Court File and Parties

COURT FILE NO.: CV-20-644568 DATE: 20200902 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: T-City Construction Inc., Applicant AND: Mirunalini Arivuchelvan, Respondent

BEFORE: Pinto J.

COUNSEL: Paul Portman, for the Applicant Obaidul Hoque, for the Respondent

HEARD: July 21, 2020

Costs Endorsement

[1] On July 21, 2020, I dismissed the within application in its entirety without prejudice to the applicant filing a defence and counterclaim, if necessary, in a related action, CV-20-644022. My reasons for decision can be found at 2020 ONSC 4502.

[2] As the parties were unable to agree on costs, they provided written submissions which I have considered in arriving at this decision on costs.

[3] The respondent seeks costs on a partial indemnity basis in the amount of $8,768.80 inclusive of fees, disbursements and taxes based on its Costs Outline.

[4] Section 131(1) of the Courts of Justice Act, R.S.O. 1990 c. C.43 provides that a judge has the discretion to award costs for a motion. The discretion is subject to the Rules of Civil Procedure.

[5] Rule 57.01 of the Rules lists several factors that the court may take into consideration in determining costs:

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.

[6] In deciding on 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 Council for the Province of Ontario (2004), 2004 14579 (On CA), 71 O.R. (3d) 291 (C.A.) at para. 24.

Entitlement

[7] Generally, costs are awarded to the successful party. Here the respondent was entirely successful with respect to the two parts of the application that were heard on July 21: (a) the applicant’s request for the return of tools and equipment left on the respondent’s property, and (b) whether the proceeding was properly commenced as an application. I declined to order the return of the tools and equipment, and held that the proceeding was not properly commenced as an application.

[8] I disagree with the applicant’s submission that neither party was successful. While I agree that my July 21 decision was an interim one, and does not represent a final ruling on the ownership of the tools and equipment, there is no doubt that the interim ruling was decided in favour of the respondent. Also, while I ordered that the applicant can file pleadings in the related action on a without prejudice basis, this does not mean that the respondent’s legitimate costs in responding to the now dismissed application (or the relevant parts thereof) do not have to be paid or must be deferred until some final merits ruling.

[9] Here the applicant’s costs submissions emphasized the inconclusive nature of the July 21 outcome, but the submissions are inconsistent with the applicant’s aggressive stance on the motion which, as the respondent pointed out, made full blown legal arguments and sought declaratory relief, damages, including punitive damages, and costs, including costs against the respondent’s legal counsel personally. It is not surprising that the respondent was forced to respond to these arguments and now seeks its legal costs for doing so. I see no reason to pass on the determination of costs to a future motions or trial judge, as the costs I am deciding on relate to issues fully argued at a contested motion: Rule 57.03(1) of the Rules.

Scale of Costs

[10] The respondent seeks costs on a partial indemnity scale which is what is generally awarded.

[11] The defendants' Costs Outline provided a breakdown of the fees (based on the hours spent) and the disbursements incurred.

Quantum

[12] The respondent was represented by two counsel. Mr. Hoque, a 2015 Call, with an hourly rate of $350.00 and Mr. Moral, a 2019 Call, with an hourly rate of $275.00. I do not find these rates unreasonable. The equivalent partial indemnity hourly rates (less than 60% of actual rates) are $200.00 and $150.00 respectively.

[13] Upon reviewing the time spent by respondent’s counsel, 12.8 hours spent by Mr. Moral and 29.2 hours spent by Mr. Hoque, I do not find them unreasonable.

[14] I note that the applicant provided a revised Costs Outline indicating its partial indemnity costs of $5,801.81, all inclusive.

[15] Costs are in my discretion. While I do not find the respondent’s costs request to be unreasonable, I find that a reduction is necessary in light of paragraph 57.01.(0.b) of the Rules, 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. Given that the tools and equipment at issue had an approximate value of $20,000, I find that $8,768.00 in costs with respect to an interim ruling on a motion is excessive.

[16] I exercise my discretion and order that the applicant pay the respondent’s costs in the amount of $7,000 within 30 days of the release of this costs endorsement.

[17] As a result of the suspension of the regular court operations, and notwithstanding Rule 59.05, this endorsement should be treated as an Order that is effective, binding and enforceable without the requirement of a formal entry.

[18] If, however, an appeal or a motion for leave to appeal is brought to an appellate court, a party shall submit a formal judgment or order in Word format for my consideration through my judicial assistant with confirmation from opposing counsel that the terms of the draft judgment or order have been agreed upon.

Pinto J.

Date: September 2, 2020