COURT FILE NO.: CV-16-550450

DATE: 20230926

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SUZANNE SEEPERSAUD-SINGH

Plaintiff

– and –

PET SOCIAL INC., MICHAEL SINGH, WAYNE RAWLINS, CLIFTON RAWLINS

Defendants

Sean Carter, for the Plaintiff

Clifton Rawlins, personally and on behalf of Pet Social Inc.

No One appearing for the balance of the Defendants

IN WRITING

a.p. ramsay j.

COSTS ENDORSEMENT

I. Introduction

[1] Following the trial in this matter, the parties were unable to resolve the issue of costs. I received submissions in writing on behalf of the plaintiff and from the defendant Clifton Rawlins.

[2] In my decision reported at Seepersaud-Singh v. Pet Social, 2023 ONSC 4174, I found that the plaintiff was an employee of Pet Social Inc. (“Pet Social”) and found the defendant Pet Social liable for damages for unpaid wages, vacation pay, and interest.

[3] The plaintiff now seeks her costs jointly and severally against the defendants Clifton Rawlins and Wayne Rawlins in the amount of $17,423.00; and her costs against Pet Social, on a substantial indemnity basis, in the amount of $113,148.00 plus $14,709.24, or $127,857.24, plus disbursements of $12,918.41, plus HST of $1,166.07, totaling $141,941.72.

[4] The defendant, Clifton Rawlins, submitted costs submissions on behalf of all defendants. Mr. Rawlins is not a lawyer. Mr. Rawlins is self-represented and was also granted leave by Associate Justice Graham to represent Pet Social as a non-lawyer. The defendants Michael Singh and Wayne Rawlins did not attend at the trial. Mr. Singh is apparently incarcerated. There is no explanation as to why Wayne Rawlins did not participate. However, in my decision dated March 18, 2023, I dismissed the action against the individual defendants. To the extent that Mr. Rawlins’ submissions at times refers to all defendants, those submissions are not considered in connection with Wayne Rawlins. The plaintiff does not seek any costs against the defendant Michael Singh.

[5] Neither the defendant Michael Singh nor the defendant Wayne Rawlins have delivered costs submissions. Neither has participated in the lawsuit beyond a statement of defence being delivered on their behalf.

II. Disposition

[6] For the reasons below, I make the following order with respect to costs of the action:

i. the plaintiff shall have costs of the action against the defendant, Pet Social Inc., on a partial indemnity basis in the amount of $59,000, plus HST of $7,670.

ii. I have allowed $12,000, all-inclusive for disbursements, to be paid by Pet Social Inc.

iii. The defendants Michael Singh, Wayne Rawlins and Clifton Rawlins are not entitled to costs.

III. Analysis

A. Costs claimed by the plaintiff

i. Legal Fees

[7] The plaintiff seeks costs of the action on a substantial indemnity basis in the amount of $113,148.00, plus HST in the amount of $14,709.24. A significant portion of the plaintiff’s costs submissions relates to the failure of the individual defendants to participate in the proceedings, to appoint counsel, or to respond to the plaintiff’s request to admit dated February 2, 2022. The plaintiff argues that these actions, including the failure or refusal to admit certain facts, unnecessarily lengthened the proceedings.

[8] The plaintiff raised, once again, the personal liability of the individual defendants in her costs submissions, seeking, indirectly, a reconsideration of my decision. This is unfair and prejudicial to the defendants, especially as they are self-represented. If the plaintiff wanted to advance a claim for oppression under the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 (“OBCA”), and pursue the directors personally for unpaid wages, be it under the OBCA or the Employment Standards Act, 2000, S.O. 2000, c. 41, she ought to have put the defendants on notice of these claims in the prayer for relief. She did not do so. The defendants would have had a choice, if they so desired, to advance any defence, including any limitation defence, that was available to them.

[9] The plaintiff, despite her divided success in relation to some of the relief sought in the statement of claim, is entitled to recover her costs against Pet Social, the sole defendant found to be liable. The Ontario Court of Appeal has rejected the notion of distributive cost orders in litigation involving multiple issues where success is divided: Armak Chemicals Ltd. v. Canadian National Railway Co. (1991), 1991 7060 (ON CA), 5 O.R. (3d) 1 (C.A.), leave to appeal to S.C.C. refused, [1992] 1 S.C.R vi; Skye v. Matthews, 1996 1187 (Ont. C.A)).

