Court File: CV-16-546199
MOTION HEARD: 20181210
REASONS RELEASED: 20190226
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
RORY ANTHONY NIEL and FRANCINE GUBUAN-NIEL
Plaintiffs
and
PETER MICHANOS, EVAGELOS GEORGOUSSIS, also known as ANGELO GEORGOUSSIS, SIGNATURE REALTY INC. o/a ROYAL LEPAGE SIGNATURE REALTY, GEORGE PAUL VLAHAKIS and FOREST HILL REAL ESTATE INC.,
Defendants
BEFORE: MASTER D. E. SHORT
COUNSEL: Mauro Marchioni F (905) 695-8489
-for moving defendant Georgoussis
David Delagran and Bonnie Clarke F (416) 593-7760
-for responding plaintiffs
RELEASED: February 26, 2019
Decision re Motion Costs Where Offer to Settle Made
I. Overview
[1] Master Graham granted the Plaintiffs an ex parte Certificate of Pending Litigation in February 2016.
[2] In April 2018, one of the Defendants brought a motion to set aside the registration of the CPL permitted by Master Graham’s order.
[3] Ultimately, (after several miss-starts) that motion came before me on December 10, 2018.
[4] Following lengthy argument, by skilled counsel on both sides, I refused to grant the relief sought the moving Defendant Georgoussis, determining to leave the CPL place.
[5] I concluded those reasons by awarding costs on a partial indemnity basis to the plaintiff, but subject to any offer to settle made by either party.
II. The Offer to Settle
[6] It turns out that the plaintiff had made an offer on November 29, just over 10 days prior to the hearing of the motion on December 10, 2018.
[7] That offer provided that the responding plaintiffs would walk away if the motion was abandoned. They proposed to not seek costs if :
“1. The Defendant Evagelos Georgoussis, consents to an order dismissing of the motion without costs.
- This offer will remain open until two minutes after the commencement of the motion.”.
[8] The defendant, however elected to proceed with his motion and was unsuccessful.
[9] The now successful, resisting respondent on the motion, seeks costs on the motion totalling $19,726.56.
III. Applicable Rules
[10] It would appear that the Offer to Settle technically complies with the applicable portions of Rule 3:
COMPUTATION
3.01 (1) In the computation of time under these rules or an order, except where a contrary intention appears,
(a) where there is a reference to a number of days between two events, they shall be counted by excluding the day on which the first event happens and including the day on which the second event happens, even if they are described as clear days or the words “at least” are used;
(b) where a period of seven days or less is prescribed, holidays shall not be counted;[my emphasis]
[11] Rule 1 defines holiday as including “any Saturday or Sunday”. Thus there were exactly seven days as defined by this rule between the date of service and the date of return of the motion, if the latter date is treated as being “before” the return date.
[12] Rule 49 deals with Offers To Settle and provides in part:
WHERE AVAILABLE
49.02(1) A party to a proceeding may serve on any other party an offer to settle any one or more of the claims in the proceeding on the terms specified in the offer to settle (Form 49A)
(2)Subrule (1) and rules 49.03 to 49.14 also apply to motions, with necessary modifications.
[13] What are appropriate or necessary modifications in this case? The sub-rule reads:
TIME FOR MAKING OFFER
49.03 An offer to settle may be made at any time, but where the offer to settle is made less than seven days before the hearing commences, the costs consequences referred to in rule 49.10 do not apply.
[14] This subrule speaks to the number of days before the hearing commences. In my view it is arguable that the intent of the drafters was that the day of the hearing ought not to be included in the seven day calculation.
[15] My consideration of the intention in Rule 49 gives rise to what I see as some ambiguity in counting days BEFORE the return date as being inclusive of the return date.
[16] Regardless, I am satisfied that the entire circumstances regarding such offers to settle are open for consideration by the court.
IV. Which Provisions apply to which Party?
[17] Rule 49 in part addresses the costs consequences of a failure to accept an “equal or better” offer than the ultimate result.
[18] With regard to a defendant’s offer the rule provides:
Defendant’s Offer
(2) Where an offer to settle,
(a) is made by a defendant at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the plaintiff,
and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.
[19] This is to be contrasted with the costs consequences of failure to accept a plaintiff’s offer:
49.10 (1) Where an offer to settle,
(a) is made by a plaintiff at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the defendant,
and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.
[20] In the case of a motion brought by a defendant and the responding plaintiff makes an Offer which rubric applies to whom?
[21] It would seem reasonable to replace plaintiff with “Moving Party” and defendant with “Responding Party”.
