Court File and Parties
NEWMARKET COURT FILE NO.: CV 18-13556
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Rueben Benquesus, Plaintiff
AND:
Amazing Print, Defendant
AND:
Amazing Print, Plaintiff by Counterclaim
AND:
Reuben Benquesus, 232362 Ontario Ltd., aka Print Three Inc., John M. Wiseman, Racad Tech, Inc., Ney Bendayan, Print Three Franchising Corporation, Andrew Hrywnak, Esther Willinger, Eden Advertising & Interactive Inc., and Jacques Benquesus also known as Jack Banks, Defendants by Counterclaim
BEFORE: The Honourable Justice S. Woodley
COUNSEL: Lorne Levine, Counsel for Amazing Print, the Plaintiff by Counterclaim Lawrence Hansen, Counsel for John M. Wiseman
READ: November 14, 2023
COSTS ENDORSEMENT
1Amazing Print, Corp. (“Amazing Print”) the plaintiff by counterclaim, has agreed to release John M. Wiseman, a defendant by counterclaim, as a defendant to the proceeding. The only issue is costs.
2The counterclaim was commenced in 2018.
3Mr. Wiseman submits that the claim should not have been advanced against him, there was no viable claim, and these facts did not change over the course of the litigation.
4Mr. Wiseman seeks costs on a substantial indemnity basis fixed at $27,390.75.
5Mr. Wiseman advises that he is 87 years old, is a retired Chartered Accountant, and has nothing to do with the matters at issue in the litigation.
6Mr. Wiseman was added to the litigation because he appears as a director in government records for Print Three, one of the corporations against which Amazing Print has a claim.
7Mr. Wiseman asserts that he was improperly listed as a director for Print Three, that he never consented to be a director, was unaware that he was listed as a director, has no knowledge of the affairs of Print Three, and has not been involved in the corporate affairs of Print Three that he was noted as being a director.
8Despite these facts, Mr. Wiseman submits that Amazing Print required him to remain in the proceedings which resulted in him incurring legal fees of $41,870.27, minus $5,796.20 already awarded to him and not including $7,000 which is work in progress. Mr. Wiseman notes that his is unlikely to be made whole for having been brought into the present legal proceeding.
9The costs submissions of Mr. Wiseman are dated June 16, 2023, but due to administrative misadventure were not brought to my attention until November 9, 2023.
10The plaintiff by counterclaim, Amazing Print, notes that it has agreed to discontinue the counterclaim against Mr. Wiseman and has offered the sum of $10,000 on account of costs thrown away.
11Amazing Print notes that Mr. Wiseman issued a crossclaim against the other defendants by counterclaim – but did not pursue the crossclaim. Amazing Print further notes that Mr. Wiseman had a lengthy relationship with many of the defendants by counterclaim and was publicly listed as a director of Print Three. In the circumstances, it was entirely reasonable for Amazing Print to add Mr. Wiseman as a party to the counterclaim.
12Amazing Print submits that it should not be penalized with an award of “exorbitant” costs for agreeing to release Mr. Wiseman from the proceedings in deference to his advanced age and claims of fragile health. Amazing Print has already paid costs to Mr. Wiseman as ordered by Associate Justice Josefo regarding the Demand for Particulars and by Justice Edwards, regarding the adjournment of the Summary Judgment Motion.
13Finally, Amazing Print submits that the fact that Mr. Wiseman was listed as a director in a government filing is not the fault of the plaintiff and this error should not be visited upon Amazing Print. Mr. Wiseman has remedies against other defendants by counterclaim that he sought not to pursue. He did not examine any of the defendants by counterclaim and did not seek an explanation as to why his name appeared as a director of Print Three. There should be no reimbursement required for costs incurred by Mr. Wiseman for dealing with the Ministry regarding Mr. Wiseman’s listing as a director of Print Three. This is the subject of Mr. Wiseman’s crossclaim that he chose not to pursue.
The Law and Analysis
14The 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. Costs are quintessentially discretionary. See Restoule v. Canada (Attorney General), 2021 ONCA 779, at para. 344, relying on Nolan v. Kerry (Canada) Inc., 2009 SCC 39, at para. 126.
15The purposes of a cost award are to indemnify the successful party of some portion, or all legal costs incurred; to encourage settlement; to deter frivolous actions and defences; and to discourage unnecessary steps that unduly prolong the litigation. See 1465778 Ontario Inc. v. 1122077 Ontario Ltd., at para. 26; Fong v. Chan (1999), 46 O.R. (3d) 220 (C.A.), at para. 22.
16In civil proceedings costs are fixed in accordance with sub-rule 1 and the Tariffs. (Rule 57.01(3)).
