Court File and Parties

COURT FILE NO.: CV-1001-18 DATE: 2021-03-10 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 1658161 Ontario Inc., Plaintiff AND: Dianne Marie Carroll, Defendant

BEFORE: D.A. Broad

COUNSEL: Filipe A. Mendes, for the Plaintiff Mark S. Grossman, for the Defendant

Costs Endorsement

[1] The parties have been unable to resolve the question of costs and have now delivered their respective written submissions on costs.

Position of the Plaintiff

[2] The plaintiff submits that, although it was granted partial and not full summary judgment, the motion was reasonably brought and necessary given the defendant’s ongoing failure to pay anything towards the Mortgage and her refusal to acknowledge that the plaintiff was always entitled to possession of both properties. It seeks costs of the action to date and of the motion on a partial indemnity basis. It seeks the total sum of $12,622.44, comprised of fees in the sum of $9,246.74, HST on fees and $1,202.07 in disbursements, inclusive of applicable HST, in the sum of $2,173.63.

[3] The plaintiff submits that, by raising and continuing with the defence that no interest was owing on the Mortgage by reason of an alleged representation by the principal of the plaintiff, the defendant unnecessarily lengthened the duration of the litigation.

[4] In the alternative to its claim for costs of the action to date and the motion, the plaintiff submits that that those costs be reserved to the court hearing the trial.

Position of the Defendant

[5] The defendant submits that in her pleadings and her factum she consented to judgment for $470,000.00 “with a possession order over the property which is subject to the first mortgage.” She says that the plaintiff insisted upon proceeding with a motion for judgment for the disputed balance without providing a detailed summary of advances and calculations. She points out that the issue of the mortgage debt in excess of $470,000.00 is the subject matter of additional litigation. She claims costs on a partial indemnity basis in the sum of $8,910.05, comprised of fees in the sum of $6,600.00, HST on fess in the sum of $858.00 and disbursements, inclusive of applicable HST in the sum of $1,452.05.

Guiding Principles

[6] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid."

[7] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in subrule 57.01(1) of the Rules of Civil Procedure, including, in particular:

(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.

[8] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behaviour by litigants (see Fong v. Chan, [1999] O.J. No. 4600 (Ont. C.A.) at para. 24).

[9] Justice Perrell in the case of 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.) reformulated the purposes of the modern costs rules, at para. 10, as follows:

(1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements.

[10] The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson, [2002] CarswellOnt 1007 (Ont. C.A.) and Macfie v. Cater, [1920] O.J. No. 71 (Ont. H.C.) at para 28).

[11] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, [2005] O.J. No. 160 (Ont. C.A.)).

Analysis

[12] I am not satisfied that the costs of the action to date and of the motion for summary judgment should be reserved to the judge hearing the trial of the issues that have been held to require a trial. The action was necessary due to the failure of the defendant to make any payments of principal and interest on the Mortgage. It would be just and efficient to fix the costs of the action to date, including the motion for summary judgment, at this stage, thereby permitting the trial judge to fix the costs relating to the issues which will be determined at trial.

[13] Counsel for the plaintiff has helpfully categorized its Bill of Costs into the distinct stages of the proceeding to date. The claimed fees attributable to the initial investigation, drafting and exchange of pleadings comprise $1,354.64, inclusive of HST and comprise $1,964.23 for the discovery process (cross-examinations) component, for a total of $3,318.87, exclusive of the motion for summary judgment. The disbursements for issuance and service of the Statement of Claim and for the cross-examinations, inclusive of applicable HST comprise $1,167.50.

[14] The plaintiff’s fees associated with the motion for summary judgment comprise the sum of $6,610.66 inclusive of HST. The sum of $519.28 is attributable to preparing the costs submissions. The balance of the claimed disbursements in the sum of $1,006.13 may be attributed to the motion for summary judgment.

[15] The outcome on the motion for summary judgment was split. The plaintiff was successful in obtaining partial summary judgment for the original principal amount of $470,000.00 and for possession of both of the mortgaged properties, rather than just one, as argued by the defendant. It was also successful in countering the defendant’s position that no interest was owing on the Mortgage. The defendant was successful in showing that the issues of the amount owing in respect of principal advances in excess of $470,000.00 and the applicable rate of interest require a trial. The latter issue was raised by the court and not by the defendant and required very little time.

[16] In my view it would be appropriate to reduce the plaintiff’s claim for costs by the sum of $2,540.00, representing one-third of the claimed partial indemnity costs which may be attributed to the motion for summary judgment.

Disposition

[17] For the foregoing reasons it is ordered that the defendant pay to the plaintiff costs in respect of the action to date, including the motion for summary judgment, rounded down to the sum of $10,000.00. This amount shall be paid within 30 days hereof.

D.A. Broad J. Date: March 10, 2021