COURT FILE NO: 09-248-00
DATE: 2021/06/09
SUPERIOR COURT OF JUSTICE-ONTARIO
RE: SONYA ROBERTS IN HER CAPACITY AS CREDITOR
IN THE MATTER OF THE BANKRUPTCY OF CALIN LAWRYNOWICZ
Plaintiff
AND
ROBERT HORNE HALLIDAY
Defendant
BEFORE: Justice A. Doyle
COUNSEL: Adam Patel, Counsel for the Plaintiff
Sean Butt, Counsel for the Defendant
HEARD: In writing
COSTS ENDORSEMENT
[1] On May 6, 2021, the Court dismissed the defendant’s motion requesting that the action be dismissed for delay.
[2] The Court also granted the plaintiff’s motion for a status hearing. The Court permitted the action to continue and ordered that:
- A pre-trial date be scheduled within 30 days from the release of the decision;
- Discoveries must take place before the pre-trial; and
- The matter be set down for trial if it does not resolve at the pre-trial.
[3] If the parties were unable to agree on the issue of costs, they were to provide the Court with costs submissions.
[4] For the reasons that follow, there will be no order as to costs.
Brief Background
[5] The Statement of Claim issued in 2009 involved an alleged debt owed by a client, the defendant Mr. Halliday to his lawyer, Mr. Lawrynowicz, who had advanced him funds to assist him in the settling of an action. Mr. Halliday raised, among other defences, that Mr. Lawrynowicz was in a conflict and should have ensured that the defendant had independent legal advice when he borrowed money from his lawyer. The defendant acknowledges that monies were advanced on his behalf but requires an accounting.
[6] Since the commencement of this action, there have been numerous intervening events that have delayed the resolution of this matter including eight changes of counsel on the file, Mr. Lawrynowicz made an assignment in bankruptcy and then was disbarred. In 2016, the current Plaintiff, Sonya Roberts, a creditor of the estate of the bankrupt of Mr. Lawrynowicz, took carriage of the file as the Plaintiff. The trial record was filed before a status review hearing was heard.
Plaintiff’s position
[7] The plaintiff submits that she is presumptively entitled to costs as she was entirely successful on the motions.
[8] The plaintiff indicates that she has incurred $30,406.38 (paid to the current counsel and previous counsel, Cunningham Swan and Pretsell Davies Hompson Benton LLP) in connection with these motions and on a substantial indemnity basis she is entitled to 80% of the total fees incurred in the amount of $24,325.10 and disbursements of $1,976.37 for a total of $36,301.47. On a partial indemnity basis, the total amount for fees and disbursements is $20,220.19
[9] The excessive fees incurred were due to the defendant’s conduct. The plaintiff moved for a status hearing in December 2016 upon assuming carriage of the action pursuant to s. 38 of the Bankruptcy Insolvency Act and she then set the action down for trial in August 2018. It was at this time that the defendant moved for the action to be dismissed for delay thereby causing costs and delay since 2018.
[10] The plaintiff submits that there was no prejudice caused by any delay in moving this matter to trial as the defendant had received the plaintiff’s affidavit of documents in 2012 and the defendant did not complain of this deficiency until this motion. The only witnesses were the defendant and Calin Lawrynowicz, both of whom are available to testify.
[11] The plaintiff submits that the defendant is liable for costs for bringing this motion forward and attempting to avoid its debt obligation.
[12] The defendant’s motion was supported by extensive affidavit materials and exhibits which required cross-examinations and required a case conference with the required briefs.
[13] Rather than proceeding to a pre-trial when this matter was set down for trial, the defendant “decided to take a shot at avoiding his obligations”.
Defendant’s Position
[14] The defendant submits that there should be no order as to costs because:
- The decision was a result of discretionary relief;
- The plaintiff was obliged to show cause; and
- The defendant rightfully sought an explanation for delay and the availability of evidence.
[15] In addition, pursuant to the Rules of Civil Procedure the plaintiff was obliged to schedule a status hearing to show cause as a result of their delay in commencing the motion and where the Court has held that there is a mixed responsibility for the delay and the defendant was within the right to require the plaintiff to show cause, it is fair that there be no costs of the motion.
[16] The plaintiff did not explain the delay until compelled to do so.
[17] The defendant denies that this motion was an effort to avoid his debt obligation and the findings of this Court endorsement support this.
[18] Here the plaintiff’s status motion was brought on the eve of administrative dismissal of the action and hence could not avail themselves of r. 48.14(7) to file a timetable at least 30 days prior to the administrative dismissal. The defendant relies on Farrage Estate v. D’Andrea, 2020 ONSC 5200, where Justice Sanfilippo noted the requirements under s. 48.14(7) and that the relief under this rule is discretionary.
