Superior Court of Justice – Ontario
RE: Angelo Ricci v. Credential Securities Inc.
BEFORE: Associate Justice Rappos
COUNSEL: Marc Munro, for the Plaintiff Eric Savas, for the Defendant
HEARD: January 15, 2024 (via videoconference)
Reasons for Decision
Overview
[1] The Plaintiff, Angelo Ricci, started this claim against Credential Securities Inc. (“Credential”) in October 2017. He seeks damages of $500,000 for, among other things, negligence, and breach of fiduciary duty.
[2] Mr. Ricci set the matter down for trial in September 2022. The parties were unable to agree to the scheduling of the trial on consent, and as a result attended trial scheduling court. Credential took the position that the trial should be scheduled as a long trial (15 days or more). Notwithstanding the objections of Mr. Ricci, the scheduling of a long trial for this action has been referred to the Regional Senior Justice. No trial has been scheduled to date.
[3] In response, Mr. Ricci brought a motion seeking leave of the Court to amend his statement of claim to reduce the damages sought from $500,000 to $200,000, so that the trial in this action can proceed under Simplified Procedure.
[4] Mr. Ricci says that he cannot afford a long trial, and is prepared to waive his entitlement to damages in excess of $200,000 in order to proceed under Simplified Procedure. Mr. Ricci argues that Credential is not litigating in good faith and is defending this action through attrition rather than on the merits. He believes that Credential would not be prejudiced if this action proceeds under Simplified Procedure.
[5] Credential argues that there is no basis for the Court to grant leave to Mr. Ricci, as there has been no substantial or unexpected change in circumstance since Mr. Ricci set the matter down for trial. Credential also argues that it would be prejudiced if the amendment is granted, as Simplified Procedure would limit Credential’s ability to advance a fulsome defence.
[6] For the reasons that follow, Mr. Ricci’s motion for leave to amend his statement of claim is granted, and the action shall proceed under Simplified Procedure.
Factual Background
[7] Mr. Ricci previously was employed by First Ontario Credit Union (“First Ontario”) as a financial advisor. Credential provided investment dealer services to First Union, which included training First Union employees who advise clients regarding the purchase and sale of securities. The training provided by Credential can enable a credit union employee to obtain the necessary regulatory qualifications to be registered as an investment advisor.
[8] Credential, First Ontario, and Mr. Ricci entered into a dual employment agreement which provided that, among other things, Mr. Ricci would participate in Credential’s training program and that Mr. Ricci would be dually employed by both Credential and First Ontario.
[9] Credential alleges that during the period that Mr. Ricci was engaged in training, he participated in business activities contrary to his employment contract, and he plagiarized another registered advisor’s work. As a result, Credential was of the view that Mr. Ricci had breached his employment agreement, along with certain undertakings and Credential directions.
[10] Credential advised First Ontario that it was unwilling to license Mr. Ricci. First Union subsequently terminated Mr. Ricci’s employment on a without cause basis.
[11] Mr. Ricci commenced this action by way of statement of claimed issued on October 26, 2017. He seeks damages in the sum of $500,000 for negligence, breach of fiduciary duty, wrongful interference economic relations, injurious/malicious falsehood, negligence and/or malicious falsehood, and inducing breach of contract.
[12] Mr. Ricci alleges that Credential made false and misleading allegations about him to First Ontario, as well as to two potential employers, Scotiabank and Diamond North Credit Union (“Diamond North”). Mr. Ricci claims that he was unable to enter into employment arrangements with Scotiabank and Diamond North because of Credential’s conduct.
[13] Credential delivered its statement of defence on January 19, 2018.
Procedural History
[14] At the time that the statement of claim was issued, subrule 76.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) provided that Simplified Procedure under rule 76 was mandatory for an action that sought damages of $100,000 or less exclusive of interest and costs. Pursuant to an amendment to the Rules that became effective on January 1, 2020, the monetary threshold under subrule 76.02 was increased to $200,000.
