Court File and Parties

Court File No.: 59/11 Date: 2023-01-25 Ontario Superior Court of Justice

Between: WAYNE SEXSMITH, MARY SEXSMITH and CHIMERA INDUSTRIAL SALES INC., Plaintiffs And: EACOTT GROUP INC. and KEVIN JUBY, Defendants

Counsel: M. Odumodu, for the Plaintiffs J. Keith, for the Defendants

Endorsement on Costs

McARTHUR J.

[1] This action arose from the aborted sale of a fastener sale and distribution business in relation to an agreement of purchase and sale dated December 7, 2010 with an extended closing date to February 4, 2011 that had been operated by the plaintiffs, Mary Sexsmith and Wayne Sexsmith.

[2] The transaction did not close. Mr. Juby did not make payment nor meet any other terms required by the agreement. He claimed misrepresentations by the plaintiffs, amongst other things. The plaintiffs claimed damages for breach of contract.

[3] This court found Mr. Juby wanted to renegotiate the purchase price of the agreement based on his changing perception and desire, but he was not entitled to insist on renegotiating the agreement based on such discrepancies in this case since these did not amount to misrepresentations.

[4] This court found that Mr. Juby did commit an anticipatory breach of the agreement and awarded damages owing to plaintiff by the defendant is $39,839 plus interest for a total of $53,310.04.

[5] The case proceeded virtually over 7 days of evidence and submissions of the parties. Both counsel are commended for their cooperation and assistance to the court throughout. This included defining the issues in advance of trial, providing an agreed statement of facts, and otherwise conducting the trial in a most professional manner throughout despite the delays and difficulties encountered as a result of the Covid-19 pandemic.

[6] The plaintiff seeks costs in the amount of $70,000 which is comprised of $14,000 for disbursements and taxes, and $56,000 for fees.

[7] The defendant submits that the plaintiffs should not recover any costs since the amount awarded was less than $200,000.

[8] I have received, reviewed and considered the written submissions of both parties and the caselaw that each have provided.

[9] A successful party is presumptively entitled to costs given success at trial. I have also considered the relevant factors as set out in Rule 57.01 of the Rules of Civil Procedure that include the principle of indemnity, the reasonableness of the amount claimed, apportionment, complexity, the importance of the issues and party conduct.

[10] The position of the plaintiffs is that they were successful in the action on both liability and damages, they were required to address allegations of civil fraud, their Rule 49 Offer to Settle was more favourable than the judgment, the quantum was well-within the reasonable expectation of the parties and an award sought is consistent with the principles of fairness, proportionality and indemnity.

[11] The position of the defendant is that the plaintiffs commenced the action at the time when the threshold under Rule 76 was $100,000, the plaintiffs chose the procedure and Rule 76.13 provisions are mandatory such that the plaintiff shall recover no costs unless the court is satisfied that it was reasonable to have allowed the action to continue in the ordinary procedure.

[12] The court also acknowledges the Rule 49 Offer made by the plaintiffs. This offer was made after an assessment of the case and the resumption the business by the plaintiffs.

[13] Other than the claim of civil fraud that will be later addressed, there was no reprehensible litigation conduct engaged in by either party. In addition to the parties involved, the lawyers for both parties involved with this transaction also testified as witnesses in the action. This evidence was both appropriate and necessary. Both witnesses were professional and helpful.

[14] The plaintiffs conduct and proceeding to establish liability and damages should be looked in a vacuum in this case. The plaintiffs rightly proceeded toward the sale of the business. Both the plaintiffs and the defendant were already in the process of transferring various activities and the defendant was also conducting sales after the agreement was signed.

[15] In the circumstances, consistent with the obligation to mitigate, the plaintiffs took steps to re-assume and re-establish the business. Prior to when the action was commenced under ordinary procedure, the plaintiffs in particular could then reasonably have known with any certainty the extent of the damages. Hindsight alone is an insufficient basis to make such a determination in circumstances like this case. Indeed, without the prompt mitigation measures taken by the plaintiffs, it is entirely possible that the issue of damages would have become more complicated and possibly increased.

[16] Furthermore, this was not a situation of simply determining extent of damages. The defendant had advanced throughout trial the allegation of civil fraud against the plaintiffs. Such a sustained position by the defendant left little room for the plaintiffs other than to address and defend this issue in the action. This also left the court to necessarily and ultimately conduct an objective assessment of the evidence in this regard. The court finds this feature was unfounded and unnecessary. The defendant cannot now reasonably expect the court to ignore, overlook or regard this in some neutral manner.

[17] In this case, it is appropriate for costs to be awarded to the plaintiff.

[18] I have reviewed the bill of costs of counsel for the plaintiffs as well as those of the defendant. This court is nevertheless also mindful that costs must also bear some relative proportionality to the decision made in the context of the wider range of reasonably possible outcomes and circumstances as exemplified in this case. In this case, had the defendant not advanced the allegation of civil fraud, the case would have been simpler, less complicated and focused. Ultimately, the costs would have been significantly reduced.

[19] Here, I determine that a fair and reasonable amount of costs to be paid by the defendant to the pay the plaintiffs is an all-inclusive amount of $64,000 for disbursements, fees and taxes.

Justice M.D. McArthur Date: January 25, 2023