[19] The defendant notes this court’s finding that the plaintiff setting the matter down for trial was a questionable step given that the required status review hearing had not yet taken place. The defendant then brought their own motion to dismiss for delay thereby requiring a case conference.
[20] The defendant was within his right to require the plaintiff to show cause as the plaintiff did not file supporting evidence to explain her delay and show that if the action were to proceed the defendant would suffer no non-compensable prejudice.
Applicable legal principles
[21] Pursuant to s. 131 of the Courts of Justice Act, costs are within the discretion of the Court and the Court may determine by whom and to what extent the costs shall be paid.
[22] Rule 57.01 sets out the principles that apply to fixing costs including:
a. The result in the proceeding; b. What the reasonable expectations of the losing party would be; c. The complexity of the proceeding; d. The importance of the issues; e. The conduct of any party that tended to lengthen the duration of the proceeding; and f. Whether any step in the proceeding was improper, vexatious or unnecessary.
[23] Rule 57.01(7) states that the Court “shall devise and adopt the simplest, least expensive and most expeditious process for fixing costs.”
[24] Partial indemnity costs are typically awarded in favour of a successful party. Rule 49 allows the Court to consider settlement offers in determining whether an enhanced scale of substantial indemnity costs is warranted.
[25] The principles of indemnity and proportionality are important considerations in arriving at the appropriate amount of costs to award. Rule 57.01(0.a and 0.b) and Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (Ont. C.A.).
Analysis
[26] There were no offers to settle presented. The plaintiff was successful in the motion.
[27] Firstly, the Court afforded an indulgence to the plaintiff. The Court exercised its discretion and permitted the plaintiff to proceed with their action.
[28] The Court found that although the delay between 2009 and 2012 was shared by the parties, the time period between the 2013 and 2016 was the responsibility of the plaintiff.
[29] This was not a complex matter and the plaintiff was in part responsible for the delay before the bankruptcy. The defendant was not denying that money had been borrowed but rather questioned the quantum. This was a case of accounting.
[30] Secondly, I agree with the defendant that the plaintiff should not have set the matter down for trial without a status hearing. By not proceeding in accordance with the Rules the plaintiff skirted the issue of explaining the delay and asking the Court permission to continue their action.
[31] The plaintiff sought and obtained an indulgence and the defendant was within his rights to require the plaintiff to show cause why the action should not be dismissed for delay.
[32] Regarding prejudice, the Court found although the prejudice was not significant as the witnesses were available and the debt details were set out in the plaintiff’s affidavit of documents, However, I note that Mr. Lawrynowicz(who was a practising lawyer at the time of the arising of the claim) only found the pertinent legal files on the eve of the motion before this Court.
[33] I agree with the findings found in Slota v. Kenora-Rainy River Districts Child and Family Services, 2019 ONSC 126, at paras. 64 and 65 and Farrage, at para. 109 where plaintiffs have required an indulgence to proceed with their action, Courts have at times awarded no costs, or costs to the responding parties, when permitting an action to proceed on a r. 48.14 motion. See Slota.
[34] Finally, the plaintiff relies on the decision of Croy Properties Inc. v. 2273865 Ontario Inc. 2015 ONSC 3332, where Master Dash, in his opening, indicated that he dismissed a motion to dismiss the action for delay and that he granted the motion for leave to restore the action to the trial list. The defendant had agreed that if the motion for dismissal for delay was dismissed then they would not oppose the motion to restore.
[35] When determining costs, Master Dash noted that this was not a matter of granting an indulgence as it would be if there was a motion for leave to restore the action to the trial list. He found that the motion to dismiss was “ill-founded particularly given the overall expedition in the action and that the plaintiffs asked for consent to restore the action to the trial list …only 33 days after it was struck” (at para. 62)
[36] I distinguish the Croy case, as there, the Court found that the defendant’s motion was “ill-advised” and had little chance of success given the short delay in the action and absence of actual prejudice and that it was tactical motion designed to take advantage of the slip by the plaintiffs’ counsel.
[37] In my view, and in the circumstances before this Court, it is fair and reasonable that there be no order with respect to these motions. Each party will bear their own costs.
Justice A. Doyle
Date: June 9, 2021
COURT FILE NO: 09-248-00
DATE: 2021/06/09
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: SONYA ROBERTS IN HER CAPACITY AS CREDITOR
IN THE MATTER OF THE BANKRUPTCY OF CALIN LAWRYNOWICZ
Plaintiff
AND
ROBERT HORNE HALLIDAY
Defendant
BEFORE: Justice A. Doyle
COUNSEL: Adam Patel, Counsel for the Plaintiff
Sean Butt, Counsel, for the Defendant
COSTS Endorsement
Judge A. Doyle
Released: June 9, 2021