Mansteel v. Katebian et al 2022 ONSC 731

Court File and Parties

COURT FILE NO.: CV-20-00000050-0000 DATE: 2022-02-01

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MANSTEEL NEW LISKEARD INC. Plaintiff

– and –

MORTEZA KATEBIAN A.K.A. BENHAM KATEBIAN A.K.A BEN KATABIAN, PAYAM KATEBIAN. PANTEA SAHEBDIVANI, HOSSEINALI SAHEBDIVANI A.K.A. HOSSEIN SAHEBDIVANI, SIMIN SAHEBDIVANI, 2450531 ONTARIO LIMTED INC., MONEY GATE MORTGAGE INVESTMENT CORPORATION, JOHN DOE and JANE DOE Defendants

Counsel: Shahryar Mazaheri, for the Plaintiff Justin H. Nasseri and Gordon W. Vance, for Defendants (Pantea Sahebdivani, Hosseinali Sahebdivani a.k.a. Hossein Sahebdivani and Simin Sahebdivani)

HEARD: in Writing

DECISION ON COSTS

WILCOX J.

INTRODUCTION

1The defendants Pantea Sahebdivani, Hosseinali Sahebdivani a.k.a. Hossein Sahebdivani and their daughter Simin Sahebdivani (Sahebdivani defendants) were successful in a contested motion for an order that the plaintiff should post security for costs. Both sides subsequently filed written costs submissions.

SUBMISSIONS

2The Sahebdivani defendants sought full indemnity costs for three pre-motion conferences and substantial indemnity costs for preparing for and attending at the motion.

3In summary, their reasons were that the plaintiff brought a prolix statement of claim containing serious allegations involving a web of numerous persons. These included one against which it knew it could not proceed, requiring the claim against that defendant to be stayed after submissions on point were heard. The Sahebdivani defendants then attempted informally to resolve the concerns underlying the motion, without success, prior to the first conference and to bringing motion materials. As of the first conference, the representation of the plaintiff was in a process of change such that a further conference was required. At the second conference, the process had not been completed, but it was understood that Mr. Mazaheri would become the plaintiff’s counsel of record. A timetable was agreed to for the steps up to and including the motion. A third conference was held at which Mr. Mazaheri informally and unsuccessfully sought an adjournment of the motion. Mr. James Zibbaras also attended that conference. He seemed to have been in the background throughout, as he reportedly represented the plaintiff in related matters and had been expected to become the plaintiff’s counsel in this matter when Mr. Mazaheri did. Submissions were heard about an intended motion to consolidate this action with others in Toronto, which had yet to be brought.

4When the Sahebdivani defendants’ motion for security for costs was heard, the plaintiff attempted unsuccessfully to late file additional material. For the motion, although the test on a motion for security for costs is set out in the relevant caselaw, the plaintiff failed to file financial disclosure of the “robust particularity” required by that test. Instead, its information about the plaintiff’s finances was rather vague. Consequently, the Sahebdivani defendants were entirely successful on their motion.

5The plaintiff submitted that full or substantial indemnity costs are not justified because there was no reprehensible, scandalous, or outrageous conduct on its part. Furthermore, the Sahebdivani defendants’ attempt to resolve the matter before bringing the motion allegedly sought information beyond what was necessary and left questions unanswered about what aspect of the litigation the requested amount applied to.

LAW ON COSTS

6Section 131 of the Courts of Justice Act leaves the costs of a proceeding to the discretion of the court. Rule 1.04(1.1) of the Rules of Civil Procedure requires the court to make orders and give directions that are proportionate to the importance and complexity of the issues and to the amount involved in the proceeding. Rule 57 sets out the factors to be considered by the court, in addition to the result in the proceeding and any offer to settle, in exercising this discretion.

7“Modern costs rules are designed to foster three fundamental purposes:

1. to indemnify successful litigants for the cost of litigation;
2. to encourage settlements; and
3. to discourage and sanction inappropriate behaviour by litigants.”¹

8Fixing costs is not simply a mechanical exercise. “(T)he costs award 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.”²

9Elevated costs awards are the exception. In Nimchick v. Nimchick³ the court explained:

[5] Elevated costs are warranted in only two circumstances. The first is as a result of an offer to settle under rule 49, where substantial indemnity costs are explicitly authorized. ...

[6] The second circumstance is where the unsuccessful party has engaged in behaviour worthy of sanction, that is, conduct that is reprehensible, scandalous or outrageous (Davies v. Clarington (Municipality), 2009 ONCA 722, at para. 28; Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p. 134). The reprehensible conduct may be in the circumstances giving rise to the cause of action, or in the proceedings (Mortimer v. Cameron (1994), 1994 10998 (ON CA), 17 O.R. (3d) 1 (C.A.), at p. 23). Unfounded allegations of fraud or improper conduct may warrant the imposition of substantial indemnity costs (Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, at para. 26).

10In Lewis v. Lewis⁴ the court stated:

[17] It is well established that the extraordinary award of substantial indemnity costs is reserved for exceptional cases, for example, involving egregious misconduct by a party or its counsel, or where the proceedings are clearly vexatious, frivolous, or an abuse of process: Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3 at p. 134. …

CONCLUSION

11In my view, although the plaintiff’s situation seemed somewhat disorganized such that the security for costs proceedings were protracted, the plaintiff’s conduct did not fall to the level required to justify imposing costs on an elevated scale. Partial indemnity costs are appropriate.

12The Sahebdivani defendants’ partial indemnity costs are $12,788.40 plus taxes and disbursements for a total of $15,036.17. The plaintiff also submitted that those are excessive. In comparison, the full account of Mr. Mazaheri⁵ for the motion and two of the three conferences amounted to $8,745.00. That is some indication of what an unsuccessful party could reasonably expect to pay, which is one of the considerations in Rule 57. Its impact is reduced by the fact that, as previously mentioned, the plaintiff did not produce financial disclosure of the required “robust particularity” for the hearing.

13Having taken into account the relevant factors enumerated under the rules and the principles set forth in the case law, I conclude that an award of costs in the amount of $12,500.00 inclusive of fees, disbursements and HST would be a reasonable one in the circumstances and I order the plaintiff to pay that amount to the Sahebdivani defendants within thirty days.

The Honourable Justice James A. S. Wilcox

Released: February 1, 2022

COURT FILE NO.: CV-20-00000050-0000

DATE: 20220201

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MANSTEEL NEW LISKEARD INC.

Plaintiff

– and –

MORTEZA KATEBIAN A.K.A. BENHAM KATEBIAN A.K.A BEN KATABIAN, PAYAM KATEBIAN. PANTEA SAHEBDIVANI, HOSSEINALI SAHEBDIVANI A.K.A. HOSSEIN SAHEBDIVANI, SIMIN SAHEBDIVANI, 2450531 ONTARIO LIMTED INC., MONEY GATE MORTGAGE INVESTMENT CORPORATION, JOHN DOE and JANE DOE

Defendants

Footnotes

1. 1Fong v. Chan, 1999 2052 (ON CA), 46 O.R. (3^rd) 330
2. 2Boucher v. Public Accountant’s Counsel (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634
3. 32019 ONSC 6653, paras. 5 and 6
4. 42019 ONCA 690
5. 5I note that the plaintiff’s counsel has changed again. The costs submissions indicate that Mr. Zibbaras is now its counsel.