Court File and Parties

COURT FILE NO.: 10024/08 DATE: 20220816

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 1238915 Ontario Limited, Plaintiff/Judgment Creditor AND: Connie Nothdurft, Defendant/Judgment Debtor

BEFORE: Justice D.A. Broad

COUNSEL: Cameron Neil, for the Plaintiff/Judgment Creditor Mackenzie Campbell, for the Defendant/Judgment Debtor

COSTS ENDORSEMENT

[1] The parties have been unable to resolve the issue of costs of the motion and have each delivered written submissions on costs.

[2] The plaintiff seeks costs of the motion on a substantial indemnity basis in the sum of $14,105.44.

[3] The plaintiff submits that it was the successful party on the motion which was necessitated by the defendant’s failure to pay the costs ordered by Edwards, J. It states that although the defendant was granted an indulgence permitting her to cure her default by paying the outstanding costs award within 30 days, it achieved success on the motion by ultimately obtaining payment. There is no reason to deviate from the general rule that costs should follow the event.

[4] The defendant submits that the plaintiff’s motion was unnecessary as she made attempts to pay the costs. She also denies that the plaintiff was successful on its motion as it had sought dismissal of her cross-motion with no opportunity to cure her default.

[5] The defendant further submits that the amount of costs sought by the plaintiffs is disproportionate and that there is no basis to award costs to it on a substantial indemnity scale. She says that it costs are awarded to the plaintiff they should be limited to the sum of $2,750.

Guiding Principles on Costs Generally

[6] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, 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 the cost shall be paid."

[7] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in sub-rule 57.01(1), including, in particular, the principle of indemnity at para. (0.a) and the amount of costs that an unsuccessful party could reasonably expect to pay at para. (0.b).

[8] The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson [2002] CarswellOnt 1007 (Ont. C.A.), 2002 41469 and Macfie v. Cater, 1920 401 (ON SC), [1920] O.J. No. 71 (Ont. H.C.) at para 28).

[9] Sub rule 57.01(4) provides that the court has the discretion to award all or part of the costs on a substantial indemnity basis or award costs in an amount that represents full indemnity. While full indemnity and substantial indemnity costs are an exception to the general rule and awarded only under special circumstances, allegations made or conduct by a party that is "reprehensible, scandalous, or outrageous" falls within the ambit of an award of full indemnity costs (see Baryluk v Campbell, [2009] O.J. No. 2772 (S.C.J.) at paras. 8-10).

[10] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 1042 (ON CA), [2005] O.J. No. 160 (Ont. C.A.)) The amount awarded for costs must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, [2013] O.J. No. 4229 (Ont. S.C.J.) at paras. 5 and 6 and the cases therein referred to).

Discussion

[11] In my view the plaintiff was the successful party and is entitled to an award of costs in respect of the motion. The Order of Edwards, J. directing both judgment debtors Connie Nothdurft and Andrew Adam Ferri to pay costs of the garnishment proceeding required full payment by April 23, 2022. It was necessary for the plaintiff to bring the motion to enforce payment and it was ultimately successful in obtaining payment. The fact that the court granted an indulgence to Nothdurft to cure her default does not detract from the fact that the plaintiff’s motion was necessary and successful.

[12] There was no evidence that Nothdurft was impecunious or lacked the ability to pay the costs award. The evidence indicated that neither she nor Ferri had any real intention of paying the costs voluntarily, as demonstrated by their having stopped payment on the cheque delivered to counsel for the plaintiff on May 17, 2022 and the letter of Ferri which accompanied the cheque referred to at para. 12 of my Endorsement. Moreover, their counsel thereafter advised counsel for the plaintiff that they had no intention of replacing the stopped cheque. Thus, Nothdurft was in direct defiance of the costs Order with no justification. Her conduct was reprehensible as deserving of censure or condemnation, attracting an award of substantial indemnity costs. Moreover, it was within Nothdurft’s reasonable expectations that she would be responsible for the plaintiff’s costs incurred in requiring her to comply with the costs Order, on a substantial indemnity scale. There is no reason that the plaintiff should be out of pocket to any significant degree, as compliance with the Order should have been automatic.

[13] I am satisfied that the substantial indemnity fees and disbursements set forth on the plaintiff’s Costs Outline are reasonable and justifiable. Nothdurft did not offer any objection to the time expended by the plaintiff’s counsel, nor the hourly rate utilized.

[14] I decline to order that failure to pay this costs order when due would automatically bar Nothdurft from proceeding with her cross-motion to set aside the Whitten Judgment. However, if the costs are not paid on a timely basis, the plaintiff is at liberty to bring a motion to seek that relief.

Disposition

[15] It is therefore Ordered that the Connie Nothdurft pay costs to the plaintiff 1238915 Ontario Limited on a substantial indemnity basis in the sum of $14,105.44 within 30 days hereof.

D.A. Broad, J.

Date: September 16, 2022