Court File and Parties

COURT FILE NO.: CV-17-131849

DATE: 20230314

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SAVERIO GRIFFO

Plaintiff

– and –

NOVASCAPE CONTRACTORS LIMITED, NOVASCAPE LIMITED, BENETTON CONSTRUCTION LIMITED, ADELE MANAGEMENT & CONSULTANTS INC., ROSEY MANAGEMENT & CONSULTANTS INC., JOE GENOVA and DINO MOSCARDELLI

Defendants

Counsel:

Charles Cooke for the Plaintiff

Stephen A. Zampini for the Defendants, Novascape Contractors Limited, Novascape Limited, Benetton Construction Limited, Adele Management & Consultants Inc., Rosey Management & Consultants Inc., and Joe Genova

No one appearing for Dino Moscardelli

HEARD: Cost Submissions in Writing

RULING on COSTS

c. boswell j.

[1] On February 8, 2023 I dismissed the plaintiff’s motion for leave to issue a certificate of pending litigation over a parcel of land in Kleinburg registered to the defendant, Dino Moscardelli. Mr. Moscardelli holds title to the lands in trust for a numbered company. That numbered company is owned in equal shares by Mr. Moscardelli and the defendant, Benetton Construction Limited. The plaintiff seeks a declaration that he is a one-half owner of the issued shares of Benetton.

[2] I found that the plaintiff is not advancing a reasonable claim to an interest in the subject lands and instead is seeking an interest in the shares of Benetton, as well as in the defendant, Novascape Contractors Limited. Moreover, I concluded that the equities did not favour the granting of the certificate.

[3] I invited the parties to make written submissions on the issue of the costs of the motion. They have made those submissions and the following reasons explain my disposition of the costs issue.

The Governing Principles

[4] An award of costs, and the amount of the award, are in the court’s discretion. That discretion is grounded in section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43. Its application is guided by the factors enumerated in r. 57.01 of the Rules of Civil Procedure.

[5] The law is now well-settled that the overarching principles to be applied to the assessment of costs are fairness, proportionality and reasonableness: see Beaver v. Hill, 2018 ONCA 840; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); and Moon v. Sher (2004), 2004 39005 (ON CA), 246 D.L.R. (4th) 440 (C.A.). In the context of determining what is fair, reasonable and proportionate, due consideration must be given to the reasonable expectations of the parties. See Neubuerger v. York, 2016 ONCA 303 at para. 17.

[6] By convention, costs are generally awarded to a successful party and are ordinarily measured on a partial indemnity basis. See Bell Canada v. Olympia & York Developments Limited et. al. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.). In special circumstances, costs may be awarded on a higher scale, but those cases are exceptional. They are reserved for cases where there has been “reprehensible, scandalous or outrageous conduct on the part of one of the parties.” See Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at para. 241. See also Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239 at para. 43.

[7] A higher scale of costs may also be applicable where triggered by r. 49 as a result of an offer to settle.

The Parties’ Positions

[8] The defendants (save for Mr. Moscardelli, who has been noted in default and took no part in the motion) seek full indemnity costs of $17,800.89. Their position is constructed on the following four pillars:

(i) The plaintiff should have expected a significant costs award being made against him, given the weakness of his case and given his admission during examinations for discovery that he did not expect to have an ownership interest in the subject lands, but rather an ownership interest in corporate shares;

(ii) The motion was unnecessarily complex;

(iii) The defendants offered to settle the motion on the basis that the motion be dismissed and that the plaintiff pay the defendants their costs fixed at $5,000; and,

(iv) Counsel to the plaintiff engaged in conduct that resulted in the motion being delayed. Specifically, he failed to canvass available dates with defence counsel prior to booking the initial return date of the motion; failed to agree to a timetable for the filing of materials and completion of cross-examinations; sought, then abandoned relief in relation to undertakings; delivered motion materials in a piecemeal fashion; and booked insufficient time for the hearing of the motion, attempting to squeeze a long motion into a one-hour time slot.