17The Court shall devise and adopt the simplest, least expensive, and most expeditious process for fixing costs and, without limiting the generality of the foregoing, costs may be fixed after receiving written submissions, without the attendance of the parties (Rule 57.01(6).
18In fixing the amount of costs the court shall consider: the result; the amounts claimed and recovered; the complexity and importance of the issues in the proceeding; and any other matter relevant to the issue of costs: Rule 57.01(1)(i).
19The actual costs incurred is a relevant factor, but it is just a factor. The overall objective is to fix an amount of costs that is objectively reasonable, fair, and proportionate for the unsuccessful party to pay in the circumstances of the case, rather than to fix an amount based on the actual costs incurred by a successful litigant. See Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587 at para. 26.
20As per the Court of Appeal in Bonday-Rafael v. Potrebic, 2019 ONCA 1026, pat para. 57, there is no set pre-determined percentage of the portion of the actual fee that constitutes partial indemnity fees. The result depends on what is fair and reasonable:
“…partial indemnity fees are not defined in terms of an exact percentage of full indemnity fees under the Rules of Civil Procedure. While representing a portion of full indemnity costs, that portion has never been defined with mathematical precision but generally amounts to a figure in the rage of more than 50% but less than 100%. This is as it should be given the myriad of facts that the court must consider in the exercise of its discretion in fixing costs.”
21It is an error in principle to award partial indemnity costs that amount to substantial or full indemnity. See 790668 Ontario Inc. v. D’Andrea Management Inc., 2015 ONCA 557, at para. 22.
22Apart from statutory presumption on elevated costs, “costs on an elevated scale are exceptional and are reserved for those situations when a party has displayed reprehensible, scandalous or outrageous conduct. See Quickie Convenience Stores Corp. v. Parkland Fuel Corporation, 2021 ONCA 287 at para. 95; Net Connect Installation v. Mobile Zone Inc., 2017 ONCA 766, at para. 9.
23A determination of costs should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs to 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.
24The express language of Rule 57.01(3) dictates that the fixing of costs is not simply a mechanical exercise. In particular, the rule makes clear that the fixing of costs does not begin and end with a calculation of hours, times, rates. The 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. See Boucher v. Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26.
25To set costs the court must undertake a critical examination of the relevant factors noted at Rule 57.01 and then step back and consider the result produced and question whether in all the circumstances, the result is fair and reasonable. See Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, at para. 24.
26Courts should proceed cautiously when submissions for costs are made in cases that have settled, and there is no agreement on costs. The question remains whether costs should be awarded. See Muskala v. Sitarski, 2017 ONSC 2842; Kearney v. Hill, 2017 ONSC 6303; Waterloo North Condominium Corporation No. 161 v. Redmond, 2017 ONSC 1304; JV Mechanical Limited v. Solarc Construction Ltd., 2008 CanLII 23494.
27In the present case, while it is agreed by all parties that the case against Mr. Wiseman should be discontinued and/or dismissed – it is not agreed that he should never have been added as a party in the first place.
28The fact that Mr. Wiseman appeared in government filings as a director of Print Three cannot be visited upon Amazing Print.
29The fact that Mr. Wiseman chose not to pursue costs against the principals of Print Three cannot result in a finding that Amazing Print is responsible for the bulk of Mr. Wiseman’s legal fees relating to his involvement in the proceeding.
30While Mr. Wiseman is entitled to some costs from Amazing Print for his continued participation in the lawsuit – the basis for his initial involvement is not the fault of Amazing Print – nor is the issuance of the Crossclaim the fault of Amazing Print – nor is the failure to obtain costs from those parties who registered Mr. Wiseman as a director of Print Three without his knowledge or consent the fault of Amazing Print.
31Had the principals of Print Three not registered Mr. Wiseman as a director, undoubtedly, Amazing Print would not have added him as a defendant to the counterclaim.
32This fact does not mean that there is no liability that attaches to Amazing Print. At some point in the proceeding, it would have been clear that Mr. Wiseman was not a proper party and should be released. Some costs incurred were simply costs thrown away due to delay and strategy. However, some costs incurred are also simply not the responsibility of Amazing Print.
33Having reviewed the Costs Outline, I am of the view that the sum of $8,300 is an appropriate costs award payable by Amazing Print considering that Amazing Print has already paid $5,796.20 towards Mr. Wiseman’s fees.
34It is my view, that considering the entirety of the circumstances, that costs totaling approximately $14,000.00 payable by Amazing Print to Mr. Wiseman based on an overall partial indemnity basis is a proportionate, fair and reasonable amount to visit upon Amazing Print.
35Order to go awarding Mr. Wiseman the sum of $8,300.00 inclusive on account of costs payable by the Plaintiff, Defendant by Counterclaim, Amazing Print, within 60 days of today’s date.
WOODLEY J.
Date: November 14, 2023