Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Adriana Hornstein, Plaintiff
AND:
Anatoly Kats and Rachel Higgins, Defendants
BEFORE: C. J. Brown J.
COUNSEL: Stephen Dyment, for the Plaintiff Mark Ross, Sharon Sam, for the Defendant, Anatoly Kats Mitchell Wine, for the Defendant, Rachel Higgins
HEARD: In writing
COSTS ENDORSEMENT
[1]
Overview
The defendants seek their costs of trial, in which they were both substantially successful.
[2]
Legal Principles
Costs generally follow the event. Costs are intended to compensate the successful party or parties to the litigation, wholly or in part for legal expenses that the party or parties have incurred. In general, costs are awarded on a partial indemnity basis. However, elevated costs or substantial indemnity costs are awarded, inter alia, where there is a finding of reprehensible, scandalous or outrageous conduct on the part of the party against which the costs award is being made: Mars Canada Inc. v Bemco Cash & Carry Inc., 2018 ONCA 239, paras 43-44; Toronto Star Newspaper v Fraleigh, [2011] O.J. No. 3689, 2011 ONCA 555, 2009 ONCA 722 (C.A.); Davies v Clarington (Municipality), [2009] O.J. No. 4236, 2009 ONCA 722 (C.A.), Walker v Ritchie, 2005 CanLII 13776 (ON CA), [2005] O.J. No. 1600, 12 CPC (6th) 51 (C.A.), rev’d on other grounds 2006 SCC 45, [2006] S.C.J. No. 45, [2006] 2 S.C.J. 428 (S.C.C.).
3Pursuant to the Courts of Justice Act and the Rules of Civil Procedure, this Court has wide discretion in awarding costs: Courts of Justice Act, RSO 1990, c. C.43, s.131; Rules of Civil Procedure, RRO 1990, Reg. 194, R. 57.01. The court has the power to award costs on a substantial indemnity basis: R. 57.01(4)(c).
[4]
Analysis
In the present case, the following findings were made in my Reasons for Decision dated May 21, 2020, which are important in determining whether substantial damages should be awarded.
a. The plaintiff fraudulently inserted information contained in the UEI contract and forged Kats’ signature without his consent [para 60];
b. Rather than returning to court to seek directions, as should have been done pursuant to the court order of Master Sproat, the plaintiff registered another notice on title prior to expiry of the previous notice, thus preventing the APS from closing [para 182];
c. It appeared that the plaintiff’s goal was to delay the closing and to gather evidence to support the plaintiff’s theory regarding the invalidation of the APS so that she could enjoy the increase in the value of the property; [para 184]
d. The plaintiff did not honour her side of her proposed agreement; her actions suggested that she was using Kats from the beginning. She maintained that there was a partnership and attempted to obtain half the value of the partnership although the evidence indicated that she made no payments on the first or second mortgage, and the carrying costs or expenses [para 199];
e. She improperly registered an indeterminate notice on title despite the court order which permitted the sale of the property to close on conditions; she wanted to take advantage of and benefit from the increase in property as a “partner”, although she contributed nothing financially [para 203];
f. A second notice, registered on title, despite the court order obtained remained on title from December 19, 2012 to the date of my decision following trial, namely eight years. It was unauthorized and improperly registered by the plaintiff in an attempt to benefit from an increase in property value, although she never contributed anything to the cost, upkeep or maintenance of the property [paras 216, 217];
g. The plaintiff’s actions were “egregious, unreasonable and malicious”, “intentional and unnecessary, particularly given the court order … and without legal foundation” [para 253];
h. “The plaintiff took advantage of Kats”; she “acted unreasonably and vindictively regarding the sale of the property” [para 257].
5I further found the plaintiff not to be credible and her evidence throughout was unreliable.
6I find the plaintiff’s conduct to have been egregious and reprehensible throughout, leading up to the litigation, from her misrepresentations to the defendant, Kats, to fraudulently using his signature on a number of documents, to improper registration of notices which prevented sale of the property for a period of eight years, despite the court order which protected any potential monetary interest she allegedly may have had in the property.
7Given her conduct, as recounted above, I am satisfied that the defendants costs, payable by the plaintiff, should be awarded a substantial indemnity basis.
8I have reviewed the costs of both defendants and I find them to be reasonable and fair.
[9]
Disposition
Accordingly, based on all of the foregoing and all of the evidence before this Court, I award costs on a substantial indemnity basis, as follows:
a. To Anatoly Katz, on a substantial indemnity basis, the total amount of $279,729.94, inclusive of HST and disbursements;
b. To Rachel Higgins, a substantial indemnity basis, the total amount of $115,180.03, inclusive of HST and disbursements.
10Notwithstanding Rule 59.05, this Order is effective from the date it is made, and is enforceable without any need for entry or filing in accordance with Rules 77.07(6) and 1.04. No formal Order need be entered and filed unless an appeal or a motion for leave to appeal is brought to an appellate court. Any party to this Order may nonetheless submit a formal Order for original signing, entry and filing when the Court returns to regular operations.
Date: September 21, 2020