Court File and Parties

COURT FILE NO.: CV-18-594870 DATE: 20190823 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2495940 Ontario Inc., Plaintiff AND: Ali Jan Alijanpour, Defendant

BEFORE: Cavanagh J.

COUNSEL: Howard Wolch, for the Plaintiff Julian Binavince, for the Defendant Tanya Walker, for the Moving Party/proposed Intervenor, Alla Nezhivenko

HEARD: In writing

COSTS ENDORSEMENT

[1] In this action, the plaintiff, a mortgagee, obtained a judgment dated January 18, 2019 from Sossin J., on consent of the defendant, the mortgagor, for payment by the defendant of the amount owing on a mortgage, possession of property municipally known as 23 Thornridge Drive, Thornhill, Ontario (the “Property”), and that a Writ of Possession be issued to the plaintiff with respect to the Property, not to be acted upon before April 4, 2019.

[2] The moving party Alla Nezhivenko (the “moving party”) moved for leave to intervene in the action and for an order (i) setting aside the Sheriff’s Notice to Vacate dated March 21, 2019, and (ii) setting aside or varying the Judgment of Sossin J. dated January 18, 2019 and declaring her to be the lawful tenant of the Property and that her tenancy remains in full force and effect under an Agreement to Lease dated May 5, 2017.

[3] The plaintiff brought a motion for an order (i) declaring that the alleged lease is invalid and that the moving party is not a lawful tenant of the Property, (ii) that the moving party vacate the Property, and (iii) that the plaintiff is entitled to proceed to enforce the Writ of Possession and Notice to Vacate which had been issued.

[4] These motions were returnable before me on May 29, 2019 and were adjourned to July 2, 2019, on terms. On June 13, 2019, a case conference was conducted at which the moving party advised that she did not wish to proceed with her motion. On that day, I made an order that (i) the motion then returnable on July 2, 2019 be discontinued, (ii) the moving party vacate the Property and deliver possession of the Property to the plaintiff forthwith, (iii) the plaintiff is entitled to proceed to enforce the Writ of Possession and Notice to Vacate issued herein, provided that said enforcement shall not take place until on or after July 4, 2019, and other relief. My order provides for costs submissions to be made.

[5] The plaintiff seeks costs against the moving party on a full indemnity scale in the amount of $110,830.21.

[6] The defendant seeks costs from the moving party on a full indemnity scale in the amount of $20,175.80.

[7] The moving party opposes an order as to costs on other than a partial indemnity scale. The moving party submits that the amount of costs claimed by the plaintiff and by the defendant, even on a partial indemnity scale, is excessive and that costs should be awarded to the plaintiff on a partial indemnity scale in the amount of $10,000 and to the defendant on a partial indemnity scale in the amount of $5,000.

Are the plaintiff and the defendant entitled to costs on a full indemnity scale?

[8] The plaintiff makes the following submissions in support of its claim to costs on a full indemnity scale:

(a) The alleged lease was clearly fraudulent. The plaintiff relies on the form of the agreement to lease which is a standard form and includes the words “Revised Mar 2018” in the bottom right corner. The agreement to lease is dated May 5, 2017 and purports to have been signed by the moving party that day.

(b) The moving party is alleged to have been involved in a convoluted fraud with a person alleged by the plaintiff to be the true owner of the Property and, according to the plaintiff’s submissions, the moving party did not deny this allegation and took steps to delay the plaintiff in order for the alleged true owner to make a fraudulent claim.

(c) The defendant delivered affidavit evidence for this motion that he did not agree to any lease with the moving party and that the signature on the purported lease is not his.

(d) The plaintiff obtained a handwriting analysis from an expert who confirmed that the signature on the purported lease was not the defendant’s signature.

(e) The moving party’s explanation about rental payments was fabricated.

(f) Counsel for the moving party did not respond to a request to identify persons who allegedly had knowledge of the validity of the lease so that they could be examined and then requested an adjournment in order to provide affidavits from three such witnesses. The plaintiff submits that this was a delay tactic.

[9] The defendant also seeks costs from the moving party on a full indemnity basis. The defendant submits that the moving party submitted materials to the court that she knew were false and that she used the court process to delay the plaintiff in its enforcement efforts.

[10] These submissions go to the merits of the motions which did not proceed to a hearing. It would be improper for me to adjudicate these contentious issues on a costs decision. As Myers J. stated in Muskala v. Sitarski, [2017] O.J. No. 2512, “... costs are an incident of the determination of the rights of the parties. They flow from a decision. They are not themselves intended to be the subject of the dispute.” In Muskala, Myers J. made the following additional observations in relation to costs awards made where there was no adjudication of the dispute:

Third, there is usually no way for the court to make the findings of fact that they [sic] parties need to support a costs determination. The parties essentially want me to pretend to hear the motion in my chambers on their material and decide what the outcome might have been without hearing from counsel and without the parties undertaking the risk of jeopardy associated with that decision. Then they ask me to assess whether bringing or defending the motion was reasonable. It is all hypothetical since there is no longer a true lis or dispute between the parties. Yet the parties ask the court to balance the factors under Rule 57.01, consider proportionality and reasonable expectations, and, in this and many other cases, ask the court to determine if a party’s conduct was reprehensible so as to justify an enhanced award of punitive costs. I cannot tell if the defendants ought to have consented in advance or if they had good reason not to consent until they did. One never knows why people settle without invading the privileged relationship between lawyer and client. Perhaps the defendants had very good defences to the motions but chose to consent for other reasons -- such as to establish their bona fides and to buy peace.