[10] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, governs the court’s jurisdiction to award costs and provides that:

131 (1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[11] In exercising its discretion with respect to costs, the court must consider the factors in r. 57.01(1) in order to achieve a just and reasonable determination: Geographic Resources Integrated Data Solutions Ltd. v. Peterson, 2013 ONSC 1041 (Div. Ct.), at para. 15.

[12] The relevant factors which the court must consider in exercising its discretion to award costs are set out in r. 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194, which provides as follows:

57.01(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(h.1) whether a party unreasonably objected to proceeding by telephone conference or video conference under rule 1.08; and

(i) any other matter relevant to the question of costs.

ii. Scale of costs

[13] Relying on r. 51.04, the plaintiff submits that the court ought to exercise its discretion and award her costs on a substantial indemnity basis due to the failure of the defendants Pet Social and Clifton Rawlins to admit facts which were subsequently proven at trial.

[14] Rule 51.04 of the Rules of Civil Procedure provides that in exercising its discretion with respect to costs, the court may consider the denial or refusal by a party to admit the authenticity of a document or fact. The provision reads:

51.04 Where a party denies or refuses to admit the truth of a fact or the authenticity of a document after receiving a request to admit, and the fact or document is subsequently proved at the hearing, the court may take the denial or refusal into account in exercising its discretion respecting costs.

[15] Elevated costs are warranted only in two circumstances, the first involving the operation of an offer to settle under r. 49.09 and the second where the party, liable to pay costs has engaged in conduct worthy of sanction: Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66. There are no offers to settle in writing or otherwise by any of the parties. The costs consequences which flow from r. 49.09 do not apply. The refusal or failure of any of the defendants to admit facts which were ultimately proven at trial does not in my view amount to behaviour worthy of sanction.

[16] In the result, costs are being assessed on a partial indemnity basis.

iii. Quantum

[17] The plaintiff submits that the failure or refusal of the defendants Clifton Rawlins and Pet Social to admit facts that were then proven at trial unnecessarily lengthened the trial.

[18] The plaintiff submits that the defendants were guilty of causing delay by failing to appoint counsel in a timely fashion, failing to respond to requests for the examination for discovery of the plaintiff, and refusing to admit facts proven at trial.

[19] I find that the pre-trial delay could not have been dealt with by way of motions. The motions to amend the claim at trial did cause some delay. Both sides are therefore guilty of some delay, but I am not satisfied that the pre-trial delay contributed appreciably to an increase in costs.

[20] Mr. Carter, a 14-year call, charges $425 an hour and his associate, Ms. LeBlanc, a seven-year call, charges $345 an hour. The hourly rates appear reasonable having regard to the years of call. Mr. Rawlins does not challenge the rates charged by the plaintiff’s lawyers.

[21] In awarding costs, there are two overarching principles: reasonableness and proportionality. The court must determine whether the costs award is reasonable, fair, and proportionate in the circumstances of the case, having regard to the factors set out in r. 57.01 and the reasonable expectations of the party: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26.

[22] The principle of proportionality is enshrined in r. 1.04(1.1) of the Rules of Civil Procedure, which provides:

In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

[23] When assessing proportionality, the court may consider the factors enumerated in r. 57 of the Rules of Civil Procedure, the principle of indemnity, the hourly rate claimed, time spent, and the amount the unsuccessful party reasonably expected to pay: Chandran v. National Bank of Canada, 2011 ONSC 4369, at para. 24, aff’d 2012 ONCA 205.

[24] The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b); Zesta Engineering Ltd. v. Cloutier (2002), 2002 25577 (Ont. C.A.), at para. 4; Davies, at para. 52.

[25] The plaintiff stated in her costs submissions that the redacted dockets would be provided within two weeks of her costs submissions. No dockets, redacted or otherwise, were filed.

[26] In deciding costs, the court may take into account the amount claimed and the amount recovered. Mr. Rawlins argues that the original statement of claim sought damages in the amount of $450,000 and the plaintiff was awarded only $132,000 in damages. Mr. Rawlins noted that the plaintiff’s claim included a claim for ownership of Pet Social.

