Court File and Parties

COURT FILE NO.: 17-72986 DATE: 20210809 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ECN FINANCIAL INC., Plaintiff/Moving Party AND: 9130764 CANADA INC. c.o.b. as OPTICAL VISION OF CANADA LTD. and ANTRANIK MARDIROS KECHICHIAN, Defendants

BEFORE: Mew J.

COUNSEL: Fraser Mackinnon Blair, for the Plaintiff/Moving Party Antranik Kechichian, litigant in person

HEARD: Written submissions received from the Plaintiff No submissions received from the Defendants

Costs ENDORSEMENT

[1] The plaintiff seeks its costs of this action and of the summary judgment motion which was resolved in its favour (reported at 2021 ONSC 3619).

[2] The plaintiff and the corporate defendant were parties to certain lease agreements which the individual defendant, Antranik Kechichian, guaranteed.

[3] In the endorsement containing my decision on the motion, I invited the parties to make submissions on costs if they could not be agreed. I have received a submission from the plaintiff. The defendants have not delivered any costs submissions.

[4] The plaintiff asserts a contractual right to costs on a full indemnity basis. The lease agreements between the plaintiff and the corporate defendant make the defendant responsible for all enforcement costs, as defined in the agreements, including all costs and expenses in respect of legal fees.

[5] It is a well settled principle that a contractual right to costs “is a relevant and important consideration” for the court to take into account when exercising its discretion to award costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194: NJS Midtown Portfolio Inc. v. CMLS Financial Ltd., 2020 ONSC 3973 at para. 98. However, an agreement between the parties cannot exclude the court’s discretion. A court may refuse to enforce the contractual right where there is a good reason for doing so, such as where the case presents “special circumstances” which render the imposition of full-or-substantial indemnity costs unfair or unduly onerous in the particular circumstances: Bossé v. Mastercraft Group Inc. (1995), 123 D.L.R. (4th) 161, 1995 CanLII 931 (ON CA), at para. 66.

[6] The full indemnity costs claimed by the plaintiff, inclusive of disbursements and G.S.T., total $83,768. Alternatively, on a substantial indemnity scale, the costs would be $75,502.11, and on a partial indemnity scale $51,234.44.

[7] The plaintiff in its costs submissions asserts that the conduct of Mr. Kechichian increased the length of the proceeding. Third party claims were brought and determined by the court to be without merit and, on the eve of the hearing of the motion, an attempt was made to examine a non-party witness and add a third party.

[8] While I accept that submission, proportionality is an important principle which underlines both the application of the Rule 57 factors and the Rules of Civil Procedure generally. In that regard, the principal amount recovered was $203.176,24. The accumulated total interest is more than that – a further $320,809.38.

[9] Not only is the amount of costs high having regard to the principal amount in dispute. I note, also, that no less than ten fee earners were involved with this matter, according to the plaintiff’s bill of costs. There would inevitably have been some overlap and duplication.

[10] The plaintiffs in the present case also claim considerably more by way of costs that the plaintiffs in the three other motions that were heard concurrently with the summary judgment motion in this action.

[11] In my view, an appropriate award of costs would be $55,000.

[12] This is an amount which takes into account both the agreement made by the parties but, also, the overarching concern that costs awards should be proportionate and reasonable in all of the circumstances.

[13] The costs submissions of the parties were accompanied by a draft order and an explanatory letter. I am nevertheless uncertain about whether the prejudgment interest paragraphs are correct. As I understand it, the corporate defendant was contractually bound to pay interest at a rate of 18% per annum. Mr. Kechichian was jointly and severally responsible for payment of that interest and, in addition, a further 5.7% pursuant to the terms of the guarantee. I suspect that what paragraphs 2 and 3 of the draft order are intended to convey is that the total accrued interest to the date of my decision is $320,809.38, all of which can be recovered from Mr. Kechichian, and up to $234,334.97 of which can be collected, on a joint and several basis, from the corporate defendant. The draft order, as presented gives the appearance of aggregating the interest payable by the corporate defendant and Mr. Kechichian respectively.

[14] Unless I have misunderstood (in which case I would be happy to receive further explanation), I would ask counsel for the plaintiff to redraft the order and remit it to me via my judicial assistant at sandra.pacheco@ontario.ca.

Mew J.

Date: 9 August 2021.