Court File and Parties

COURT FILE NO.: CV-20-455-00 DATE: 2023 01 05

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

David Bacchus Plaintiff

Counsel: Norman Groot and Ashley Ferguson, for the Plaintiff

- and -

Sara Lorraine Munn Defendant

Counsel: Howard Cohen and Sabrina Waraich, for the Defendant

HEARD: In Writing

COSTS ENDORSEMENT

LEMAY J

[1] This is an ongoing action that I have been case-managing for more than two years. The matter is set for trial in September of 2023. On November 30th, 2022, I released a decision on whether a second related fraudulent conveyance action brought by the Plaintiff should be stayed and/or dismissed as an abuse of process. That decision is reported at 2022 ONSC 6745.

[2] The Plaintiff argued that the fraudulent conveyance action should be stayed pending the outcome of the main action. The Defendant argued that the fraudulent conveyance action should be dismissed. I accepted the Plaintiff’s position as I found that the fraudulent conveyance action raised issues that had not been raised in the main action and that it would be efficient for that action to proceed after the conclusion of the main action.

[3] It is now time to fix the costs for this motion.

Positions of the Parties

[4] The Plaintiff seeks substantial indemnity costs in the sum of $13,770.18, inclusive of HST and disbursements. These costs are sought on the basis that the Plaintiff provided an offer to settle, although that offer does not trigger the costs consequences under Rule 49 of the Rules of Civil Procedure. The Plaintiff also seeks substantial indemnity costs on the basis that the Defendant had a weak and tenuous basis for her position on this motion.

[5] The Defendant asks that the costs of this motion be deferred to the trial judge or until the main action is dealt with by the Court. In the alternative, counsel argues that this motion did not delay the hearing of the main action and that the Plaintiff’s offer to settle should not be considered.

Analysis

[6] Having reviewed the materials provided by the parties, I have to determine three questions as follows:

a) Whether costs should be deferred to the trial judge b) What scale should costs be payable on c) What quantum is reasonable for costs

[7] I will deal with each issue in turn.

Deferring Costs to the Trial Judge

[8] Defendant’s counsel argues that awarding costs at this stage would be premature and might be unfair depending on the outcome of the main action. I disagree. The outcome of the main action does not affect the costs for this motion for two reasons.

[9] First, the Plaintiff proposed staying the fraudulent conveyance action until the main action was concluded. This was a reasonable position to adopt as it allowed the parties to determine the merits of the main action before having to even deal with the fraudulent conveyance action.

[10] Second, the Defendant was unsuccessful in her claim that the fraudulent conveyance action was an abuse of process. While it is possible that the fraudulent conveyance action will either not proceed or be dismissed on its merits, that does not change the fact that, on this motion, the Defendant was unsuccessful and the Plaintiff was successful.

[11] In other words, the ultimate outcome of the fraudulent conveyance action will not change my analysis as to whether costs should be awarded in this case. Given that the Rules of Civil Procedure mandate that we fix costs as expeditiously as possible, I see no reason to defer these costs to the trial judge.

Scale of Costs

[12] The Plaintiff seeks costs for the motion on a substantial indemnity basis. These are sought on the basis that there was an offer to settle and on the basis that the Defendant’s conduct was unreasonable. Neither argument succeeds.

[13] The Plaintiff did make a formal offer to settle this motion. It was an entirely reasonable offer. Indeed, had the offer been made in a timely way, it would have triggered the cost consequences of Rule 49 and entitled the Plaintiff to substantial indemnity costs. It was not served in time, so it does not trigger the Rule 49 consequences.

[14] However, contrary to the Defendant’s assertion, the offer to settle is a factor that should be considered in assessing costs. This is especially true since the Defendant’s offer to settle was not reasonable.

[15] This brings me to the argument that the Defendant’s conduct was unreasonable. The Plaintiff is correct in his assertion that the Defendant’s argument was tenuous. However, if Rule 49 does not apply, then substantial indemnity costs should not be awarded except in rare and exceptional circumstances. Jansari v. Jansari, 2020 ONSC 3237. Generally, substantial indemnity costs are only awarded where a party has behaved in an abusive, egregious or otherwise reprehensible manner. Skourtis v. City of Toronto, 2021 ONSC 4492 at para. 7.

[16] On the facts of this case, I see no basis to award substantial indemnity costs for this motion. The Defendant had some basis for concern when she received a second action over the same facts. While her position was tenuous, advancing that position did was not abusive or egregious. The scale in this case should be partial indemnity and not full indemnity.

Quantum of Costs

[17] Rule 57.01 of the Rules of Civil Procedure set out the factors that I should consider in analyzing the quantum of costs. The amount of partial indemnity costs claimed by the Plaintiff is $9,180.12 inclusive of HST and disbursements. I am of the view that this is a generally reasonable amount but should be reduced to take into account the fact that the dockets cover more than time relating to this motion. They also cover time relating to the case more generally.

[18] Turning to the specific considerations under Rule 57.01, I have already discussed the significance of the offer to settle. It is a factor that supports an award of costs to the Plaintiff for this motion.

[19] The complexity of the proceeding is another factor that generally supports the position of the Plaintiff. Although this motion was argued in less than an hour, it was not a traditional short motion as the legal issues were complex and factums were required. Indeed, had I not been familiar with the underlying facts in this case, it would clearly have been a long motion.

[20] Then, there are the expectations of the losing party. The Defendant made an offer to settle this motion before it was heard. As part of this offer, the Defendant sought costs for the Fraudulent Conveyance action in the sum of $8,950.00. This offer was made in September, well before the motion was argued. This suggests that the Plaintiff’s costs demand is reasonable.

[21] However, as I said there are docket entries related to the management of the case more broadly. Those dockets include attending the case conference on August 18th, 2022, which is clearly a matter of more general application.

[22] When all of these factors are taken into account, I have determined that the Defendant shall pay the Plaintiff costs in the sum of $9,000.00 inclusive of HST and disbursements for this motion. Those costs are to be paid within thirty (30) days.

Conclusion

[23] For the foregoing reasons, I have concluded that the Defendant shall pay the Plaintiff the sum of $9,000.00 inclusive of HST and disbursements for this motion within thirty (30) days of today’s date.

LEMAY J Released: January 5, 2023