Court File and Parties

COURT FILE NO.: CV-17-583798 DATE: 2022-01-13 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sheila McKenzie-Barnswell, Plaintiff AND Xpert Credit Control Solutions Inc., Right Choice Builders Inc., Sam Joshi a.k.a. Sanjive Joshi, Defendants

BEFORE: C. J. Brown J.

COUNSEL: Olando Vinton, for the Plaintiff Olumbunmi Ogunniyi, for the Defendants

HEARD: Final Costs Submissions In Writing-November 27, 2021

COSTS ENDORSEMENT

[1] The plaintiff, Sheila McKenzie-Barnswell, seeks her costs of this seven-day trial, in which she was substantially successful.

[2] In general, costs are intended to compensate the successful party, in whole or in part, for their costs incurred in a proceeding. In general, costs are awarded on a partial indemnity basis.

[3] Pursuant to the Courts of Justice Act and the Rules of Civil Procedure, this Court has wide discretion in awarding costs: Courts of Justice Act, RSO 1990, c. C.43, s.131; Rules of Civil Procedure, RRO 1990, Reg. 194, R. 57.01.

[4] Costs must be fair and reasonable and within the expectation of the parties. Boucher v Public Accountants Counsel for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634, 71 O.R.(3d) 291 (Ont. C.A.).

[5] It appears from the plaintiff’s written costs submissions of April 27, 2021, that the plaintiff seeks costs on a substantial indemnity basis of $397,593.27 or partial indemnity costs of $313,177.52, plus disbursements of $12,708.34 inclusive of HST. The plaintiff offered to settle costs on the basis of payment of $347,978.76, which was not accepted by the defendants.

[6] The plaintiff’s costs submissions were not initially detailed with respect to the work done and disbursements incurred. I therefore requested a detailed statement of accounts in order to assess the fairness and reasonableness of the costs sought. Plaintiff’s counsel provided a voluminous bundle comprising a more detailed account statement, with many entries redacted, perhaps for reasons of solicitor-client privilege. I carefully reviewed what was provided. Defendants’ counsel provided his final written response to the plaintiff’s additional costs submissions on November 27, 2021.

[7] As regards the factors set forth at Rule 57.01, to be considered in exercising my discretion to fix costs, I make the following comments:

Importance: The matter was of significant importance to the plaintiff. The parties had commenced actions against one another, arising from the same impugned transactions. The plaintiff alleged as against the defendants, inter alia, fraud, fraudulent misrepresentation, breach of contract, negligence, negligence in construction management, deceit, duress and unconscionability. The defendants claimed as against the plaintiff for damages of $1,355,280.33, representing amounts owing pursuant to mortgages/charges on the plaintiff’s property ($1,260,000 with interest at 9.9% from December 19, 2017) and monies owing pursuant to a construction contract executed between the plaintiff and Right Choice Builders Inc.

Complexity: The issues themselves were of moderate complexity. The materials presented at trial were voluminous.

Experience of Counsel: Plaintiff’s counsel had less than eight years of experience. He undertook all of the work done in preparation for trial. His assistant completed administrative, secretarial and some paralegal work. The statements of account indicate that some administrative/secretarial work was charged to the client, which I have discounted. Her work of a paralegal nature was not discounted.

Hours spent: In reviewing the breakdown of fees charged, I am of the view that there was excessive time spent on research of each legal issue raised. I previously noted in my Reasons for Decision that there was also a failure to advance only those issues most relevant to the facts of the case. I have taken these things into account with respect to awarding costs.

Expectations and Proportionality: I am satisfied that the defendants, who are all businessmen and corporations, anticipated a significant award of costs if they were not successful, given the issues and the two actions which were to have been heard seriatim.

Having reviewed the costs of the plaintiff, and having taken into account the amounts to be discounted, including excessive research time spent, some questionable timekeeping entries including secretarial/administrative time docketed, I am satisfied that the final amounts awarded are proportional.

Conduct of the parties/improper or unnecessary steps/if denial or refusal to admit things that should have been admitted:

The defendant, Sam Joshi (“Joshi”), denied numerous facts which he subsequently, at trial, admitted, including the fictitious, fraudulent nature of his construction company, the amount of work that was not done at all, work that was not done pursuant to the terms of the contract, work that was poorly or shoddily done and significant delays in construction in breach of the construction contract. Had these facts been admitted earlier, much time and expense would have been saved at trial.

[8] I have taken all of the foregoing into account. I have further considered the following.

[9] Costs generally follow the event. Costs are intended to compensate the successful party or parties to the litigation, wholly or in part for legal expenses that the party or parties have incurred. In general, costs are awarded on a partial indemnity basis. However, elevated costs or substantial indemnity costs are awarded, inter alia, where there is a finding of reprehensible, scandalous or outrageous conduct on the part of the party against which the costs award is being made: Mars Canada Inc. v Bemco Cash & Carry Inc., 2018 ONCA 239, paras. 43-44; Toronto Star Newspaper v Fraleigh, [2011] O.J. No. 3689, 2011 ONCA 555, 2009 ONCA 722 (C.A.); Davies v Clarington (Municipality), [2009] O.J. No. 4236, 2009 ONCA 722 (C.A.); Walker v Ritchie, 2005 CanLII 13776 (ON CA), [2005] O.J. No. 1600, 12 CPC (6th) 51 (C.A.), rev’d on other grounds 2006 SCC 45, [2006] S.C.J. No. 45, [2006] 2 S.C.J. 428 (S.C.C.), R. 57.01(4)(c).

[10] Pursuant to the Courts of Justice Act and the Rules of Civil Procedure, this Court has wide discretion in awarding costs: Courts of Justice Act, RSO 1990, c. C.43, s.131; Rules of Civil Procedure, RRO 1990, Reg. 194, R. 57.01. The court has the power to award costs on a substantial indemnity basis: R. 57.01(4)(c).

[11] In the present case, the following findings were made in my Reasons for Decision, which are important in determining whether substantial damages should be awarded.

a. Right Choice Builders Inc., the construction company of the defendant Joshi, was, as admitted by Joshi at trial, a fictitious company that he “sometimes used for contracts”, and was not incorporated.

b. The construction work done by Right Choice Builders Inc., the fictitious company, was poorly and shoddily done, with deficiencies and incomplete work, in breach of the contract.

c. The defendants fraudulently induced the plaintiff to enter into the construction contract.

d. The defendant Joshi falsely represented to the plaintiff that his company would act as construction manager, and supervise his fictitious company, Right Choice Builders Inc. There was no evidence adduced of any supervision.

e. The defendant Joshi and his companies engaged in unconscionable conduct.

[12] I further found the defendant Joshi not to be credible and his evidence throughout was unreliable.

[13] I find the defendant Joshi’s conduct to have been reprehensible from his misrepresentations to the plaintiff, to fraudulently causing and encouraging the plaintiff to enter into a contract with his company which he knew to be fictitious.

[14] Given the defendant Joshi’s conduct, as recounted above, I am satisfied that the plaintiff’s costs, payable by the defendants, should be awarded on a substantial indemnity basis.

[15] Accordingly, based on all of the foregoing and all of the evidence before this Court, and applying the discounts to the account statements, as above mentioned, I award costs to the plaintiff on a substantial indemnity basis, in the amount of $286,250, plus disbursements of $12,708.34, all inclusive.

[16] The defendants are jointly and severally liable for the costs awarded.

[17] The plaintiff should not be required to pay legal fees of any difference between the amount awarded for costs in this decision and the amounts in the account statements provided to the court.

C.J. Brown J.

Released: January 13, 2022