COURT FILE NO.: 14-60859
DATE: 2019/11/19
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jill C. Nimchick and Susan J. Nimchick, Plaintiffs
AND
Bruce Craig Nimchick, Irene Nimchick and Justin Craig Ross Nimchick, Defendants
BEFORE: Justice R. Ryan Bell
COUNSEL: Ryan Flewelling, for the Plaintiffs
Robert J. De Toni, for the Defendants
HEARD: In writing
COSTS ENDORSEMENT
Overview
[1] The plaintiffs alleged that Bruce Nimchick devised a plan to financially exploit his mother, Jill Nimchick, for the benefit of himself, his spouse Irene, and their son Justin. Following a ten-day trial, I dismissed the plaintiffs’ claim. I found that Jill intended to make a financial gift of £67,000 to Bruce and to Justin, that Bruce did not exert undue influence over Jill, and that the plaintiffs had failed to prove their allegations that Bruce made false representations to Jill.
[2] I have received the parties’ costs submissions in writing. I note the advice of plaintiffs’ counsel that due to his inability to obtain instructions, he has provided the plaintiffs’ submissions in his capacity as an officer of the court.
[3] The defendants seek their substantial indemnity costs of the action in the amount of $147,651.53. In the alternative, the defendants seek partial indemnity costs to the date of trial in the amount of $62,533.62, and substantial indemnity costs of the trial in the amount of $50,397.44, for a total of $112,931.06. The defendants’ partial indemnity costs of the action are $100,082.64.
[4] The plaintiffs’ position is that costs on a partial indemnity basis in the amount of $85,000.00 would be appropriate.
Scale of Costs
[5] Elevated costs are warranted in only two circumstances. The first is as a result of an offer to settle under rule 49, where substantial indemnity costs are explicitly authorized. The defendants made an offer to settle in August 2016; that offer was withdrawn in February 2018. A second offer was made in February 2018; however, that offer was open for only three weeks. Accordingly, neither offer qualifies as a rule 49 offer.
[6] The second circumstance is where the unsuccessful party has engaged in behaviour worthy of sanction, that is, conduct that is reprehensible, scandalous or outrageous (Davies v. Clarington (Municipality), 2009 ONCA 722, at para. 28; Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p. 134). The reprehensible conduct may be in the circumstances giving rise to the cause of action, or in the proceedings (Mortimer v. Cameron (1994), 1994 10998 (ON CA), 17 O.R. (3d) 1 (C.A.), at p. 23). Unfounded allegations of fraud or improper conduct may warrant the imposition of substantial indemnity costs (Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, at para. 26).
[7] While the court has a discretion to take a withdrawn or expired offer into account in exercising its discretion in fixing costs, the court’s discretion under rule 49.13 is not so broad as to change the law that substantial indemnity costs are awarded only in rare and exceptional cases, where there has been some form of reprehensible conduct which makes such costs desirable as a form of chastisement (McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), 2002 41899 (ON CA), 59 O.R. (3d) 97 (C.A.), at para. 39).
[8] For the following reasons, I find that the plaintiffs engaged in reprehensible conduct deserving of sanction.
[9] Jill and Susan advanced baseless allegations of wrongdoing against Bruce – Jill's son and Susan’s brother – and failed to prove their claims of civil fraud and deceit. The plaintiffs framed their case as one of elder abuse, one where an adult son financially exploited his elderly mother. I have no doubt that the allegations of wrongdoing against Bruce, Irene and Justin have been devastating to them.
[10] The plaintiffs’ specific allegations against Bruce, Irene and Justin included misappropriation, breach of the duty of good faith, breach of trust, breach of fiduciary duties and knowingly assisting in such breaches, and deceit, civil fraud and fraudulent misrepresentation. At the outset of the trial, I allowed amendments to the statement of claim. Those amendments included an allegation that Bruce deceived the plaintiffs by convincing Jill to agree to the transfer of funds based on the false representation that NatWest was on the brink of collapse, and an additional claim for damages for civil fraud and fraudulent misrepresentation. I rejected the plaintiffs’ allegations in their entirety. In particular, I rejected the plaintiffs’ story that Bruce made fraudulent misrepresentations to Jill about NatWest going under as one lacking any air of reality.