[15] Examinations for discovery were completed on January 19, 2021. The examination of Mr. Ricci lasted 7 hours and 35 minutes over two days. The examination of Credential’s representative lasted 4 hours and 12 minutes.
[16] Credential provided answers to their undertakings on July 21, 2023. Mr. Ricci had originally sought an order compelling Credential to deliver its answers to the undertakings in this motion. Mr. Ricci takes issue with Credential’s delay in delivering its answers.
[17] On September 30, 2022, Mr. Ricci served his trial record and set the matter down for trial.
[18] In the Central South Region, once a trial record is filed, the parties are required to schedule the trial. If they are unable to agree to a trial date, they must appear at trial scheduling court.
[19] A short civil trial is a trial that is expected to be completed in 15 days or less. A long civil trial is a trial that is expected to take more than 15 days. All civil cases requiring more than 15 days in length for a trial must be referred to the Office of the Regional Senior Justice in this region.
[20] The parties appeared in Assignment Court on December 14, 2022. Credential took the position that the action should be placed on the long trial list.
[21] Justice Sheard adjourned the matter to February 15, 2023 and made it peremptory on Credential to set the trial date and pre-trial conference date or confirm that it will be a long trial, in which case an intake form was to be completed by the parties.
[22] Credential completed the long trial intake form and shared it with Mr. Ricci on February 14, 2023. At that time, Credential estimated that it would call eleven (11) witnesses for trial, and that the trial would take between 15 to 20 days.
[23] On February 15, 2023, Justice Parayeski ordered that the parties speak to Regional Senior Justice Sweeny to obtain a long trial date. The trial has not been scheduled to date.
Mr. Ricci’s Motion
[24] Mr. Ricci brings a motion for leave to amend his statement of claim to reduce the damages sought from $500,000 to $200,000, so that the trial may proceed under Simplified Procedure.
[25] Mr. Ricci has sworn an affidavit indicating that he cannot afford a long trial, and for that reason is seeking to reduce the damages he is seeking to $200,000 so that the action can proceed under Simplified Procedure. Mr. Ricci states that his income for 2022 was approximately $60,000, and his 2021 notice of assessment listed income of $23,897.
[26] In his factum, Mr. Ricci claims to have suffered damages in the amount of $350,000 as a result of lost income. However, there is nothing in the affidavits filed in support of his motion that provides a calculation of damages.
[27] Credential’s position, which is set out in an affidavit sworn by counsel to Credential, is that, given the serious nature of the allegations and the quantum of damages claimed by Mr. Ricci, Credential has been represented by senior counsel throughout this proceeding. Credential has prepared a Bill of Costs dated March 17, 2023, which extends from the commencement of the action up to the attendances in assignment court. The Bill of Costs totals $125,560.60 for fees on a 90% substantial indemnity basis, disbursements and HST.
[28] Credential alleges that if the action had been transferred to Simplified Procedure at an earlier point in time, then primary carriage of the defence would have been undertaken by a junior lawyer with oversight from senior counsel.
[29] Credential has identified 11 witnesses that it intends to call, and only four of the witnesses were still employed by Credential as of March 2023. For the remaining seven witnesses, Credential did not have updated information as to their current whereabouts. Credential notes that Mr. Ricci has not confirmed who he intends to have as witnesses for the trial other than himself.
[30] Credential’s position is that it would be restricted from delivering a fulsome defence to Mr. Ricci’s claim if the action is transferred to Simplified Procedure, since it may be unable to obtain affidavits from all 11 witnesses and would not have the ability to summons individuals to be witnesses at trial under Simplified Procedure.
Issues
[31] The issues raised on this motion are as follows:
- Does an amendment to a claim to limit damages to $200,000 result in a mandatory transfer of the action to Simplified Procedure?
- What is the applicable test on a motion to amend a pleading that is brought after the action has been set down for trial?
- Should leave be granted to Mr. Ricci to amend his statement of claim?
- If leave is granted, is Credential entitled to costs under subrule 76.13(1)?