[9] The defendants filed a Costs Outline in which they detailed fees incurred in the amount of $15,520, disbursements of $263.29 and HST of $2,017.60. The time spent by counsel to the defendants is calculated as 37.3 hours. His claimed hourly rate is $400. He also seeks a $600 “lawyer’s fee” for the attendance on January 31, 2023 when the motion was argued. I do not understand that additional fee, since he has included his time for the attendance on the motion in the 37.3 hours calculated.

[10] The plaintiff concedes that the time spent by the defendants’ counsel is reasonable. He opposes, however, the elevated level of costs sought. He suggests that an appropriate substantial indemnity rate is $360/hr (90% of counsel’s actual rate) and that an appropriate partial indemnity rate is $260/hr (65% of counsel’s actual rate).

[11] The plaintiff further concedes that the defendant made an offer to settle on November 28, 2022 and that the defendants have equalled or bettered that offer in the result on the motion. He submits that the general rule is that the successful party is entitled to partial indemnity costs to the date of the offer and substantial indemnity costs thereafter. He accepts that there is no reason to depart from that rule in this instance. He has calculated that defence counsel billed 29.8 hours prior to the offer and 7.5 hours thereafter. Using the rates he contends are appropriate for substantial and partial indemnity fees in this instance, he calculates that the defendants’ reasonable fees are $10,448.

[12] The plaintiff disputes the disbursements sought by the defendants on the basis that they are wholly related to photocopying documents. He contends that the parties filed all of their documents electronically so there should have been no need to make extensive photocopies.

Discussion

[13] Like the plaintiff’s counsel, I too consider the number of hours claimed to have been incurred by defence counsel on the motion to be reasonable.

[14] I do not share defence counsel’s view that the conduct of the plaintiff’s counsel on this motion rises to a level of concern such that full indemnity costs are justified. The motion may have proceeded more efficiently. Certainly it ought to be have been booked as a long motion given its obvious time requirements. Having said that, I would not characterize the conduct of the plaintiff’s counsel as reprehensible, scandalous or outrageous.

[15] In my view, the principal issue for determination in the circumstances, is the effect of the defendants’ offer to settle.

[16] Rule 49.10(1) establishes a presumptive entitlement to elevated costs where a plaintiff makes an offer to settle and then equals or exceeds it in the result. The same presumptive rule does not apply when a defendant makes an offer to settle. Instead, r. 49.10(2) provides as follows:

(2) Where an offer to settle,

(a) is made by a defendant at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the plaintiff,

and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.

[17] In S & A Strasser Ltd. v. Richmond Hill (Town), (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243 (Ont. C.A.), the Court of Appeal for Ontario held that r. 49.10(2) does not apply where a plaintiff’s claim has been entirely dismissed. It only applies where the plaintiff has had some success, but less than the offer made. That said, the court retains a discretion to award elevated costs having regard to the factors enumerated in r. 57.01(1). Moreover, r. 49.13 expressly provides that, when exercising its discretion to award costs, the court may take into account any offer made in writing.

[18] The principles articulated in Strasser were recently affirmed by the Court of Appeal in Oz Merchandising Inc. v. Canadian Professional Soccer League, 2021 ONCA 520.

[19] In light of the foregoing, I do not necessarily agree with counsel for the plaintiff that “the general rule is that the successful party is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs thereafter”. Rule 49 does not treat plaintiffs’ and defendants’ offers equally.

[20] Having said that, I very nearly agree with the position of the plaintiff in terms of the amount that I consider appropriate for costs in this instance, having regard to the offer made by the plaintiff and a number of other factors including: (1) the motion was complex and nuanced and required significant preparation; (2) the amount at stake in the proceedings, at $1.5 million, is significant; and (3) the time spent by the defendants’ counsel is consistent with that spent by the plaintiff’s counsel. In other words, the amount sought is in line with what the plaintiff might reasonably have expected to pay in costs if unsuccessful on the motion.

[21] In my view the sum of $10,000 is appropriate in terms of the defendants’ fees. I have no difficulty with the modest disbursements sought. I appreciate that materials were filed electronically, but I accept that defence counsel created a hard copy of all of the materials for his own use and file. Some people prefer to work from a hard copy and I do not consider that unreasonable.

[22] In the result, the total award is $10,233 plus $1,330.29 in HST, for a total of $11,563.29, which costs are payable within 30 days.

C. Boswell J.

Released: March 14, 2023