COURT FILE NO.: CV-14-511862

DATE: 20200116

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SAM CHABA

Plaintiff

– and –

MUHAMMAD ASLAM KHAN

Defendants

AND BETWEEN

SWAT EMERALDMINE AND MARKETING INC.

Plaintiffs by Counterclaim

– and –

SURINDER CHABA a.k.a. SAM CHABA, MONICA GOYAL and JOHNATHAN MACKENZIE

Defendants to the Counterclaim

Richard H. Parker, Q.C., lawyer for Surinder Chaba a.k.a. Sam Chaba, Plaintiff, Defendant to the Counterclaim

Muhammad Aslam Khan, in person and as lawyer for Swat Emeraldmine and Marketing Inc., Plaintiff by Counterclaim

HEARD: December 13, 2019

G. DOW, J.

REASONS FOR DECISION ON COSTS

[1] I heard the trial of the counterclaim from March 26 to March 28, 2019 and released reasons dismissing the counterclaim on May 22, 2019 (ONSC 2093). The main action had been dismissed on a motion for summary judgment before Justice Stewart on November 17, 2016 and her endorsement dated May 10, 2017 deferred the determination of costs to the judge disposing of the counterclaim. The parties were unable to agree on costs and a one-half day hearing was scheduled before me and proceeded.

Preliminary Issues

[2] As part of the material prepared and filed, I was alerted to the claim of the defendant, Mr. Khan and the plaintiff by counterclaim, Swat Emeraldmine and Marketing Inc. (“Swat Emeraldmine”) that they were seeking costs as against non-parties, that is, the lawyers and law firm that previously represented Mr. Chaba. I note the cause of action in the counterclaim was assigned by Mr. Khan, a lawyer, to the corporation in August, 2015. The claim for costs against non-parties was made under Rule 57.07.

[3] I was also made aware that this claim was abandoned in advance of the hearing and confirmed same at the commencement of submissions.

[4] There were also two preliminary motions. The first was by Mr Chaba to add Mr. Khan’s name to the title of proceeding in the counterclaim on the basis the corporate litigant was a shell corporation of Mr. Khan’s and any award of costs against Swat Emeraldmine would not be collectable. This was abandoned at the commencement of submissions.

[5] The other motion was to formalize the name of the plaintiff and defendant by counterclaim, Sam Chaba to his formal name of Surinder Kumar Chaba. This was not opposed and the title of proceedings is altered so that the plaintiff and defendant by counterclaim be Surinder Kumar Chaba, also known as Sam Chaba.

[6] I would note at the conclusion of the hearing, which extended beyond the one-half day scheduled, Mr. Khan requested additional time to make further submissions which I declined. I did so because Mr. Khan had used more than one half of the scheduled time allotted and I had the benefit of his Factum and Book of Authorities on the issue of costs and his Factum and Book of Authorities responding to Mr. Chaba’s motion. I also received and was directed to additional case law provided to me during his submissions.

Costs of the Main Action

[7] I agree Mr. Khan is entitled to costs arising from the main action given its dismissal. The issue is the quantum.

[8] Mr. Khan sought his costs of defending the main action, as dismissed by Justice Stewart on November 17, 2016 on a full indemnity basis. The amount sought was $50,580.76 inclusive of fees in the amount of $42,336.00, HST of $5,503.68 and disbursements of $2,740.78.

[9] Mr. Khan provided the decision of Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766 where (at paragraph 8) substantial indemnity costs (aside from Rule 49.10(1)) should be awarded in “only very narrow circumstances” where there has been conduct “worthy of sanction” and full indemnity costs only where the conduct worthy of sanction is “especially egregious”.

