COURT FILE NO.: CV-20-74315

DATE: 2023/06/06

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Renee Wilson and Peter Wilson

Plaintiffs

– and –

Ryan David Hill d.b.a. Crown Hill Builders

Defendant

Barry L. Yellin for the Plaintiffs

Luigi de Lisio for the Defendant

HEARD: In Writing

COSTS DECISION

Justice l. sheard

Overview

1As per Reasons for Judgment dated May 4, 2023 (the “Reasons”), the plaintiffs obtained judgment against the defendant in the amount of $50,000.

2The action proceeded as a summary trial under the Simplified Procedure Rules. At the two-day trial, evidence in chief was tendered by affidavit, on which the affiants were cross-examined. In addition, the parties submitted an Agreed Statement of Facts. The plaintiffs submitted a document brief; the defendant produced no documents.

3In the Reasons, the plaintiffs were found to be entitled to the return of a $50,000 cash deposit they gave to Mr. Hill, for renovations he was to perform on the plaintiffs’ home. Mr. Hill did no renovations and was found to have “knowingly and falsely represented to the Wilsons that he intended to undertake renovations to the Property, when he had no such intention” (Reasons, at para. 94).

4In the Reasons, I found that Mr. Hill’s false representations to the Wilsons rose “to the level of fraudulent misrepresentation”. Mr. Hill “embarked on a scheme to obtain a significant amount of cash money from the Wilsons, while planning to move and, effectively, disappear” (Reasons, at para. 95).

Positions of the Parties

5This decision follows the court’s review of the parties’ written costs submissions.

The Plaintiffs

6The Wilsons seek their costs on a substantial indemnity basis – 85% of actual rates – in the “all-in” amount of $27,681.94 (Bill of Costs, filed). They submit that they are entitled to costs on the elevated scale because:

(a) on January 6, 2023, they served an Offer to Settle under r. 49 of the Rules of Civil Procedure, R.R.O. 1990, O. Reg. 194, by which they offered to settle their claim upon payment of $50,000 (the “Offer”). Had the Offer been accepted, the action would been resolved on a no-costs basis;

(b) the defendant did not accept the Offer;

(c) the result at trial entitled the plaintiffs to judgment for $50,000, plus interest and costs, a result more favourable to the plaintiffs than the Offer; and

(d) the finding of fraudulent misrepresentation entitles the plaintiffs to elevated costs: see, BH Frontier v. Canadian Choice Supply, 2022 ONSC 3707, at paras 5-6.

The Defendant

7The defendant does not challenge the hourly rates charged by the plaintiff’s counsel but submits that:

(a) costs should be awarded on a partial indemnity scale (65%) up to the date the Offer was served, and substantial indemnity costs only after that date, thereby reducing the fees claimed by $1,885.26;

(b) there should be a further reduction of $52.00 in the fees charged by Brandon Church, as those fees appear to relate to “corporate due diligence”, when the litigation did not involve any corporate entities; and

(c) although the court made findings “with respect to credibility and “fraudulent misrepresentation”, the defendant denies these findings.

8In their brief reply costs submissions, the plaintiffs explain that the “corporate searches” noted in the plaintiffs’ Bill of Costs were business name searches and address searches, and, as such, were properly claimed.

The Law

Costs Awards

9Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, gives the court the discretion to determine by whom and to what extent costs are to be paid. Costs are discretionary and, in the exercise of that discretion, the court is to consider the factors set out in r. 57.01

10In civil litigation, costs usually follow the event. That rule should not be departed from except for very good reasons: see Gonawati v. Teitsson 2002 41469 (ONCA), [2002] CarswellOnt 1007 (Ont. C.A.)], 2002 41469 and Macfie v. Cater, 1920 401 (ON SC), [1920] O.J. No. 71 (H.C.J.) at para 28): Usanovic v. La Capital Life Ins., 2016 ONSC 5795, at para. 7.

11In 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.), Perell J. reformulated the purposes of the modern costs rules, at para. 10, as follows:

(1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements.

12Overall, the objective is to fix an amount that is fair and reasonable, having regard for, among other things, the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at paras. 26 and 38.

13A costs award should reflect what the court views as a fair and reasonable contribution by the unsuccessful party to the successful party rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), 2002 CarswellOnt 4020, 118 A.C.W.S. (3d) 341 (C.A.), at para. 4: Fehr et al. v. Sun Life Assurance Company of Canada, 2021 ONSC 8368, at para 83).

14Elevated costs are appropriate in a case in which there is a finding of “reprehensible conduct conduct…which make such costs desirable as a form of chastisement”: Davies v. Clarington (Municipality) 2009 ONCA 722, at para. 30.

Analysis

15I begin by noting that the defendant does not challenge the hourly rates charged by the plaintiffs’ counsel. Also, apart from submissions concerning fees of $52.00 apparently related to “corporate due diligence”, the defendant does not seek a reduction in fees based on time spent.

16I accept the plaintiff’s explanation for the $52.00 in fees.

17The defendant accepts that the fees claimed by the plaintiffs should be awarded a substantial indemnity scale, but only after service of the Offer.

18The last issue raised by the defendant is whether the plaintiffs should be awarded fees at an elevated, or substantial indemnity, rate prior to service of the Offer.

19The plaintiffs referred the court to the costs endorsement of E.M. Morgan J. in BH Frontier v. Canadian Choice Supply, 2022 ONSC 3707. In BH, referencing Davies v. Clarington, despite having found that the defendants had made false claims, Morgan J. determined to award elevated, but not substantial indemnity, costs because his finding of fraud “was a somewhat less reprehensible form of fraud”, which “was not done with the intent of misappropriating the Plaintiff’s money” (B.H., at paras. 7, 5).

20In this case, the findings do amount to the “reprehensible form of fraud” described by Morgan J., (Reasons, at paras. 16, 87, 92, 94, and 95).

Disposition

21I find that the costs claimed by the plaintiffs to be fair and reasonable, having taken the following into account:

1. the facts and circumstances of this case;

2. the factors set out in r. 57.01(1);

3. the costs submissions received; and

4. the position taken by the defendant to the costs claimed.

22Also, as explained above, I find that all the plaintiffs’ costs should be awarded on a substantial indemnity basis.

Disposition

23The defendant is ordered to pay the plaintiffs’ costs fixed in the substantial indemnity amount of $28,282.94, inclusive of fees, disbursements and H.S.T. for the costs of the action, which includes the additional $500 claimed for preparation of the plaintiffs’ costs submissions.