Court File and Parties

COURT FILE NOs.: CV-21-00670759, CV-22-00682595 DATE: 20230103 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: HAYLEY IDA CORDA FROMSTEIN and JAMES LEWIS ALBIEZ, Applicants/Respondents by Counter-Application – and – RITA DI MICHELE-KING, Respondent/Applicant by Counter-Application

BEFORE: Justice E.M. Morgan

COUNSEL: Catherine Allen, for the Applicants/Respondents by Counter-Application James Davies, for the Respondent/I also Applicant by Counter-Application

HEARD: Costs submissions in writing

COSTS ENDORSEMENT

[1] The Applicants and Respondent are neighbours who share a mutual driveway, documented by reciprocal easements. In an Application and Counter-Application, they each sought to enforce their view of the easements.

[2] On November 25, 2022, I issued my judgment. The Applicants, who sought to enforce the easements as written and as historically practiced by past owners of the two properties, were entirely successful. The Respondent, who sought to modify the easements and, in effect, eliminate the Applicants’ use of the mutual driveway as a driveway, was unsuccessful.

[3] The Applicants seek costs of the entire Application on a substantial indemnity basis, which comes to a total of $78,406.41 ($72,362.42 in fees and $5,043.98 in disbursements). The reason for claiming on a substantial indemnity basis is that they served an offer to settle the same week as they issued their Notice of Application. That offer mirrored the relief sought in the Notice and, ultimately, mirrored the relief I granted in my judgment with the exception of costs. The Applicants offered to waive any claim to costs if the matter were to resolve with an acceptance of their offer.

[4] The Respondent did not accept the offer and fought the Applicants all the way, including by issuing her own Counter-Application. It was, of course, the Respondent’s right to challenge everything that the Applicants said in court, and she did so by amassing a substantial evidentiary record and having counsel do a significant amount of research and argue the position vigorously in a factum and in court. The merits of the case simply did not go her way.

[5] No one can take issue with how the Respondent decided to respond to the Application or how her counsel approached the litigation. The only thing is, having taken this approach the Respondent is now liable for costs on a substantial indemnity basis.

[6] The Respondent could have avoided the entire exercise had she accepted the Applicants’ offer at the outset. Having not done so, Rule 49.10 of the Rules of Civil Procedure provides the Applicants with a claim for costs on a substantial rather than a partial indemnity basis.

[7] Respondent’s counsel argues that the costs consequences of Rule 49 should not apply here, because the Applicants’ offer to settle was served after the Notice of Application but before the full Application Record containing all of the supporting evidence. Counsel submits that the Respondent therefore could not properly assess the offer when it was first served on her.

[8] With respect, I do not see the any cogency in this argument.

[9] The full Application Record was served on the Respondent before she had to respond to it with a record of her own. She obviously had ample time to do so, as her response took the form of a Counter-Application with a full supporting record. The parties then engaged in cross-examinations, etc. The Application was not argued within an especially compressed time schedule.

[10] I do understand the Respondent wanting to wait and see the Applicants’ evidence before accepting or rejecting an offer to settle. But the Applicants’ timing did not prevent that. The Respondent could have accepted the offer any time up until the actual hearing.

[11] The Applicants could, of course, have waited to serve their offer until after serving their full Application Record, but that would have provided the Respondent with no particular advantage. As it is, by serving their offer at a very early stage, the Applicants merely gave the Respondent a longer time to think about their offer.

[12] Rule 49 does not apply if the offering party serves its offer too late – i.e. too soon before a hearing. But nowhere does it say, and there would be no logic in it saying, that it does not apply where an offer is served too early. Rule 49.03 specifically provides that “[a]n offer to settle may be made at any time, but where the offer to settle is made less than seven days before the hearing commences, the costs consequences referred to in rule 49.10 do not apply.” [emphasis added]

[13] The Bill of Costs submitted by Applicants’ counsel establishes that the hours reflected in the substantial indemnity costs request were indeed incurred by them. I have no inclination to look behind that accumulation of hours. The overall amount claimed by the Applicants is within what has become the usual range for a complete hearing that entails a complex evidentiary record, cross-examinations, significant legal research and factums. Applicants’ counsel invested what it took to be successful, and there is no reason for me to question the need for that investment.

[14] Rounding the figures down somewhat for the sake of convenience, the Respondent shall pay the Applicant costs in the all-inclusive amount of $75,000.00.

Date: January 3, 2023 Morgan J.