COURT FILE NO.: CV-22-00089119-0000 DATE: 2023/11/17 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
MOSTOFA MIAH operating as MIA’S INDIAN CUISINE, Plaintiff – and – 1000087635 ONTARIO INC., Defendant
Counsel: Michael J.A. Beeson, Counsel for the Plaintiff Paul D’Angelo, Counsel for the Defendant
HEARD: In writing
COSTS ENDORSEMENT
H.J. Williams, J.
Overview
[1] The applicant, Mostofa Miah, operates a restaurant. In the spring of 2022, he brought an application against the respondent, his landlord, requesting injunctive relief and a declaration that his lease and a lease extension agreement were valid and that the landlord was bound by them.
[2] The day before the application was to be heard on May 9, 2023, the landlord informed Miah that, other than the wording of the judgment and the issue of costs, it would not oppose the application.
[3] I ruled in favour of Miah on the wording of the judgment and requested written costs submissions.
[4] Miah now seeks costs of the application. He argues that he is entitled to full or at least substantial indemnity costs because of the conduct of the landlord and its counsel.
[5] The landlord says the parties should each pay their own costs.
Legal Principles
[6] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, provides that the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court.
[7] Although discretionary, a court must fix costs on a principled basis. (Davies v. Clarington, 2009 ONCA 722, at para. 40.)
[8] Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the factors the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, in exercising its discretion under s. 131 of the Courts of Justice Act to award costs. These factors include the principle of indemnity, including the experience of the lawyer involved, the hourly rate, and the hours spent. They include the complexity of the proceeding and the importance of the issues. They also include certain conduct of the parties, including conduct that may have shortened or lengthened the duration of the proceeding or that was improper, vexatious, or unnecessary.
[9] The Court of Appeal has made it clear that the fixing of costs does not begin and end with a calculation of hours times rates. It says the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay rather than an amount fixed by the actual costs incurred by the successful litigant. (Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), at para. 26.)
[10] In Davies, the Court of Appeal noted that it had repeatedly said that elevated (that is to say, full or substantial indemnity as opposed to partial indemnity) costs are warranted in only two circumstances: (1) where specifically authorized through the operation of an offer to settle under rule 49.10; or (2) where the losing party has engaged in behaviour worthy of sanction. Substantial indemnity costs are only awarded in rare and exceptional cases. (St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, at para. 92.)
Analysis
[11] I have read the parties’ written costs submissions carefully.
[12] I am satisfied that Miah was entirely successful on the application. The landlord argues that Miah was not granted the injunctive relief he had requested. I agree with Miah that an October 2022 order of Hackland J. effectively granted Miah injunctive relief.
[13] As the successful party, Miah is presumptively entitled to costs on a partial indemnity basis. I am, however, of the view that, because of the landlord’s conduct, this is one of the rare and exceptional cases in which substantial indemnity costs are warranted.
[14] Some examples of the landlord’s conduct follow:
[A] On February 9, 2022, shortly after the landlord purchased the property leased by Miah, the landlord wrote to Miah and said that Miah did not have a lease and that a new lease would be required for him to continue operating his restaurant from that location. At the time, however, the landlord knew that Miah had exercised a lease renewal option before the landlord offered the purchase the leased property. Further, in an email dated November 25, 2021, the lawyer for Miah’s previous landlord (from whom the landlord purchased the leased property) had informed the landlord’s lawyer: (a) that there was no doubt Miah had properly exercised his renewal option; (b) that Miah had exercised the option months before the landlord offered to purchase the property; and (c) that there was no basis for treating the renewal as invalid. In a notice of termination served on Miah in April 2022, the landlord again asserted that the parties did not have a lease.
[B] In motion materials served in May 2022, the landlord accused Miah of having colluded with his former landlord. The landlord’s counsel cross-examined Miah in June 2022. The transcript of the cross-examination was not filed. There was no evidence in the material before me of any collusion between Miah and the former landlord.
[C] The landlord’s lawyer accused Miah’s lawyer of lying about whether Miah had paid rent in October 2022, prompting Miah’s lawyer to swear an affidavit to which he attached a bank record and in which he described a conversation he had had with Miah’s banker.
[D] In October 2022, Miah’s lawyer wrote to the trial coordination to schedule a hearing for this application, saying that two hours should be sufficient. The parties agreed to a hearing date of January 10, 2023. The landlord’s lawyer requested an adjournment. Miah refused to consent. In error, Miah’s motion confirmation form said that three hours were required for the hearing. The court adjourned the hearing, as it had been set down for only two hours. Miah’s lawyer informed the court that Miah wished to proceed and that only two hours would be required for the hearing. The landlord’s lawyer wrote to the court and said that he would require 90 minutes for his client’s arguments and did not want the hearing to be compressed. The hearing did not proceed in January. When Miah’s lawyer took steps to reschedule the hearing, the landlord’s lawyer said a long hearing was not required, and that he could present his client’s arguments in one hour as long as Miah’s counsel did the same.
[E] The landlord did not prepare a factum for the hearing on May 9, 2023 nor, as I have already mentioned, did it file the transcript of Miah’s cross-examination. The landlord said it was attempting to settle the issues and did not want to incur additional costs. The landlord also did not file a response to Miah’s motion confirmation form, which said that the hearing would be proceeding, listed nine documents the presiding judge would be referred to and said that each party would require 60 minutes for submissions. The day before the hearing, the landlord informed Miah’s counsel it would consent to the relief sought, although, even then, the landlord’s position was that the judgment should say that the lease was valid and binding, but not refer to the lease extension, which was the source of the dispute.
[15] The litigation between the parties lasted more than a year and was hard-fought and at times acrimonious. It does not appear that the landlord ever had a legitimate basis for contesting Miah’s request for the order I made on May 9, 2023.
[16] In its costs submissions, the landlord said that Miah’s conduct was not always beyond reproach and that his credibility had been called into question. I agree with Miah’s counsel that admissible evidence in support of these allegations was not before me.
[17] Miah seeks full indemnity costs, inclusive of disbursements and HST, in the amount of $38,967.99, including full indemnity fees of $33,572.25. Alternatively, Miah seeks substantial indemnity costs, inclusive of disbursements and HST, in the amount of $35,071.20, including substantial indemnity fees of $30,215.25.
[18] I see no basis for an award of full indemnity costs in this case.
[19] The landlord says the fees sought by Miah are too high. However, the landlord did not file a bill of costs, which deprives me of the opportunity to compare the parties’ costs, which can often be helpful in assessing the reasonableness of the fees sought by the successful party.
[20] I am satisfied by Miah’s lawyer’s justification for the amount of time spent and I do not consider the hourly rates charged to be unreasonable. Miah’s lawyer conceded that he spent less time in court on May 9, 2023 than he had expected to when the bill of costs was prepared.
[21] Having considered the parties’ submissions and all of the factors listed in Rule 57.01(1), I have concluded that substantial indemnity costs in the amount of $33,000, inclusive of disbursements and HST, is a fair and reasonable amount for the landlord to pay Miah for this application.
Disposition
[22] The landlord shall pay Miah substantial indemnity costs of the application in the all-inclusive amount of $33,000.
Date: November 17, 2023 Madam Justice H. J. Williams