Court File and Parties

COURT FILE NO.: CV-19-00629599-0000 DATE: 20210708

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Silver Sky Painting Inc., Plaintiff AND: Reza Seyyedi, Niroo Group Inc., 2157875 Ontario Limited, Tahareh Oskooei and Mohammad Ghamoshi Ramandi, Defendants

BEFORE: Stewart J.

COUNSEL: Gabriel Krikunez, for the Plaintiff Ryan J. Atkinson and Andrea Mauti, for the Defendants

HEARD: May 19, 2021

Endorsement

[1] At the attendance before me on May 19, 2021 on motions by the Defendants seeking orders to vacate a default judgment and for summary judgment, counsel for the parties advised that they had settled their dispute on all issues except costs.

[2] On consent, a timetable was established for providing written submissions on the subject of costs. I now have received and considered those submissions.

[3] The proceedings involve a claim by the Plaintiff for payment for painting work done at 47 Verwood Avenue, Toronto in the amount of approximately $55,000.00, plus costs. A lien for the amount of the claim plus costs was registered against the property where the work had been carried out.

[4] The Defendant Tahera Oskooei, a mortgagee of the property, was the only party to take steps to defend the action. After the litigation had been commenced and the lien had been registered, Oskooei sold the property on power of sale and attempted to have the lien administratively deleted, all without notice to the Plaintiff.

[5] Default judgment against the Defendant Reza Seyyedi in the amount of $63,741.73 inclusive of costs was obtained by motion to a judge by the Plaintiff but without notice to Oskooei. Seyyedi had not defended the action, although it is submitted that the Plaintiff was aware of her interest in settling the claim together with Oskooei.

[6] Seyyedi and Oskooei entered into negotiations with the Plaintiff to settle the claim. No argument was raised by them suggesting that the claim ought to be dropped in its entirety or that a lien was not available to the Plaintiff. The only real issue between the parties was the proper amount of payment owing for the work that had been done by the Plaintiff.

[7] On April 27, 2021 Seyyedi and Oskooei offered a payment of $30,000.00 to the Plaintiff to settle the dispute. The offer did not specifically reference any separate amount proposed for costs, nor was it expressly described as being either inclusive of costs or "all-inclusive".

[8] The Defendants maintain that their offer was intended to deal with the amount of the default judgment in full, including the Plaintiff's costs. However, the offer did not specifically refer to the amount of the default judgment obtained as against Seyyedi, but only to the dispute between the parties.

[9] The Plaintiff accepted the offer on May 14, 2021.

[10] No party is seeking to resile from the settlement or set it aside. Instead, they take different approaches as to the costs consequences which should flow from it.

[11] The Plaintiff now seeks costs against Seyyedi and Oskooei on a substantial indemnity basis in the amount of $12,783.24 up to the date of service of the Defendants' offer to settle. Alternatively, costs are sought by the Plaintiff on a partial indemnity basis in the amount of $9,745.80. The Plaintiff relies upon Rule 49.07(5)(a) of the Rules of Civil Procedure, RRO 1990, Reg 194 in that regard which states that where an accepted offer to settle does not provide for the disposition of costs a plaintiff is entitled, where the offer was made by a defendant, to the plaintiff's costs assessed to the date the plaintiff was served with the offer.

[12] In response, the Defendants submit that the Plaintiff should not get any costs but, rather that the Defendants are entitled to costs on a substantial indemnity basis in the amount of $11,947.47 or, in the alternative, on a partial indemnity basis in the amount of $8,138.80. Among other arguments, the Defendants submit the Plaintiff waited several days before accepting the Defendants' offer and did not actually communicate its acceptance until much of the work preparing for attendance upon the motions that had been scheduled had been done.

[13] I note, however, that at no time between the making of the offer and the date of its acceptance was the offer made by them ever withdrawn by the Defendants. That option was available to them but not exercised in this case.

[14] Further, it cannot be said that Seyyedi and Oskooei were successful either in the litigation or on the motions brought by them which did not proceed.

[15] In seeking costs, the Defendants also rely on Rules 49.02(2) and 49.07(5) and submit that it is they who are the parties entitled to costs flowing from the making of their offer and its acceptance by the Plaintiff.

[16] I do not agree with these submissions by the Defendants. In my opinion, the context and the provisions of the Rules relied upon by the Plaintiff entitle it to receive costs of the proceedings up to the date the offer which it accepted was served upon it. I also consider that such costs should be awarded on a partial indemnity basis in all the circumstances, there being no persuasive reason to deviate from such an approach.

[17] When all of the arguments advanced by the parties are taken into account in light of the many factors that may influence the exercise of discretion in an award of costs, including the overriding principle of proportionality, I consider that a just and reasonable amount for the Plaintiff to receive for costs is $8,500.00, inclusive of all disbursements and applicable taxes. The Defendants appearing on this matter shall pay that amount to the Plaintiff within 30 days of the date of this endorsement.

Date: July 8, 2021