Analysis
Issue 1 - Does an amendment to a claim to limit damages to $200,000 result in a mandatory transfer of the action to Simplified Procedure?
[32] Mr. Ricci brings this motion for leave to amend his statement of claim to reduce the amount of damages he seeks to $200,000 on the understanding that, if leave is granted, his claim will proceed under Simplified Procedure.
[33] Subrule 76.02(7) addresses three situations where an action not commenced under Simplified Procedure is continued under Simplified Procedure. The first situation is where all parties consent, which is not the case before me. The second situation is where a jury notice delivered in accordance with subrule 76.02.1(2) is struck, which again is not the case before me.
[34] The third situation is where the plaintiff’s pleading is amended under rule 26 to comply with subrule 76.02(1) and all other claims, counterclaims, crossclaims and third party claims comply with this rule. Subrule 76.02(1) provides that Simplified Procedure must be used if, among other things, a plaintiff’s claim is for money and the amount of money claimed is $200,000 or less exclusive of interest and costs.
[35] Credential argues that even if leave is granted, the action need not proceed under Simplified Procedure and can still proceed under ordinary procedure under the Rules. Credential relies on the following statement made by Justice A.P. Ramsay in Thomas v. Aviva, 2022 ONSC 1728: “I therefore disagree with the plaintiff that as damages are now reduced to the limits for simplified procedure actions, a transfer to Rule 76 is mandatory.”
[36] In my view, the facts of Thomas v. Aviva are distinguishable, and Justice A.P. Ramsay’s statement is restricted to the facts of that case.
[37] In that case, the claim was commenced in 2018 and related to a motor vehicle accident. Two defendants delivered a jury notice in September 2018. The plaintiff sought to strike the jury notices. The plaintiff’s motion to amend the statement of claim for damages to $200,000 was granted on consent.
[38] The case required the Court to interpret the amendments to rule 76 and the Courts of Justice Act that came into effect on January 1, 2020, which included the introduction of subrule 76.02.1 which limits jury trials in actions governed by Simplified Procedure.
[39] Justice A.P. Ramsay, when disagreeing with the plaintiff’s position as noted by Credential, went on to state in paragraph 14 of the decision that “In my view, given the existence of the defendants’ jury notice any consideration of whether the action may be transferred to continue under Rule 76 is, by necessity, tethered to the existence of the defendants’ jury notice.”
[40] Justice A.P. Ramsay went on to consider the plaintiff’s request to strike the jury notice and ultimately dismissed the motion.
[41] As there is no jury notice at issue in this case, Justice A.P. Ramsay’s comment from Thomas v. Aviva is not applicable.
[42] In my view, the language contained in subrule 76.02(7)(b) is clear that, if a plaintiff’s pleading is amended under rule 26 to reduce damages to $200,000 or less, the action must proceed under Simplified Procedure. The same conclusion was reached by Justice Heeney in Sutherland Estate v. London Health Sciences Centre, 2022 ONSC 5942.
Issue 2 – What is the applicable test on a motion to amend a pleading that is brought after the action has been set down for trial?
[43] Mr. Ricci has set this matter down for trial. Subrule 48.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that “a party who has set an action down for trial shall not initiate or continue any motion or form of discovery without leave of the court.” There are exceptions to this rule contained in subrules 48.04(2) and (3), none of which are applicable to this motion.
[44] As a result, Mr. Ricci requires leave of the court to bring his pleadings amendment motion.
[45] The test for granting leave to bring a motion under subrule 48.04(1) is subject to disagreement among Ontario courts. Some courts have required the moving party to show a substantial or unexpected change in circumstances such that a refusal to make an order granting leave would be manifestly unjust. Horani v. Manulife Financial Corporation, 2023 ONCA 51, paras. 16-17.
[46] Some courts have determined that for leave to be granted, the moving party must demonstrate that the interlocutory step is necessary in the interests of justice, even in the absence of a substantial or unexpected change in circumstances. Horani v. Manulife Financial Corporation, 2023 ONCA 51, para. 18.
