COURT FILE NO.: CV-20-00636729-0000 DATE: 20240524
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ANTONY DAVID and MARIA DAVID, Plaintiffs AND: DAN STIUCA, Defendant
BEFORE: Madam Justice A.P. Ramsay
COUNSEL: David Marcovitch, for the Plaintiffs Bernie Romano and Jordan Nussbaum, for the Defendant
HEARD: In Writing
COSTS ENDORSEMENT
I. Introduction
[1] In my Reasons for Judgment dated January 4, 2024, I dismissed the claims advanced by the plaintiffs/defendants by counterclaim, Antony David and Maria David, for damages or alternatively, for a declaration that the defendant holds his interest in an investment property that was the subject of this litigation in a resulting trust or a constructive trust for the plaintiffs. I granted certain claims advanced by the defendant in his counterclaim, finding him to be a one-third owner of the property, granted him relief for an accounting for a certain period, and allowed his request for an order for a replevin.
[2] I set a timetable for submissions if the parties were unable to resolve the issue of costs. The parties were unable to resolve costs and I received submissions in writing which were completed on March 6, 2024, with the delivery of the defendant’s Reply Costs Submissions.
[3] The plaintiffs do not dispute that the defendant as the successful party is entitled to his costs, but they submit that costs should be limited to $50,000 as the action was commenced under the simplified procedure contained in r. 76 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”).
[4] The defendant is requesting his costs of this action, fixed and payable by the plaintiffs, jointly and severally, in the amount of $110,604.19, inclusive of HST and disbursements, plus post-judgment interest at the rate of seven percent per annum. In the alternative, the defendant asks for his costs on a partial indemnity basis throughout, in the amount of $77,831.68. The defendant submits that he was successful at trial and that costs ought to follow the event in his favour. The defendant submits that the plaintiffs’ claims, including their new claims as a result of amendments made during trial, were dismissed, whereas he was successful in defeating the plaintiffs’ claim that he held his one-third share in the subject property in trust for the plaintiffs; in obtaining a judgment that he was the legal and beneficial owner of a one-third interest in the subject property, for an accounting of the income and expenses incurred with respect to the subject property, and for net rental income, if any, from 2017 to the date of judgment; and in obtaining an order for replevin with regard to his personal belongings.
II. Disposition
[5] For the reasons which follow, I make the following disposition:
i. The defendant is entitled to costs on a partial indemnity scale;
ii. The defendant is entitled to his partial indemnity costs for the action and the counterclaim in the amount of $64,455.50 plus HST of $8,379.22; and
iii. I allow disbursements to the defendant in the amount of $6,332.69.
III. Analysis
1. Does the cap apply?
[6] The plaintiffs do not dispute that the defendant as the successful party is entitled to costs. The plaintiffs say, however, that that there is no justification for the amount being sought by the defendant. The plaintiffs submit that costs should be reasonable, fair, and proportional to the facts and the issues in the case.
[7] Furthermore, the plaintiffs rely upon r. 76.12.1(1) to argue that the costs of this matter are limited under the Simplified Rules to $50,000. Rule 76.12.1(1) provides as follows:
(1) Except as provided for under rule 76.13 or an Act, no party to an action under this Rule may recover costs exceeding $50,000 or disbursements exceeding $25,000, exclusive of harmonized sales tax (HST).
[8] I agree with the defendant that the cap suggested by the plaintiffs does not apply to this action. This action was commenced on March 14, 2019. Rule 76.12.1(2), a transition provision, expressly states that “[s]ubrule (1) does not apply in the case of an action that was commenced before January 1, 2020.” Therefore, r. 76.12.1(1) does not apply, and there is no $50,000 costs cap for this action.
2. Scale of costs
[9] The defendant served an offer to settle under r. 49, dated May 8, 2019. The offer to settle remained open for acceptance until the commencement of trial. The defendant argues that he obtained a judgment that was better than the terms of his offer to settle and, in the result, seeks his costs of the action and the counterclaim on a partial indemnity scale to May 8, 2019, in the amount of $7,830.90, and on a substantial indemnity basis thereafter, in the amount of $96,366.10. The defendant also claims disbursements in the amount of $6,407.19 for a total of $110,604.19. The defendant says that the costs consequences under r. 49 are mandatory.
