Kossay El-Khodr v. Northbridge Commercial Insurance Company and Hughes Amys LLP
ONSC 3160 COURT FILE NO.: CV-19-80507 DATE: 20200520
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
KOSSAY EL-KHODR Applicant
– and –
NORTHBRIDGE COMMERCIAL INSURANCE COMPANY and HUGHES AMYS LLP Respondents
Joseph Obagi, Counsel for the Applicant
Harvey Klein, Counsel for the Respondent Northbridge Commercial Insurance Company
HEARD: In writing
COSTS ENDORSEMENT
H.J. Williams, J.
Background
[1] In his application, Kossay El-Khodr had sought the opinion, advice or direction of the court in respect of minutes of settlement he had signed with Northbridge Commercial Insurance Company (“Northbridge”) relating to his claim against another insurer for statutory accident benefits.
[2] I dismissed Mr. El-Khodr’s application and found that Northbridge was entitled to the settlement funds of $385,000.00.
[3] The parties agree that Northbridge should be awarded its costs of the application.
The Issue
[4] The issue is whether Northbridge is entitled to an order for costs that exceeds the amount in the Form 57B costs outline Northbridge delivered before I released my decision on the application.
Analysis
[5] For the following reasons, I have concluded that Northbridge’s costs must be limited to the amount in its costs outline.
[6] Subrule 57.01(6) of the Rules of Civil Procedure requires any party who intends to seek the costs of a step in a proceeding to prepare a Form 57B costs outline, to provide a copy to every other party and to bring it to the hearing.
[7] Mr. El-Khodr’s counsel brought an outline to the February 19, 2020 hearing. In his outline, Mr. El-Khodr said that, if successful on the application, he would request all-inclusive (fees, disbursements and HST) costs of $18,781.62.
[8] Northbridge’s counsel did not bring an outline to the hearing. I said that I would require one before releasing my decision. Northbridge’s counsel filed his outline on March 20, 2020. It said that, if successful, Northbridge would seek partial indemnity fees of $6000.00 and disbursements of $490.40.
[9] I released my decision in favour of Northbridge on April 17, 2020. I urged counsel to settle costs but invited them to deliver written submissions if they were unable to agree.
[10] On May 8, 2020, Northbridge’s counsel delivered costs submissions in which he said that, through inadvertence, a number of hours of work had been omitted from the Northbridge costs outline. He also requested an increase in his counsel fee from the $1,500.00 requested in the outline to $2,500.00, the amount Mr. El-Khodr’s counsel had requested in his outline. Northbridge was now seeking partial indemnity costs of $13,612.53, inclusive of fees, disbursements and HST, about twice the amount in its costs outline.
[11] Mr. El-Khodr argued that, after a party receives a court’s decision in its favour, it should not then be permitted to ask for more costs than it had requested in its costs outline. Mr. El-Khodr argued that this would undermine the purpose of the requirement to exchange costs outlines. Mr. El-Khodr also argued that the costs Northbridge added to its March 20, 2020 outline improperly included costs of an unsuccessful motion it had brought before the Court of Appeal, in which costs were awarded to Mr. El-Khodr.
[12] Mr. El-Khodr does not take issue with the costs requested by Northbridge in its costs outline.
[13] Other than inadvertence in respect of the missing hours and perhaps hindsight in respect of the counsel fee, Northbridge provided no other reasons for having under-estimated its costs in its Form 57B. Northbridge argues that the $13,612.53 in costs it is now seeking is a fair and reasonable amount, and still considerably less than the amount Mr. El-Khodr would have asked for if his application had been successful.
[14] I agree with my colleague Beaudoin J., who said that one of the purposes of the Form 57B costs outline is to force a party to commit to the amount it will be seeking in costs so that, in the event that it is unsuccessful, it cannot be heard to say that the motion or proceeding was simple or unimportant in order to diminish the costs which would otherwise be payable. (Wallace v. Campbell, 2017 ONSC 2767, at para. 5.) A costs outline can also expose an opposing party’s inflated claim for costs. For example, if Mr. El-Khodr had been successful on the application, I am sure I would have weighed Mr. El-Khodr’s claim for almost $19,000.00 in costs against Northbridge’s claim of less than $7,000.00; that Mr. El-Khodr’s costs would have appeared to be almost triple those of Northbridge would have factored into my assessment of the reasonableness of Mr. El-Khodr’s claim. In that scenario, had Northbridge asked for $13,612.53 in its costs outline, Mr. El-Khodr’s claim for $19,000.00 would have appeared much more reasonable.
[15] A party which understates its costs on its Form 57B, inadvertently or intentionally, and is later permitted to ask for a higher amount, would have the benefit of potentially driving down the costs it would be required to pay if it is unsuccessful without any corresponding detriment if successful. Parties are expected to commit to their costs positions in their costs outlines; if parties are permitted to ask for more costs after they learn they are going to be on the receiving end and not the paying end of the costs equation, Forms 57B may become more strategic than reliable and subrule 57.01(6) would no longer serve its purpose.
Conclusion
[16] Mr. El-Khodr shall pay Northbridge the costs it requested in its March 20, 2020 costs outline. HST shall be added to the fees of $6,000.00 and to taxable disbursements, if any.
[17] As I have fixed the costs of the application based on the Form 57B issue, it is not necessary for me to consider Mr. El-Khodr’s second argument in respect of the costs claimed by Northbridge that related to the its unsuccessful appeal.
Date: May 20, 2020
ONSC 3160 COURT FILE NO.: CV-19-80507 DATE: 20200520
ONTARIO SUPERIOR COURT OF JUSTICE
RE: KOSSAY EL-KHODR Applicant
– and –
NORTHBRIDGE COMMERCIAL INSURANCE COMPANY Respondents
BEFORE: Madam Justice H.J. Williams
COUNSEL: Joseph Obagi, for the Applicant Harvey Klein, for the Respondents
REASONS FOR JUDGMENT Madam Justice H. J. Williams
Released: May 20, 2020