[27] With respect to the quantum, the plaintiff’s award of damages is not insignificant. She was also substantially successful in her action against Pet Social. Her claim based on an ownership interest in the company was an alternative relief to pursue the remedy of a constructive trust, based on interrelated facts. I note that although the defendants admitted in their statement of claim that the plaintiff was employed with Pet Social, it was necessary for the plaintiff to prove for damages at trial. Pet Social made no admissions with respect to damages. Pet Social did not offer to settle the plaintiff’s action.

[28] Neither side addressed the issue of the complexity of the proceedings. I find that the case was of moderate complexity, complicated at times by the motions by the plaintiff during the trial to amend the pleadings to add new causes of action.

[29] Neither side address the importance of the issues to the parties. A consideration of experience, rates charged, and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering. Pet Social has not challenged the amount claimed nor the time spent by the plaintiff’s lawyers but rather points to pre-trial delay caused by the plaintiff, the nature of the claims sought by the plaintiff, and argues that “(a) lot of the problems that the plaintiff is claiming has nothing to do with myself”.

[30] The plaintiff’s legal fees on a partial indemnity basis amount to $64,656.00, plus HST of $8,405.28 ($73,061.28). Given the delay caused by the plaintiff, I have discounted the amount claimed by $5,000.00, and award $59,000.00 plus HST.

iv. Disbursements

[31] I find that the disbursements claimed by the plaintiff are, for the most part, reasonable, I have disallowed the amounts for the psychology reports, all travel and parking expenses, and expenses related to the legal assistant. The lack of details for some of the claimed items prevents a proper assessment of the items claimed. I have reduced the amounts claimed for photocopying and faxes, which are typically part of overhead. Disbursements are allowed in the amount of $12,000.00 all inclusive.

B. Costs claimed by defendant Clifton Rawlins

[32] The action was dismissed against all individual defendants.

[33] Mr. Rawlins seeks costs for the defendants in the amount of $60,000 for lawyers’ fees; costs to be assessed for the defendant’s court time away from work to attend a five-day trial, or matter before associate Justice Jolley; and costs thrown away at the initial commencement due to the plaintiff’s illness. The trial was adjourned at that time. Mr. Rawlins submits that there was some delay caused by the plaintiff who was awaiting the decision in a criminal court against Michael Singh and some delay caused by the defendant’s inability to afford legal counsel. However, Mr. Rawlins argues that the plaintiff made no attempt to move the case forward or narrow the statement of claim.

[34] While a defendant who has successfully defended the action normally would have some expectations for recovering costs from the plaintiff, there are good reasons to depart from that general proposition in this case.

[35] Mr. Rawlins has put forward no evidence of legal fees for lawyers. It does appear from his submissions that he is also seeking costs as a result of time away from work to attend the trial. Generally, costs are awarded to self-represented litigants who demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation and, as a result, incurred an opportunity cost by foregoing remunerative activity: Girao v. Cunningham, 2021 ONCA 18; Benarroch v. Fred Tayar & Associates P.C., 2019 ONCA 228, 433 D.L.R. (4th) 112. Mr. Rawlins has not put any such evidence before the court.

[36] I also note that the claims made by the plaintiff against Mr. Rawlins and against Pet Social were interwoven. Mr. Rawlins is the representative of Pet Social’s interest. In the result, he was obliged to attend at the trial and present a defence on behalf of Pet Social. Mr. Rawlins called no witnesses and was only examined as a witness at trial as part of the plaintiff’s case. This was open to the plaintiff to do, regardless of which hat Mr. Rawlins was wearing at the time. He had effectively been one the plaintiff’s employers.

[37] Finally, I note that counsel for the plaintiff raised the issue of the conduct of Mr. Rawlins following the issuance of the statement of claim, whereby, as an officer and director of Pet Social, he took steps to wind up Pet Social and start it up under a new name. This conduct should not be rewarded, and no doubt it precipitated the plaintiff’s belated attempts to amend the pleadings.

IV. Conclusion

[38] I would not award costs of the remaining defendants Michael Singh and Wayne Rawlins, both self-represented, for the reasons set out above.

Justice A.P. Ramsay

Released: September 26, 2023