Court File and Parties

COURT FILE NO.: CV-15-539959 DATE: 20230315 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: EF INSTITUTE FOR CULTURAL EXCHANGE LIMITED Plaintiff – and – WORLDSTRIDES CANADA INC. and DAVID CONKLIN. Defendants

Counsel: Bryan Fromstein Lawyers for the Plaintiff Bradley E. Berg, Naiara Toker and Alysha Li, Lawyers for the Defendants

HEARD: IN WRITING

G. DOW, J.

Reasons for Decision on Costs

[1] In my Reasons released November 10, 2022 (2022 ONSC 4920) I dismissed the plaintiff’s action on a motion for summary judgment. I urged the parties to agree on costs. Before making my decision, I required the parties to advise me (and each other) what they would seek in costs in the event they were successful.

[2] The plaintiff uploaded a Costs Outline of $28,909.03 inclusive of fees, HST and disbursements for the motion and $26,144.63 again, inclusive of fees, HST and disbursements for the action. This totalled $55,053.66. By comparison, the defendant sought $199,038.48.

[3] I reminded the parties I would be guided by the principles outlined in Boucher et al v. Public Accountants Counsel for the Province of Ontario et al, [2004] O.J. No. 2634 (and specifically of the objective “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding rather than an amount fixed by the actual costs incurred by the successful litigation”.

[4] Unfortunately, the parties were unable to agree and, as I directed in that event, they served and filed written submissions dated December 15, 2022 and January 6, 2023.

[5] In those submissions, the defendant reduced its demand to $180,753.95. The reduction was apparently due to a previous order for costs paid by the plaintiff. In accordance with Rule 57.01 of the Rules of Civil Procedure, the defendants relied on the following factors to support its claim:

a) the plaintiff having rejected an offer to settle costs on November 23, 2022 in the amount of $140,000.00, all inclusive;

b) the defendants’ Rule 49 Offer to Settle of June 21, 2022 to pay $5,000.00 to the plaintiff to achieve a settlement;

c) the result achieved, being a complete success;

d) presumably greater complexity given the plaintiff being “a moving target” and the shifting nature of the relief sought; and

e) conduct by the plaintiff such as periods of dormancy, failure to focus discovery and seeking further discovery with little success.

[6] Despite a basis for seeking substantial indemnity costs from its formal offer to settle, the defendants’ material submitted the circumstances supported the “high end of any range of partial indemnity costs”.

[7] Regarding the extent of the settlement discussions to avoid the need for this decision by me, I do not give same any weight as I would expect those discussions not to be disclosed to me as part of encouraging the parties to reach a compromise agreement without repercussions, if unsuccessful.

[8] Regarding the defendants’ success, I agree this supports their claim.

[9] Regarding the suggestion this action involve greater complexity due to the plaintiff’s conduct, I remain concerned how it justified (or how the plaintiff could reasonably expect) to face a claim for costs almost four times what it expended. I have the same reaction to the defendants’ submissions as to the plaintiff’s conduct that increased the need to incur such a large amount of legal costs.

[10] I also have concerns with my previously noted observation (in my earlier reasons at paragraph 33) that the disparity in the accounts of each party could be attributable to the defendants identifying 10 different lawyers having worked on the matter with years of call ranging from 2022 back to 1994 and hourly rates ranging from $466.00 per hour to $833.00 per hour. The explanation provided was time incurred for duplication of efforts and transitions were not billed to the client or included in their Costs Outline. Frankly, this heightens my concerns as it suggests even greater time and expense was expended.

[11] I agree with the plaintiff’s reliance on the statement in Ayesof Professional Inc. v. Revera Inc., 2022 ONSC 217 that “the party who is required to pay a costs award cannot be expected to pay for overpreparation” (at paragraph 24). I acknowledge a party is entitled to choose the counsel or firm which it wishes to represent them at a cost upon which the firm and client agree.

[12] However, the binding principle, to paraphrase Boucher et al v. Public Accountants Counsel for the Province of Ontario et al, supra is to fix an amount that is fair and reasonable for the unsuccessful party to pay rather than the actual amount of costs incurred by the successful party.

[13] As a result, and having considered the factors set out in Rule 57.01(1) of the Rules of Civil Procedure, I agree with the plaintiff’s submission and award the amount of $65,000.00, inclusive of fees, HST and disbursements, payable by the plaintiff to the defendants, forthwith.

Mr. Justice G. Dow

Released: March 15, 2023