Court File and Parties

Court File No.: CV 12798/19 Date: 2021/02/26

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Sedia Inc., Plaintiff

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Athena Donair Distributors Ltd., Athena Donair Distributors Ltd. and Business Development Bank of Canada, Defendants

A N D B E T W E E N:

Athena Donair Distributors Ltd., Plaintiff by Counterclaim

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Sedia Inc. and Azzam Tawachi, Defendants by Counterclaim

THE HONOURABLE JUSTICE D.L. EDWARDS

DECISION ON COSTS

[1] On January 4, 2021 I heard a motion brought by the defendant to the counterclaim, Azzam Tawachi (“Tawachi”), for an order dismissing the counterclaim against him. I granted that order. I also ordered that Athena Donair Distributors Ltd. (“Athena”) commence a separate action with respect to the issues raised in the counterclaim and that this new action be governed by the terms of the order of Justice Sweeny dated November 9, 2020.

[2] I requested cost submissions which I have received and reviewed. This is my cost decision.

Counsel

Adam Wainstock, for the Plaintiff (Sedia Inc.) and for the Defendants by Counterclaim (Sedia Inc. and Azzam Tawachi) Peter A. Mahoney, for the Defendant Athena Donair Distributors Ltd. and for the Plaintiff by Counterclaim (Athena Donair Distributors Ltd.)

The Position of the Parties

[3] Tawachi seeks costs on a substantial indemnity basis in the amount of $5,669.66.

[4] Athena seeks costs on a partial indemnity basis in the amount of $6,500.

The Law

[5] Rule 57.01 of the Rules of Civil Procedure sets out the factors that I should consider in fixing costs in exercising my discretion under Section 131 of the Courts of Justice Act.

[6] Rule 57.01 states:

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.

[7] My overall task is to fix an amount that is fair and reasonable for the unsuccessful party to pay in this proceeding, and not an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario, at para. 24.

Analysis

[8] I am satisfied that this motion was necessary due to the actions of Athena and that Tawachi was substantially successful and is entitled to a cost award.

[9] In reviewing the Bill of Costs of Tawachi’s counsel, I am satisfied that the hours docketed are reasonable and the hourly rate of Tawachi’s counsel is appropriate.

[10] One factor in determining the reasonableness of a Bill of Costs is what a losing party could expect to pay, which can be reflected in that party’s counsel’s Bill of Costs.

[11] I note that on a partial indemnity basis Athena’s Bill of Costs is $6,677.25, whereas Tawachi’s counsel’s Bill of Costs on a partial indemnity basis is $4,688.53.

[12] The motion was necessary because Athena added Tawachi by way of counterclaim when that was not permitted by the Construction Lien Act.

[13] I did grant alternate relief because, given that the parties were in court, it was the most expeditious and cost-effective way to resolve the issue. However, had Athena not contravened the provisions of the Construction Lien Act by adding Tawachi by way of a counterclaim, this motion would not have been necessary.

[14] Athena should not benefit for this misstep via a cost award.

[15] Athena delivered an Offer to Settle on the basis that the counterclaim be converted to a separate action and proceed in tandem with the lien actions.

[16] I did not grant that relief, but rather permitted Athena to commence an action and, if it did so, that action would proceed in tandem with the lien actions.

[17] As I have indicated, Tawachi was successful and is entitled to a cost award. The question is whether it should be on a partial or substantial indemnity basis.

[18] On November 26, 2020 Tawachi delivered an Offer to Settle which was not accepted. It provided that the counterclaim be dismissed against Tawachi and partial indemnity costs be paid to him.

[19] I granted the relief described in Tawachi’s Offer to Settle, but I went further and granted an indulgence to Athena.

[20] In all of the circumstances, I am satisfied that Tawachi is entitled to a cost award on a partial indemnity basis in the amount of $4,688.53 fixed, inclusive of HST, payable within 30 days.

[21] I order that Athena pay to Tawachi the sum of $4,688.53 fixed inclusive of HST within 30 days.

D.L. Edwards J. Released: February 26, 2021