COURT FILE NO.: CV-19-627063
MOTIONS HEARD: 20201106 and 20210204
REASONS RELEASED: 20201126 and 20210326
WRITTEN COSTS SUBMISSIONS FILED: 20210416
COSTS ENDORSEMENT RELEASED: 20210804
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
XIN LI
Plaintiff
- and-
WEI LI and YAN ZHANG
Defendants
BEFORE: MASTER M.P. McGRAW
COUNSEL: C. Sparling E-mail: christopher.sparling@sympatico.ca -for the Plaintiff
M. Magonet E-mail: m@magonetlaw.com -for the Defendants
COSTS ENDORSEMENT RELEASED: August 4, 2021
Costs Endorsement
I. Introduction
[1] By Reasons For Endorsement dated November 26, 2020 (Li v. Li, 2020 ONSC 7315) I dismissed the Plaintiff’s motion (the “CPL Motion”) for leave to issue a Certificate of Pending Litigation (“CPL”) without prejudice to her right to seek an alternative form of security pending trial.
[2] On or about December 23, 2020, the Defendant entered into an agreement to sell the property at issue (the “Property”) to a third party which was scheduled to close on March 30, 2021. The Plaintiff subsequently brought a motion seeking to have the proceeds of sale or $700,000, whichever is less, paid into court or held in escrow pending the disposition of this action (the “Security Motion”). The Security Motion was dismissed pursuant to my Reasons For Endorsement dated March 26, 2021 (Li v. Li, 2021 ONSC 2325).
[3] The Defendants seek their costs of both motions.
II. The Law and Analysis
[4] Subject to the provisions of an Act or the Rules, 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 costs shall be paid (s. 131(1), Courts of Justice Act (Ontario)). In exercising this discretion, in addition to the result and any offer to settle made in writing, the court may consider the factors set out in Rule 57.01(1).
[5] The overriding principles in determining costs are fairness and reasonableness (Boucher v. Public Accountants Council for the Province of Ontario, (2004) 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)). The general rule is that costs on a partial indemnity scale should follow the event except for very good reasons such as misconduct of the party, miscarriage in procedure or oppressive or vexatious conduct (1318706 Ontario Ltd. v. Niagara (Regional Municipality) (2005), 2005 CanLII 16071 (ON CA), 75 O.R. (3d) 405 (C.A.); 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 at paras. 10, 12-14).
[6] Prior to the Security Motion, the parties each filed two sets of costs submissions (including replies) for the CPL Motion. The Defendants seek costs of the CPL Motion in the amount of $26,228.67 on a partial indemnity scale. The Plaintiff argued that costs should be deferred until after the Security Motion or alternatively, reserved to the trial Judge. In my view, there is no reason to depart from the general rule that the Defendants are entitled to costs of the CPL Motion reflective of their success.
[7] At the time the CPL Motion was argued, the Property was listed for sale. The Plaintiff acknowledged that the Property is not unique, that her claim is primarily for damages comprised of her deposits and agreed that the Property could be sold to a third party. I concluded that it was not just and equitable to order a CPL in the circumstances which would be inconsistent with the principle that a CPL should not be used as security for a damages claim and contrary to both parties’ wishes that the Property be sold. As the presence of a CPL would likely prevent a sale, fully and successfully responding to the CPL Motion was important to the Defendants (Rule 57.01(1)(d)).
[8] The Plaintiff submits that the amount requested by the Defendants should be reduced by $9,785 (excluding HST) with respect to the cross-examination of the Plaintiff (which the Plaintiff claims did not yield any admissions which were not in the pleadings), attendance on the motion and the rate for legal research. I agree that the quantum sought should be reduced but by a different amount and for different reasons. In my view, the total amount, based on 56 hours, is unreasonable for a CPL motion where the Defendants did not prepare and file any affidavit evidence. A reduction is also necessary to reflect that the Plaintiff was successful in arguing that there was a triable issue regarding a reasonable claim to an interest in the Property such that the remedy of constructive trust may be available to the Plaintiff at trial.
[9] Having considered all of the relevant factors and circumstances, I am satisfied that it is fair and reasonable and within the reasonable expectations of the parties for the Plaintiff to pay costs of the CPL Motion on a partial indemnity scale fixed in the amount of $18,000 within 30 days.
[10] The Defendants seek costs of the Security Motion of $11,292.95 on a partial indemnity scale. The Plaintiff submits that costs should be reserved to the trial Judge but concedes that “in hindsight” the Security Motion should not have been brought, that $10,000 in costs is just and in her own Costs Outline would have sought $12,570 if successful. In the circumstances, I am satisfied that the Defendants are entitled to costs reflective of their complete success on the Security Motion and that it is fair and reasonable and within the parties’ reasonable expectations for the Plaintiff to pay costs of the Security Motion fixed in the amount of $11,000 within 30 days.
[11] Order to go on the terms set out above.
Costs Endorsement Released: August 4, 2021
Master M.P. McGraw