[22] If that is done the rule would read:
Rule 49 provides in part:
Costs Consequences Of Failure To Accept:
Responding Party’s Offer
(2) Where an offer to settle,
(a) is made by a Responding Party at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the Moving Party,
and the Moving Party obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the Moving Party is entitled to partial indemnity costs to the date the offer was served and Responding Party is entitled to partial indemnity costs from that date, unless the court orders otherwise.
[23] The alternative asserted as applicable by plaintiff’s counsel is that the rule, as established for the initiator of the litigation, should also apply to motions whether the plaintiff is the moving or the responding party on an interlocutory motion.
[24] They would thus interpret the rule as directing
Responding Plaintiff’s Offer
49.10 (1) Where an offer to settle a motion,
(a) is made by that plaintiff at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the moving defendant,
and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.
V. Costs Determination
[25] Arguably on the last possible date, the offer was made to trigger the potential availability of a higher cost scale. By that point, the efforts of both sides to prepare for the motion were at the stage where the moving party had little choice but to proceed with the motion and to see how it ultimately turned out.
[26] The defendant, having elected to proceed with his motion and lost, has a cost, liability. The quantum of which liability I must now address
[27] The plaintiff seeks a total of $19,726.56.
[28] Both counsel delivered concise and well thought out cost submissions.
[29] Despite the specific rules relating to the cost determination, there still is an obligation on my part to apply the concept of proportionality. I am not satisfied that the attendance of two counsel was necessary on the motion, nor that the moving party should bear that expense, as it had no opportunity, in weighing the potential cost of proceeding with the motion, to anticipate the cost of two counsel on the return of the motion. (Particularly if at a substantial indemnity level).
[30] In any event, my determination is guided by Rule 49.13 and also the General Principles contained in Rule 57.
DISCRETION OF COURT
49.13 Despite rules 49.03, 49.10 and 49.11, the court, in exercising its discretion with respect to costs, may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer.
The Disbursement claim of $1499.41 1499.41 not challenged.
[31] Rule 57 addressing “Costs of Proceedings” provides ,with my emphasis added:
GENERAL PRINCIPLES
Factors in Discretion
57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) 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;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(i) any other matter relevant to the question of costs.
[32] Rule 57.01 (4) specifically addresses the “Authority of Court” on costs determinations:
(4) Nothing in this rule or rules 57.02 to 57.07 affects the authority of the court under section 131 of the Courts of Justice Act,
(a) to award or refuse costs in respect of a particular issue or part of a proceeding;
(b) to award a percentage of assessed costs or award assessed costs up to or from a particular stage of a proceeding;
(c) to award all or part of the costs on a substantial indemnity basis;
(d) to award costs in an amount that represents full indemnity; or
(e) to award costs to a party acting in person.
[33] The Rule further provides guidance as to the appropriate “Process for Fixing Costs”:
(7) The court shall devise and adopt the simplest, least expensive and most expeditious process for fixing costs and, without limiting the generality of the foregoing, costs may be fixed after receiving written submissions, without the attendance of the parties.
[34] As well the Rule provides this guidance with respect to costs flowing from the hearing of a contested motion, and provides that unless the court is satisfied that a different order would be more just, the court shall, fix the costs of the motion and order them to be paid within 30 days.
VI. Conclusion
[35] Having considered all the foregoing guidance, I continue to have doubt as to whether the offer to settle was timely. Regardless, I have doubt as to whether there is an entitlement to substantial indemnity costs as I am not convinced that a responding party on a motion should be granted similar rights to those given by the Rules to a plaintiff in an action.
[36] There was no dispute regarding the disbursements claimed of $1,499.41. The partial indemnity costs up to November 29 are within the bounds of reasonableness in my view and I award them at the amount claimed of $4,688.40 plus HST, for a total of $5,297.89 on a tax-in basis.
[37] What remains are the claims for substantial indemnity based on co-counsel at substantial indemnity rates for what was roughly a half day motion. I cannot find the sum sought of $8929.26 is fair or reasonable and does not in my opinion meet of what would be proportionate in the circumstances of this case.
[38] In my view $3000 being roughly a third of the substantial indemnity amount sought plus HST of $390 for a total of $3390, is more proportional and in keeping with the principles I have outlined above.
[39] In the result, I fix the sum payable within 30 days by the unsuccessful moving party, to the plaintiffs to be the all-inclusive sum of $10,187.30 (being made up of $1,499.41 plus $5,297.89 and $3390.00).
R. 269/DS __________________
Master D.E. Short