See also Waterloo North Condominium Corporation No. 161 v. Redmond, 2017 ONSC 1304 at para. 34.

[11] Although the plaintiff’s motion was withdrawn, the fact that the motions were not heard and decided on their merits makes it impossible for me to make the factual findings needed to decide whether an award of costs on an elevated scale would be proper. I am unable to conclude that the moving party engaged in reprehensible conduct such that costs should be awarded on an elevated scale. Costs should be awarded on a partial indemnity scale.

What amount should be fixed for the plaintiff’s partial indemnity costs?

[12] The plaintiff submitted a bill of costs to support its claim for costs. The plaintiff claims fees in the amount of $51,532, HST on fees in the amount of $6,699.16, disbursements in the amount of $8,767.50 and HST on disbursements of $1,093.82, a total of $68,092.48.

[13] The fees claimed are based upon an hourly rate equal to 60% of the actual hourly rates charged by the plaintiff’s counsel. In this case, given the amount owing to the plaintiff, the importance of the issues to the plaintiff because of the risk of impairment to its security through delay, and the nature of the issues raised on the moving party’s motion and the cross motion, I regard the hourly rates claimed to be appropriate.

[14] In the plaintiff’s bill of costs, the services are broken down into categories including scheduling, preparation for and attendance at scheduled cross-examinations on May 10, 2019 (which did not proceed due to the non-appearance by the moving party) (13.2 hours); attendances at Civil Practice Court (3.2 hours); and services in relation to the hearing of the motions scheduled for May 29, 2019 including review of the four volume motion record of the moving party, review of the defendant’s motion record, preparation of documents included in the plaintiff’s responding record; preparation for argument of the motions including review of the moving party’s factum and preparation of the plaintiff’s factum and authorities and matters relating to obtaining a report from a forensic handwriting expert; and services related to the case conference on June 13, 2019 (90.7 hours for lead counsel and 31.7 hours for second counsel, plus counsel fee for the two court appearances).

[15] The moving party submits that the fees claimed by the plaintiff are excessive. The moving party relies upon an earlier bill of costs in which the time claimed for the plaintiff’s lead counsel was 62.6 hours, whereas, the bill of costs upon which the plaintiff relies includes a claim for 90.7 hours of time spent by lead counsel. The plaintiff’s counsel explains this apparent discrepancy on the basis that the original bill of costs had been prepared before the time dockets for lead counsel had been entered. The plaintiff’s counsel attached time entries for the plaintiff’s lead counsel to support the time claimed.

[16] The moving party also submits that the plaintiff’s bill of costs does not differentiate between work done by the plaintiff’s lead counsel and work done by second counsel and, therefore, the moving party cannot determine whether there has been any duplication of work or services performed which ought to have been done by second counsel or law clerk, rather than lead counsel.

[17] In awarding costs, the court must consider the amount that would be reasonable having regard to the reasonable expectations of the unsuccessful litigant. The assessment of reasonableness is discretionary and very much dependent upon the circumstances of each case. In this case, because the moving party withdrew her motion before it was heard, I am not in a position to make determinations on the issues raised by the plaintiff in opposition to the moving party’s motion. I am not able to say that the time expended by counsel for the plaintiff was not reasonable in the circumstances of this case. I take into consideration in fixing the amounts to be paid for costs that the moving party’s motion delayed the plaintiff’s right to enforce the mortgage and that the moving party only decided to abandon her motion after terms were imposed for the adjournment that she requested, and after causing considerable delay to the plaintiff and the defendant by bringing her motion.

[18] I accept the plaintiff’s submission that the motions were very important to the plaintiff because it was owed over $1.2 million with interest continuing to accumulate, and its security through its mortgage on the Property was at risk of deterioration because of changing market conditions.

[19] I find on the material before me that the plaintiff is entitled to its partial indemnity costs in the amount claimed, and I fix costs in the amount of $68,092.48 to be paid by the moving party to the plaintiff within 30 days.

What amount should be paid for the defendant’s partial indemnity costs?

[20] The defendant provided a costs outline which shows the amount claimed for costs on a partial indemnity scale to be $12,223.66 comprised of fees of $10,817.40 and HST on fees of $1,406.26. The services described in the costs outline include reviewing the moving party’s motion record, drafting responding materials, preparation for and attendance on the return of the first motion date and other related services.

[21] The defendant submits that the motion was important for him because he consented to the judgment of Sossin J. and wishes for the Property to be sold for the highest price possible as quickly as possible.

[22] I am satisfied that the time expended was reasonable. The amount claimed exceeds 60% of the amount claimed on a full indemnity basis. I reduce the amount claimed to an amount equal to 60% of the defendants full indemnity costs claim and fix the defendant’s partial indemnity costs in the amount of $11,959.92 to be paid by the moving party to the defendant within 30 days.

Cavanagh J.

Date: August 23, 2019