Court File and Parties

COURT FILE NO.: CV-17-584885 DATE: 20220829

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 9725440 CANADA INC., Plaintiff – and – MARKANDU VIJAYAKUMAR and MATHIVATHANA V1JAYAKUMAR, Defendants

BEFORE: Justice E.M. Morgan

COUNSEL: James Wortzman and Catherine Allen, for the Plaintiff Patrick Summers and Kristina Bezprozvannykh, for the Defendants

HEARD: Cost submissions in writing

COSTS

[1] On June 26, 2022, I released my reasons for judgment following this one-week trial. The claim was brought by a disappointed house purchaser against vendors who had reneged on their commitment under an agreement of purchase and sale. I awarded judgment to the Plaintiff and ordered specific performance as the remedy: 9725440 Canada Inc. v. Vijayakumar, 2022 ONSC 3689.

[2] Counsel for the Plaintiff seek costs on a partial indemnity basis until February 4, 2022 – the date the Plaintiff served an offer to settle under Rule 49 of the Rules of Civil Procedure – and on a substantial indemnity basis thereafter. The total amount sought by the Plaintiff is $248,822.28, inclusive of fees, disbursements, and HST.

[3] Counsel for the Defendants submits that this is not a case for substantial indemnity costs. Although the Defendant concedes that the offer was in form a Rule 49 offer, in substance it was really no offer at all. That is, the terms of the offer were that the Defendant either purchase the subject property as called for in the agreement of purchase and sale, or pay damages that are more or less the equivalent of the increase in appraised value of the property over the agreement price. In other words, as Defendants’ counsel put it, there is no “element of compromise” in the Plaintiff’s offer.

[4] The Court of Appeal indicated in Walker Estate v. York Finch, 1999 CanLII 2158, at paras 73-80, that the existence, or not, of compromise in an offer to settle is to be factored into the court’s discretion in determining whether to award substantial indemnity costs. This discretion is to be exercised in such a way that, as my colleague Myers J. put it in Rosenberg v. 206 Bloor Street West Ltd., 2016 ONSC 1111, at para 13, “clear, understandable, genuine compromise is rewarded and clever tactics to try to gain the benefit of the Rule without meaningful, clear, and understandable compromise is not.”

[5] With these guideposts in mind, I would agree with the Defendants that their failure to accept the Plaintiff’s offer does not attract substantial indemnity costs. The ordinary partial indemnity scale is what should apply here.

[6] Defendants’ counsel also point out that some $50,000 of the Plaintiff’s costs appear from its Bill of Costs to be related to an early motion to amend the Statement of Claim and an unsuccessful motion it brought for summary judgment during the pre-trial phase. The pleadings amendment was a consent motion for which the Defendants should not bear any costs. As for the summary judgment motion, the motion judge did not award costs to either side. The fact is, however, that the Defendants successfully argued that the matter should go to trial. While the result did not warrant costs of that motion going to the Defendants, it likewise does not warrant costs going to the Plaintiff.

[7] Defendants’ counsel submit that an appropriate amount of costs on a partial indemnity scale, inclusive of the roughly $13,000 that Plaintiff’s counsel incurred in disbursements, would be $150,000. I am prepared to agree with that figure; in fact, as I calculate it from Plaintiff’s counsel’s Bill of Costs, that is somewhat more than a strict partial indemnity scale might give the Plaintiff. I view this figure as reflecting the principle that costs be “fair and reasonable for the unsuccessful party to pay in the particular proceeding”: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 OR (3d) 291, at para 26 (Ont CA).

[8] The Defendant shall pay costs of this action to the Plaintiff in the all-inclusive amount of $150,000.

Date: August 29, 2022 Morgan J.