[11] There was no evidence led to support the fraud allegations against Justin or Irene. Although the plaintiffs alleged that Bruce exerted undue influence over his mother, they led no expert evidence to demonstrate that Jill was not fully capable when she determined to gift the money to Bruce and to Justin. There was no credible evidence led at trial to suggest that Jill and Susan were particularly vulnerable to Bruce, Irene or Justin; in fact, the evidence was to the contrary.
[12] At trial, the plaintiffs suggested that the defendants “concocted” evidence to conceal the extent of Irene’s involvement in the alleged misappropriation of funds. This was a serious and baseless allegation, prejudicial to the character of not only Irene, but also to Bruce and to Justin.
[13] Finally, I am compelled to comment once again on Susan’s testimony at trial. It was not credible. She proffered a story about being “blindsided” by Bruce at the hospital. I rejected her story as one designed for the singular purpose of casting aspersions on Bruce’s character. I rejected her explanation of her March 10, 2014 email as a complete fabrication. Bruce provided Susan with copies of the documents he sent to NatWest. To address this potentially insurmountable hurdle to the plaintiffs’ case, Susan claimed that she did not see the documents for months after she received Bruce’s email attaching them because she did not open the attachments. I found this evidence, too, to be untruthful.
[14] I have no difficulty concluding that the plaintiffs’ conduct at trial, including their pursuit of unfounded allegations of fraud and improper conduct, was reprehensible. It crossed the line and is deserving of judicial sanction. The defendants are entitled to their partial indemnity costs to the date of trial and their substantial indemnity costs thereafter.
Quantum of Costs
[15] I turn to the issue of quantum. The costs fixed by the court “should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)). In dealing with substantial indemnity costs, the costs must not only be reasonable as between a lawyer and her client, but also the amount must be within a range that the unsuccessful party ought reasonably to expect.
[16] I have not been provided with the plaintiffs’ bill of costs. Such disclosure would have been helpful. It is difficult to address the reasonable expectations of the unsuccessful party without at least some information as to the costs the unsuccessful party incurred in addressing the same issues.
[17] I find the rates charged by individual counsel to be reasonable and appropriate given their respective years of experience. The plaintiffs take no issue with the hourly rates of counsel.
[18] The defendants highlight the fact that the action was originally scheduled for a five-day trial in November 2017; days before the trial was to commence, the plaintiffs sought to amend their statement of claim to withdraw certain admissions and served a supplementary affidavit of documents. The parties agreed to adjourn the trial. A second pre-trial conference took place. In the end, the trial lasted ten days. As a result of these events, defendants’ counsel effectively prepared for trial twice.
[19] The defendants changed their legal representation twice during the litigation. The costs of the two prior law firms are included in the defendants’ bill of costs. While the defendants were entitled to their choice of lawyer, the unsuccessful party ought not to be responsible for any duplication of effort on the part of counsel in “getting up to speed” on the file. Here, a review of the accounts of the two successor law firms shows that counsel spent several hours reviewing the pleadings and discovery transcripts, tasks that the first law firm retained by the defendants had already billed for. This duplication of effort warrants a decrease in the partial indemnity costs claimed by the defendants prior to trial.
[20] The total amount claimed for disbursements is approximately $5,000.00. There is no issue raised with respect to any of the disbursements claimed. The defendants are entitled to recover this amount from the plaintiffs.
Conclusion
[21] Considering all of the above, the principles in Boucher, and the factors listed in rule 57.01 of the Rules of Civil Procedure, I fix the defendants’ costs of the action in the amount of $100,000.00, all inclusive.
Justice R. Ryan Bell
Date: November 19, 2019
COURT FILE NO.: 14-60859
DATE: 2019/11/19
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Jill C. Nimchick and Susan J. Nimchick, Plaintiffs
AND
Bruce Craig Nimchick, Irene Nimchick and Justin Craig Ross Nimchick, Defendants
BEFORE: Justice R. Ryan Bell
COUNSEL: Ryan Flewelling, for the Plaintiffs
Robert J. De Toni, for the Defendants
COSTS ENDORSEMENT
Ryan Bell J.
Released: November 19, 2019