Court File and Parties

Court File No.: CV-19-623904-0000 Date: 2024-02-26 Superior Court of Justice - Ontario

Re: EULALIA GOMES, NASCIMENTO COELHO and THE ESTATE OF TITO DA SILVA, DECEASED, BY ITS ESTATE TRUSTEE, OTILIA DA SILVA Plaintiffs And: VICTOR A.P. DA SILVA, Defendant

Before: VERMETTE J.

Counsel: Stephen M. Turk, for the Plaintiffs Antonio Conte, for the Defendant

Heard: In writing.

Endorsement as to Costs

[1] On November 13, 2023, I released Reasons for Judgment (2023 ONSC 6392) granting the action and, with the exception of a payment in the amount of $30,510.00, dismissing the counterclaim.

[2] The parties were not able to agree on costs and have delivered costs submissions.

[3] I note that this matter was commenced as an Application and was converted into an action by Order of Justice Perell dated November 18, 2019. Justice Perell ordered that the costs of the Application be in the cause of the action.

Positions of the parties

a. Position of the Plaintiffs

[4] The Plaintiffs submit that, having obtained the relief requested in their Statement of Claim and successfully opposed the Defendant’s counterclaim, they are entitled to their costs of the claim, the counterclaim and the preceding Application. The Plaintiffs seek costs on a substantial indemnity basis in the amount of $197,230.74. In the alternative, the Plaintiffs seek costs on a partial indemnity scale in the amount of $143,301.49.

[5] The Plaintiffs state that their simple and straightforward Application for partition and sale was turned into a claim and counterclaim that required a five-day trial and a court attendance for the initial Application. They argue that there was never any serious debate that the facts called for an order for partition and sale and that the resulting trust claim was completely devoid of merit. They submit that the decision rendered on the claim and counterclaim was premised on fundamental and well-established principles concerning partition and sale and resulting trust.

[6] The Plaintiffs note that the relief sought was critically important to both the Plaintiffs and the Defendant. They argue that the Defendant engaged in tactics to avoid a partition and sale ruling, and that none of them needed to occur. They submit that the Defendant’s position was an attempt to rewrite history and that it warrants an award of costs on a substantial indemnity basis. They also submit that the Defendant put forward a counterclaim that was wholly devoid of merit and had the impact of unnecessarily running up the costs of the litigation. The Plaintiffs state that costs can and should be used as a “reality check” for a litigant who brings forward ill-conceived and unnecessary litigation.

[7] The Plaintiffs point out that they have attempted to settle the dispute on numerous occasions, throughout the proceedings and before the litigation. They note that as a result of the real estate market fluctuating, the price offered to the Defendant to purchase the Plaintiffs’ interest in the property changed from time to time. They state that time and time again, the offers were refused and the position set out therein was ignored. The Plaintiffs argue that their offers demonstrate a genuine and continuing effort by them to settle this case, and that pursuant to Rule 49.13 of the Rules of Civil Procedure, this Court should consider the numerous offers of the Plaintiffs and rely on them as a further basis for an award on a substantial indemnity basis.

[8] The Plaintiffs submit that the Defendant’s bill of costs is missing items that should have been listed.

b. Position of the Defendant

[9] While the last paragraph of my Reasons for Judgment is very clear that the parties’ costs submissions were not to exceed four pages, double-spaced, the Defendant’s submissions are four pages, single-spaced. Further, most of the submissions do not relate to the issue of costs. The only submissions that are summarized below are the submissions on the issue of costs. [1]

[10] The Defendant submits that the focus of a costs award should be on which party caused the need for a trial and, if there were offers, which party was unreasonable in the demands made. The Defendant argues that, in light of the offers that were exchanged, the trial was due to the unwillingness of the Plaintiffs to be reasonable. The Defendant also submits that it would not be fair to determine costs prior to the sale of the property and prior to knowing whether the Plaintiffs or the Defendant did better than the offers made to the other side. According to the Defendant, for the Plaintiffs to get as much as the Defendant offered prior to trial, the property will have to be sold for more than $2.1 million and this is not realistic.

[11] The Defendant argues that the amount claimed by the Plaintiffs is excessive. He states that the trial lasted four and a half days and that the amount of time for preparation for trial should not be more than the length of the trial. He points out that he was partially successful in that he won the initial Application and was awarded $30,510.00 at trial. The Defendant also notes that a large amount of time went into the compiling of the joint book of documents, which was done by the Defendant’s counsel. The Defendant submits that the “absolute maximum” amount of costs that he would have expected to pay is the amount set out in his own bill of costs, which is $86,237.43.

