Court File and Parties

Court File No.: CV-18-597312 Costs Submissions: In Writing Costs Submissions Released: 2022-04-19

Superior Court of Justice – Ontario

Between:

DANNY SETO Plaintiff

- and-

VIKKI LAROCQUE and JAMES DASTI Defendants

Before: ASSOCIATE JUSTICE McGRAW

Counsel: M. Donald, for the Defendants L. Honickman, for the Plaintiff

Costs Endorsement Released: April 19, 2022

Costs Endorsement

[1] This is a motion by the Defendants seeking costs under Rule 23.05(1) arising from the Plaintiff’s discontinuance of this action.

[2] In 2015, an individual using the pseudonym “Andrew Jones” posted death threats on Facebook with respect to the Defendants’ 10-year old son, J.D. The Defendant James Dasti is J.D.’s biological father. The Plaintiff Danny Seto is a dentist practicing in Ontario and the Northwest Territories and at the relevant times was in a relationship with J.D.’s biological mother, Angela Ransom. Ms. Ransom and Mr. Dasti are former common law spouses. Starting in 2015, the Defendants and Ms. Ransom were involved in family law proceedings with respect to J.D. regarding custody, support and other issues.

[3] The Defendants did not know who “Andrew Jones” was and in November 2015 reported the matter to the Ontario Provincial Police (“OPP”) detachment in Noelville, Ontario near Sudbury. After the OPP started its investigation, the Defendants obtained the Order of Aktar J. dated January 6, 2016 compelling Facebook and other service providers to disclose information with respect to the identity of “Andrew Jones”. By then, the OPP had determined that the Plaintiff was a suspect in its investigation.

[4] On November 3, 2016, the Plaintiff commenced a Small Claims Court action against OPP Detective Constable Dominic Lalonde for loss of reputation and income which was dismissed on consent on June 13, 2017. Motion materials filed by Detective Constable Lalonde in support of his motion to strike the claim reveal that internet protocol addresses for “Andrew Jones” were traced to the Plaintiff’s home in Toronto; the home of his father or brother; hotels in which he was staying; and the home of Ms. Ransom’s father while the Plaintiff was staying there. This and other evidence was disclosed in the OPP’s investigation file produced pursuant to the Order of Master Brott (as she then was) dated December 18, 2018 in the present action.

[5] The Plaintiff commenced this action in Small Claims Court on April 3, 2017 claiming $20,000 in damages for defamation and loss of reputation. The Plaintiff alleged that the Defendants maliciously provided false information to the OPP, the Children’s Aid Society and others. By Order of Zwicker J. dated November 30, 2017, the Small Claims Court action was set down for trial. However, on March 5, 2018, the Plaintiff transferred this action to Superior Court and increased his damages claim to $200,000. On February 7, 2020, prior to examinations for discovery, the Plaintiff discontinued this action.

[6] This matter first came before me on a telephone case conference on September 3, 2020. The Defendants requested that the motion for costs proceed orally. I concluded that it was unnecessary and disproportionate for costs related to an action which started in Small Claims Court, however, given the circumstances I ordered that full motion materials be filed. A second telephone case conference proceeded on February 17, 2021 to speak to cross-examinations and a third on June 3, 2021 to speak to over 65 refusals, almost all of them by the Plaintiff. I encouraged the parties to resolve as many as possible and file some answers with their motion materials in order to avoid a refusals motion which would reduce the cost-efficiencies of having written costs submissions in the first place. A refusals motion was tentatively scheduled for August 6, 2021 and adjourned to September 17, 2021 but did not proceed.

[7] The Defendants seek costs of $33,018.53.50 on a substantial indemnity scale. The Defendants submit that if costs are awarded on a partial indemnity scale, they are entitled to $29,402.10. The Plaintiff concedes that the Defendants are entitled to some costs but submits that they should receive $15,000 on a partial indemnity scale.

[8] Pursuant to Rule 23.05(1) a party may, within 30 days of an action’s discontinuance, bring a motion seeking costs. The court has complete discretion under Rule 23.05 to fashion a costs award for a discontinued action that is in the interests of justice (Enerworks Inc. v. Glenbarra Energy Solutions Inc., 2016 ONSC 4291 at paras. 13-15; Muskoka Standard Condominium Corp., No. 66 v. Thompson et al., 2019 ONSC 1558 at paras. 7-13; Icecorp Logistics Inc. v. Tsitlishvilli, 2015 ONSC 4214 at para. 11). Costs under Rule 23.05 dovetail with and follow the general principles set out in section 131(1) of the Courts of Justice Act (Ontario) and Rule 57.01 (Muskoka at para. 12). Whether or not a defendant should be awarded costs on the discontinuance of an action requires a very fact-specific analysis of the circumstances giving rise to the initiation of the action and its discontinuance (Enerworks at para. 15; Muskoka at para. 8). The analysis should consider whether the plaintiff has satisfied the court that the material filed on the motion discloses a bona fide cause of action which is not frivolous and vexatious and which the plaintiff had some justification to commence, having regard to the conduct of the defendant; there must be some evidence to justify the commencement of the action even if at an early stage it is not possible to say that the action may or may not ultimately succeed (Enerworks at para. 13; Muskoka at para. 8).

