Court File and Parties

COURT FILE NO.: C-440-17 DATE: 2022 Jan 10 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Inderpal Dhillon, Sarita Dhillon, Jasmeen Dhillon, Anisha Dhillon, Binita Dhillon and Krishma Dhillon, Plaintiffs AND: The Corporation of the City of Cambridge, The Cambridge & District Humane Society o/a Animal Services Cambridge, Arian Gashi, Mohammad Hadi and Kandi Simpson, Defendants

BEFORE: Justice D.A. Broad

COUNSEL: Michael W. Kelly, for the Plaintiffs Branko J. Kurpis, for the Defendants The Corporation of the City of Cambridge and The Cambridge & District Humane Society o/a Animal Services Cambridge

Costs Endorsement

[1] The parties have been unable to resolve the issue of costs and have each delivered written submissions on costs.

[2] There is no dispute that the defendants The Corporation of the City of Cambridge and The Cambridge & District Humane Society o/a Animal Services Cambridge (together the “defendants”) were successful in having the action dismissed against them and are entitled to an award of costs of the action against the plaintiff Inderpal Dhillon. The issues are the scale of costs in light of an Offer to Settle served by the defendants, the quantum of costs, and the liability of the Family Law Act claimants Sarita Dhillon, Jasmeen Dhillon, Anisha Dhillon, Binita Dhillon and Krishma Dhillon (the “FLA plaintiffs”) for any part of the defendants’ costs.

[3] The defendants seek costs on a blended partial and substantial indemnity basis in the amount of $40,581 in respect of fees, disbursements and HST. The defendants point to their Offer to Settle dated July 23, 2019 proposing dismissal of the action and all cross-claims against them, without costs. The plaintiff say they incurred partial indemnity costs in the sum of $8,120 prior to the Offer to Settle and substantial indemnity costs in the sum of $32,461 after the Offer to Settle.

[4] The plaintiffs submit that there is no basis for an award of costs against them partly on a substantial indemnity basis. There is no provision in rule 49.10 to provide for substantial indemnity costs to a defendant absent a finding that it acted unreasonably or in bad faith for the purpose of delay, neither of which apply in the case at bar.

[5] The plaintiffs also submit that, absent the production of time dockets, it is difficult to assess the reasonableness of the time expended by defence counsel.

[6] The plaintiffs submit further that all work and time related to the motion brought on January 10, 2019 should not be included in any claim for costs, as it was ordered that no costs were payable in respect of the motion. The plaintiffs also submit that any work attributed to dealing with the cross-claim against the defendant Gashi should not be included in any costs against the plaintiffs. Moreover, the plaintiffs submit that any costs awarded should be only against the plaintiff, Inderpal Dhillon and not the FLA plaintiffs. The FLA plaintiffs had little or no involvement in the case and abandoned and released the defendants early in the litigation and would have no stake in the outcome had the plaintiff Inderpal Dhillon been successful in recovering damages.

[7] Finally, the plaintiff Inderpal Dhillon submits that he has experienced impecuniosity and hardship as a result of his injuries affecting his ability to work and has had to resort to social assistance. Although this does not eliminate the said plaintiff’s liability for costs, it is a factor the court can consider in determining the reasonable amount of costs.

Guiding Principles

[8] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, 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 the costs shall be paid.”

[9] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in sub rule 57.01(1), including, in particular:

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged, and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.

[10] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan, [1999] O.J. No. 4600 (Ont. C.A.) at para. 24).

[11] Justice Perrell in the case of 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.) reformulated the purposes of the modern costs rules, at para. 10, as follows:

(1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements.

[12] The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson, [2002] CarswellOnt 1007 (Ont. C.A.) and Macfie v. Cater, [1920] O.J. No. 71 (Ont. H.C.) at para 28).

[13] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, [2005] O.J. No. 160 (Ont. C.A.)).

Discussion

[14] With respect to the scale of costs, rule 49.10(2) provides that where an offer to settle is made by a defendant by the time stipulated, is not withdrawn and does not expire before the commencement of the hearing, and was not accepted by the plaintiff and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.

[15] There is no provision in the rule for a defendant having served an offer to settle to be awarded substantial indemnity costs as a result. The defendants cited no authority for such a result. In any event, I find that the defendants’ Offer to Settle did not contain a sufficient element of compromise to attract an award of elevated costs.

[16] It is not apparent from a review of the defendants’ Costs Outline that a claim is being advanced for costs in relation to the January 10, 2019 motion, Similarly, it is not apparent that in a claim is being advanced in respect of cross-claims between the defendants and the co-defendants. I see no basis to reduce the defendants’ claim for costs on these accounts.

[17] As indicated, the plaintiffs have asserted that is difficult to assess the reasonableness of the time expended by defence counsel in the absence of production of time dockets. On the other hand it is also difficult to assess the plaintiffs’ reasonable expectations respecting the defendants’ costs in the absence of a Costs Outline from the plaintiffs.

[18] In the exercise of my discretion, in reliance on the reasoning of Coats, J. in the recent case of Noori v Liu, 2021 ONSC 3445 at paras. 31-35, and in the authorities therein referred to, I decline to make an award of costs against the FLA plaintiffs in respect of their dismissed derivative claims against the defendants. In the case at bar the FLA plaintiffs proposed dismissal or discontinuance of their claims on a without costs basis on September 23, 2019 and delivered an executed release of the plaintiffs on November 13, 2019. The FLA plaintiffs were not examined for discovery.

[19] I accept that the court may take into account the impecuniosity of a party liable to pay costs in determining the quantum. However, the impact of a substantial award of costs on the plaintiff Inderpal Dhillon is difficult to assess due to the lack of particularity respecting his current circumstances.

[20] As indicated previously, the court’s task is to fix an amount for costs that is fair and reasonable for the plaintiff to pay in the particular circumstances of this case.

[21] In my view, in light of all of the circumstances, I find that an award of costs against the plaintiff Inderpal Dhillon on a partial indemnity scale fixed in the sum of $25,000, inclusive of fees, disbursements and HST would considered to be fair and reasonable.

Disposition

[22] It is therefore ordered that the plaintiff Inderpal Dhillon pay costs of the action to the defendants The Corporation of the City of Cambridge and The Cambridge & District Humane Society o/a Animal Services Cambridge fixed in the sum of $25,000 inclusive within 30 days hereof.

D.A. Broad, J. Date: January 10, 2022