[10] The offer provided for the sale of the property and a division of the net proceeds of the sale being split on a 2/3–1/3 basis between the plaintiffs and the defendant, and provided that the plaintiffs would return the defendant’s belongings.
[11] In support of his costs claim, the defendant relies on Roberts v. Dresser Industries Canada Ltd., 1988 CarswellOnt 2780 (Dist. Ct.). In Roberts, Mossop D.C.J. rejected the defendant’s submission that because the amount awarded to one of the plaintiffs in excess of the offer was only minimal, he ought not to exercise his discretion to not award solicitor-and-client costs. In my view, this case is distinguishable as it involved costs being claimed by several plaintiffs.
[12] The defendant also relies on Niagara Structural Steel (St. Catharines) Ltd. v. W.D. LaFlamme Ltd. (1987), , 58 O.R. (2d) 773 (C.A.), for the proposition that the general rule contained in r. 49.10 is intended to be an incentive to settle litigation and should not generally be deviated from. However, in that case, the Court of Appeal was dealing with an offer to settle made by a plaintiff and r. 49.10(1). For example, the defendant refers to the following passage from the decision:
The relevant rule in the case where there has been an offer of settlement by a plaintiff is r. 49.10(1). The importance of written offers to settle is emphasized by the reference to them in the opening part of r. 57.01, which is concerned with the awarding of costs. The general, or basic, rule contained in r. 49.10(1) is intended to be an incentive to the settlement of litigation. While r. 49.10(1) does not set forth the basis for resorting to the exception to it, it is reasonable to assume that the occasions for the application of the exception should not be so widespread or common that the result would be that the general rule is no longer, in fact, the general rule. If this were to happen, the presumption in favour of the general rule and the resulting reasonable degree of predictability respecting the incidence of costs would disappear and the incentive policy of the rule would be substantially frustrated. Another consequence would be a more uneven application of the rule in litigation generally.
[13] The plaintiffs say that the defendant’s offer only provides for partial indemnity costs, and further argue that elevated costs should only be awarded where there is reprehensible or egregious conduct, of which there was none in this case. The plaintiffs rely on Agius v. Home Depot, 2011 ONSC 5272, at para. 31, for this proposition. In Agius, Ricchetti J. reviewed the controlling authorities of S & A Strasser Ltd. v. Richmond Hill (1990), , 1 O.R. (3d) 243 (C.A.), and Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, before arriving at that conclusion.
[14] I do not entirely agree with the plaintiffs’ submission that elevated costs can only be awarded to a successful defendant who delivers an offer to settle if there is reprehensible or egregious conduct. Ontario’s highest court has sought to clarify the law over the past few years.
[15] The starting point regarding a successful defendant’s entitlement to costs in this civil action is r. 49.10. Rule 49.10(2) sets out the costs consequences for a plaintiff’s failure to accept an offer to settle that (a) was made in writing by the defendant at least seven days before the hearing commenced, (b) remained open for acceptance until after the commencement of the hearing, and (c) was not accepted by the plaintiff. In Strasser, the court held that the rationale of r. 49.10(2) does not apply where a plaintiff does not recover a judgment.
[16] The defendant says that the rule is mandatory. However, the rule does not provide for substantial indemnity costs to a defendant who obtains a judgment that is as favourable or more favourable than the defendant’s offer to settle; rather, only partial indemnity costs is contemplated depending on the nature of the judgment obtained by the plaintiff. Under r. 49.10(2), if the plaintiff obtains a judgment as favourable or less favourable than the terms of the defendant’s offer to settle, the plaintiff is entitled to costs of the litigation on a partial indemnity basis until the date of the offer and the defendant is entitled to partial indemnity costs from that date. In this case, the plaintiff did not obtain any judgment against the defendant, and, in the result, the court must resort to the common law.