[10] The draft account in support of the claim sought payment of 122 hours of time by lawyers, which included over 50 hours by Mr. Khan himself. I raised with Mr. Khan my concern that the law requires someone representing himself or herself to show evidence of a lost opportunity to engage in other remunerative activity. To that extent, I may have a more nuanced understanding of the law than my colleague, Justice Shelston, who, in Fortier v, Lauzon, 2018 ONSC 946 (at paragraph 31), stated “self-represented litigants do not need to prove lost opportunities for remuneration”. One of the decisions relied on by Mr. Khan was 1806700 Ontario Inc. v. Khan 2018 ONSC 7348. Mr. Khan also acted for himself in that matter. In paragraph 13 of that decision, the issue of awarding costs to self-represented litigants was addressed and reference made to the decision of Mustang Investigation v. Ironside 2010 ONSC 3444 (Div. Ct.). That decision sets out the following principles which I prefer to follow in these circumstances (at paragraphs 14 and 23):

a) there is no “automatic right to recover costs” by a self-litigant;

b) the trial judge maintains a discretion to make the appropriate costs award;

c) “self-represented litigants, be they legally trained or not, are not entitled to costs calculated on the same basis as those of the litigant who retains counsel”; and

d) to receive costs a self-represented litigant must demonstrate that he or she devoted time and effort to do the work ordinarily done by a lawyer and that as a result “they incurred an opportunity cost by foregoing remunerative activity” (emphasis added by me).

[11] I was not satisfied by the evidence tendered by Mr. Khan, which I understand relied on the time spent by him and court appearances attended by him in this matter rather than on any evidence of remunerative work that he was unable to accept such that he should be awarded costs at his lawyers hourly rate for his time spent defending the main action. Mr. Khan is a 2004 call and claimed a full indemnity rate of $350.00 per hour.

[12] I was also concerned with reference in the draft account to work done, such as “Issued Statement of Defence and Counterclaim” which inherently included time spent advancing the counterclaim. The counterclaim proceeded to trial before me and was dismissed. This will lead to a set-off of the costs to be awarded in favour of Mr. Khan.

[13] Mr. Khan also relied on an Offer to Settle dated October 19, 2014 which included proposing the action be discontinued. Having not been accepted and made at least seven days before commencement of the hearing, it appears Rule 49.10(2) should be considered. However, this Rule only provides for the defendant to be awarded his or her partial indemnity costs from the date of the offer which does not assist Mr. Khan.

[14] Mr. Khan also relied on evidence at trial of an email dated August 25, 2015 from Mr. Chaba to a mortgage broker, Irina Vlassova describing Mr. Khan as a “fraudster” (see Tab 38 of Mr. Khan’s Motion Record, exhibit 79 at trial). Ms. Vlassova testified at trial and I described her evidence (at paragraph 20 of my trial reasons) as “apparently for the purpose of revealing Mr. Chaba had an action against her set for trial in Small Claims Court on April 11, 2019 alleging unpaid commissions”.

[15] Mr. Khan made other submissions in support of his claim for full indemnity costs which included pre-litigation conduct by Mr. Chaba and his lawyers, damage to his reputation, being “coerced” into reporting the action against him to LawPro, and Mr. Chaba admitting during the litigation taking no steps to move the litigation forward in an attempt to minimize legal costs. These submissions did not persuade me the appropriate scale and quantum of costs to award for conduct “especially egregious” was beyond the narrow circumstances for substantial indemnity.

[16] The position of Mr. Chaba was that the account rendered by Mr. Khan was inflated, included time spent on the counterclaim and ancillary matters to the extent it should be reduced by at least 50%.

[17] I do not propose to complete a line by line analysis of the submitted account. I have concluded, in all of the circumstances, and in accordance with Rule 57.01, with application of the principles contained within that rule to award Mr. Khan costs as against Mr. Chaba on a substantial indemnity basis. Generally, I have reduced the time docketed by 25 percent and the value of Mr. Khan’s docketed time to $50.00 per hour. I also rely on the discretion afforded to me under Section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43. Further, I am mindful of the statement of the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634, (at paragraph 26) to “fix an amount that is fair and reasonable for the unsuccessful party to pay”. The amount is fixed in the sum of $20,000.00 inclusive of fees, HST and disbursements.

