Hordo v. Zweig, 2020 ONSC 1442

Court File and Parties

COURT FILE NO.: CV-13-490665 (Toronto) MOTION HEARD: 2019 11 21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Diana Hordo and Michael J. Hordo v. Arnold H. Zweig

BEFORE: MASTER R. A. MUIR

COUNSEL: Plaintiffs appearing in person Peter Smiley for the defendant Debra Eveleigh for the non-party LawPro Frank Caruso for the non-party Law Society of Ontario Mariam Moktar for the non-parties Lynda Ciaschini and Charles Sinclair

SUPPLEMENTARY REASONS FOR DECISION - COSTS

[1] On November 21, 2019 I heard a motion brought by the plaintiffs. The main form of relief sought was an order removing Mr. Leigh Youd and his firm as lawyers of record for the defendant. The plaintiffs also requested orders for the production of various documents from the defendant and non-parties, along with an order for the examination of non-parties. The plaintiffs asked that the defendant answer outstanding undertakings and re-attend for a continued examination for discovery. Finally, they requested an order striking various paragraphs of the defendant’s statement of defence.

[2] I released my reasons for decision on November 26, 2019. I made an order that the plaintiffs be permitted additional examination for discovery of the defendant by way of follow-up questions in writing. I dismissed all of the other relief the plaintiffs were seeking.

[3] I also requested written costs submissions. I have now received and considered those submissions.

[4] The defendant and the non-party Law Society of Ontario (“LSO”) both seek costs on a substantial indemnity scale. The defendant requests costs in the total amount of $9,000.00. LSO seeks the amount of $7,240.00.

[5] The plaintiffs ask for their costs of this motion, to be paid in full by the responding parties on a joint and several basis. The plaintiffs submit that their costs total more than $105,000.00.

[6] The court’s general authority to award costs as between parties to litigation is found in section 131(1) of the Courts of Justice Act, RSO 1990, c C.43, which provides that costs are in the discretion of the court. Rule 57.01(1) of the Rules of Civil Procedure allows the court to consider the result achieved in the proceeding or motion and any offer to settle. This Rule also includes a non-exhaustive list of factors the court may consider when awarding costs. Rule 1.04(1.1) is also applicable. It requires the court in applying the Rules to make orders that are proportionate to the importance and complexity of the issues and to the amount involved in the proceeding.

[7] When dealing with costs, the overall objective for the court is to fix an amount that is fair and reasonable for the unsuccessful party who generally must pay the costs of the successful party. See Zesta Engineering Ltd. v. Cloutier, [2002] OJ No. 4495 (CA) at paragraph 4 and Boucher v. Public Accountants Council for the Province of Ontario, [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.

[8] Substantial indemnity costs may be appropriate in situations where a party alleges but fails to prove allegations of fraud, criminal conduct, dishonesty or other reprehensible conduct. See Lyons v. Todd, 2019 ONSC 2269 at paragraph 30 and Investment Administration Solutions Inc. v. Pro-Financial Asset Management Inc., 2018 ONSC 2589 at paragraph 14.

[9] These are the factors and principles I have considered in determining the costs issues arising from this motion.

[10] LSO has been completely successful. The defendant has been mostly successful. The plaintiffs succeeded on only one relatively minor issue in relation to the further examination of the defendant.

[11] The plaintiffs’ lengthy costs submissions repeated many of the arguments made at the hearing of the motion. The plaintiffs’ submissions also described various events that took place after my decision was released. I have not considered those portions of the plaintiffs’ costs argument in determining the appropriate costs orders on this motion. A costs submission is not the place to re-argue the motion. If the plaintiffs have concerns with events that took place after this motion was decided they should address those concerns in the appropriate forum. Those events are simply not relevant to the costs of this motion.

[12] In my view, the defendant and LSO are entitled to costs as the successful parties. I am also satisfied that it is appropriate that costs be paid on a substantial indemnity basis. The plaintiffs made very serious allegations against the defendant, his counsel and LSO. The plaintiffs’ allegations against the defendant, his counsel and LSO included interfering with the plaintiffs’ right to counsel, bribery, criminal breach of trust, perverting the course of justice, dishonesty, swearing false affidavits and various other similar misconduct. These allegations appear repeatedly throughout the plaintiffs’ evidence. Specifically, they can be found, among other places, at paragraphs 39 and 43 of Mr. Hordo’s affidavit sworn October 10, 2019 and at paragraphs 7, 8, 17, 18, 19, 23, 35, 36, 53, 54, 55 and 59 of Mr. Hordo’s affidavit sworn October 28, 2019.

[13] I addressed these allegations at paragraph 18 of my reasons for decision dated November 26, 2019, where I stated, in part, as follows:

18. In summary, there is simply no evidence of improper conduct on the part of Mr. Youd, LawPro, LSO or the defendant. The plaintiffs’ allegations are pure speculation based on inference and conjecture and nothing more. They have failed to provide any direct evidence to support their serious allegations of misconduct.

[14] The plaintiffs made very serious allegations that included criminal behaviour, dishonesty and other reprehensible conduct by the defendant, his lawyers and LSO. The plaintiffs failed to prove those allegations. Mr. Hordo is a retired lawyer. He should be aware of the serious nature of such allegations and the potential consequences if they are not proven. Substantial indemnity costs are warranted in the circumstances of this motion.

[15] I have reviewed the costs outlines submitted by the parties. The defendant’s costs outline appears fair and reasonable in the circumstances of this motion, especially when compared to the plaintiffs’ costs outline. The defendant had to respond to numerous forms of requested relief and lengthy affidavits from the plaintiffs. This was a complex motion from a factual perspective. The main issue was obviously important to the defendant as the plaintiffs were seeking to deny the defendant his choice of counsel. The hearing required approximately three hours of court time. In my view, the defendant is entitled to the costs requested, with a small reduction to reflect the lack of complete success.

[16] I view the LSO costs request as somewhat excessive. I accept that it was necessary for LSO to respond to this motion with independent counsel. However, the relief requested that affected LSO was much narrower than the relief sought against the defendant. LSO’s response to this motion was not as extensive or involved when compared to the defendant. In my view, it is fair and reasonable for LSO to receive 50% of the substantial indemnity costs requested by the defendant.

[17] For these reasons, I have concluded that it is fair and reasonable for the plaintiffs to pay the costs of this motion to the defendant and LSO on a substantial indemnity basis. The plaintiffs shall pay $8,000.00 to the defendant and $4,500.00 to LSO. These amounts are inclusive of taxes and disbursements. These costs shall be paid by April 14, 2020.

Master R. A. Muir DATE: 2020 03 10