[47] Lastly, some courts have considered both tests and determined that they need not weigh in on the proper approach as the moving party was unable to even meet the broader “interest of justice” test. Horani v. Manulife Financial Corporation, 2023 ONCA 51, para. 19.
[48] Credential argues that Mr. Ricci has failed to meet the threshold to pass either test for granting leave. Credential cites a number of decisions in support of its position.
[49] However, each of the decisions predate the Court of Appeal’s decision in Horani v. Manulife Financial Corporation, 2023 ONCA 51.
[50] In that case, the motion judge held that with a request for leave to amend a statement of claim after the action had been set down for trial, the language of rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 regarding pleading amendments defines the scope of the discretion to be exercised by the court. Horani v. Manulife Financial Corporation, 2022 ONSC 2350, para. 28.
[51] In the case before the motion judge, the plaintiff sought to increase the amount of damages and add a claim for punitive, aggravated and/or exemplary damages. The motion judge reviewed the general principles that apply to motions for leave to amend pleadings, and ultimately granted the requested increase to the amount of damages and dismissed the request to add a claim for punitive damages. Horani v. Manulife Financial Corporation, 2022 ONSC 2350, paras. 46-53.
[52] On appeal, the Court of Appeal noted the divergence regarding the applicable tests for motions for leave under rule 48.04(1). The Court of Appeal did make clear that it agreed with the motion judge’s approach and held that:
“ (i) leave to bring a motion to amend a pleading under Rule 48.04(1) is shaped by the requirements of Rule 26.01 and (ii) leave to amend a pleading under Rule 26.01 will be refused if it would result in prejudice that cannot be compensated for by costs or an adjournment [citations omitted]. Briefly put, regardless of which Rule 48.04(1) test is adopted, this appeal must fail if the motion judge properly determined that allowing the appellants’ proposed amendment would result in non-compensable prejudice.” Horani v. Manulife Financial Corporation, 2023 ONCA 51, para. 22.
[53] The Court of Appeal ultimately decided that it was not necessary to determine the appropriate test under subrule 48.04(1) on the appeal. Horani v. Manulife Financial Corporation, 2023 ONCA 51, para. 38.
[54] The Court of Appeal did favourably cite the decision of Justice Morgan in Trillium Power Wind Corp. v. Ontario, 2019 ONSC 6905, where Morgan J. stated that “The mandatory language of Rule 26.02 applies here even though the Defendant has brought a motion for leave under Rule 48.04 for leave under Rule 26.02(c). The question for a pleading amendment is whether anything is prejudicial, not whether anything is surprising or new. In the context of this double motion, Rule 48.04 is not just a companion to Rule 26.02(c); it is its doppelgänger.”
[55] The Court of Appeal dismissed the appeal of the motion judge’s decision to deny leave. Horani v. Manulife Financial Corporation, 2023 ONCA 51, paras. 2, 31 and 40. The Court of Appeal held that the motion judge made no error in her determination in applying the principles to be followed in considering whether to allow a proposed amendment to pleadings. Horani v. Manulife Financial Corporation, 2023 ONCA 51, para. 24.
[56] Based on my review of Horani v. Manulife Financial Corporation, in considering a motion for leave to amend a pleading after an action has been set down for trial, the appropriate test to be applied in determining whether leave is to be granted is that which is applicable on a motion under subrules 26.01 and 26.02.
Issue 3 – Should leave be granted to Mr. Ricci to amend his statement of claim?
[57] There are three provisions of the Rules that primarily come into play in this motion.
[58] The first one is rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[59] The second one is subrule 26.02(c) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that a party may amend its pleading with leave of the court.
[60] The last one is subrule 1.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that the rules are to be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. This provision has been described as the heart of the Rules. Klassen v. Klassen, 2020 ONSC 4835, at para. 46.
