Court File and Parties

Court File No.: CV-18-5202-00 Date: 2020 01 16 Ontario Superior Court of Justice

Between: SURABH BAWEJA AND BINDIYA BAWEJA, Plaintiffs

And: ROYAL AUTO COLLISION and ECONOMICAL INSURANCE, Defendants

Counsel: P. Singh Wadhwa, Counsel for the Plaintiffs S. Rustomji, Counsel for the Defendant Economical Insurance No one appearing for Royal Auto Collision

Heard: In-writing

Reasons for Decision

LEMAY J

[1] In written reasons dated December 17th, 2019 (see 2019 ONSC 7319), I granted the Defendant Economical’s motion to have portions of the Plaintiffs’ claims struck, but gave the Plaintiffs leave to amend their Statement of Claim. It is now time to fix the costs for that motion.

Background

[2] Most of the background is set out in my previous reasons, so I will just highlight a couple of points that are relevant to the issues before me. As I have noted, the pleadings have not yet closed in this matter.

[3] As I detailed in my reasons, Economical sought additional particulars on two separate occasions. After each response to the request for particulars was received from the Plaintiffs’ counsel, Economical took the position that the Plaintiffs’ particulars were inadequate. Some of this history is detailed in my reasons. However, other portions of the history only became clear with the filing of additional correspondence as part of the costs submissions.

[4] The second Demand for Particulars was served on January 17th, 2019. In that document, counsel for Economical made it clear that if a satisfactory response was not received, then this motion would be brought. A reply to this second Demand for Particulars was served by counsel for the Plaintiffs on January 18th, 2019. In that reply, counsel for the Plaintiffs indicated that he would give Economical one last chance to file its’ Statement of Defence but, if that was not done by 5 pm on January 23rd, 2019, then the Plaintiffs would note Economical in default.

[5] On January 23rd, 2019, Ms. Mukherjee-Gothi (counsel for Economical) wrote to Mr. Wadhwa (counsel for the Plaintiffs) and advised that Karan Khak, who had carriage of the file for Economical, had a family emergency and was not available until the following week. In spite of that fact, Ms. Mukherjee-Gothi went on to set out Economical’s position that they would be proceeding with a pleadings motion, and seeking Mr. Wadhwa’s dates for that motion.

[6] On January 25th, 2019, Mr. Wadhwa noted Economical in default. I did not see any correspondence between the parties from the time of Ms. Mukherjee-Gothi’s letter and the time of the noting in default. In his costs submissions, Mr. Wadhwa also did not raise any issue about whether he had received Ms. Mukherjee-Gothi’s letter of January 23rd, 2019 although he did raise other issues with Economical’s costs submissions. As a result, I accept that Mr. Wadhwa had this letter when he noted Economical in default.

[7] As part of its correspondence, Economical has made two offers that are mentioned. One of the offers relates to the action more generally, and I will not discuss it in any detail in these reasons as it might affect any costs determinations following trial. The second offer was made after my decision was released, and was designed to resolve the costs issue.

[8] I am of the view that those offers do not assist Economical in these costs submissions. The offer to settle the entire action does not trigger any cost consequences under Rule 49 on this motion as the action is continuing. As will be seen, the offer to resolve the costs also does not trigger any significant consequences for the Plaintiffs.

[9] With these observations in mind, I now turn to the positions of the parties.

The Positions of the Parties

[10] The Defendants seek substantial indemnity costs in the sum of $11,641.60 inclusive of HST and disbursements. They seek these costs on the basis of the factors in Rule 57, as well as the conduct of Plaintiff’s counsel with respect to the noting in default.

[11] The Plaintiffs argue that they are entitled to the costs of the motion on the basis that the motion to set aside the noting in default was “brought without seeking any consent to set aside the noting in default.” In addition, counsel argues that Economical delayed in asking for particulars until the very last moment. Finally, counsel directs the Court’s attention to the decision in Koon v. LPIC (2019 ONSC 389) as a decision where “the court ordered the cost [sic] against the moving party after allowing the motion in part, as has happened in this motion.”

[12] As an alternative argument, the Plaintiffs state that if I am going to order costs to Economical, the amount sought, even on a partial indemnity basis is too high for the nature of the motion and the work done.

Issues

[13] Given these positions, there are three issues that arise:

a) Who was the successful party? b) Should Economical be entitled to costs on a substantial indemnity basis? c) Are the costs claimed by Economical proportional?

[14] I will deal with each issue in turn.

Issue #1- Who Was the Successful Party?

[15] The normal rule in costs submissions is that the costs follow the result of the motion or the action. As Pazaratz J. noted in Scipione v. Scipione (2015 ONSC 5982) the question is who got what they asked for? In this case, the answer to that question is clear. Economical got everything that they asked for except for this action to be transferred to the Small Claims Court. In addition, the request to move the action to Small Claims Court was not an unreasonable request to make. As a result, Economical was the successful party on this motion.

[16] In addressing this issue, I should comment on three additional points. First, counsel for the Plaintiffs asserts that the Plaintiffs tried their best to respond to the vague demands for the particulars which were received from Economical. I have already concluded that the Plaintiffs’ responses were not sufficient, so this argument does not assist the Plaintiffs.

