Court File and Parties

COURT FILE NO.: CV-14-504975-A3

DATE: 2020-09-21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Mireille Carrillo De Albornoz, Plaintiff

AND:

Krysten Leigh Christie, Matthew James Herbert Christie, Flow Investment Properties Inc., Kings Construction Ltd., 2365483 Ontario Inc. o/a Littler Construction, City of Toronto and The Dominion of Canada General Insurance Company, Defendants

AND:

Carmazan Engineering Inc., Third Party

BEFORE: Pinto J.

COUNSEL: Joel Cormier, for the Defendant Kings Construction Ltd.

Tom Macmillan, for the Third Party Carmazan Engineering Inc.

HEARD: September 3, 2020

COSTS ENDORSEMENT

[1] The Defendant Kings Construction Ltd. consented to a dismissal of its third party claim against Carmazan before Carmazan’s motion for summary judgment was heard. As the parties were unable to agree on costs, this decision was required.

[2] The within action is one of two civil actions arising from the partial collapse of a residential home in Toronto in April 2014. This action is brought by a neighbour against the Christie homeowners, the King Construction company who performed the underpinning work, and others. The other action, CV-15-525093, is brought by the Christie homeowners against King and an insurer. In both actions, King commenced third party claims against Carmazan, the engineering firm that drafted the underpinning drawings, several years after the main actions had commenced.

[3] The Third Party seeks costs on a partial indemnity basis in the amount of $33,984.79 inclusive of fees, disbursements and taxes based on its Costs Outline.

[4] King’s third party claim against Carmazan in the Christie action continues, but its third party claim in the within action will be dismissed. The question arises as to how much of Carmazan’s costs it can legitimately claim here when its lawyers’ time was also spent on the other action? In its Costs Outline, Carmazan acknowledges that it derived its cost calculation by dividing equally the total time spent on the two actions. King objects and suggests that, in fact, the plaintiffs in this action were demanding significantly less damages than the Christie plaintiffs, and that aspect should be taken into account in assessing costs. Moreover, King argues that Carmazan’s costs include time spent on factum preparation but the summary judgment motion did not proceed.

[5] For the reasons that follow, I disagree with King’s arguments and award Carmazan its costs as requested.

[6] 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.

[7] 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.

[8] In deciding 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 CanLII 14579 (On CA), 71 O.R. (3d) 291 (C.A.) at para. 24.

Entitlement

[9] Generally, costs are awarded to the successful party. Here the defendant agreed to its third party claim being dismissed in the face of a pending summary judgment motion. In my view, there is no question that the Third Party is entitled to costs.

Scale of Costs

[10] The Third Party seeks costs on a partial indemnity scale at 66% of its full indemnity costs. The percentage is within the acceptable range.

Quantum

[11] The Third Party’s costs were based on time docketed by 5 lawyers and one law clerk. In particular, significant work was done by Mr. Macmillan, a 10-year call whose actual hourly rate was $290. I find the professionals’ rates and the allocation of work as between them to be reasonable.

[12] Based on the Rule 57.07 factors, I find as follows:

(a) Amount sought and recovered: The De Albornoz plaintiff's action was for over $6.5 million plus interest and costs. King’s third party action against Carmazan is to be dismissed after Carmazan brought a summary judgement motion. I agree with King’s submission that not too much stock should be placed on the face value of the De Albornoz claim, however, the fact still remains that King attempted to place responsibility on Carmazan for significant damages.

(b) The importance of the issues: King brought the third party action several years after the main action commenced arguing that it had only latterly understood that Carmazan was responsible for drafting the underpinning documents, see Affidavit of Peter Boeckle. The third party would have argued in the summary judgment motion that King was well out of time. The successful resolution of the third party action was critical to Carmazan, a small engineering firm.

(c) The complexity of the proceeding: The third party action against Carmazan was moderately complex.

(d) Whether any step was improper or unnecessary: King is correct that Carmazan’s costs are not the same as if the summary judgment motion proceeded, however, I find that including the factum preparation in its costs was reasonable in the circumstances.

[13] Carmazan claims its legal professionals spent 182.65 hours. King declined to provide its own Costs Outline. This placed it at a significant disadvantage in arguing that Carmazan’s costs were excessive. I do not find the hours claimed to be excessive although this determination is caught up in King’s main objection over alleged duplication of hours in respect of the two actions, which I address next.

[14] King objects to Carmazan’s methodology of equally dividing its costs as between the two actions. While King argues that the actual damages sought in this action were considerably less than in the other action, on balance, I agree with Carmazan’s response that a significant baseline amount of legal work was still necessary. More to the point, I do not find the overall quantum, $33,984.79, to be unreasonable in light of the stage in litigation of the third party action combined with the bringing of a summary judgment motion. It is easy to criticize Carmazan’s simplistic methodology, however, when King’s counsel was asked to provide an alternative, his proposed quantum was unrealistically low and completely failed to take into account the amount of time necessary to deal with this third party claim.

[15] I find Carmazan’s approach of simply splitting its time defending against the third party claims in the two actions acceptable in the circumstances.

[16] I find the Third Party’s disbursements of $1,887.29 to be reasonable.

[17] Additionally, I find the Third Party’s request for $574.20 in counsel fees, when taking into account the parties’ August 31 and September 3, 2020 attendances before me, to be reasonable.

[18] Accordingly, I order that the defendant King pay the Third Party Carmazan’s costs in the amount of $33,984.79 within 30 days of the release of this costs endorsement.

[19] 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.

[20] 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 21, 2020