ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
APEX RESULTS REALTY INC., formerly known as Sutton Group Results Realty Inc.
Walter R. Wellenreiter, for the Plaintiff
Plaintiff
- and -
SHARIEF H. ZAMAN, EMINENCE LIVING INC., and HIGHER LIVING DEVELOPMENT INC.
Ivan Marini, for the Defendants
Defendants
A N D B E T W E E N:
SHARIEF H. ZAMAN, EMINENCE LIVING INC., and HIGHER LIVING DEVELOPMENT INC.
Ivan Marini, for the Plaintiffs by Counterclaim
Plaintiffs by Counterclaim
- and -
APEX RESULTS REALTY INC., formerly known as Sutton Group Results Realty Inc.
Walter R. Wellenreiter, for the Defendant by Counterclaim
Defendant by Counterclaim
RULING ON COSTS
The Honourable Mr. Justice J. R. H. Turnbull
Introduction
1The plaintiff Apex Results Realty Inc. brought an action for damages against the defendants for breach of a Buyer Representation Agreement (BRA). A motion for summary judgment was argued before me on December 10, 2019 and judgment in favour of the plaintiff was released on December 31, 2018 (2018 ONSC 7387).
2I have now received written submissions from counsel with respect to costs.
Costs Sought
3The plaintiff seeks a two part costs order on the following issues:
a. Its costs of the action on a partial indemnity basis to September 17, 2015 which is the date the plaintiff’s Offer to Settle pursuant to Rule 49 was served and substantial indemnity costs on the action from that date forward to the present plus interest, disbursements and applicable HST.
b. Its costs of the Summary Judgment motion.
c. An order that any costs ordered to be paid by the defendants, jointly and severally, forthwith.
Rule 49 Offers to Settle
4In this case, the plaintiff served an offer to settle the action pursuant to Rule 49 on September 17th, 2015. The plaintiff obtained a judgment that was more favourable to it than what was contained in its offer to settle of September 17th, 2015. This court’s award amounted to $155,092.50 (including HST) compared to the plaintiff’s offer in 2015 to settle for $145,000.00, including HST.
5I further note the plaintiff also made two “limited time” offers to settle on July 16th, 2018 and October 30th, 2018 which both expired and therefore were not Rule 49 offers. These two limited time offers specifically did not displace the plaintiff’s September 17th, 2015 offer to settle which at all times remained in effect and open for acceptance. It satisfies me that the plaintiff at all times was prepared to deal reasonably with this matter, recognizing that it had a very strong case on the merits. That position was sustained by the judgment granted in its favour.
6The plaintiff is therefore entitled to partial indemnity costs to the date that the offer to settle was served on September 17th, 2015 and substantial indemnity costs from that date forward to the present date as specified by Rule 49.10 of the Rules of Civil Procedure.
7From the detailed dockets provided by Mr. Wellenreiter, it is clear that all of the work in connection with discoveries and this summary judgment motion took place after September 17th, 2015.
8The costs rules are designed to advance several purposes in the administration of justice. One is to indemnify successful litigants. That purpose is evident and leads to the second purpose; namely, to facilitate access to justice. Costs rules are also designed to discourage frivolous claims and defences, as in this case. Delay and refusal to acknowledge clear facts or legal positions can be sanctioned in order to discourage inappropriate behaviour by litigants in the conduct of the proceedings. Finally, costs rules are designed, specifically Rule 49, to encourage settlement of actions at an early date, recognizing that significant costs sanctions can be imposed for failure to accept a Rule 49 settlement offer.
Objections to the Motion Record
9In his reply submissions, Mr. Marini complained that a voluminous motion record was prepared which contained many documents which ultimately were not referred to. In that respect, he claims that the work done by Mr. Wellenreiter was excessive and much of it unnecessary and resulted in extra work having to be completed by Mr. Marini in his preparation to argue the motion.
