Court File and Parties

Court File No.: CV-14-5109-00 Date: 2020 01 16 Ontario Superior Court of Justice

Between: JONGKYU JUNG, also known as JONG KYU JUNG and EUNJUNG SIM, Plaintiff And: HYUNKYU LEE, also known as HYUN KYU LEE, Defendant

Counsel: Mr. E. Nadler, for the Plaintiff Ms. M. Choi, for the Defendant

Costs Endorsement

DENNISON J.

[1] The Plaintiff, Mr. Jung, obtained summary judgment in the amount of $180,000.00 based on a promissory note that the Defendant, Mr. Lee, signed but did not pay back as required by the terms of the promissory note. The Defendant’s counterclaim was dismissed. These reasons can be found at 2019 ONSC 5950.

[2] The Plaintiff seeks costs on a substantial indemnity basis in the amount of $28,634.22 for fees, which includes costs orders that have not been paid, plus disbursements.

[3] The parties were encouraged to work out the issue of costs. If they could not, I indicated that the Plaintiff could file written submissions for costs within 15 days of receipt of my decision. He filed his costs submissions on November 7, 2019. The Defendant was to file any cost submissions within ten days of receipt of the Plaintiff’s submissions. The Defendant did not file any cost submissions. More than ample time has past to permit the Defendant to make submissions. I am therefore releasing my decision on costs.

Guiding Principles

[4] Costs are generally awarded to the party who was the successful party.

[5] Section 131(1) of the Courts of Justice Act, R.S.O. 1990 c. C. 43 provides that the judge has the discretion to award costs for a motion. This discretion is subject of any rule of the court.

[6] Rule 57.01 of the Rules of Civil Procedure list several factors that the court may take into consideration in determining costs. It states:

57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(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 apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs. R.R.O. 1990, Reg. 194, r. 57.01 (1) ; O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1.

[7] Modern cost rules are designed to advance five purposes (1) to indemnify the successful litigant for costs, although not necessarily completely; (2) to facilitate access to justice; (3) to discourage frivolous claims and defences; (4) to discourage and sanction inappropriate behaviour by litigants; and, (5) to encourage settlement: Perell & Morden, The Law of Civil Procedure in Ontario, 3rd ed. (2017), at p. 902.

[8] In deciding the issue of costs, the overall objective is to fix costs in an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v. Public Accountants Counsel for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.).

[9] I will now turn to the issues of entitlement, scale, and quantum.

Entitlement

[10] The Plaintiff was the successful party in the summary judgment motion. He received a judgment that awarded almost the entire amount he sought. In addition, the Plaintiff was successful in having the Defendant’s counterclaim dismissed.

Scale

[11] The Plaintiff submits that the Court should grant costs at a substantial indemnity basis because:

i. The Plaintiff had to attend two aborted cross-examinations. ii. The Plaintiff had to obtain a court order compelling the Defendant to attend cross-examination. iii. The Defendant raised spurious counterclaims that where ultimately dismissed by the court. iv. The Defendant unreasonably resisted a strong claim for money that the Defendant admitted borrowing. v. The Defendant’s claims were not properly pleaded, and statute barred. vi. The Plaintiff had to respond to an unfounded allegation that Mr. Nadler was in a conflict of interest. vii. The Defendant delayed the Plaintiff’s action by filing two consumer proposals.

[12] Costs are generally awarded on a partial indemnity basis in Ontario. Costs on a substantial indemnity basis should only be awarded where there has been “reprehensible, scandalous or outrageous conduct of one of the parties” either in circumstances giving rise to the cause of action or in the proceedings. Conduct that rises to the point of offending the sensibility of the court justifies costs on a substantial indemnity basis. Misguided litigation does not warrant censure, but malicious conduct or harassment of a party by futile claims may merit an elevated cost order: Davies v. Clarington (City of), 2009 ONCA 722, at para. 40. Young v. Young, [1993] 4 S.C.R. 3, at p. 134; Orkin, The Law of Costs, 2nd Ed. (1993), pp. 2-91 to 2-92.

[13] Offers to settle are also considered because it may justify an order for costs on an elevated basis. In this case there were no offers to settle.

[14] I am not satisfied that the conduct of the Defendant in this case rose to the level or being reprehensible such that costs should be awarded on a substantial indemnity basis.

[15] There is no dispute that there was delay caused by the Defendant in this case. However, some delay was also the result of the Plaintiff’s actions. I do agree with the Plaintiff, that it was not acceptable that the Defendant did not attend cross-examination. However, I note that Woollcombe J. ordered costs against the Defendant when she made an order that he attend for cross-examination when he failed to attend for the two prior cross-examinations.

[16] While the counterclaims were misguided and dismissed, I would not classify them as scandalous or outrageous. The Defendant was unrepresented at various times during the proceedings. In addition, there seemed to be a language barrier. The fact that some of what the Defendant alleged was statute barred may have been the result of the fact that he did not have the assistance of counsel.

[17] Similarly, with respect to the Defendant’s assertion that Mr. Nadler was in a conflict, I could see how an someone not legally trained may be concerned that Mr. Nadler represented the Plaintiffs. Mr. Nadler represented the Defendant in a claim against the purchasers of an aborted sale of the Willowbrook home. The Defendant argued that the Plaintiff was also negligent as the real estate agent in that same aborted sale.

[18] In all of the circumstances, I am of the view that costs should be awarded on a partial indemnity basis.

Quantum

[19] The court is also required to consider the quantum of the costs. This includes consideration of the year of call of counsel, the lawyer’s hourly rate, the reasonableness of the time spent and that the costs awarded must be fair and reasonable for the party who is expected to pay the costs.

[20] In considering what is reasonable for the party to pay, it is appropriate for the court to consider the financial ability of the party to pay. The Defendant made no submissions in response to the Plaintiff’s cost submissions. In considering what the Defendant could reasonable expect to pay, I recognize that the Defendant’s counsel submitted at the start of the summary judgment motion that her client could not pay the outstanding $5,000.00 in costs. In addition, the Defendant tried to file two consumer proposals suggesting that he was not able to pay the debt. There is however no evidence before me that the Defendant is impecunious, so I give little weight to this factor.

[21] With respect to the quantum of costs, I note that the Plaintiff’s counsel has 43 years of experience. His hourly rate was $400.00 per hour from 2015 to 2018 and $475 per hour 2018 onward. Counsel provided a bill of costs, which I have reviewed. The Plaintiff seeks costs in the amount of 18,985.00 plus HST. I note that in the calculation, the Plaintiff included the costs orders that were already made by Woollcombe J. and Harris J. Those costs should not be included in the costs of the summary judgment motion because they were costs awarded at different steps in the proceeding. They are separate orders. When those amounts are deducted the amount sought is $13,758.00 plus HST, totalling $15,546.54. These costs appear reasonable given the number and complexity of the issues that were raised in the summary judgment motion and the counterclaim.

[22] The Plaintiff also seeks costs for disbursements. Again, I have reviewed the costs and I am satisfied that they are reasonable in the circumstances. The total for disbursements inclusive of HST is $6,963.36

[23] It is ordered that the Defendant, Mr. Lee pay to the Plaintiff, Mr. Jung costs in the amount of $22,509.90.

Dennison J.

Date: January 16, 2020