[17] The jurisprudence in Ontario establishes that r. 49.10 applies where a defendant exceeds their offer to settle and where the plaintiff has recovered a judgment of some value: Strasser; Scapillati v. A. Potvin Construction Ltd. (1999), , 44 O.R. (3d) 737 (C.A.); Dunstan v. Flying J Travel Plaza (2007), , 54 C.P.C. (6th) 123 (Ont. S.C.); Schwark v. Cutting, 2010 ONCA 299, 57 E.T.R. (3d) 1.
[18] Appellate decisions in Ontario have consistently stated that apart from the operation of r. 49.10, elevated costs should only be awarded where there is a clear finding of reprehensible conduct on the part of the party against whom the costs award is made: Davies, at paras. 28, 40; St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, 319 D.L.R. (4th) 74, at para. 92; McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), , 59 O.R. (3d) 97 (C.A.), at para. 39; and Walker v. Ritchie (2005), , 197 O.A.C. 81 (C.A.), varied on other grounds, 2006 SCC 45, [2006] 2 S.C.R. 428.
[19] In Iannarella v. Corbett, 2015 ONCA 110, 124 O.R. (3d) 523, at paras. 138-39, Lauwers J.A., speaking for the court, commented on the evolution by the Court of Appeal of dealing with substantial indemnity costs relating to a successful defendant who had delivered an offer to settle. He referenced several other Court of Appeal decisions in doing so, noting:
The development of this court’s approach to awards of substantial indemnity costs has evolved since Strasser, as this court noted in Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66. Outside of rule 49.10, to make such an award as a matter of judicial discretion the court must find that the party has been guilty of egregious misconduct in the proceeding. See St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, at para. 92 and McBride Metal Fabricating Corp. v. H. & W. Sales Co. (2002), , 59 O.R. (3d) 97 (C.A.), at para. 39.
[20] In Davies, which was cited by Lauwers J.A. in Iannarella, the Court of Appeal noted that costs on an elevated scale are justified in only very narrow circumstances, where an offer to settle is engaged, or where the losing party has engaged in behaviour worthy of sanction: see Davies, at para. 28.
[21] In Strasser, Carthy J.A. awarded substantial indemnity costs to a defendant when the action against him was dismissed. In OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2021 ONCA 520, the Court of Appeal upheld the trial judge’s award of substantial indemnity costs after the date of the respondents’ offer to settle where the action was dismissed against them. However, the Court of Appeal also noted that the trial judge’s awarding costs to the respondents on a partial indemnity basis to the date of the offer and, thereafter, on a substantial indemnity basis “was consistent with well-established case law.” The Court of Appeal noted that “[t]he trial judge was also satisfied the appellant’s conduct in the course of the trial warranted an elevated costs award”, but went on to state, at para. 85:
Although the trial judge’s finding that the conduct of the appellant merited an award of costs on a substantial indemnity basis was supportable on this record, it was unnecessary to the trial judge’s finding with respect to the respondents’ entitlement to costs on a substantial indemnity basis. The trial judge had determined, apart from the appellant’s conduct, based on the offers to settle, that the respondents should have substantial indemnity costs from the date of the offers in 2017, well before the commencement of the trial: Costs Decision, at paras. 36-39.
[22] The court retains the discretion to award substantial indemnity costs where an action is dismissed against the defendant: Strasser; OZ; Lalani Properties et al. v. Intact Insurance / 2160943 Ontario v. Intact Insurance et al., 2024 ONSC 892. Since the Court of Appeal’s decision in OZ, there may be a question as to whether a successful defendant against whom an action is dismissed, and who had delivered a valid r. 49 offer to settle, may recover elevated costs in the absence of reprehensible, scandalous, or outrageous conduct.
[23] In Lalani, my colleague Vella J. noted that the Court of Appeal in OZ did not comment on Davies or Scapillati, and she relied on OZ to award substantial indemnity costs to the successful defendant in that case. In exercising her discretion to award costs at the elevated scale from the defendant’s r. 49 offer, Vella J. considered the policy objectives underlying offers to settle, including encouraging settlements. There are a series of cases which predate Davies where the court awarded the defendant substantial indemnity costs in similar circumstances.