Discussion

a. Offers to settle

[12] There is no suggestion that any of the offers to settle made in this case triggered costs consequences under Rule 49.10 of the Rules of Civil Procedure. However, the parties agree that pursuant to Rule 49.13, the court may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer in exercising its discretion with respect to costs.

[13] I note that both sides made offers to settle in this case, and each side is blaming the other for the failure to reach a settlement.

[14] In my view, the offers to settle that were made by the parties do not have an impact on the issue of costs. This is because I am unable to determine whether the offers to settle were less favourable, as favourable as or more favourable than the outcome of the litigation. As acknowledged by the Plaintiffs, the real estate market fluctuated during the relevant time period and I cannot assess the reasonableness of the offers in the absence of evidence regarding the value of the property at the time the different offers were made.

[15] Contrary to the Defendant’s submission, I would not be in a better position to assess the offers to settle after the sale of the property. Given that the value of the property fluctuated with the real estate market, the price at which the property will be sold in the future is not an indicator of the reasonableness of prices offered at various times in 2019, 2020, 2022 and 2023.

b. Scale of costs

[16] As has been observed in many cases, 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. 4.

[17] In my view, the conduct of the Defendant in this case does not rise to the egregious level required to award costs on an elevated scale. Hard-fought litigation is insufficient to justify an elevated costs award. While I did not agree with the Defendant’s position, he was entitled to advance his position and was not required to settle. This is not a case where the process of the court was abused. See Davies v. Clarington (Municipality), 2009 ONCA 722 at paras. 42-46.

[18] I conclude that the appropriate scale of costs in this case is partial indemnity.

c. Quantum

[19] I have reviewed the Plaintiffs’ bill of costs. I find that the partial indemnity hourly rate claimed is reasonable.

[20] However, the number of hours reflected in the Plaintiffs’ bill of costs is almost twice as many as the number of hours reported in the Defendant’s bill of costs (373.8 hours vs. 189.7 hours). While I agree with the Plaintiffs that the Defendant’s bill of costs is underinclusive – both with respect to items/tasks included and total time for certain tasks, I find that it is appropriate to apply a reduction to the costs sought by the Plaintiffs to take into account some duplication of work over the life of the file, and to ensure the overall reasonableness of the costs award in light of all the circumstances of the case.

[21] While it is my view that it is appropriate to apply a reduction, I do not accept that Mr. Da Silva’s reasonable expectations are limited to the amount of his own bill of costs. As stated above, the Defendant’s bill of costs was underinclusive. Further, it should have been apparent to the Defendant that the Plaintiffs would incur more costs than him. Among other things, the Plaintiffs’ counsel was retained before the Defendant’s counsel and he had to deal with three clients.

[22] Given the small amount of the payment ordered in favour of the Defendant at trial ($30,510.00) and the fact that this was a very minor issue in the litigation, this very limited “win” does not justify a reduction of the Plaintiffs’ costs. Further, even though the Defendant may have been successful in having the Application converted into an action, Justice Perell ordered that the costs of the Application be in the cause of the action. I also note that the issue of partition and sale could have proceeded by way of Application had the Defendant not raised resulting trust and other issues on which he was unsuccessful at trial.

[23] In my view, the appropriate amount of costs on a partial indemnity basis is $125,000.00.

Conclusion

[24] Taking the foregoing into account, as well as the factors set out in Rule 57.01(1) of the Rules of Civil Procedure and the reasonable expectations of the parties, I find that the fair and reasonable award of costs in favour of the Plaintiffs is on a partial indemnity basis in the all-inclusive amount of $125,000.00. In my view, this is an amount that the Defendant should reasonably have expected to pay in the event that he was unsuccessful in the action.

Vermette J. Date: February 26, 2024

Footnote:

[1] In his costs submissions, the Defendant seeks a reconsideration of my decision. He does not specify the legal basis for his request for reconsideration. In any event, the grounds raised by the Defendant (e.g., incorrect findings) are grounds to be raised on appeal. Given that an appeal has already been commenced, the Defendant can raise these grounds before the Court of Appeal. In my view, it would not be appropriate for me to “reconsider” my decision in the face of a pending appeal. Further, the Defendant can bring a motion to adduce fresh evidence on appeal if he wishes to do so. The new allegations made in the Defendant’s costs submissions on the basis of letters that are in a language that counsel does not understand and that have yet to be translated in English are, among other things, premature.