours for Ms. Goodman, an associate at Mr. Leslie’s firm, and six hours for a Clerk. A quick calculation reveals that the partial indemnity scale represents 85% of the actual rates charged to the plaintiff. This percentage for partial indemnity is higher than the percentage some courts have awarded on a substantial indemnity scale.

Analysis

[10] Determining costs is a discretionary function of the court, governed by section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43 and by r. 57.01 of the Rules of Civil Procedure.

[11] Rule 57.01 lists a number of factors for the court to consider in the assessment of costs which include, but are not limited to the following:

(a) the complexity of the proceeding; (b) the importance of the issues; (c) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (d) whether any step in the proceeding was improper, vexatious or unnecessary or taken through negligence, mistake or excessive caution; (e) the principle of indemnity; and, (f) the concept of proportionality, which includes at least two factors: i. the amount claimed and the amount recovered in the proceeding; and, ii. the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.

[12] While the factors set out above provide guidance when a court is assessing and fixing costs, as Boswell J. held in Nesbitt v. Jeffery, 2018 ONSC 7285:

Regardless of the particular factors considered relevant by the court on any given assessment, it is now well-settled that the overarching principles to be observed in the exercise of the court’s discretion to fix costs are fairness, proportionality and reasonableness: see Beaver v. Hill, 2018 ONCA 840; Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.); and Moon v. Sher (2004), 246 D.L.R. (4th) 440 (C.A.).

[13] The court should also look to fix costs that are fair and reasonable having regard to the expectation of the parties: Boucher. If the defendants had succeeded on the motion, I do not believe the plaintiff would have reasonably expected to pay costs approaching $40,000.

[14] I acknowledge the motion’s importance to the plaintiff. I do not agree with plaintiff’s counsel that the matter was complex. The motion was argued over the course of two half-days. Having regard to the overarching principles of proportionality, fairness and reasonableness, I award the plaintiff costs in the amount of $20,000, inclusive of both the $5,000 for costs thrown away in respect of the November 2, 2018 adjournment, and disbursements.

CASULLO J Date: September 10, 2019

Correction

September 10, 2019 – Correction: The citation in the second line of para. 12 has been corrected to read: Nesbitt v. Jeffery, 2018 ONSC 7285.

Footnotes

[1] In his initial Costs Submissions, counsel did not include preparation or attendance costs for the second day of the motion. These were provided by way of Supplementary Costs Submissions.