Court File and Parties

Court File No.: CV-19-620508 Motion Heard: 2020-01-23 Endorsement Released: 2020-01-23 Written Costs Submissions Filed: 2020-02-14 Costs Endorsement Released: 2020-07-08

Superior Court of Justice – Ontario

Between:

5001398 ONTARIO CORP. Plaintiff

- and-

MEHRAN AMINI aka SAEED JOSHAGHANI aka SAL AGHANI aka JOSHUA ZACKERY, HANIF JOSHAGHANI, SOUTHCOAST REALTY LIMITED, COLIN DALZIEL CAMPBELL, AHMARI LAW FIRM and ALI AHMARI-MOGHADDAM Defendants

Before: MASTER M.P. McGRAW

Counsel: A. Kamyab (aryan@kamyablaw.com) -for the Defendants Mehran Amini and Hanif Joshaghani

G. Low (garth.low@garthlow.com) -for the Plaintiff

Costs Endorsement Released: July 8, 2020

Costs Endorsement

I. Introduction

[1] Pursuant to my Endorsement dated January 23, 2020 (the “Endorsement”), the motion by the Defendants Mehran Amini and Hanif Joshaghani (the “Defendants”) for security for costs was resolved on consent. The Defendants wished to seek costs and the parties filed written submissions pursuant to the timetable in the Endorsement.

[2] The Defendants seek costs of the motion in the amount of $12,471.52 on a substantial indemnity scale. The Plaintiff submits that $2,500 is fair and reasonable.

II. The Law and Analysis

[3] Section 131(1) of the Courts of Justice Act (Ontario) states:

“Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.”

[4] In exercising its discretion to order costs, the court may consider the factors set out in Rule 57.01(1) of the Rules of Civil Procedure. Costs rules serve five purposes: (1) indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) facilitate access to justice, including access for impecunious litigants; (3) discourage frivolous claims and defences; (4) discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) encourage settlements (394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 at para. 10; Deonath v. Iqbal, 2017 ONSC 3672 at para. 20).

[5] The overriding principles in determining costs are fairness and reasonableness (Boucher v. Public Accountants Council for the Province of Ontario, 71 O.R. (3d) 291 (C.A.); Deonath at para. 21). The general rule is that costs on a partial indemnity scale should follow the event which should only be departed from for very good reasons such as misconduct of the party, miscarriage in procedure or oppressive or vexatious conduct of proceedings (1318706 Ontario Ltd. v. Niagara (Regional Municipality) (2005), 75 O.R. (3d) 405 (C.A.); 394 Lakeshore at para. 14).

[6] Generally speaking, costs will not be awarded where a motion is settled on all issues except for costs unless there are exceptional circumstances (Kearney v. Hill, 2017 ONSC 6306 at paras. 27-31; Muskala v. Sitarski, 2017 ONSC 2842 at paras. 5-12). Exceptional circumstances may include situations where the parties have agreed to resolve the motion on all issues except for costs and where it is unlikely that the motion would have proceeded on consent without deferring costs (Kearney at paras. 28-30). The court must also consider Rule 1.04(1) to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits and Rule 1.04(1.1) to make costs orders which are proportionate to the importance and complexity of the issues and to the amount involved (Deonath at para. 21).

[7] This action was commenced on May 23, 2019. The Defendants were noted in default and the Plaintiff consented to setting it aside based on the parties’ agreement to a timetable which provided for the completion of examinations for discovery by September 30, 2019.

[8] On August 9, 12 and 14, 2019, Defendants’ counsel requested information regarding the Plaintiff’s assets. Plaintiff’s counsel responded on August 15, 2019 and the parties agreed that day to conduct examinations for discovery on October 7, 2019. On August 15 and 20, 2019, the Defendants requested that the Plaintiff post security for costs of $50,000 barring which they would bring a motion. The Plaintiff did not agree. On or about August 23, 2019, Defendants’ counsel advised that they would be bringing the security for costs motion and discoveries were cancelled. On September 23, 2019, Plaintiff’s counsel advised that the Plaintiff would oppose the motion based on the merits of its claim and funds it held in trust with third parties.

[9] On October 17, 2019, the parties agreed that the motion would proceed on November 29, 2019, however, Defendants’ counsel did not book the date. On November 8, 2019, Defendants’ counsel again offered to resolve the motion if $50,000 were posted and advised that they would consider any reasonable counter-offer. The Plaintiff refused. On November 22, 2019, the parties agreed to the return date of January 23, 2020.

[10] On January 10, 2020, Plaintiff’s counsel wrote to Defendants’ counsel inquiring into the status of their motion materials and for the first time advised that the Plaintiff would agree to post $50,000 in security. On or about January 13, 2020, the Defendants served their Motion Record which did not include a Bill of Costs. The Defendants also delivered a Factum.

[11] Although the motion proceeded on consent, I am satisfied that the Defendants are entitled to costs. In addition to the Plaintiff’s acknowledgement and expectation that some costs should be paid, I am satisfied that exceptional circumstances exist. Specifically, the motion would likely not have proceeded on consent had the Defendants not been provided with an opportunity to seek costs. In my view, having motions proceed on consent with costs submissions in writing is consistent with Rule 1.04(1) and furthers the goals of promoting settlement, fairness to the parties, access to justice and proportionality (Cadieux (Litigation guardian of) v. Cloutier, 2019 ONCA 241 at paras. 21-25).

[12] I decline to order costs on a substantial indemnity scale. This higher scale is reserved for rare and exceptional cases where the conduct of a party is reprehensible or there are other special circumstances (394 Lakeshore at para. 17). These circumstances may include those where a party has behaved in an abusive manner, brought proceedings wholly devoid of merit and/or unnecessarily run up the costs of the litigation, having regard to Rules 57.01(e) and (f) (Standard Life Assurance Co. v. Elliot at paras. 9-10).

[13] There is no basis in the present case to depart from the general rule that costs should be awarded on a partial indemnity scale. I agree with the Defendants that the Plaintiff’s failure to accept the Defendants’ offer to post $50,000 for almost 5 months until 13 days before the motion unnecessarily added to the costs of the motion. However, in my view, this is not the kind of conduct which calls for substantial indemnity costs. The fact that the Plaintiff was prepared to argue the motion on November 29, 2019 and was intent on proceeding with examinations for discovery demonstrates that the Plaintiff did not intentionally or improperly delay the motion. The Defendants also contributed to the delay by failing to secure the November 29 date.

[14] In the circumstances, the primary factor in determining quantum is the Plaintiff’s delayed acceptance of the Defendants’ offer to settle. Although it was not a Rule 49 offer, it is a relevant factor in the exercise of my discretion including consideration of the factors under Rule 57.01 (J.A.L. Developments Inc. v. Residences of Springhill Inc., 2019 ONSC 1132 at para. 17). Further, although there was some added complexity given the Plaintiff’s stated position, I cannot conclude that it was necessary for 2 articling students to docket a combined total of 86 hours on a motion of this nature.

[15] Having considered all of the relevant factors and circumstances, I conclude that it is fair, reasonable, proportionate, consistent with Rule 1.04(1) and within the reasonable expectations of the parties for the Plaintiff to pay costs to the Defendants fixed in the amount of $4,500 payable within 90 days. Given the ongoing suspension of regular court operations due to the COVID-19 pandemic, this Order is effective forthwith without the requirement for the filing and entry of a formal order although the parties may do so if they choose.

Released: July 8, 2020 Master M.P. McGraw