Court File and Parties
COURT FILE NO.: CV-22-88637
DATE: 2022/06/15
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: City Core Consortia Limited, Plaintiff
AND
2549386 Ontario Inc., Defendant
BEFORE: Madam Justice Robyn M. Ryan Bell
COUNSEL: Stéphane Hutt and Simon Regimbald, for the Plaintiff/Moving Party
Stephen Schwartz and Emily Quail, for the Defendant/Responding Party
HEARD: In writing
COSTS ENDORSEMENT
[1] On May 6, 2022, I dismissed City Core Consortia Limited’s motion for a certificate of pending litigation. The parties have not agreed on costs of the motion and have provided me with their submissions.
[2] As the successful party on the motion, 2549386 Ontario Inc. (“254 Ontario”) seeks its costs in the total amount of $40,944.42, including fees on a partial indemnity basis until March 25, 2022 in the amount of $11,909.70, and fees on a substantial indemnity basis thereafter in the amount of $23,195.25.
[3] City Core submits that costs of the motion should be reserved to the trial judge. In the alternative, City Core submits that 254 Ontario’s costs are unreasonable and disproportionate.
[4] Costs are in the discretion of the court: Courts of Justice Act[^1], s. 131(1). Rule 57.01(1) of the Rules of Civil Procedure[^2] lists the factors the court may consider in awarding costs. In addition to the result and any offer to settle, the factors include the principle of indemnity, the complexity of the proceeding, and the importance of the issues to the parties.
[5] The overarching principle is that costs “should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant”: Boucher v. Public Accountants Council for the Province of Ontario.[^3]
[6] Rule 57.03(1)(a) provides that on the hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall fix the costs of the motion and order them to be paid within 30 days. In support of its position that costs of the motion should be reserved to the trial judge, City Core relies on Rogers Cable T.V. Ltd. v. 373041 Ontario Ltd.[^4] In Rogers, the plaintiff was successful on its motion for an interlocutory injunction. As Borins J., as he then was, observed at para. 4, different considerations apply to motions for interlocutory injunctive relief as compared to motions for other kinds of interlocutory remedies. In my view, Rogers does not assist City Core.
[7] City Core has also referred me to Weiche v. Berghof Estate[^5] and Shcolyar v. 1241 Scaw Inc.[^6] In Weiche, the court ordered that the certificate of pending litigation be discharged but reserved costs of the motion to the trial judge on the basis that “the ultimate determination of whether or not a fraud has occurred will be decided by the trial judge.”[^7] In Shcolyar, I note that costs were not argued at the motion; the court expressed the “preliminary view” that in the circumstances of the motion, costs should be in the cause, reserved to the trial judge.
[8] The general rule is that costs follow the event. In my view, in the circumstances of this case, the appropriate time to determine and fix the costs of the motion is now. City Core has not persuaded me that a different order would be more just.
[9] 254 Ontario served an offer to settle dated March 25, 2022. 254 Ontario offered to settle on the basis that the motion for a certificate of pending litigation be dismissed without costs. The offer remained open for acceptance until one minute after the commencement of the hearing of the motion. 254 Ontario plainly obtained a result as favourable as the terms of its offer to settle. Accordingly, 254 Ontario is entitled to partial indemnity costs to March 25, 2022, and substantial indemnity costs thereafter: r. 49.10(1).
[10] One measure of what is fair and reasonable to pay in costs is to consider the costs incurred by the unsuccessful party in addressing the same legal issues. In arguing that the costs claimed by 254 Ontario are excessive and unreasonable, City Core highlights that its actual costs exclusive of HST and disbursements are approximately $21,000, less than one-half the actual costs incurred by 254 Ontario. I note, however, that the total time spent by counsel for 254 Ontario on the motion (78 hours) is roughly comparable to that spent by counsel for City Core (86 hours).
[11] While the issues addressed on the motion were not complex, the motion was of critical importance to both parties. In particular, a certificate of pending litigation would have prevented 254 Ontario from proceeding with the sale of the property to a new purchaser. To ensure that the agreement with the new purchaser would not be put in jeopardy, the motion was brought on an urgent basis with an expedited timetable. I accept that this required greater time and effort by the parties.
[12] For the period up to and including March 25, 2022, I have considered the total hours spent on behalf of 254 Ontario by the three counsel involved. The costs outline reflects considerable overlap in the work performed. The partial indemnity rates claimed ($435 for senior counsel with 38 years’ experience and $237 for counsel with five years’ experience) are 60 per cent of the actual rates charged by the lawyers to their own client. Amounts calculated at 55-60 per cent of a reasonable actual rate reflect partial indemnity rates, particularly in the context of two sophisticated litigants well aware of the stakes: Inter-Leasing, Inc. v. The Minister of Finance.[^8] In my view, the actual rates charged by the lawyers to their own client were reasonable in the circumstances, having regard to the experience of counsel and the importance of the motion. Taking into account the overlap in the work performed, I would allow $6,000 in fees on a partial indemnity basis for the period up to and including March 25, 2022.
[13] For the period following March 25, 2022, 254 Ontario is entitled to fees calculated on a substantial indemnity basis. Costs awarded on a substantial indemnity scale are to be determined by applying a factor of 1.5 to the amount of the partial indemnity costs as fixed (or that would otherwise have been fixed) in accordance with the Rules and Tariff A: Akagi v. Synergy Group (2000) Inc.[^9]; r. 1.03. The substantial indemnity rates in 254 Ontario’s costs outline were calculated based on applying a factor of 1.5 to the partial indemnity rates. There appears to have been some overlap in the time spent by senior counsel and junior counsel in the preparation of the factum, reviewing of transcripts from cross-examinations, and discussions with the client. I would allow $20,000 in fees on a substantial indemnity basis for the period following March 25, 2022.
[14] There is no issue taken with the amount claimed for disbursements. 254 Ontario is entitled to disbursements in the amount claimed of $1,275.83.
[15] In summary, having regard to all of the above, I fix costs of the motion in the all inclusive amount of $30,655.83. City Core shall pay this amount to 254 Ontario within 30 days.
Madam Justice Robyn M. Ryan Bell
Date: June 15, 2022
COURT FILE NO.: CV-22-88637
DATE: 2022/06/15
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: City Core Consortia Limited, Plaintiff
AND
2549386 Ontario Inc., Defendant
COUNSEL: Stéphane Hutt and Simon Regimbald, for the Plaintiff/Moving Party
Stephen Schwartz and Emily Quail, for the Defendant/Responding Party
COSTS ENDORSEMENT
Justice Ryan Bell
Released: June 15, 2022
[^1]: R.S.O. 1990, c. C.43. [^2]: R.R.O. 1990, Reg. 194. [^3]: 2004 14579 (ON CA). [^4]: [1994] O.J. No. 1087. [^5]: 2013 ONSC 7742. [^6]: 2019 ONSC 3701. [^7]: Weiche, at para. 41. [^8]: 2014 ONCA 683, at para. 5. [^9]: 2015 ONCA 771, at paras. 56-57.