COURT FILE NO.: CV-16-544251

DATE: 20220607

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: MELISSA BASARABA, Plaintiff

AND:

BRIDAL IMAGE INC., YORKDALE CONTRACT INTERIORS LIMITED, STEPHEN-MITCHELL REALTY LIMITED. H. LEDERMAN LIMITED carrying on business as LISSARD HOLDINGS LIMITED, HAROLD LEDERMAN LIMITED carrying on business as LEDBROW INVESTMENTS LTD., and 1548019 ONTARIO INC., Defendants

BEFORE: S.F. Dunphy J.

COUNSEL: Ryan Caesar and Star Deak, for the Plaintiff

Jay Skukowski, for the for the Defendants, Yorkdale Contract Interiors Limited, Stephen Mitchell Realty Limited, H. Lederman Limited carrying on business as Lissard Holdings Limited and Harold Ledeman Limited carrying on business as Ledrow Investments Ltd.

Denise Junkin and Daniel Iaboni, for the Defendant, Bridal Image Inc.

Allison M. Gaw and Leeza Pece, for the Defendant, 1548019 Ontario Inc.

HEARD at Toronto (Video): December 6, 2021

REASONS FOR DECISION - COSTS

[1] On December 6, 2021, I dismissed the defendants’ motions for summary judgment and directed the parties to resolve the matter of costs between themselves failing which they were to upload their submissions as to costs on Caselines for my review and ultimate decision. My reasons for that decision can be found at Basaraba v. Bridal Image Inc., 2021 ONSC 8038. Those reasons contain a concise summary of my decision and the reasons for it which I shall not repeat here.

[2] The frequency with which judges direct the parties to discuss and resolve costs at the end of a hearing is definitive proof if proof be needed of the continuing vitality of the philosophy of optimism in this world despite the appallingly low success ratio such exhortations are generally greeted with. I cannot say if Charlie Brown ever connected with the football that Lucy pulled away from him every time he tried to kick it, but I can say that every once in a while the parties surprise me and actually resolve costs by applying pragmatic common sense to the problem. Alas, this was not one of those occasions. It was, as far as I can see, not for want of trying. So the short straw comes back to me and a decision must be rendered.

[3] Every system has its flaw and in this case, the flaw was that Caselines notifications of uploaded matters. I gave the parties a deadline to upload their materials to Caselines but the notification of their diligent and timely efforts in that department was helpfully directed to my spam mailbox with the result that I was blissfully unaware this matter was still pending when I returned to my duties in the new year and the parties politely declined to clear their throats or rattle my cage a little to remind me. With apologies for the tardiness in getting around to this, I can report that I have now been able to review all of the submissions uploaded and am in a position to render my decision.

[4] This matter was cleared for a hearing by Vella J. in terms that ought to have given the moving parties at least some cause for pause since Vella J. explicitly reminded them that her authorization to permit the motions to be scheduled was without prejudice to the motions judge deciding that the matters could not appropriately be dealt with by way of summary judgment. That is precisely what happened in this case.

[5] Justice Vella’s words of caution were not the only yellow light the moving parties chose to charge through in bringing these motions. Justice Myers made similar observations when the matter first appeared in Practice Court on February 21, 2020:

“This is not a case that can be resolved summarily. The issues turn on credibility and experts. There are issues among the defendants as well so that partial summary judgement will not be a neat, independent issue that could be one of the "rare cases in which partial summary judgment is appropriate.”

[6] The bottom line with these motions is that a tremendous volume of material was filed by all of the defendants to which the plaintiff was required to respond with her best foot forward. She could not assume that the motions would be rejected. No defendant on a summary judgment motion can.

[7] I do not often find David v. Goliath comparisons helpful or appropriate. Well-heeled corporations and insurance companies are as entitled to a fair hearing on the merits as a lone citizen with few means. Cases are decided on their merits and not based on subjective beauty contests. However, three separate groups of defendants filed three separate motions which, while similar, were not identical. They did so with affidavits from members of the law firm defending the action rather than from a responsible person with actual personal knowledge of any of the facts. This meant that separate responses were required but it also meant that the plaintiff’s efforts to advance the case in any way through cross-examination was doomed to failure. This added aggravation, time and expense to the task of responding.