[61] The law regarding leave to amend motions under rules 26.01 and 26.02 is well developed. The general principles have been summarized as follows:
(a) the rule requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court's process; or the pleading discloses no reasonable cause of action; (b) the amendment may be permitted at any stage of the action; (c) there must be a causal connection between the non-compensable prejudice and the amendment. In other words, the prejudice must flow from the amendments and not from some other source; (d) the non-compensable prejudice may be actual prejudice, i.e., evidence that the responding party has lost an opportunity in the litigation that cannot be compensated as a consequence of the amendment. Where such prejudice is alleged, specific details must be provided; (e) non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial; (f) at some point, the delay in seeking an amendment will be so lengthy, and the justification so inadequate, that prejudice to the responding party will be presumed; (g) the onus to prove actual prejudice lies with the responding party; and (h) the onus to rebut presumed prejudice lies with the moving party. Horani v. Manulife Financial Corporation, 2023 ONCA 51, paras. 15, 22, 24, 25 and 32, citing 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42, para. 25.
[62] Mr. Ricci argues that his claim is analogous to a wrongful dismissal action, and is not a complicated dispute. He believes that there are no expert reports or any indication of an intent to call expert testimony. Mr. Ricci alleges that there would be no prejudice to Credential if the action is tried under Simplified Procedure.
[63] Mr. Ricci relies on the decision of this Court in Sutherland Estate v. London Health Sciences Centre, 2022 ONSC 5942 in support of his position. In that case, the plaintiff brought a motion to reduce damages from $950,000 to $200,000. Discoveries had been completed and the trial record had been filed. The trial had been scheduled on consent for seven days, but it was not called to be heard at the scheduled sittings.
[64] The motion to reduce the amount of damages was brought since the plaintiff had died and the claim for cost of future care of the plaintiff had been eliminated.
[65] The defendants argued against a transfer to Simplified Procedure because: (a) it was a complicated medical malpractice case that could not be completed in 5 days; (b) a 5 day trial would provide them would insufficient time to put in all of their evidence; (c) a 5 day trial would hinder the ability of the judge to analyze the evidence and render a just verdict; and (d) they had conducted the case throughout as one that would lead to an ordinary trial and they would be prejudiced if it was tried under Simplified Procedure.
[66] Justice Heeney rejected each of these arguments. He noted that subrule 76.02 makes no exceptions for complicated cases, and that had the action been commenced under simplified procedure, the defendants would have not been able to opt for an ordinary trial. Justice Heeney also referenced rule 1.04 and that having a 5-day trial would be cheaper and would free up additional judicial resources.
[67] On the issue of evidence being put before the Court, Justice Heeney noted that the defendants would have the ability to put in their evidence in chief by way of affidavit, which would assist the trial judge.
[68] Justice Heeney concluded that the “defendants cannot argue that they are prejudiced being denied an ordinary trial. Given that only $200,000 is at stake, a simplified trial is a just, expeditious and proportionate manner of trying the case. The defendants are being treated no differently than any other defendant facing a lawsuit for $200,000 or less.”
[69] Credential relies on the decision of Justice Christie in Edwards v. Alcock, 2022 ONSC 4099. In that case, the plaintiff brought a motion to amend his statement of claim to reduce the amount of damages so that the trial could proceed under Simplified Procedure. A jury notice had been delivered by the defendant. The plaintiff brought the motion after a pre-trial that had resulted in a 12-13 day trial being scheduled with no objection by the plaintiff.
[70] Justice Christie dismissed the plaintiff’s motion. Justice Christie applied the “substantial or unexpected change of circumstances test” and the “interests of justice test” under subrule 48.04(1).
[71] Justice Christie concluded that the plaintiff’s primary motivation in bringing the motion was to limit his costs exposure, and that he had “not established a substantial or unexpected change of circumstances since the filing of the trial record, or that it is just to grant leave in the particular circumstances of this case. Therefore, even applying the more flexible approach to granting leave, this court is of the view that it should be refused.”
