Royal Bank of Canada v. 2414973 Ontario Limited
2020 ONSC 7456
COURT FILE NO.: (Royal Bank of Canada v. 1898936 Ontario Inc.) CV-18-597047 (Royal Bank of Canada v. 2414973 Ontario Limited) CV-18-592837
DATE: 2020-12-03
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ROYAL BANK OF CANADA, Plaintiff AND: 1898936 ONTARIO INC. and HOMAYOUN BALALAEY, Defendants
AND BETWEEN: ROYAL BANK OF CANADA, Plaintiff AND: 2414973 ONTARIO LIMITED O/A TANDIS FINE FOOD, MOHAMMAD BEZKOOL and HOMAYOUN BALALAEY, Defendants
BEFORE: Justice Glustein
COUNSEL: Michael J. Brzezinski, for the plaintiff in both actions Esmaeil Mehrabi, for the defendant Homayoun Balalaey in both actions
COSTS REASONS
Overview
[1] By two sets of reasons dated October 9, 2020:
(i) In Court File No. CV-18-597047 (the 189 Action), I dismissed the summary judgment motion brought by RBC[^1] against 189 based on the loan agreements and against Balalaey on his Guarantees; and
(ii) In Court File No. CV-18-592837 (the Tandis Action), I dismissed the summary judgment brought by RBC against Balalaey on his Guarantees. I granted summary judgment against Tandis, which was not opposed.
[2] The parties delivered written costs submissions (on a combined basis) for both motions. I received Balalaey’s written costs submissions on October 22, 2020. RBC delivered responding written costs submissions on November 20, 2020. Balalaey delivered reply written costs submissions on December 1, 2020.
[3] These costs reasons address the costs of both motions.
[4] In the 189 Action, Balalaey seeks (i) partial indemnity costs of $1,465.20 (plus HST) up to August 31, 2020, the date of an offer to settle the motion (the “Offer”), and (ii) substantial indemnity costs of $2,628 (plus HST) after the Offer. With applicable HST, Balalaey seeks total costs for the 189 Action of $4,625.32.
[5] In the Tandis Action, Balalaey seeks (i) partial indemnity costs of $2,758.80 (plus HST) up to August 31, 2020, and (ii) substantial indemnity costs of $4,608 (plus HST) after the Offer. With applicable HST, Balalaey seeks total costs for the Tandis Action of $8,324.48.
[6] In addition, Balalaey seeks combined disbursements for the two motions of $874.25 inclusive of HST.
[7] Consequently, Balalaey seeks a total costs order (inclusive of costs, disbursements, and HST) of $13,824.05, payable by RBC to Balalaey within 30 days.
[8] RBC does not challenge the reasonableness of the quantum sought by Balalaey, as RBC’s costs are similar to those sought by Balalaey. The costs incurred by both parties are reasonable and consistent with the costs that an unsuccessful party would expect to pay.
[9] RBC submits:
(i) Balalaey is not entitled to any costs due to his delay and breach of court orders;
(ii) In the alternative, costs should be awarded in the cause; and
(iii) In any event, RBC is entitled to its costs thrown away arising from its attendances before Justice Sossin on July 9, 2019 and before me on December 2, 2019, which RBC submits are $4,208.69, or $2,697.88 on a partial indemnity basis.
[10] In his reply submissions, Balalaey opposes the first and second submissions of RBC. Balalaey agrees that RBC is entitled to costs thrown away, but Balalaey submits that the amount should be set at $2,500.
[11] I address these issues below.
Analysis
The Offer
[12] I do not find that the Offer provides a basis to award substantial indemnity costs to Balalaey from the date it was made.
[13] Balalaey was the defendant in both actions, and cannot rely on Rule 49.10(1) which applies (if appropriate) to an offer made by a plaintiff.
[14] Under Rule 49.13, the court can consider any offer to settle in its discretion to order costs. However, in the present case, the Offer did not provide a full compromise to the debts which Balalaey offered to pay. In the 189 Action, while Balalaey offered to pay on his personal guarantees of $65,000, he only proposed payment over a 22-month period. In the Tandis Action, Balalaey only offered payment on the VISA and SBFL Guarantees over a 26-month period.
[15] On that basis, I cannot find that it was unreasonable for RBC to reject the Offer. Consequently, I do not order substantial indemnity costs from the date of the Offer. Rather, I order costs payable by RBC to Balalaey on a partial indemnity scale.
Delay and disregard for court orders
[16] RBC submits that Balalaey should not be awarded costs because he failed to comply with the orders of Justice Sossin and Master Short.
[17] RBC does not rely on Rule 20.06 to claim that it should be awarded substantial indemnity costs due to Balalaey’s alleged misconduct. Rather it relies on the principles set out in Himidan v. 2546579 Ontario Inc., 2018 ONSC 6037, to submit that “improper conduct” can be considered by the court when awarding costs.
[18] In the present case, I find that the appropriate manner to address Balalaey’s failure to comply with the deadlines imposed by Justice Sossin and Master Short is to order costs thrown away, which I consider below. At the December 2, 2020 hearing before me, I accepted Balalaey’s position (opposed by RBC) that he was entitled to an adjournment, but I held that any costs thrown away would be addressed upon the hearing of the motions. Justice Sossin took a similar approach in his July 9, 2019 order.
