Court File and Parties
COURT FILE NO.: CV-20-00651684-0000 DATE: 2022-07-19
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
YI-HANG CHAN and CHIAO-WEI HSIAO Applicants
- and –
SHAN MANGAL and HOMELIFE SUPERSTARS REAL ESTATE LIMITED Respondents
Counsel: Annabelle Lui for the Applicants Samir Chhina for the Respondent Shan Mangal
Heard: In writing
REASONS FOR DECISION - COSTS
PERELL, J.
[1] In this proceeding by application, the Applicants, Yi-Hang Chan and Chiao-Wei Hsiao, sue Shan Mangal and Homelife Superstars Real Estate Limited (“Homelife”) for the return of a $50,500 deposit paid on an abortive real estate transaction. Chan and Hsiao sought a reference for damages as against Mangal or, in the alternative, damages for costs thrown away in the amount of $7,818.22. The defendant Homelife did not oppose the application. I granted Chan and Hsiao a judgment for $50,500 for the return of the deposit but without interest or a claim for damages. I dismissed Mangal’s claims.
[2] I directed the parties that if they cannot agree about the matter of costs, they may make submissions in writing beginning with the submissions of Chan and Hsiao within twenty days of the release of my Reasons for Decision followed by Mangal’s submissions within a further twenty days.
[3] Chan and Hsiao seek costs of: $70,060.32, all inclusive, on a substantial indemnity basis.
[4] In the alternative they seek $61,581.70, all inclusive, comprised of partial indemnity costs to January 2, 2022 ($38,703.75) and substantial indemnity costs after January 2, 2022 ($22,877.95).
[5] Notwithstanding that he was the unsuccessful party Mangal requests costs of $45,267.23, all inclusive, on a substantial indemnity basis.
[6] For the reasons that follow, I award costs of $25,000, all inclusive, on a partial indemnity basis to Chan and Hsiao.
[7] The pertinent background facts for this costs assessment are as follows.
[8] On February 6, 2020, Mangal agreed to sell 16 Bryant Ave. to Chan and Hsiao. The purchase price was $1,010,000 with a $50,500 deposit. The transaction was scheduled to close on March 17, 2020.
[9] Chan and Hsiao retained Adam Richardson as their conveyancing lawyer, and on March 9, 2020, he sent Karanpaul Singh Randhawa, Mangal’s lawyer, a requisition letter.
[10] On March 11, 2020, Richardson learned that there were four open building permit files and one active investigation about 16 Bryant Ave. His office requisitioned that these matters be dealt with by the closing of the transaction.
[11] On the day of the closing, March 17, 2020, Mangal’s lawyer asked for an extension of the closing date for Mangal to resolve outstanding matters. The request for an extension was refused, and Chan and Hsiao insisted that Mangal immediately deal with the requisitions and be in a position to close.
[12] Mangal, however, was unable to close and on March 18, 2020, a variety of matters remained outstanding but Chan and Hsiao tendered. They demanded a return of their deposit in exchange for a mutual release.
[13] On May 15, 2020, Chan and Hsiao offered to settle the matter by offering to allow Mangal to return $49,500.00 of the deposit money and retain $1,000.00. He, however, was prepared to refund only $10,000.
[14] Mangal did not return the deposit. Rather, he relisted the property for sale, and on June 29, 2020, it was resold for $999,000.
[15] Chan and Hsiao repeated their demands for a return of the deposit, and when they were rebuffed, they sued Mangal for a return of the deposit and damages. He counterclaimed for forfeiture of the deposit and damages.
[16] On September 16, 2020, Mangal commenced a Small Claims Court action against Chan and Hsiao. He offered to refund $15,000.
[17] On December 8, 2020, the parties were scheduled to attend in Civil Practice Court. Mangal failed to attend. The attendance was rescheduled to January 11, 2021.
[18] On January 11, 2021, Justice Myers referred the action to a case management conference.
[19] On March 15, 2021, there was a case management conference and Justice Pollack indicated that the action should proceed in the Superior Court.
[20] On March 16, 2021, Chan and Hsiao again offered to settle for payment of $65,000 inclusive of costs.
