COURT FILE NO.: CV-22-00685202
DATE: 20231017
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1000249084 ONTARIO INC
Plaintiff
– and –
PAYAM ANDAZESGISHAHR
Defendant
Stephen Schwartz, for the Plaintiff
Megan Van Kessel, for the Defendant
READ: October 16, 2023
Papageorgiou J.
COSTS ENDORSEMENT
Overview
[1] The plaintiff holds a mortgage over property held by the defendant (the “Property”).
[2] On September 21, 2023 I granted the plaintiff Judgment in the amount of $567,767.25 and made an Order for possession over the Property.
[3] The plaintiff seeks costs in the amount of $40,659.20 in respect of both the motion and the action inclusive of HST.
Decision
[4] For the reasons that follow I am ordering that the defendant pay costs in the amount of $40,659.20 within 30 days. If these costs are not paid, they shall be paid out of the proceeds of sale from the Property.
Issues
[5] The main issue is whether the plaintiff is entitled to substantial indemnity costs.
Analysis
[6] Pursuant to s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, costs are in the discretion of the court. Rule 57 of the Rules sets out the factors which courts should have regard to when awarding costs. The overall objective is “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 litigant”: Zesta Engineering Ltd. v. Cloutier (2002), 2002 CanLII 25577 (ON CA), 21 C.C.E.L. (3d) 161 (Ont. C.A.), at para. 4; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26; Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52; and G.C. v. Ontario (Attorney General), 2014 ONSC 1191, at para. 5.
[7] Courts will generally respect a contractual entitlement to costs, except where there is good reason not to do so, such as inequitable conduct or special circumstances that would make the imposition of costs unfair in the circumstances or duly onerous: The Trustees of the Labourers’ Pension Fund of Central and Eastern Canada et al. v. Sino Forest Corporation et al, 2019 ONSC 4632 at para 36 citing inter alia Bosse v. Mstercrafat Group Inc., 1995 CanLII 931 (ON CA). The Court always retains the discretion under s. 131 of the Courts of Justice Act to award costs on a partial indemnity scale even when the parties have agreed to substantial indemnity costs: Crystal Lakes Development Inc. v. Donqab Co. Inc., 2023 ONSC 2009 at para 8.
[8] In this case, the Standard Charge terms entitle the plaintiff to substantial indemnity costs and there are no special circumstances or inequitable conduct which would disentitle the plaintiff to such costs or which persuade this Court to depart from the scale of costs agreed to by the parties.
[9] In terms of the quantum, the defendant’s main argument is that these costs could not have been within his reasonable contemplation because the plaintiff’s costs as set out in his Bill of Costs are only $25,112.66. But the defendant’s Bill of Costs does not include the costs of the action and it is unknown what costs the defendant incurred other than for this motion. Therefore, what the defendant has submitted as comparable is not. Since the plaintiff obtained summary judgment, it is also entitled to the costs of the action.
[10] In any event, the mere existence of disparity does not on its own establish that the winner’s costs are not within the losing party’s reasonable expectations: Singh v. RBC Insurance Agency Ltd., 2020 ONSC 6745 at para 37; Nour v. Youssef, 2021 ONSC 5539 at para 15.
[11] Although the defendant argues that the plaintiff should have used more junior counsel, the allegations made by the plaintiff were serious. He alleged that the plaintiff had colluded with another to deliberately harm the defendant. The defendant’s own costs submissions references these allegations:
• That the plaintiff was acting in bad faith in concert with another to improvidently sell the Property by power of sale in order to defeat the defendant’s rights to share in his share of the net proceeds; and
• That the plaintiff’s action constituted a bad faith attempt to displace the defendant so that they could unjustly benefit from the defendant’s investment.
[12] Given the allegations, it was reasonable for the plaintiff to retain more senior counsel.
[13] I add that both parties used a combination of one more senior and one more junior counsel, but the plaintiff also used a student.
[14] The total hours spent in respect of the motion itself were almost identical. The main difference in costs is that the plaintiff’s more senior counsel was much more senior to the defendant’s. But, I add that the plaintiff’s counsel divided up the work so that the more junior counsel did the bulk of the work and billed the bulk of the time which was appropriate and reasonable. As I have said, the defendant could not have expected that he would make the sort of allegations he did, and that the plaintiff would not expend sufficient resources to defend against them.
[15] Other factors that support the quantum sought are as follows:
• The matter was of significance with $567,000 at stake; and
• The plaintiff prepares two motion records while the defendant only prepared one.
[16] I have reviewed the rates and time spent and I find them reasonable and within the reasonable contemplation of the defendant.
[17] The interest rate pursuant to the Charge was 9.99 % per annum compounded monthly. The combination of s. 3.1 and s. 1 of the Standard Charge Terms means that this interest rate should also apply to the costs award. See Capital One v. Jonathan, 2022 ONSC 836 (Div Court) at para 32 where the court awarded post-judgment interest on costs at the contractually agreed upon interest rate.
Papageorgiou J.
Released: October 17, 2023