[17] Second, counsel for the Plaintiffs argues that Economical never sought any consent to set aside the noting in default. I am of the view that Economical should not be criticized for not seeking consent, even if that is a correct statement. I reach that conclusion for two reasons. First, it was always open to the Plaintiffs to make an offer to have the noting in default set aside. If the Plaintiffs had advanced that position, they might have been entitled to a deduction in the amount of costs payable. Second, given the context in which the noting in default was obtained by Plaintiffs’ counsel, Economical’s assumption that they would require a court order to set the noting in default aside is not unreasonable either.

[18] Finally, counsel for the Plaintiffs directs my attention to the decision in Koon v. LPIC (2019 ONSC 389). Counsel argues that Koon is a decision where the Court awarded costs against the moving party, even though the moving party was partially successful.

[19] Counsel has misapprehended the result in Koon, supra. Counsel is correct that the moving party (LawPRO) was partly successful on the motion. However, Master Sugunasiri ordered Ms. Koon to pay LawPRO costs in the sum of $4,500.00. The reasoning in Koon does not assist the Plaintiffs.

[20] There is nothing in the facts before me that would cause me to conclude that I should depart from the usual rule that the successful party is entitled to its costs. Therefore, I conclude that Economical is entitled to its’ costs of the motion.

Issue #2- Should Economical Receive Substantial Indemnity Costs?

[21] There are two ways in which Economical could claim substantial indemnity costs, as set out in Davies v. Clarington (2009 ONCA 722). First, as a result of cost consequences of an offer to settle. Second, if one party engages in sanction-worthy conduct. I have already explained why the offer to settle the trial does not trigger substantial indemnity costs.

[22] In terms of the offer to settle the costs after the motion was heard, as will be seen, the amount that Economical sought was higher than what I am awarding. As a result, this offer does not assist Economical either.

[23] There are two aspects of the Plaintiffs’ conduct that counsel for Economical argues are troubling. First, there is the fact that the Plaintiffs’ replies to the Demands for Particulars were circular and incomplete. However, in my view, that concern has been dealt with by my reasons and my order that the pleadings be struck.

[24] The second, and more important, issue is whether the circumstances surrounding the noting in default justify an enhanced award of costs. In my view, counsel for the Plaintiffs should not have noted Economical in default. Even without Ms. Mukherjee-Gothi’s letter of January 23rd, 2019, counsel for the Plaintiffs should have been well aware that a motion on particulars was coming, and that noting Economical in default was premature.

[25] The letter from Ms. Mukherjee-Gothi makes the situation worse. Mr. Wadhwa had been specifically told that a motion was coming and been asked for dates. A motion for particulars is normally brought before the moving party is required to plead. As a result, after Ms. Mukherjee-Gothi’s letter was received, Mr. Wadhwa had no basis for noting Economical in default.

[26] Mr. Wadhwa’s conduct in noting Economical in default clearly tended to lengthen the motion and make this matter more complex. It is a matter that justifies a higher award of costs against the Plaintiffs and also justifies negative commentary about the conduct from this Court.

[27] However, although it is a close call, I am not persuaded that the noting in default, standing alone, justifies enhanced costs for Economical on the facts of this case. The noting in default was a relatively minor issue in the hearing of the motion, and the conduct that would justify substantial indemnity costs needs to be very serious. Further, Mr. Wadhwa did not pursue the noting in default in oral argument. As a result, I am of the view that Economical is entitled to partial indemnity costs in this matter.

Issue #3- Are the Costs Claimed by Economical Proportional?

[28] Yes.

[29] Counsel for the Plaintiffs argues that the costs are unreasonable because there was 44 hours of work on this motion. In support of this position, counsel points to his own bill of costs, which is only for 17.5 hours.

[30] There are two problems with the Plaintiffs’ submissions. First, Plaintiffs’ counsel only claims 8 hours for his research and his factum. While I accept that this is the time it took Plaintiffs’ counsel to complete his factum, I also note that his factum did not set out the legal tests for the various causes of action that he was claiming.

[31] Economical, on the other hand, was required to research a whole series of torts in order to determine whether the Plaintiffs’ pleadings met the tests under Rules 21 and 25. I accept that the research and preparation of the legal argument would have taken Economical considerably longer than it took the Plaintiff on the facts of this case.

[32] Second, counsel for the Plaintiffs is a second-year lawyer. As a result, his hourly rate is likely to be substantially lower than the rates charged by Economical’s counsel. The rest of the time claimed on Economical’s accounts appears to be entirely reasonable with one minor exception. Given that Mr. Khak had a family emergency in January of 2019, I am of the view that there is some duplicate time in the invoice and that there should be a small deduction from the costs payable to account for this duplicate time.

[33] In addition, when the factors under Rule 57.01 are considered, it is worth noting that this motion was of moderate complexity, that the noting in default was an improper step and that the Plaintiffs’ conduct tended to lengthen the proceeding. These are all factors that support a higher quantum of costs for Economical.

[34] For the foregoing reasons, I order that the Plaintiffs shall pay Economical’s costs in the sum of $7,500.00 inclusive of HST and disbursements.

Conclusion

[35] The Plaintiffs are jointly and severally liable to pay Economical’s costs in the sum of $7,500.00 inclusive of HST and disbursements within thirty (30) days of today’s date.

LEMAY J Released: January 16, 2020