Costs of the Counterclaim

[18] As a successful party, Mr. Chaba claims his costs on a partial indemnity basis. Mr. Khan not only disputes Mr. Chaba’s claim for costs of the counterclaim but asks for his costs of unsuccessfully advancing it. Mr. Chaba relied on an Amended Bill of Costs which outlined fees claimed totaling $26,894.00 at a substantial indemnity rate or $23,532.25 for a partial indemnity rate, inclusive of HST. Disbursements were claimed totaling $252.38.

[19] The amounts sought were higher than previous drafts forwarded to Mr. Khan with the explanation by counsel for Mr. Khan’s that errors have been corrected and additional time incurred. I accept that explanation by counsel for Mr. Chaba. It is clear additional time and expenses were incurred after my trial reasons were released on May 22, 2019.

[20] Mr. Khan submitted any award in favour of Mr. Chaba for his successful defence of the counterclaim must be reduced for a number of reasons. First, Mr. Khan was entitled to a set-off for costs incurred in preparing for Mr. Chaba’s motion to add Mr. Khan as a plaintiff in the counterclaim which was abandoned and not argued before me. This was quantified to be in the range of $3,000.00 - $3,200.00 and included preparing a Responding Motion Record, Factum and Book of Authorities. I accept that submission (but not the quantum sought).

[21] In addition, Mr. Khan claimed the adjournment of the trial from December 10, 2018 to March 25, 2019 at the request of Mr. Chaba should include costs consequences as no reason was given for the request despite Mr. Khan asking for same. I do not accept that submission. The File/Direction/Order of Justice Firestone of December 10, 2018 (Tab 49 of motion record) made no reference to any costs consequences. It does indicate Mr. Khan was in attendance and could have requested this be addressed or at least referenced in the endorsement to be specifically addressed by the trial judge.

[22] Mr. Khan also relied on the conduct before the litigation commenced such as Mr. Khan’s previous counsel complaining to the Law Society about Mr. Khan’s conduct and making “disparaging” remarks about him. I do not accept that as a proper or sufficient basis to deny costs to Mr. Chaba for his successful defence of the counterclaim. Any relief for such claims are more appropriately pursued before the Law Society or in a separate action.

[23] Similarly, I reject complaints about the conduct of Mr. Chaba’s previous counsel having “malice” against Mr. Khan and details of the related claim with the Posadas. The background to the involvement of the Posadas in this matter was set out in my reasons and will not be repeated here aside from the fact Mr. Khan settled his action with them in or about June, 2016. I consider that settlement to include all issues involved. Thus, it is not proper grounds to deny Mr. Chaba his costs or award Mr. Khan costs for his unsuccessful counterclaim.

[24] Mr. Khan raised an intentional infliction of mental distress accompanied by a “visible and provable injury to me and my reputation” (at paragraph 56 of Mr. Khan’s affidavit in his Motion Record). This claim was not supported by any evidence detailing same such as medical reports or independent evidence from a client taking their retainer elsewhere. Civil litigation, by its very nature and the financial consequences which can result, is inherently stressful. I reject this submission as a basis to deny Mr. Chaba his costs or award Mr. Khan costs for an unsuccessful counterclaim.

[25] Mr. Khan submitted Mr. Chaba breached the Rule 50.08 Report to Trial Judge prepared by Justice C. Brown who conducted the pre-trial conference on October 25, 2018 and noted Mr. Chaba would deliver his Request to Admit by November 9, 2018 and failed to do so as a basis to deny him costs. I agree the Report to Trial Judge, signed by counsel for the parties and the pre-trial judge is to be complied with as an order of the court and the failure to comply can result in costs consequences (or even contempt of court). However, Mr. Khan also submitted being improperly served with multiple Requests to Admit dated November 29, 2018, February 5 and February 25, 2019. My review of the Report to Trial Judge does not indicate any prohibition to serve other or additional Requests to Admit in accordance with the Rules and I decline to sanction Mr. Chaba on that basis. Further, I reject the submission that such Requests to Admit were ‘intended to harass, annoy, intimidate or humiliate” Mr. Khan as he deposed in paragraph 73 of his Motion Record affidavit.

