Court File and Parties
COURT FILE NO.: CV-18-00599707
DATE: 20190816
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Lukasz Orwinski, Robert Kazanecki, Roma Budaniw, Ewa Kocan, Jan Kocan, Janina Levtchouk, Aleksander Mrozowski, Tadeusz Mierzejewski, Marta Orwinska, Kinga Orwinski, Krzysztof Orwinski, Anna Orwinski, Marc Podell, Tadeusz Siwon and Malgorzata Siwon, Plaintiffs
AND:
Hi‑Rise Capital Ltd., 54 Shepherd Road Inc. and 60 Shepherd Road Inc., Defendants
BEFORE: J.E. Ferguson J.
COUNSEL: Jameel Madhany and Lindsay A. Woods, for the Plaintiff John Birch and Kate Byers, for the Defendant Hi-Rise Capital Ltd. Anu Koshal, for the Defendants 54 Shepherd Road Inc. and 60 Shepherd Road Inc.
HEARD: In writing
COSTS ENDORSEMENT
[1] On June 26, 2019 I released the decision in the summary judgement motion brought by all parties heard on June 11, 2019.
[2] I granted the summary judgement motion brought by the two defendant groups and dismissed the summary judgement motion brought by the plaintiffs.
[3] I have now received cost submissions from all of the parties.
Law of Costs
[4] In Chandra v. CBC, 2015 ONSC 6519, the court set out the following applicable principles for dealing with costs at paras. 15-17:
- The general principles to be applied in fixing costs are conveniently articulated in Agius v. Home Depot Holdings Inc., 2011 ONSC 5272, at paras. 10-12, as follows:
Cumming J. in DUCA Financial Services Credit Union Ltd. v. Bozzo, 2010 ONSC 4601 at para. 5, described the “normative approach” to an application for costs:
Costs are in the discretion of the Court: s. 131, Courts of Justice Act, R.S.O. 1990, c. C.43 and Rule 57.01 of the Rules of Civil Procedure. In Ontario, the normative approach is first, that costs follow the event, premised upon a two-way, or loser pay, costs approach; second, that costs are awarded on a partial indemnity basis; and third, that costs are payable forthwith, i.e. within 30 days. Discretion can, of course, be exercised in exceptional circumstances to depart from any one or more of these norms.
Fixing of costs is not merely a mechanical exercise in reviewing the receiving party’s Cost Outline. In Andersen v. St. Jude Medical Inc. (2006), 2006 CanLII 85158 (ON SCDC), 264 D.L.R. (4th) 557, the Divisional Court set out several principles to be considered in making an award of costs:
The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher [Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291], Moon [Moon v. Sher (2004), 2004 CanLII 39005 (ON CA), 246 D.L.R. (4th) 440], and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 CanLII 1042 (ON CA), 75 O.R. (3d) 638 (C.A.).
A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.), at para. 4.
The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).
The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano v. Bank of Montreal (1998), 1998 CanLII 5633 (ON CA), 41 O.R. (3d) 222 (C.A.), at p. 249.
The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.
The Court of Appeal has identified the overriding principle to be that the amount of costs awarded be reasonable in the circumstances. In Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 Epstein J.A. stated at paras. 51-52:
As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should 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. In Boucher, this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at para. 37, where Armstrong J.A. said “[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice.”
- As Mark Orkin in The Law of Costs, 2nd ed., loose-leaf (Aurora, Ont.: Canada Law Book, 2010) reminds us (at para. 201) awarding costs is an exercise in balancing two principles:
…One, that a successful party to litigation who is free of blame should not be required to bear the costs of either prosecuting or defending the action, and two, that citizens will be unduly hesitant to assert or defend their rights in court if an unsuccessful party is required to bear all of the costs of a successful one.
- The principle of indemnification is no longer the only purpose of costs awards. There is recognition that modern costs awards may encourage settlement, prevent (or at least discourage) frivolous or vexatious litigation, or sanction behaviour that increases the expense of litigation.
[5] Hi‑Rise Capital Limited (“Hi‑Rise”) took the lead on this motion with 54 Sheppard Road Inc. and 60 Sheppard Road Inc. (“Shepherd”) having much less work to do and less exposure on the motion.
[6] Hi‑Rise seeks $93,139.76 in partial indemnity costs.
[7] Shepherd seeks $57,519.99 in partial indemnity costs.
[8] Had the plaintiffs been successful on the motion they would have been seeking $33,838.64 in partial indemnity costs (inclusive of approximately $5,200.00 in disbursements).
[9] The plaintiffs’ position is that the combined defendants’ costs of approximately $150,000.00 are unreasonable and that payment of costs of $40,000.00 for Hi‑Rise and $20,000.00 for Shepherd would be reasonable. Their submissions include the following:
(i) the matter involved the interpretation of a single contractual provision;
(ii) the proceeding consisted of pleadings and a 1 1/2-day motion which was lengthened by Hi-Rise’s trust/tax argument which ultimately played no role in the decision;
(iii) the plaintiff's partial indemnity costs are $33,830.64 with Hi‑Rise spending about 33% more time than that of the plaintiffs. Shepherd claims approximately $24,000.00 more than the plaintiffs and they did not file any motion records, conduct cross‑examinations, or deal in any way with the trust/tax argument or the abuse of process/res judicata issue raised by Hi‑Rise;
(iv) the hours spent by both defendant groups are unreasonable;
(v) the defendant groups’ unwillingness to have discussions to resolve costs without troubling the court;
(vi) the cross-examination of all plaintiffs mainly on the trust/tax law argument was a waste of time; and
(vii) the res judicata issue involving Mark Podell was without merit and a waste of time.
[10] Hi‑Rise makes the following submissions:
(i) the plaintiffs were seeking $1.2 million on their motion for summary judgement and they recovered zero dollars;
(ii) the issues were complex (I note that the most complex issue I tackled was the trust/tax issue which in the end was not necessary to resolve);
(iii) the importance of the motion (it was for all parties); and
(iv) the discounting of Hi‑Rise’s bill to the clients.
[11] Sheppard makes the following submissions:
(i) Shepherd was wholly successful on the motion;
(ii) the issues were significant and could have caused considerable financial difficulty to Shepherd;
(iii) Shepherd minimized its costs by relying on the affidavit evidence of Hi‑Rise and did not attend all of the cross examinations; and
(iv) there was no cause of action against Sheppard and the plaintiffs refused to release Sheppard, necessitating preparation of a factum and attendance at the motion.
[12] In applying the law as cited above and in considering the submissions received from all counsel the plaintiffs are ordered to pay forthwith $65,000.00 to Hi‑Rise and $$30,000.00 to Shepherd.
[13] Any judgment may be sent to my assistant at: lorie.waltenbury@ontario.ca.
J.E. Ferguson J.
Date: August 16, 2019.