[24] In Richardson Estate v. Mew (2008), 69 C.C.L.I. (4th) 206 (Ont. S.C.). Strathy J., as he then was, noted that there have been a number of cases in which substantial indemnity costs have been awarded to defendants after unaccepted offers to settle and the plaintiff’s claim has been dismissed: at paras. 28-29. In Dunstan, at para. 13, Smith J. stated, “[T]he court in exercising [its] discretion pursuant to Rule 57.01(1) may find it appropriate to award costs on a substantial indemnity basis from the date of the defendant’s offer to settle, if the defendant made an offer to settle and the plaintiff did not recover a judgment of any value after trial.” Smith J. awarded substantial indemnity costs to the defendant from the date of the offer to settle. Taylor J. made a similar award in H.L. Staebler Company Limited v. Allan (2008), , 92 O.R. (3d) 788 (S.C.), where the action was dismissed against the defendants.
[25] The conduct of the party was a factor that was considered by the court in awarding elevated costs in Strasser, Davies, Scapillati, and Schwark, and was also a factor considered in OZ. OZ is in fact the most recent articulation by the Court of Appeal on the issue. Much of the appellate authority in Ontario since Davies is consistent with the decision of the Supreme Court of Canada decision of Young v. Young, , [1993] 4 S.C.R. 3, in which the Supreme Court acknowledged the general principle for awarding elevated costs at common law. Young however did not involve an offer to settle. In Young, at p. 134, McLachlin J. described the circumstances when elevated costs are warranted at common law, stating: “Solicitor‑client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.”
[26] Given that much of the appellate authority awarding elevated costs considers the conduct of the party against whom costs is awarded, I am inclined to follow it. In this case, the defendant does not argue that there was any conduct on the part of the plaintiffs that warrants elevated costs.
3. Offer to settle
[27] Even though an offer to settle may not meet the requirements mandated by r. 49.10, “the court, in exercising its discretion with respect to costs, may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer”: r. 49.13; see also Elbakhiet v. Palmer, 2014 ONCA 544, 121 O.R. (3d) 616. The plaintiffs made no offer to settle. Only the defendant demonstrates that he was prepared to compromise, and to do so at an early stage.
[28] I am mindful that the defendant’s offer to settle includes both the plaintiffs’ action and the counterclaim but note that one of the defendant’s defences mirrors his counterclaim (that is, his ownership interest in the property). As to the return of his personal belongings, there was some evidence at trial that he could have picked up his belongings but for the miscommunication between the parties. As for the accounting of the rent, which was relief sought in the counterclaim, the defendant was only partially successful as I found part of the claim to be statute barred.
[29] Having said that, I find that the defendant’s offer to settle was reasonable and an early attempt to compromise both the action and the counterclaim which, if it had been accepted, would have terminated the litigation at a very early stage. The plaintiffs therefore took the risk, early on, that they may be unsuccessful.
4. Quantum
[30] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, governs the court’s jurisdiction to award costs and provides:
(1) Subject to the provisions of an Act or rules of court, the 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.
[31] The relevant factors which the court must consider in exercising its discretion to award costs are set out in r. 57.01(1) of the Rules.
[32] The overarching consideration for awarding costs is whether the award is reasonable, fair and proportionate in the circumstances of the case, having regard to the factors set out in r. 57.01 and the reasonable expectations of the parties: Boucher v. Public Accountants Council for the Province of Ontario (2004), , 71 O.R. (3d) 291 (C.A.), at para. 26.
a) Proportionality
[33] Costs must not be disproportionate to the amount claimed and should be consistent with the objectives of fairness, reasonableness, and the need for proportionality: Elbakhiet, at paras. 37-38; Muskoka Fuels v. Hassan Steel Fabricators Limited, 2011 ONCA 495, at para. 6. In Boucher, at para. 37, Armstrong J.A. explained the interrelationship of the objective of access to justice with the costs regime under the Rules, noting that access to justice is incorporated in the costs system.