[19] Balalaey was successful on the motion and would otherwise be entitled to costs as the successful party. Given the prior orders of the court, there is no basis to deprive him of costs, subject to costs thrown away for preparation and attendance before Justice Sossin and me.
Costs in the cause
[20] RBC submits that costs should be reserved to the cause because (i) “[t]he reasons for denying the Motions as against Balalaey were based on the technical requirements for summary judgment motions and Justice Glustein made no comment as to whether Balalaey may be ultimately successful at trial”. I do not agree.
[21] The motions were decided on the basis of summary judgment law. It is not a “technical requirement” to rely on the principles denying summary judgment when there are credibility issues that must be determined at trial and when the evidence before the court does not enable it to determine the issues before it with confidence.
[22] The purpose of a summary judgment motion is only to determine if there is a genuine issue requiring trial. If the court finds that such a genuine issue exists, the court should not assess the likelihood of success at trial.
[23] Rule 20.06 only sanctions costs for improper use of the summary judgment process. It does not deny costs to a successful party who defends the motion, regardless of the subsequent trial result.
[24] I adopt the similar approach taken by the court in York Regional Standard Condominium Corporation No. 1206 v. 520 Steeles Developments Inc., 2018 ONSC 5563 [YRSCC No. 1206]. I find that (i) Balalaey is prima facie entitled to his costs as the successful party on both motions; (ii) the general rule should be followed that costs follow the event and should not be departed from in the present case since there are not any “very good reasons” to do so (such as misconduct, miscarriage in procedure, or oppressive or vexatious conduct); and (iii) there is no basis of “fairness” connecting the costs of these motions to the result at trial (YRSCC No. 1206, at paras. 12-14, and 40).
[25] In the present case, I relied on the principles of law governing the appropriateness of summary judgment, which militated against granting the relief sought by RBC.
[26] Consequently, I follow the general rule and order costs payable by RBC forthwith.
Costs thrown away
[27] I agree with Balalaey that costs thrown away should be fixed at $2,500.
[28] RBC seeks $4,208.69 (inclusive of HST) for costs allegedly “thrown away” as a result of “preparing for and attending on the first two return dates for the Motions”. Based on the actual hourly rate of $195 for RBC’s counsel, RBC submits, in effect, that it incurred 19 hours of wasted time.
[29] However, not all of the costs incurred in preparing for the motions before Justice Sossin and myself can be considered “thrown away”. Much of the initial factum was used for the amended factum. Much of the research for the initial hearings was used in the amended book of authorities for the hearing before me. When these factors are taken into account, I find that Balalaey’s proposal of $2,500 (inclusive of HST), which reflects costs thrown away of slightly more than 11 hours, is a more accurate assessment of such costs.
Conclusion
[30] For the above reasons, I fix costs for legal fees for the motions on a partial indemnity scale at:
(i) $3,833.41 ($3,392.40 plus $441.01 for HST) for the 189 Action, including (a) $1,465.20 (plus HST) in costs before the Offer and (b) $1,927.20 (plus HST) in costs after the Offer; and
(ii) $6,935.94 ($6,138 plus $797.94 for HST) for the Tandis Action, including (a) $2,758.80 (plus HST) in costs before the Offer and (b) $3,379.20 (plus HST) in costs after the Offer.
[31] I fix the combined disbursements at $874.25, inclusive of HST. I divide those costs equally in both actions, so that the disbursements in the 189 Action are $437.12 and in the Tandis Action are $437.13.
[32] I deduct a total of $2,500 (inclusive of HST) for the combined actions. I divide those costs equally between both actions, so that I deduct $1,250 from the costs in each action.
[33] Consequently, the total costs in the 189 Action (inclusive of legal fees, disbursements, HST, and deducting costs thrown away) are $3,020.53 ($3,833.41 in legal fees, plus disbursements of $437.12, less $1,250 in costs thrown away).
[34] The total costs in the Tandis Action (inclusive of legal fees, disbursements, HST, and deducting costs thrown away) are $6,123.07 ($6,935.94 in legal fees, plus disbursements of $437.13, less $1,250 in costs thrown away).
[35] The costs in each action are to be paid by RBC to Balalaey within 30 days of these reasons.
GLUSTEIN J.
Date: 2020-12-03
Royal Bank of Canada v. 2414973 Ontario Limited
2020 ONSC 7456
COURT FILE NO.: (Royal Bank of Canada v. 1898936 Ontario Inc.) CV-18-597047 (Royal Bank of Canada v. 2414973 Ontario Limited) CV-18-592837
DATE: 2020-12-03
ONTARIO SUPERIOR COURT OF JUSTICE
ROYAL BANK OF CANADA Plaintiff
AND: 1898936 ONTARIO INC. and HOMAYOUN BALALAEY Defendants
AND BETWEEN: ROYAL BANK OF CANADA Plaintiff
AND: 2414973 ONTARIO LIMITED O/A TANDIS FINE FOOD, MOHAMMAD BEZKOOL and HOMAYOUN BALALAEY Defendants
COSTS REASONS
Glustein J.
Released: December 3, 2020
[^1]: All defined terms are as set out in the Reasons.