[72] Justice Christie also concluded that: (a) the trial could not be fairly conducted in 5 days; (b) there would be no prejudice to the plaintiff to having the ordinary procedure followed, other than costs; (c) the motion was brought too late and would be unfair to move to Simplified Procedure when the defendants had been preparing for a jury trial for 2.5 years; and (d) the plaintiff commenced the claim with full appreciation of the cost consequences and accepted the estimate of trial time from the pre-trial conference.
[73] In my view, the Edwards v. Alcock decision is distinguishable, and the Sutherland Estate v. London Health Sciences Centre is the binding authority.
[74] Firstly, the Edwards v. Alcock decision involved a jury notice and a proposed reduction of damages from $1.0 million to $200,000. Justice Christie’s comments about fairness and the inability to complete the trial in 5 days were largely connected to the fact that it was to be a jury trial, the plaintiff was seeking to strike the jury notice and the defendants had been preparing for a jury trial.
[75] Additionally, the Court did not consider rule 26.01 in its analysis of the issues, and was solely focused on the tests under rule 48.04. As described above, the Court of Appeal in Horani v. Manulife Financial Corporation, 2023 ONCA 51 has held that this is not the correct approach to be taken on an amendment motion. The result was that the onus was placed on the plaintiff to satisfy the tests under rule 48.04, as opposed to the presumption of allowing an amendment under rule 26.01.
[76] In the case before me, rule 26.01 requires me to grant leave to amend unless Credential would suffer non-compensable prejudice. The onus on proving actual prejudice is on Credential.
[77] Credential argues that it would be prejudiced in two ways: firstly, for costs thrown away from the matter being commenced in the ordinary procedure, and secondly, the impact on its ability to advance a fulsome defence in this matter if it proceeds under Simplified Procedure.
[78] On the issue of costs, pursuant to subrule 76.12.1(2), as this case was commenced before January 1, 2020, the limits on costs and disbursements awards contained under subrule 76.12.1(1) is not applicable. As a result, if Credential is successful in its action, it will be able to seek an unrestricted cost award.
[79] On the issue of the impact of Simplified Procedure on its defence, Credential notes that it expects to call seven witnesses for trial that no longer are employed with Credential. Under Simplified Procedure, Credential cannot force or compel non-party witnesses to swear an affidavit. Credential argues that had the action been commenced in Simplified Procedure from the start, it could have secured affidavits from these individuals.
[80] I do not accept this argument. There is nothing in the evidence that suggests that Credential, at any time since this action was commenced in October 2017, has taken any steps to contact these seven individuals to discuss the expectation that they would be called as witnesses and their evidence. It was open to Credential, when responding to this motion, to attempt to contact the witnesses. They chose not to do so. In my view, the mere possibility that some or all of these seven individuals may not swear an affidavit does not satisfy the onus on Credential to establish actual prejudice if the trial proceeds under Simplified Procedure.
[81] Additionally, I echo the comments made by Justice Heeney in Sutherland Estate v. London Health Sciences Centre, 2022 ONSC 5942. The amount of the claim here is to be reduced to $200,000. A trial under Simplified Procedure will provide an expeditious and least expensive determination of this proceeding on its merits, and will ensure efficient use of judicial resources that is proportionate to the amount involved in the proceeding. Permitting this matter to proceed under ordinary procedure for a long trial would in no way achieve the goals of proportionality under rule 1.04.
[82] Lastly, while I acknowledge that the timing of the request to amend was less than ideal, I do not believe that it results in a presumption of prejudice faced by Credential. In fact, the amendment will significantly reduce the potential exposure faced by Credential in the litigation.
[83] In my view, Credential has failed to establish that it will suffer prejudice that cannot be compensated through an award of costs or an adjournment if the amendment is granted and the action is tried under Simplified Procedure.
[84] Accordingly, Mr. Ricci’s request for leave to amend his statement of claim to reduce the damages sought from $500,000 to $200,000 is hereby granted.
Issue 4 – If leave is granted, is Credential entitled to costs under subrule 76.13(1)?