[34] The principle of proportionality is enshrined in r. 1.04(1.1) of the Rules, which provides:
In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
[35] The principle of proportionality is also one of the hallmarks of the simplified procedure: Williams Distinctive Gems Inc. v. Advantex Dining Corporation, 2019 ONCA 702; Trafalgar Industries of Canada Ltd. v. Pharmax Ltd. (2003), , 64 O.R. (3d) 288 (S.C.), at paras. 5-7. Historically, the court has considered the objectives of the simplified procedure when fixing costs: Rakoon Impex v. Nasr Foods Inc., [1999] O.J. No. (S.C.), at para. 9; McLean v. 721244 Ontario Ltd. (c.o.b. Paint Shoppe Services), [2000] O.J. No. 3507 (S.C.).
[36] In addition, in all cases when assessing proportionality, the court may consider the factors enumerated in r. 57 of the Rules, the principle of indemnity, the hourly rate claimed, the time spent, and the amount the unsuccessful party reasonably expected to pay: Chandran v. National Bank of Canada, 2011 ONSC 4369, 95 C.C.E.L. (3d) 322, at para. 24, aff’d 2012 ONCA 205, 99 C.C.E.L. (3d) 277.
[37] In this case, the action and counterclaim proceeded through documentary and oral discovery, mediation, a pretrial conference, a trial, and a motion at trial to amend the pleadings. Even though the evidence in chief of the witnesses was by way of affidavit, the trial lasted four days. The time spent by the various lawyers in relation to the action and the counterclaim were not separate, and given the nature of the counterclaim, is understandable. Indeed, the plaintiffs have offered no challenge.
b) Reasonableness
[38] A consideration of experience, rates charged, and hours spent is appropriate but subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), , 21 C.C.E.L. (3d) 161 (Ont. C.A.), at para. 4.
[39] The plaintiffs do not challenge the defendant’s lawyers’ hourly rate, their years of call, or their time for duplication. However, they challenge the time spent on the basis that the amounts claimed are “grossly exaggerated”. I therefore accept the hourly rates as reasonable.
c) Principle of indemnity
[40] The defendant’s Bill of Costs sets out partial indemnity costs in the amount of $66,817.50 plus HST of $8,686.28.
[41] The plaintiffs say the defendant’s costs should be $25,725 on a partial indemnity basis. They argue that they did the heavy lifting, and the factual matrix was not complicated, nor was the response.
[42] I have considered the plaintiffs’ argument that the amounts claimed are “grossly exaggerated”. Except for one example, this is a bald assertion. On the other hand, I agree with the defendant that the plaintiffs’ own costs outline is incomplete and does not reflect all the time spent and the plaintiffs’ reasonable expectation of costs. The most cogent examples include time for the mediation and communicating with defence counsel. I note the time did not include two attendances before me.
[43] There were three lawyers involved on the defendant’s side, whose years of call are 1993, 2016 and 2019. In my view, the quantum of costs sought by the defendant is supported by the record before me. With respect to the hourly rates, they appear reasonable having regard to the years of call of the identified lawyers.
[44] However, in keeping with the objective of the simplified procedure regime, I have removed Mr. Nussbaum’s trial time for attendance (10.5 hours or $2,362) and therefore will allow $64,455.50 plus HST.
d) The reasonable expectations of the parties
[45] The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: r. 57.01(1)(0.b); Zesta Engineering, at para. 4; and Davies, at para. 52.
[46] The plaintiffs say that had they succeeded, the defendant would not have expected costs for this simplified procedure matter to be close to $100,000. The plaintiffs submit that it is unclear if the defendant could pay this amount or how a person in the defendant’s position would have agreed to or afforded this.