[26] I also note submissions were made and it was brought to my attention that there were periods of time Mr. Chaba was without counsel. His current counsel initially wrote to Mr. Khan’s counsel on June 16, 2016 advising of his retainer. Counsel got off the record by order of Master Brott dated January 29, 2018. His current counsel resumed acting by Notice of Appointment (as deposed by Mr. Khan was filed) on May 2, 2018.

[27] Mr. Khan raised Mr. Chaba “perjured” himself at the trial by testifying he was not aware of Mr. Khan’s October 19, 2014 settlement offer until a few months before the trial began when it was clear it had been communicated to his counsel in or about its date. This perjury was predicated on the theory that whatever is served on a party’s counsel is deemed to be within the knowledge of the client.

[28] While that legal principle is correct and I have grave doubts about the veracity of Mr. Chaba’s evidence, I have concluded the more important and relevant factor is to again follow the statement of the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, supra, to fix an amount that “is fair and reasonable for the unsuccessful party to pay”.

[29] In his factum, Mr. Khan relies on a decision of this court, Envoy Relocations Services Inc. v. Canada (Attorney General), 2013 ONSC 2622 at paragraphs 114 and 116 where “the strong sentiment that the matter, or the issue at least, should never have been brought before the court in the first place, leading to a reaction against the innocent party should not have had to pay a penny towards the costs of the litigation”. This was considered in a decision dealing with an award of costs personally against counsel. (Best v. Ranking, 2016 ONCA 492). I have concluded the conduct of Mr. Chaba and his counsel does not amount to that level. The effort to have costs awarded against counsel was resolved and did not proceed before me.

[30] Mr. Khan also included in his factum reference to the decision in Serra v. Serra, 2009 ONCA 395 (at paragraph 8) where the court identified the three fundamental purposes of modern costs rules to be:

a) partially indemnify successful litigants for the costs of litigation;

b) encourage settlement; and

c) discourage and sanction inappropriate behaviour by litigants.

I would conclude the proper application of these principles result in Mr. Chaba being awarded his costs of successfully defending the counterclaim.

[31] To that end, again, I do not propose to complete a line by line analysis of these submitted account. I have considered all of the above described circumstances and the submissions made in accordance with the principles contained in Rule 57.01 and the discretion afforded me in that rule and under Section 131 of the Courts of Justice Act, supra. I award Mr. Chaba partial indemnity costs in successfully defending the counterclaim in a three-day trial where he was represented by experienced counsel. I award the same in the sum of $18,000.00 inclusive of fees, HST and disbursements.

Order

[32] The parties agreed that if each side was awarded costs, the award should be set-off against each other. To that end, Mr. Khan is entitled to net costs in the amount of $2,000.00 inclusive of fees, HST and disbursements. In addition, the title of proceedings is altered to “Surinder Kumar Chaba also known as Sam Chaba”

Conclusion

[33] Finally, Mr. Khan raised in his Factum and submitted to me that I ought to defer awarding costs on the basis my dismissal of the counterclaim had been appealed and the appeal had been perfected. I reject that submission. I welcome the Court of Appeal correcting any errors made by me in deciding the issues to be addressed. Part of my role as the trial judge is to complete the determination of all the outstanding issues which includes the issue of costs.

_____________________________ Mr. Justice G. Dow

Released: January 16, 2020

COURT FILE NO.: CV-14-511862

DATE: 20200116

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SAM CHABA

Plaintiff

– and –

MUHAMMAD ASLAM KHAN

Defendants

AND BETWEEN

SWAT EMERALDMINE AND MARKETING INC.

Plaintiffs by Counterclaim

– and –

SURINDER CHABA a.k.a. SAM CHABA, MONICA GOYAL and JOHNATHAN MACKENZIE

Defendants to the Counterclaim

REASONS FOR DECISION ON COSTS

Mr. Justice G. Dow

Released: January 16, 2020