[8] The plaintiff in this case was wholly successful. Her entire claim was on the line and she successfully turned back the attacks on her claim. She will live to fight another day. I cannot say that she will succeed and I cannot say that she will fail. I concluded only that the questions placed before me could not properly or fairly be addressed in the forum of summary judgment.

[9] The moving party defendants suggest that I ought to defer the costs question to the trial judge or order costs to be paid only in the cause. As tempting as that proposition might sound to a judge who is asked to pick up a file after a six-month hiatus, that is not a fair or reasonable answer.

[10] This was neither a “close call” nor a case where a plaintiff’s “novel theory” was given a chance to be explored more fulsomely at trial. I have not found that the plaintiffs’ claims were “well-founded in law” but merely deficient in some minor technicality. The plaintiff was successful on these motions and her success was neither divided nor a close-run thing. The plaintiff incurred considerable expenses in defending these motions and was required to do so by the motions the defendants elected to bring. Those costs have been incurred already and the general policy governing costs in this jurisdiction is that the victor is normally entitled to some degree of indemnification of those costs. There may have been no decision on the merits of the case; there was most definitely a decision on the merits of the motions.

[11] The defendants’ submissions on costs all appear to proceed from the premise that it is all but pre-ordained that they will be successful on the merits at trial and the plaintiff has done no more than forestall the inevitable. I shall decline to comment on the hubris implicit in that assumption beyond reminding them all of my written reasons dismissing the motions and the discussions held with the parties informally after the close of the hearing. I described the liability question as being as “clear as mud” for a reason. It was not just the lack of a document or one more paragraph in an affidavit. That comment proceeded from an assessment of the fact-intensive nature of the inquiry necessary to resolve the questions raised by the plaintiff in this case. I was certainly not dismissive of the plaintiff’s chances of success – I studiously declined to express any views on them whatsoever for the good and sufficient reason that the record before me was not up to the task of permitting a reasoned and fair decision on the merits.

[12] Summary judgment is not a one-way street for the moving party. It is not heads I win, tails I will try again later and you’ll just have to eat the costs you can pay your lawyer now and wait and see what happens years from now at trial. While I have no doubt that some of the work put in by all sides in preparing this motion will be able to be recycled to some degree in trial preparation, there are any number of bends and twists in the litigation road between now and then and it would be pure speculation on my part to assert that all or substantially all of the effort put in for these motions represents time and money saved for trial preparation. I did encourage the parties to consider working collaboratively towards a summary trial/hybrid trial proposal that might permit a greater portion of the work expended to be re-purposed. That would be a development to be desired but hardly one that can factor into my disposition of costs. Among other things, the defendants are continuing to insist on a jury trial which would be quite incompatible with any summary or hybrid trial proposal.

[13] The usual order of costs is usual for a reason. I find that the plaintiff is entitled to its costs from the defendants.

[14] That leaves the questions scale and amount to be addressed.

[15] The only issue on scale is the impact if any of the plaintiff’s offer to settle. The plaintiff made an offer to settle in writing on September 10, 2021. The plaintiff served the moving parties with a straightforward offer to settle the motions for summary judgment (not the whole case) that provided for an incentive to accept the offer and abandon the motion. Were the defendants to have accepted the offer and withdrawn or consented to an order dismissing their motion by September 30, 2021, they would be responsible only for the plaintiff’s disbursements incurred. Thereafter, the plaintiff would require payment only of substantial indemnity costs as the price of abandonment thereafter. The offer was, as required, open for acceptance until one minute following the commencement of the hearing of the motion on December 6, 2021. Needless to say, the offer was never accepted.

[16] The defendants say that the offer should be ignored because it did not offer to settle the action itself and “Rule 49.10(1) does not envision circumstances where a party fails to recover any judgment”: para. 25 of the costs submissions of Yorkdale Contract Interiors et al. The simple answer to the objection is Rule 49.02(2) that provides that Rules 49.03 to 49.14 also apply to motions with necessary modifications.

[17] That being said, even with “necessary modifications”, Rule 49(10) does not offer a responding party who successfully resists a motion much incentive to make an offer to settle in advance. While I do have discretion to review an offer to settle in exercising my discretion as to costs, this is not a case where that appears advisable. The moving party can always withdraw a motion subject to paying costs which would normally be fixed on a partial indemnity basis. The responding party cannot unilaterally change the tariff for putting up a white flag by the expedient of making a settlement offer.