[47] The plaintiffs’ Costs Outline indicates “full” indemnity legal fees in the amount of $42,875 and partial indemnity legal fees of $25,725, exclusive of HST. The plaintiffs’ disbursements amounted to $6,009.33. It is not clear whether the plaintiffs are assigning the meaning of “full indemnity” as defined in Davies or using the term interchangeably for “substantial indemnity”. It is difficult to reconcile what is truly the plaintiffs’ reasonable expectations as their Costs Outline does not accurately reflect all the time spent on the file, does not include all the time spent, and because of their use of the term “full”, make it difficult to determine the percentage assigned for their calculation of “partial indemnity” legal fees. Rule 1.03 (1) of the Rules defines substantial indemnity costs to be 1.5 times partial indemnity costs.
e) Amount involved
[48] The plaintiffs do not set out the amount involved in their Costs Outline or Submissions. The defendant says the plaintiffs claimed $92,802.49 in damages and beneficial entitlement to the defendant’s one-third interest in the property, which was appraised by the expert witnesses as between $1,150,000 and $1,455,000. The defendant counterclaimed for a declaration of his ownership of a one-third interest in the property, and $26,982.63 for rents owing.
f) Complexity of the proceedings
[49] The plaintiffs submit that the complexity of the proceedings was moderate. The plaintiffs argue that they claimed less than $100,000 for contributions to the property’s renovation and carrying costs and the defence, which essentially boiled down to “prove it”, was not complicated, as the defendant took the position that the claims were unjustified and unsubstantiated.
[50] I disagree. There were several issues raised by the plaintiffs, including a domestic contract under the Family Law Act, R.S.O. 1990, c. F.3, the transfer of the subject property after the action was commenced, and new claims raised by the plaintiffs even after the trial had commenced. As the plaintiffs note, the renovation costs by the plaintiffs as well as the ownership interest of Mr. David were in issue. The plaintiffs failed on all their claims.
[51] I agree though with the plaintiffs that the counterclaim was not complicated, for the reasons already stated above.
g) Importance to the parties
[52] The plaintiffs acknowledge that the issues were very important to the parties.
h) Conduct of the parties
[53] The plaintiffs do not argue that there was any conduct by the defendant that was improper, vexatious, or unnecessary, or taken through negligence, mistake, or excessive caution, nor do they point to any refusal to admit something that the defendant should have.
[54] On the other hand, the defendant submits that the plaintiffs refused to answer questions and produce documents at discovery that were relevant, for example related to the renovation expenses and accounting documents, and the plaintiffs’ refusal to permit an inspection of the property by the defendant’s expert. The defendant points to the amendments to the statement of claim made during the trial, which the defendant suggests lengthened the proceedings.
[55] In my view, the defendant has not established how this conduct lengthened the proceedings, but I am satisfied that the conduct, in hindsight, was not reasonable, and had the plaintiffs cooperated more fully by making early disclosure when asked, the parties may have taken advantage of other opportunities to compromise. I am not persuaded that the plaintiffs’ insistence that mediation take place in person warrants a cost sanction.
i) Any other matter – plaintiffs’ financial status
[56] The plaintiffs argue that that they are not wealthy and that they are of modest means. The court’s discretion to exempt an unsuccessful party from indemnifying the successful party for costs is unfettered, provided that it is exercised judicially: Orkin, for example, notes this in Mark M. Orkin, Robin G. Schipper, Orkin on the Law of Costs, 2nd ed., (Canada: Carswell 1987), at p. 2-20; Williams v. Thunder Bay (City), [1993] O.J. No. 2531 (Gen. Div.). Under clause (i) of r. 57.01(1) of the Rules, the court may consider “any other matter relevant to the question of costs”, which may include impecuniosity.