[21] On March 24, 2021, Mangal offered to return $40,000 and Chan and Hsiao rejected the counteroffer.
[22] On September 7, 2021, there was a further attendance in Civil Practice Court and Chan and Hsiao’s application was scheduled to be heard on March 18, 2022.
[23] On November 19, 2021, the parties proceeded to a four-hour examination on the affidavits.
[24] On December 3, 2021, Mangal offered to return the deposit but not to pay costs.
[25] On January 13, 2022, Chan and Hsiao served a Rule 49 offer. The terms of the offer were that Mangal return the $50,500 deposit and pay an additional $22,850, inclusive of all damages, costs and HST.
[26] On January 17, 2022, Chan and Hsiao served their factum for the Application.
[27] On March 11, 2022, approximately a month overdue, Mangal delivered his responding factum.
[28] The application was argued on March 17, 2022.
[29] Chan and Hsiao submit that they are entitled to substantial indemnity costs because of the intransigent, uncompromising and uncooperative position of Mangal and because of the wasted time dealing with the staying or discontinuance of the Small Claims Action, which they regard as tactical manoeuvring and forum shopping by Mangal.
[30] It appears that Mangal requests costs based on a tit for tat reciprocal argument that it was Chan and Hsiao who were intransigent, uncompromising, and uncooperative and because of their refusal to settle a settlement offer and their insulting attack on the motivations and conduct of Mangal and his lawyer.
[31] In the immediate case, costs should be determined on a partial indemnity basis and awarded to the successful party in accordance with the normal guidelines that shape the exercise of the court’s discretion. In Davies v. Clarington (Municipality),[^1] the Court of Appeal held that the substantial indemnity scale of costs should be employed only when there was a clear finding of reprehensible conduct on the part of the party against which the cost award is being made. This was hard fought litigation and Mangal had at least an arguable theory for his substantive defence and counterclaim. I cannot make a clear finding of reprehensible conduct.
[32] The most general rule about costs, not to be departed from without good reason, is that costs at a partial indemnity scale follow the event, which is to say that normally costs are ordered to be paid by the unsuccessful party to the successful party on a partial indemnity scale.[^2]
[33] A critical controlling principle for the awarding of costs is that the sum awarded reflect the fair and reasonable expectations of the unsuccessful litigant.[^3] The overriding principle in awarding costs is reasonableness.[^4] In my opinion, in the immediate case costs that are fair and reasonable and within the reasonable expectations of the unsuccessful litigant are $25,000 all inclusive.
[34] In my opinion, there is nothing in the immediate case that would justify granting costs to the unsuccessful party.
[35] Order accordingly.
Perell, J.
Released: July 19, 2022
COURT FILE NO.: CV-20-00651684-0000 DATE: 2022-07-19
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
YI-HANG CHAN and CHIAO-WEI HSIAO Applicants
- and -
SHAN MANGAL and HOMELIFE SUPERSTARS REAL ESTATE LIMITED Respondents
REASONS FOR DECISION – COSTS
PERELL J.
Released: July 19, 2022
[^1]: (2009), 2009 ONCA 722, 100 O.R. (3d) 66 at paras. 28–40 (C.A.).
[^2]: McCracken v. Canadian National Railway, 2012 ONSC 6838; Hague v. Liberty Mutual Insurance Co., 2005 CanLII 13782 (ON SC), [2005] O.J. No. 1660 (S.C.J.); Pike's Tent and Awning Ltd. v. Cormdale Genetics Inc. (1998), 27 C.P.C. (4th) 352 (Ont. Gen. Div.); Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 CanLII 239 (ON CA), 17 O.R. (3d) 135 (C.A.).
[^3]: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 at para. 24 (C.A.); Stellarbridge Management Inc. v. Magna International (Canada) Inc., 2004 CanLII 9852 (ON CA), [2004] O.J. No. 2102 at para. 97 (C.A.); Zesta Engineering Ltd. v. Cloutier (2002), 2002 CanLII 25577 (ON CA), 21 C.C.E.L. (3d) 161 at para. 4 (Ont. C.A.).
[^4]: Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 at para. 52 (C.A.).