Court File and Parties

Court File No.: CV-20-00636813 Date: 2020-05-19 Superior Court of Justice - Ontario

Re: 2103308 Ontario Inc. and Jie Qi and 2487455 Ontario Corporation, Applicants And: 2209034 Ontario Inc., Respondent

Before: Schabas J.

Counsel: Melvyn Solmon, for the Applicants Brett Moldaver, for the Respondent

Heard: May 19, 2020

Costs Endorsement

[1] I signed an Order on consent resolving this matter on April 23, 2020, which was the date on which the Application was to be heard. The matter dealt with a dispute over the discharge of a mortgage and an alleged $5,000,000 payment. It is clear from the relief granted in the Order that the Applicants were successful, as the mortgage was reduced from over $5,000,000 to $10,000.

[2] The remaining issue is costs. The Respondent agrees that the Applicants are entitled to costs on a partial indemnity basis, which is what is sought by the Applicants. The dispute is over quantum.

[3] The Applicants seek $139,642.93 inclusive of HST and disbursements. The Respondents argue that costs should not exceed $70,000, all in.

[4] On March 2, 2020, a hearing of this application was scheduled for April 16, 2020. Due to the suspension of normal court operations that hearing date was not possible. However, the matter was assigned to me as an urgent matter by Myers J and I held a conference call with the parties on April 8, 2020.

[5] At that time, the parties had exchanged materials, including a reply affidavit which raised the need for more evidence. Further, a principal of the Respondent, Mr. Santaguida, had retained separate counsel who, subsequently, filed evidence and sought to intervene.

[6] I set an aggressive schedule for the parties to exchange further evidence, conduct cross-examinations and file factums over the next two weeks in order to have the matter heard before me on April 23. The matter settled on April 21 when the Respondent accepted an offer to settle made by the Applicants on April 15.

[7] My overall objective is to fix an amount for costs that is fair and reasonable for the 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 Ontario. Pursuant to the Courts of Justice Act, s.131 (1), the Court has a broad discretion when determining the issue of costs, and in exercising that discretion Rule 57.01(1) sets out factors to be considered by me. As well, I must have regard to the principle of proportionality in fixing an amount that balances the indemnity principle with the objective of promoting access to justice.

[8] The costs sought here are high, but so were the stakes. The work done was justifiably time-consuming, and had to be done under significant time constraints in difficult circumstances due to the COVID-19 outbreak and the need to conduct examinations remotely. While I made no findings in this matter, it is clear to me that the Applicants were entirely successful and their offer ought to have been accepted when made. I accept that the Respondents took steps to delay and avoid having the application heard, especially the filing of a lengthy affidavit from Mr. Santaguida, his proposed intervention, and cross-examinations of the Applicants’ deponents.

[9] In my view the Respondent ought to have anticipated a large cost award against them given the amount at stake, the urgency of the matter, and their efforts to prevent an order to which they ultimately agreed. The amount suggested by the Respondent is too low, and fails to take into account the conduct of the Respondent and the work required by a party to respond to lengthy materials that, in the end, had little merit. However, I do find the Applicants Bill to be somewhat high, mostly due to the fact that most of the work was done by senior counsel.

[10] I award costs to the Applicants in the amount $100,000.00 inclusive of disbursements and taxes.

Schabas J. Date: 2020-05-19