[57] In general, impecuniosity does not and should not eliminate a party’s obligation to pay costs: Balasundaram v. Alex Irvine Motors Ltd., 2012 ONSC 5840; Agius; Boucher; Guelph (City) v. Wellington-Dufferin-Guelph, 2011 ONSC 7523, 97 M.P.L.R. (4th) 105, at para. 14; and Barber v. Goerz, 2021 ONSC 3698. A party relying on impecuniosity bears the onus of establishing their impecuniosity: Kolosov v. Lowe’s Companies Inc., 2016 ONCA 973, 34 C.C.L.T. (4th) 177, at para. 18. In this case there is no evidence before the court that either plaintiff impecunious or of modest means, but in any event, I am not convinced that this would be an appropriate case to consider the plaintiffs’ financial means as a factor. As I noted in my judgment, it appears that the transfer of the property from Maria David to her son, Antony David, was an attempt to circumvent the terms of the Marriage Contract. Despite the very able arguments by their counsel, it was apparent on the evidence before me, that there was a lack of disclosure of relevant and vital information both before and after the lawsuit started, which arguably may have resulted in an earlier resolution of the issues.
5. Joint and several liability
[58] The plaintiffs indicate that Mr. David should be responsible for the costs since he was pursuing his interest. The defendant submits that the plaintiffs should be jointly and severally liable for the costs. The defendant has not provided any authority to assist the court. The general rule appears to be that unsuccessful plaintiffs are jointly and severally liable for costs: Mark M. Orkin, Robert G. Schipper, Orkin on The Law of Costs, 2nd ed (Toronto: Thomson Reuters Canada, 2023) (loose-leaf updated 11/2023) at 219.1.1. However, the cases cited for the proposition are not from Ontario, and of the sole case cited from Ontario, Baldwin v. Daubney, , the court declined to follow the general rule.
[59] In my view, as both plaintiffs were pursuing claims, and given the significant amendments to the statement of claim at trial, the plaintiffs are liable for costs. However, I am not inclined to make any order for joint and several liability. Although the plaintiffs have not addressed this issue, counsel for the parties may provide any authority and further submissions to address this issue within 10 days of the release of the costs endorsement and should address the pleadings.
6. Disbursements
[60] The defendant seeks disbursements in the amount of $6,407.19, inclusive of HST. Both parties retained experts. The defendant’s expert delivered an initial appraisal report and a supplementary appraisal report. The expert testified at trial. The plaintiffs do not challenge the reasonableness or fairness of the expense.
[61] The plaintiffs have also not challenged the other items being claimed. The disbursements, for the most part, are all assessable and appear fair and reasonable. I would allow the amount being claimed for disbursements to be reduced by $74.50 for mileage and parking and, if necessary, any applicable HST.
7. Counterclaim
[62] The plaintiffs argue that the defendant provided no supporting documentation for his request for funds received and disbursed, relying instead on his expert. The plaintiffs argue that the accounting will be based on the hard data, not expert advice. The plaintiffs submit that the counterclaim was not a complicated matter. I do not agree with the plaintiffs. First, I accepted the opinion of the defendant’s expert about the appropriate market rental value over the expert retained by the plaintiffs. Second, the underlying facts had to be established at trial, and I note that the plaintiffs refused to allow the defendant to inspect the property. I do agree that the counterclaim was not a complicated matter, but in my view, it was made more complicated by the nondisclosure of accounting records, refusal to permit inspection of the property, and the changing positions of the plaintiffs, and as stated above, the claim and counterclaim were somewhat intertwined with respect to some of the issues.
IV. Conclusion
[63] Having considered the principles of proportionality, reasonableness, fairness, the factors under r. 57, and the timing and terms of the defendant’s offer to settle, I find that the defendant is entitled to his partial indemnity costs and disbursements, as set out above. As is evident from my judgment, there were several claims advanced by the plaintiffs and which warranted a response from the defendant. Both sides also defended some of the claims advanced by the other on the basis that those claims were prescribed by the limitation period. I do not believe however that the late amendment to the statement of claim significantly increased the costs of the litigation as counsel for the plaintiffs had put the defendant on notice of the potential amendments.
[64] As for costs of preparing the costs submissions, the defendant says that on January 9, 2024, he proposed to settle the issue of costs in the amount of $100,000, inclusive of HST and disbursements, plus interest at the rate of seven percent per annum from the date of judgment until payment in full. However, it is not clear from the submissions and the Costs Outline whether costs are being claimed for this step and in the result, I will assume this is included in the total amount.
A.P. Ramsay J.