[9] Section 131(1) of the Courts of Justice Act provides that 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. In exercising its 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). The overriding principles in determining costs are fairness and reasonableness (Boucher v. Public Accountants Council for the Province of Ontario, (2004), 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), 75 O.R. (3d) 405 (C.A.); 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 at paras. 10, 12-14).

[10] The Plaintiff submits that since he has conceded that the Defendants are entitled to some costs, the only issue on this motion is the quantum to be awarded on a partial indemnity scale. The Plaintiff argues that it is not open for the court to determine if costs should be awarded on a substantial indemnity scale or to consider whether there was a bona fide cause of action and/or there was any justification for commencing it. I reject these submissions.

[11] The Plaintiff has not referred me to any case law which supports his assertion that where a party discontinues an action and agrees to pay some costs the court’s discretion is limited to determining the quantum of costs on a partial indemnity scale. In my view, this would run contrary to and unduly restrict the court’s complete discretion to fashion on a costs award which is just in the circumstances. It would also allow a party to avoid substantial indemnity costs and the court’s scrutiny of its claim by simply discontinuing its action and agreeing to pay some costs. In Blair v. Toronto Community Housing Corporation, 2014 ONSC 2292, relied on by both parties, Perell J. considered costs on a substantial indemnity sale but held that just because the claim was unlikely to succeed did not justify costs on a substantial indemnity scale in that case:

“31 There has been no determination of the merits of the Third Party Claim, and all that can be said is that it appears that the case against Claims Pro and Mustang Security was unlikely to succeed; but that circumstance in and of itself is not a basis for substantial indemnity costs. Costs on a substantial indemnity scale or full indemnity scale are reserved for rare and exceptional cases, where the conduct of the party against whom costs is ordered is reprehensible or where there are other special circumstances that justify costs on the higher scale. The case at bar is not a case for substantial indemnity costs.

32 In the case at bar, costs should be assessed in accordance with the normal principles set out in rule 57.01 and the case law about the exercise of the court's discretion with respect to costs. Of these, in the circumstances of the case at bar, the principle from Boucher v. Public Accountants Council for the Province of Ontario is particularly important.”

[12] In my view, the circumstances related to this action and the Plaintiff’s conduct during these proceedings are exceptional and call for costs on a substantial indemnity scale. The Plaintiff, who has provided no evidence that his claim was bona fide or that there was any justification for commencing this action, brought his claim against the Defendants after bringing a claim against the police officer whose investigation determined that he was a suspect. In the face of the information revealed by the OPP’s investigation, the Plaintiff advanced his claim through Small Claims Court only to transfer the action to Superior Court after it was set down for trial, increase his damage claim ten-fold to $200,000 then discontinue it before discoveries.

[13] I decline to draw any adverse inferences from the Plaintiff’s refusal to answer over 60 questions on cross-examination with respect to his claim. However, without some of these answers or any other evidence, the Plaintiff relies solely on the following bald statement in his affidavit: “I deny that I acted unreasonably during this action or the Small Claims Court Action”. This alone, without any further explanation or evidence with respect to the justification or bona fides of his claim is insufficient and the absence of any explanation or evidence is a relevant factor in awarding costs on a higher scale (Morris v. Johnson, 2012 ONSC 5824 at paras. 24-32). When considered in the context of the evidentiary record, the Plaintiff has failed to demonstrate that his claim was bona fide or that he had any justification for commencing it and leads me to conclude that it was unlikely to succeed.

[14] Numerous factors under Rule 57.01(1) regarding the Plaintiff’s conduct of this action are also relevant. Consistent with Master Dash’s (as he then was) conclusion in Enerworks, commencing this action without a bona fide claim was improper and unnecessary (Rule 57.01(1)(f)) (Enerworks at para. 14). The Plaintiff’s transfer of this action from Small Claims Court to Superior Court after it had been set down for trial and two settlement conferences added unnecessary time and costs including additional pleadings and unnecessarily lengthened the duration of the proceeding (Rule 57.01(1)(e)(f)). Given the transfer, costs should also be awarded at the Superior Court scale (Haggan v. Mad Dash Transport, 2018 ONSC 1889; Peel Condominium Corporation No. 346 v. Florentine Financial Corp., 2018 ONSC 1848). The Plaintiff submits that Ms. Larocque’s complaint to the Law Society of Ontario which ultimately caused the Plaintiff’s previous counsel to remove himself from the record added unnecessary time and cost. I have taken this into consideration but do not consider it to be a material factor, particularly since the record demonstrates that the Plaintiff’s former counsel was on a limited retainer and had not committed to representing the Plaintiff through to trial.

[15] In reviewing the Defendants’ Bill of Costs and related documentation, I am satisfied that the amount claimed by the Defendants should be reduced to more appropriately reflect the reasonable expectations of the parties. This includes the amounts related to the settlement conferences and for some of the Defendants’ personal expenses.

[16] Having considered all of the relevant factors, I conclude that it is in the interests of justice, fair and reasonable in the circumstances and within the reasonable expectations of the parties for the Plaintiff to pay costs to the Defendants fixed in the amount of $27,000 on a substantial indemnity scale within 30 days.

Costs Endorsement Released: April 19, 2022

Associate Justice McGraw