10I disagree with that submission. During the course of this motion, Mr. Wellenreiter referred to a great number of documents, both at his own initiative and on my request during the course of his submissions. When a motion is brought for summary judgment, all parties must put their very best foot forward and that includes having the full documentary record before the court to be able to respond to any issues that arise during the course of the motion. I would think that it is only in the most exceptional cases where counsel should be criticized for carefully including all documents which may be referred to during the course of the argument, either at the instance of counsel or upon the questioning of the presiding judge. It cannot be lost upon counsel that failure to succeed in a summary judgment motion can have significant costs consequences against the moving party.
Breakdown of Costs
11In his costs summary, Mr. Wellenreiter seeks total partial indemnity and substantial indemnity costs with respect to the action and substantial indemnity costs on the motion for summary judgment, including HST, disbursements, prejudgment interest and post-judgment interest as follows:
a. Costs on the action $15,797.40
b. Costs on the motion for summary judgment $34,707.67
c. Costs endorsement made by Justice Milanetti $500.00
d. Disbursements $8,710.71
e. Prejudgment interest $10,992.24
f. Post-judgment interest from December 31st, 2018 to January 11th, 2019 - $153.00
g. Post-judgment interest from January 11th, 2019 at $12.75 per day to date of payment
Total costs sought - $70,861.02 plus $12.75 per diem after January 11th, 2019
12Mr. Wellenreiter has helpfully given a breakdown of the costs he seeks on behalf of his client, which is reproduced as follows:
a. Breakdown of costs on the Action:
i. Partial Indemnity Costs (60%) on the action up to September 17, 2015 (date of service of Plaintiff’s Rule 49 compliant offer to settle).
21.4 hrs x $350/hr x 60% = $4,494.00
+$584.22 (HST)
Total: $5,078.22
ii. Substantial Indemnity Costs (90%) of the Action – after September 17, 2015 (the date of service of the Plaintiff’s Rule 49 compliant offer to settle).
8.4 hrs x $350/hr x 90% = $2,646.00
19 hrs x $400/hr x 90% = $6,840.00
= $9,486.00
+$1,233.18 (HST)
Total = $10,719.18
b. Breakdown of substantial indemnity (90%) costs on the Motion for Summary Judgment:
i. 80.3 hrs x $425/hr x 90% = $30,714.75
+$3,992.92 (HST)
ii. Plus the June 26, 2018 costs Endorsement of Madam Justice Milanetti in the amount of + $500.00
TOTAL = $35,207.67
c. Disbursements:
i. Disbursements of the Action (see Appendix “A-1”) $1,911.86
ii. Disbursements of the MSJ (see Appendix “A-2”) $6,798.85
Total Disbursements: $8,710.71
Factors under Rule 57.01
13In assessing costs, the court is obliged to consider the factors listed in Rule 57.01(1).
14In this proceeding, the amount claimed by the plaintiff in its statement of claim was $155,092.50, plus interest and costs. The plaintiff was completely successful on the motion for summary judgment and therefore on the action.
15While the documentation was somewhat voluminous, this was not a terribly complex breach of contract case. In my view, it was made somewhat more complicated and lengthened by the unreasonable factual contentions and positions advanced by the defendants, together with a counterclaim for negligence which was not argued and clearly is baseless. The defendants’ refusal to acknowledge the binding terms of the 2012 BRA necessitated the review assessment, consideration and production of a reasonably voluminous record of documents and which had to be submitted as evidence is support of the plaintiff’s claim.
16The case was important for the plaintiff because it related to the plaintiff’s enforcement of a prior representation agreement as against its purchaser client. The claim is important to the plaintiff because the BRA governed the plaintiff’s relationship with this client and with other clients and the plaintiff must rely upon on the BRA to protect its fees and working arrangements with clients.
17The plaintiff alleges that the conduct of the defendants tended to lengthen unnecessarily the duration of the proceeding because the summary judgment motion was adjourned numerous times between June 2018 and the ultimately hearing date of December 10th, 2018. I do not find from the review of the record I made that there was great delay caused and, in any event, the plaintiff will be indemnified for costs incurred in attending on one or more of the adjournment requests.
18Of great significance as outlined above, is the plaintiff’s Rule 49 compliant offer to settle.
