COURT FILE NO.: CV-19-1867
DATE: 20191216
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Bluekat Capital Corp
Applicant
– and –
YDB Investment Corp, Ijeoma Chijindu, Joy Chijindu, and Christian Chijindu
Respondents
B. Belmont, for the Applicant
No counsel appearing for the Respondents
HEARD: in writing
decision as to costs
Speyer, J.
A. Introduction
[1] On October 25, 2019, I gave judgment for the applicant declaring a mortgage registered by YDB to be a fraudulent mortgage and granting ancillary relief.
[2] I invited written submissions as to costs in the event that the parties were unable to agree as to costs. Having considered those submissions, these are my reasons for awarding costs to the applicant in the amount of $20,000.
[3] The applicant submits that it was entirely successful on the application and seeks costs on a substantial indemnity basis. Alternatively, the applicant seeks her costs on a partial indemnity scale for the period prior to which an offer to settle was made to the respondents, and thereafter on a substantial indemnity scale.
[4] The respondents submit that because my order is the subject of an appeal by them, I should decline to make any order as to costs and leave the determination of that issue to the appellate court.
B. The Applicable Legal Principles
[5] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides: “Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid”.
[6] Rule 49.13 provides a discretion to the court, as it relates to costs, to take into account any offer to settle made in writing, the date the offer was made and the terms of the offer.
[7] In exercising its discretion as it relates to costs, the court is required to consider the matters described in Rule 57.01. Those that are engaged in this case are:
(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 complexity of the proceeding;
c) the importance of the issues;
d) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceedings;
e) any other matter relevant to the question of costs.
[8] The assessment of costs is governed by the principle of reasonableness. In Davies v. Clarington (Municipality), 2009 ONCA 722, 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.”
[9] The assessment of costs is not an exercise in counting the number of hours expended on a file and then multiplying that number by an acceptable hourly rate. Rather, the court must approach its task from the perspective of determining what is reasonable and what the losing party might reasonably have expected to pay in costs. The Court of Appeal, in Davies, endorsed the following principles:
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);
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: see Boucher et al. v. Public Accountants Council for the Province of Ontario et al., 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). 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;
The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable;
The court should seek to avoid inconsistency with comparable awards in other cases;
The court should seek to balance the indemnity principle with the fundamental objective of access to justice.
[10] The guiding principle that governs whether costs should be awarded on a substantial indemnity basis was described in Davies. The Court of Appeal, at para. 40, emphasized that substantial indemnity costs should only be considered where there is a “clear finding of reprehensible conduct on the part of the party against which the cost award is being made” that is deserving of sanction. I cannot find that the manner in which the respondents conducted the litigation is reprehensible and decline to order costs of the entire proceedings on a substantial indemnity basis. I note that I have distinguished between the manner in which the litigation is conducted, something that is relevant to the assessment of costs, and the substance of the respondents’ position on the application or their credibility and reliability as witnesses.
[11] However, Rule 49.10(1) provides that where the plaintiff obtains a judgment as favourable as or more favourable than the terms of an offer to settle, the plaintiff is entitled to partial indemnity costs to the date on which the offer was served, and to substantial indemnity costs from that date, unless the court orders otherwise. The defendant has addressed no submissions to this issue. The plaintiff obtained a judgment as favourable as the offer to settle and is entitled to her costs on a substantial indemnity basis from August 5, 2019, the date on which an offer to settle was made to the respondents.
C. Conclusion
[12] I conclude that it is fair and reasonable for the respondents to pay costs in amount of $20,000, inclusive of disbursements and HST. The amount awarded is somewhat less than that sought by the applicant. The amount awarded is, in my view, proportionate to the amount at issue in the proceeding. It reflects the complexity of the proceedings and the fact that the issue was undoubtedly of great importance to the parties. It reflects that the hearing of this matter involved a substantial amount of time in court.
[13] The applicant is entitled to costs in the amount of $20,000, payable by the respondents jointly and severally, within 30 days of the release of this decision.
The Honourable Madam Justice J. Speyer
Released: December 16, 2019
COURT FILE NO.: 348/16
DATE: 20191216
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Bluekat Capital Corp
Applicant
– and –
YDB Investment Corp, Ijeoma Chijindu, Joy Chijindu, and Christian Chijindu
Respondents
DECISION AS TO COSTS
The Honourable Madam Justice J. Speyer
Released: December 16, 2019