[85] Subrule 76.13(1) provides that, regardless of the outcome of the action, the party whose pleadings are amended, which is Mr. Ricci in this case, shall pay, on a substantial indemnity basis, the costs incurred by the opposing party, Credential, up to the date of the amendment that would not have been incurred had the claim originally complied with the Simplified Procedure rules, unless the court orders otherwise.
[86] Credential seeks costs of $55,637.50 on a substantial indemnity basis, which is 90% of their actual rate. I do not take issue with this percentage being used for substantial indemnity costs.
[87] Of this amount, Credential seeks $3,078 based on having attended 13 hours and 36 minutes in discoveries, when only six (6) total hours of discovery is permitted under subrule 76.04(2). They also seek $7,492.50 for the additional preparation they performed to conduct the 13 hours and 26 minutes of discovery. This amount reflects approximately 50% of the cost incurred in preparing for conducting the discoveries.
[88] Lastly, they seek $45,067 on the basis that had the claim been originally commenced under Simplified Procedure, it would not have required the involvement of senior counsel and could have been conducted by junior counsel. This amount represents the difference in costs that would have been incurred at the lower hourly rate of junior counsel as compared to senior counsel.
[89] Mr. Ricci objects to the amount sought by Credential. His view is that, at most, Credential is entitled to $2,100 for the costs of the additional time of examinations for discovery that were conducted. Mr. Ricci disputes any entitlement for Credential on account of preparation time or the costs of using senior counsel versus junior counsel.
[90] Credential relies on the decision of Justice H.M. Pierce in Hewitson Holdings Inc. v. Bur-Met Contracting and Concrete Walls, 2021 ONSC 3197, where the Court held that there was an obligation on the plaintiff to continue evaluating the extent of its damages, and that the plaintiff had over-estimated damages and should have known that damages would fall within the simplified procedure range before claiming damages under ordinary procedure.
[91] In my view that case is distinguishable. This is not a case where Mr. Ricci failed to realize that his damages would be less than $200,000 and should have moved the action to Simplified Procedure at an earlier time. Mr. Ricci remains of the view that he is entitled to $350,000 in damages, but has chosen to forego that amount of damages so that the matter could be dealt with under Simplified Procedure in an efficient and cost-effective manner.
[92] I am satisfied that that Credential is entitled to costs in connection with preparing for and attending at almost 12 hours of examinations for discovery when only 6 hours would have been available to the parties under Simplified Procedure. Based on my review of the Bill of Costs, I believe that a fair and reasonable amount of costs is $7,500 all inclusive.
[93] With respect to the costs sought due to Credential using senior counsel for a $500,000 claim versus using junior counsel for a $200,000, in my view the trial judge will be in a better position to assess the reasonableness of this decision following the determination at trial. As a result, I exercise my discretion under subrule 76.13(1) to not award costs to Credential in connection with this request.
Disposition and Costs
[94] For the reasons set out above, Mr. Ricci’s motion to amend his statement of claim is granted, and costs of $7,500 is fixed and is to be paid by Mr. Ricci to Credential within 30 days as costs under subrule 76.13(1).
[95] Mr. Ricci seeks costs of the motion on a partial indemnity basis in the all-inclusive amount of $13,000. Credential would have requested costs on a partial indemnity basis in the all-inclusive amount of $26,290.92 if it had been successful on the motion.
[96] Costs of a step in a proceeding are in the discretion of the Court, as set out in section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 sets out factors that the court may consider in exercising such discretion. The overriding principles in determining costs are fairness and reasonableness. Boucher v. Public Accountants Council for the Province of Ontario, at paras. 24, 26, and 37-38.
[97] Based on my review of the costs outline and hearing the submissions of the parties, I believe that $13,000 is a fair and reasonable amount of costs for Credential to pay as the unsuccessful party.
[98] As a result, I hereby fix costs in the amount of $13,000 payable by Credential to Mr. Ricci within 30 days.
[99] The parties shall agree to a form of draft order and submit it to the Assistant Trial Coordinator for my review.
Associate Justice Rappos DATE: April 30, 2024