[18] As well, this responding party did not come to the motion prepared to fix the quantum of costs. This of course is a requirement of Rule 57.01(6) and has been for some time. This salutary rule has been treated as a dead letter by the Toronto civil bar for far too long. Cost reserves from motions arise close to 100% of the time which contributes materially to the logjams in the civil justice system. This lamentable habit on the part of the bar is a practice that the Toronto civil judges are determined to break and breaking it requires repeated and consistent messaging.

[19] Costs on these failed motions shall be payable to the plaintiff on a partial indemnity basis. I decline to award substantial indemnity costs after the date of the offer.

[20] The plaintiff’s outline of costs provided me with partial indemnity costs to September 30, 2021 and substantial indemnity costs thereafter without any subtotals. It extends over 13 pages instead of the three contemplated by Rule 57.01(6) and is essentially a data dump of the firm’s dockets.

[21] This is a far cry from what is required. My job as judge is to decide questions placed before me but not to set up spreadsheets to do the work that counsel has failed to do. The quoted rates for the partial indemnity portion of the outline amounts to two-thirds of the substantial indemnity rate quoted and the total fees quoted is $40,787.35 on a mixed partial indemnity and substantial indemnity basis and including HST. While there is no sub-total of the September time, an eyeball assessment confirms that this figure is only a relatively small fraction of the total claimed fees.

[22] The interests of justice and of the clients on all sides of the question will not be served by further delay or back and forth on this issue. I have decided to fix partial indemnity costs for fees at $27,000 inclusive of HST. That figure rounds down the plaintiff’s claim by reason of the failure to provide me with the data necessary to calculate the amount more precisely. Having reviewed the moving parties’ submissions about alleged excess time incurred, I am of the view that the figure I have arrived at is fair and reasonable in all of the circumstances and coming from the perspective of someone who has had to fix costs hundreds of times from this side of the bench.

[23] I also note the lack of any corresponding outline of costs of the moving party defendants, a circumstance that strongly suggests to this judge not born yesterday that the level of costs claimed by the plaintiff compares quite favourable to the fees charged to their own clients for these motions, a factor that would have a bearing on the amount the losing party should reasonably expect to pay.

[24] The objections raised by the moving parties as regards disbursements were somewhat more substantive. The primary exception taken was in relation to expert reports that the defendants claimed were of little to no value and the cost of ordering discovery transcripts. I think that the defendants have made valid points on both subjects.

[25] If there is any expense of these motions that is likely to be salvageable at trial, it would be discovery transcripts and expert reports. These are both things that will be clearly necessary for trial at all events. If, as suggested, the experts were of little value, the plaintiff may have learned that lesson more cheaply now than finding out at trial – a comment offered without implied commentary on my part as to the value of those reports. If, to the contrary, the reports are valuable and will be used at trial, the plaintiff would have to incur the cost of producing them regardless. Either way, it seems to me the value of these reports is something that relates as much to the trial as to the motion.

[26] The foregoing observations being made, I must also bear in mind the risk that the trial may not happen at all. It may be that the plaintiff settles the case. Such settlements are often negotiated on an “all in” basis such that $1 of extra costs is $1 less in compensation. The plaintiff may have a change of heart and agree with the moving parties that his cause is hopeless and choose to walk away. In either event, the front-end loading of costs that she may have prudently wished to defer until nearer the time of trial reduces her fiscal manoeuvering room in ways that place fiscal pressure on her and benefit the moving party defendants who may be seeking to test or exhaust her resolve.

[27] I think that it would be reasonable to split the costs associated with those two issues in half. The plaintiff’s cost outline seeks $15,964.68 in disbursements all inclusive. I shall reduce that amount by $4,636.99 representing one-half of the cost of discovery transcripts plus expert reports including HST. The allowed amount for disbursements will be $11,328.

[28] I therefore fix the amount of partial indemnity costs payable by the moving party plaintiffs at $38,328 including fees, disbursements and HST.

[29] The defendants were separately represented moving parties on each of these motions although they were brought on a joint basis at least informally. Obviously the plaintiff cannot recover three times but it is not clear to me that joint liability for costs is appropriate here. I am ordering the amount awarded to be paid within thirty days as to one-third by each moving party group unless the parties have come to a different arrangement.

S.F. Dunphy J.

Date: June 6, 2022