Court File and Parties

2021 ONSC 1901 Court File No.: CV-15-524235 Date: 20210315 Superior Court of Justice – Ontario

Re: SUB-PRIME MORTGAGE CORPORATION and ELLE MORTGAGE CORPORATION, Plaintiffs And: DAVID KAWEESA, JACQUELINE KAWEESA and JEREMY KAWEESA, Defendants

And Re: DAVID KAWEESA and JACQUELINE KAWEESA, Plaintiffs by Counterclaim And: SUB-PRIME MORTGAGE CORPORATION, ELLE MORTGAGE CORPORATION and TERRY WALMAN, Defendants to the Counterclaim

Before: Stinson J.

Counsel: Glenn Cohen, for Sub-Prime Mortgage Corporation and Elle Mortgage Corporation Karen Sanchez, for David Kaweesa and Jacqueline Kaweesa Ranjan Das, for Terry Walman

Heard at Toronto: by written submissions

Reasons for Decision as to Costs

[1] These reasons for decision relate to the costs of a motion for judgment that was heard by me on January 26, 2021. It was brought by the plaintiffs to enforce minutes of settlement. In my reasons for decision released January 29, 2021, I granted the relief sought. I invited the parties to agree on the costs of the motion or, failing agreement, to make written submissions. These reasons follow from their written submissions.

[2] I should add that, following the release of my January 29 decision, at the request of the plaintiffs, I received supplementary submissions regarding potential terms that might be imposed during the 90-day “stay period” directed as part of my decision. Specifically, I directed that no steps be taken to enforce the writ of possession for a period of 90 days after the then-existing state of emergency in Ontario formally ended. In supplementary reasons for decision released February 17, 2021, I imposed certain terms as a condition of the stay. The plaintiffs also seek costs of their supplementary submissions.

Liability for costs

[3] As the successful parties on the motion, the plaintiffs are presumptively entitled to costs. The defendants do not dispute that principle or its applicability in this case, although they challenge the quantum of costs sought.

[4] As regards the defendant to the counterclaim, Terry Walman, the defendants/plaintiffs by counterclaim, submit that his participation was not necessary for the motion. I disagree. As a defendant added to the counterclaim, Mr. Walman was independently represented in the litigation, as he was entitled to be. Claims were advanced against him. He and his counsel participated in the settlement negotiations. The agreed-upon settlement included a dismissal of the counterclaim as against him, on a without costs basis. He therefore had a stake in and was entitled to participate in the motion to enforce the settlement, as he did. I would therefore award costs to Mr. Walman, to be paid by the defendants/plaintiffs by counterclaim.

Scale of costs

[5] As regards the plaintiffs, pursuant to the terms of their mortgages with the defendants that were the subject of the mortgage enforcement proceedings in this action, the plaintiffs are entitled to substantial indemnity costs. I therefore award them costs on that scale.

[6] As regards, Mr. Walman, he was not a mortgagee, and thus he has no contractual right to a higher scale of costs. Substantial indemnity costs awards are reserved for rare and exceptional cases, where the misconduct of the paying party has been such as to warrant a punitive sanction from the court. Although they resisted the motion to enforce the minutes of settlement and were unsuccessful in doing so, I am not prepared to find that by doing so, the defendants' conduct was of such a nature as to warrant a punitive costs sanction. I would therefore award costs in favour of Mr. Walman on a partial indemnity basis.

Quantum

[7] As regards the plaintiffs, they were entirely successful in obtaining the relief they sought. The motion was made necessary by reason of the defendants’ failure to perform the settlement to which they agreed. Although, in the circumstances, they could have informed plaintiffs’ counsel that they were prepared to consent to judgment, they instead resisted the relief sought. As a result, the plaintiffs had to proceed with the full argument of the motion. The defendants were unsuccessful on virtually all issues they advanced. They were granted an indulgence by the court by way of the 90 day stay of enforcement of the writ of possession. The only relief sought by the plaintiffs that was not granted in full were the terms the plaintiffs sought to have imposed as a condition of the stay (although some limited terms were granted).

[8] Defendants objected to the expenses incurred by the plaintiffs to have an investigator attend at the premises to provide evidence regarding occupancy. Since a writ of possession was being sought, I consider that expense appropriate.

[9] Overall, I consider the time spent and the rates charged by plaintiffs' counsel to be reasonable. Moreover, they should have been within the range of expectations of the defendants when they chose to resist the motion.

[10] I would therefore award the plaintiffs $8,537 for the costs of the motion, inclusive of fees, disbursements and HST. Given that success was divided in relation to the supplementary submissions regarding the terms of the stay, I would award no costs for that exercise.

[11] Turning to the costs claim of Mr. Walman, as I have indicated, he was a proper participant on the motion. It was a matter of real concern to him since he sought to extricate himself as a personally named party in the litigation. I consider the time spent and amounts charged by his lawyer (at an hourly rate of $285 for partial indemnity costs) to be reasonable. I further consider that a costs award in the range sought by Mr. Walman should have been within the reasonable expectations of the defendants.

[12] In relation to specific amounts, the Walman Costs Outline includes 2.2 hours under the category "prepare for and attendance for hearing; prepare oral submissions", at an amount of $627. The Walman Costs Outline also includes a partial indemnity fee of $500 specified as "estimated counsel fee for appearance". To me, this appears to be double counting. I would therefore reduce the requested costs in favour of Mr. Walman from the claimed $3000, to $2500, inclusive of fees, disbursements and HST.

Conclusion and disposition

[13] For these reasons, I order the defendants to pay costs to the plaintiffs in the all-inclusive amount of $8,357. I further order the defendants/plaintiffs by counterclaim, to pay costs in favour Mr. Walman in the all-inclusive amount of $2,500. These sums are payable within 30 days. The costs awarded in favour of the plaintiffs shall be added to the mortgage debt.

Stinson J. Date: March 15, 2021