SUPERIOR COURT OF JUSTICE – ONTARIO

Mehrabi v. Colangelo

CV-12-470125 (Toronto)

Motion Heard: 2019 12 11

ENDORSEMENT

Master R. A. Muir -

[1] This is a motion about costs the defendants have incurred so far in defending this Superior Court action.

[2] On August 29, 2019 I made an order, on consent, transferring this action to the Small Claims Court. The issue of costs was adjourned and ultimately heard by me today.

[3] The defendants seek their costs thrown away on a full indemnity scale. They argue that they incurred costs that they otherwise would have avoided had this action been in the Small Claims Court from the outset. The defendants’ total costs of the action to date, as set out in their bill of costs, is more than $43,000.00 for fees and another $3,000.00 for disbursements.

[4] The plaintiff argues that any costs award should be limited to reasonable costs thrown away in connection with steps taken that would not have been required in the Small Claims Court.

[5] The court has authority to award costs thrown away as a term of an order transferring an action from Superior Court to Small Claims Court. See Ali v. Schrauwen, 2011 ONSC 2158 (Master) at paragraph 8. There is also authority to suggest that such costs orders may be made on an elevated scale. However, it is clear from those authorities that such orders are made when it is obvious that the costs have been completely wasted and where warranted by the circumstances of each particular case. See Lamarche v. ING Insurance Co. of Canada, 2012 ONSC 4111 (Master) at paragraph 2(f) and May v. Hutchinson, 2013 ONSC 7712 at paragraph 12.

[6] It is also important to note, as the Court of Appeal has stated in many decisions, that costs are in the discretion of the court. When dealing with costs, the overall objective for the court is to fix an amount that is fair and reasonable. See Zesta Engineering Ltd. v. Cloutier, 2002 CanLII 25577 (ON CA), [2002] OJ No. 4495 (CA) at paragraph 4 and Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] OJ No. 2634 (CA) at paragraph 26. In Davies v. Clarington (Municipality), 2009 ONCA 722 the Court of Appeal stated as follows at paragraph 52:

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.

[7] First, I am satisfied that it was not unreasonable for the plaintiff to have started and continued this action in the Superior Court. The plaintiff was injured in an accident that was not his fault. The plaintiff alleged that his injuries prevented him from continuing to operate his grocery business. The grocery business closed after the accident and the plaintiff pursued a living as a real estate agent. It is not clear whether the grocery business would have been successful in the long run, but for the accident. However, it appears reasonable for the plaintiff to have made a claim for future loss of income in the Superior Court under the circumstances. The viability of that claim changed over the course of the litigation which led the plaintiff to seek a transfer of this action to the Small Claims Court. Of course, the transfer to the Small Claims Court will save time and expense for both sides going forward as compared to a Superior Court jury trial.

[8] I agree with the plaintiff that the defendants’ costs thrown away should be limited to the steps taken that would not have been necessary if this action had been started in the Small Claims Court. In my view, those steps include oral discovery, mediation and the pre-trial conference, in part. Pleadings and documentary discovery would have been necessary even if this action had been started in the Small Claims Court.

[9] However, I am unable to conclude that oral discovery and mediation were completely wasted expenses in the context of this action. An oral discovery of the plaintiff has provided some benefit to the defendants which will have some use at trial. The defendants’ preparation for mediation will also be useful for any pre-trial or other settlement process in the Small Claims Court. I am therefore not prepared to award costs thrown away on an elevated scale in the circumstances of this action.

[10] In my view, there should be some costs awarded for the pre-trial conference. I do not know whether a further pre-trial will be required in the Small Claims Court and I am not prepared to make an order affecting the procedures of the Small Claims Court. It should be noted though that some of the work for the pre-trial will be useful for any pre-trial procedures in the Small Claims Court.

[11] I also accept the plaintiff’s argument that the defendants’ costs appear somewhat excessive. The examination for discovery of the plaintiff was very brief. The mediation material was not lengthy.

[12] I have reviewed the defendants’ bill of costs with these observations in mind. I have determined that an order should be made in favour of the defendants for partial indemnity costs thrown away as follows:

Oral discovery: $1,500.00;

Mediation: $1,500.00; and,

Pre-trial: $1,000.00.

(HST shall be added to these amounts)

[13] I do accept the defendants’ argument that some additional time would have been spent simply because this action was in the Superior Court and sought damages equal to the limits of the defendants’ available insurance. However, I am not prepared to award any costs to account for this factor as I have found that the plaintiff’s initial decision to commence and continue this action in the Superior Court was reasonable at the time.

[14] The defendants are also entitled to payment of disbursements in relation to the mediation in the amount of $1,130.00 (which includes HST). I am not awarding disbursements in relation to the oral discovery. Those disbursements have some value to the defendants going forward.

[15] I have therefore concluded that it is fair and reasonable for the plaintiff to pay the defendants’ Superior Court costs thrown away in the total amount of $5,650.00, inclusive of HST and disbursements.

[16] I am not satisfied with the evidence in relation the plaintiff’s inability to pay these costs. There is simply no evidence of the plaintiff’s current financial circumstances. These costs shall therefore be paid by January 13, 2020.

[17] The defendants have been successful, but only partially. They have not been awarded the amount of costs they were seeking. In fact, they were awarded costs only slightly more than the plaintiff offered before the last return date for this motion. For these reasons, it is fair and reasonable that there be no order for the costs of this motion.

2019 12 11

Master R. A. Muir