19Rule 57 further provides that the court should consider a party’s denial or refusal to admit anything that should not have been admitted. Mr. Zaman refused to admit that he was bound by the terms and conditions of the 2012 Buyer Representation Agreement. That denial is what necessitated the law. That fact, if admitted, would have led to the early resolution of the lawsuit. It was Mr. Zaman’s refusal to admit that he cut the plaintiff’s representative out of the final negotiations and closings for 86 Dundas Street East and 45 Agnes Street, which led to this protracted proceeding. In my view, those facts should have been admitted. In addition, Mr. Zaman failed to answer an undertaking to produce all communications between himself and the sellers of 86 Dundas Street East and 45 Agnes Street. As a result, the court drew an adverse inference against him.
Hourly Rates and Time Spent
20I have reviewed Mr. Wellenreiter’s costs summaries in detail including the detailed dockets submitted by him. He has indicated that he has 20 years of experience in litigation, having been called to the Louisiana State Bar in 1997 and the Ontario Bar in 2008. He is an experienced litigation lawyer with 20 years of total practice experience. During the course of his four year retainer, his hourly rate increased from $350.00 per hour to a rate of $450.00 per hour in 2019.
21Mr. Marini, on behalf of the defendants, has submitted that excessive time was applied to the file by Mr. Wellenreiter in various areas including preparation of the statement of claim, eight hours to prepare an affidavit of documents, eleven hours for the preparation of an examination for discovery, nine hours for the preparation of the affidavit of Mr. Rahman, nine hours for the purpose of preparing for the cross-examination of Mr. Zaman, five hours claimed for attendance at motions court on March 13th, 2018, March 20th, 2018 and June 26th, 2018, eight hours spent for the preparation of oral argument on the long motion for summary judgment and seven hours for legal research on the issue of costs. I tend to agree that perhaps some of that time docketed is excessive and have adjusted the requested sums in an effort to reflect those concerns.
Expert's Report
22The defendants also take issue with respect to the request for the payment of the “expert” which was relied upon by the plaintiff. Mr. Marini noted during the argument of the summary judgment motion that the expert’s opinion was not even based upon the cross-examination of the affidavits or other relevant information. No amended expert report was filed to consider the issues and evidence raised in the cross-examination. He submits that the expert’s report was useless as any type of evidentiary guidance for the honourable court.
23With respect to the expert’s report, I disagree with Mr. Marini. The expert’s report was a necessary component of the plaintiff’s case that was required in defence of the counterclaim for negligence. Mr. Johnson, the expert, expressed the opinion that the plaintiff and its agent were not negligent in the exercise of their professional responsibilities and met the standard of care of the industry. The preliminary expert’s report was necessary and if in fact the matter went to trial, obviously an amended expert’s report would have been obtained. Mr. Wellenreiter wisely decided to not incur those additional expenses and argued the motion on the existing expert’s report with its evident factual limitations.
Conclusion
Conclusion
24The overall objective of assessing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding. Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), [2004] O.J No. 2634 (C.A.) After review of the costs outline submitted by Mr. Wellenreiter and considering the submissions of Mr. Marini, I allow the costs as follows:
Costs of the action: $11,000.00;
Costs of the motion for summary judgment: $27,500.00;
Justice Milanetti’s costs endorsement: $500.00;
disbursements: $8,710.71;
pre-judgment interest: $10,992.24;
post-judgment interest: $153.00,
Those heads of recovery total $58,855.95, plus $12.75 per diem post-judgment interest after January 11, 2019.
TURNBULL J.
Released: January 31, 2019
COURT FILE NO.: 14-49332
DATE: 2019-01-31
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
APEX RESULTS REALTY INC., formerly known as Sutton Group Results Realty Inc.
Plaintiff
- and -
SHARIEF H. ZAMAN, EMINENCE LIVING INC., and HIGHER LIVING DEVELOPMENT INC.
Defendants
A N D B E T W E E N:
SHARIEF H. ZAMAN, EMINENCE LIVING INC., and HIGHER LIVING DEVELOPMENT INC.
Plaintiffs by Counterclaim
- and -
APEX RESULTS REALTY INC., formerly known as Sutton Group Results Realty Inc.
Defendant by Counterclaim
RULING ON COSTS
JRH:co
Released: January 31, 2019