Court File and Parties

Barrie Court File No.: CV-21-00000075-00 Date: 2022-03-15 Ontario Superior Court of Justice

Between: Royal Bank of Canada, Plaintiff – and – Yin Ping Cheung and Yiu Wah Kwong also known as Kermit Yiu Wah Kwong, Defendants

Counsel: J. Kukla, for the Plaintiff Defendants – Self-Represented

Heard: By Written Submissions

Costs Decision

Healey J.

[1] This is a decision on costs following a successful motion for summary judgment brought by the plaintiff. The plaintiff was awarded judgment against the defendants in the sum of $87,071.70 plus interest.

[2] I have reviewed submissions from the plaintiff and from Mr. Kwong. Ms. Cheung did not file submissions.

[3] The mortgage provides for the payment of costs in the event of a proceeding arising from the defendants’ default. Specifically, it provides that the defendants agree to pay all “reasonable and necessary costs, charges and expenses of and incidental to this Charge… without limiting the generality of the foregoing, all solicitor’s fees, costs and expenses…”

[4] While costs are in the discretion of the court, I agree with the remarks of Morgan J. in Royal Bank v. Edna Granite & Marble Inc., 2014 ONSC 3377, at para. 17, that judicial discretion is secondary where the parties have a contract that dictates the scale and scope of a costs award. That said, the cost must still be “reasonable and necessary”. So while the contractual terms dictate the scale, in my view the factors set out in r. 57.01(1) still apply, including the reasonable expectation of the defendants.

[5] Royal Bank seeks costs in the amount of $19,072.26. Contributing to these costs is the fact that Mr. Kwong complicated these proceedings by commencing his own motion seeking, inter alia, an order dispensing with Ms. Cheung’s consent to a refinance of the subject charge. As the relief sought by Mr. Kwong impacted Royal Bank, additional costs were incurred by the plaintiff to address Mr. Kwong’s motion, to attend at a scheduled case conference, and to make efforts to negotiate those issues among the parties. I agree with Royal Bank that those related costs were reasonably incurred and should be allowed as costs of the action.

[6] Most of the material filed by both defendants was focused on issues of mortgage renewal in the context of their marriage breakdown. This court ordered that their crossclaims be transferred to the Family Court to be heard and determined together with or immediately after any proceeding brought by either party in that forum, as the court may direct. Again, this approach required unnecessary and additional work for Royal Bank’s lawyers.

[7] Finally, at the hearing of the summary judgment motion Mr. Kwong raised issues concerning lack of knowledge of the tax account for the first time, also making allegations of calculation errors. This required additional material to be filed by Royal Bank and necessitated counsel reviewing Mr. Kwong’s response. Ultimately this court found that Mr. Kwong’s evidence did not support his allegation of a calculation error or that he was unaware of the creation and composition of the tax account.

[8] Mr. Kwong submits that Ms. Cheung should be responsible for all Royal Bank’s costs because she failed to consent to a mortgage renewal even though to do so would not, in his submission, cause her any prejudice. This submission ignores that Ms. Cheung is a co-chargor, responsible for this debt and the full amount of any refinancing. Again, Mr. Kwong’s submissions focus on the conduct of Ms. Cheung, which is better raised in a family law proceeding.

[9] As indicated in my ruling, the defendants will each pay the plaintiff’s costs, and those costs will be shared equally between them. Regardless of any former negotiations or agreements that may have occurred between the defendants, which were not properly before this court, the evidence filed by the plaintiff demonstrated that both defendants were responsible for payment of the mortgage, both were responsible for the consequences of default, and therefore both responsible for the costs incurred by Royal Bank for its enforcement proceeding.

[10] I have reviewed the plaintiff’s costs outline, which includes a detailed breakdown of time spent for each step related to the summary judgment motion and Mr. Kwong’s motion. I have considered Mr. Kwong’s submissions with respect to the hourly rate of the lawyers involved and the time spent. There is no duplication in the work done by successive lawyers who had carriage of the matter. The hourly rates charged by the lawyers are appropriate to their experience. The fact that the defendants were self represented at various times during this litigation is not a factor that I would take into account in the face of the agreed-upon provision in the mortgage related to costs, fees and expenses.

[11] Mr. Kwong has submitted that his reasonable expectations were in the range of $5,000-$7,500, not the full indemnity costs of $19,072 sought by the plaintiff. In forming those expectations, however, Mr. Kwong has either disregarded or forgotten the terms of the mortgage that entitles Royal Bank to recover all its reasonable and necessary costs. And because Mr. Kwong has not submitted any legal invoices or other evidence from when he was represented earlier on in this proceeding, it is not possible for the court to evaluate his submission that he anticipated costs in the range he suggests. I note his submission that he had to discharge his counsel because he could not afford to pay legal fees, suggesting that he was likewise aware of the costs likely to be incurred in this proceeding by the Royal Bank as it proceeded.

[12] In considering the time spent by Royal Bank, I take into account that there is always a component of unproductive time and duplication of work required by file review that is captured in dockets even for the most conscientious lawyer. There is also, in my view, some elevated time spent in this particular instance for some tasks that could have been delegated to a clerk, such as drafting of a motion confirmation form and correspondence with the court, as opposed to being charged at senior counsel’s rate of $450.

[13] Having considered the facts and the law and each of the factors set out in r. 57.01(1), and “stepping back” to consider the appropriateness of the costs overall, I find that an amount that is fair and reasonable to award to the plaintiff is $18,000 inclusive, to be paid by both defendants jointly and severally. Order to issue accordingly.

Healey J. Released: March 15, 2022