SUPERIOR COURT OF JUSTICE - ONTARIO
RE: RANTRA HOLDINGS INC., Plaintiff
- and -
BAOZHANG GUO, Defendant
BEFORE: Associate Justice Todd Robinson
COUNSEL: S. Chadwick, for the plaintiff
O. Chaudhry, for the defendant
HEARD: November 28, 2023 (by teleconference)
COSTS ENDORSEMENT (Settled Refusals and Undertakings Motion)
1This costs endorsement is in respect of the unresolved costs of the plaintiff’s otherwise settled motion on refusals and undertakings. The defendant accepted the plaintiff’s offer to settle the motion, but the parties were ultimately unable to agree on costs. I heard submissions on costs and reserved my decision. That decision has been unfortunately delayed through no fault of the parties.
2The reason that the parties were unable to agree on costs of the motion is apparent: the costs incurred by the plaintiff in bringing this motion are, in my view, entirely disproportionate to the issues in dispute. The motion sought to compel answers to 109 undertakings and 15 questions taken under advisement. The defendant did not oppose the motion nor indicate any intention to oppose the motion at any time prior to materials being prepared and served. Nevertheless, per the costs outline filed, the plaintiff incurred actual costs of $43,948.53 in bringing the motion, The plaintiff seeks its partial indemnity costs of $26,004.72, including HST and disbursements.
3The plaintiff relies on the term of its offer requiring the defendant to pay the plaintiff’s partial indemnity costs of the motion, less $500. The defendant does not dispute that he accepted that term, but argues that there was no indication at the time that the plaintiff’s costs claim would be so substantial. The defendant submits that the costs claim is well beyond what he reasonably expected at the time of accepting the plaintiff’s offer. The defendant submits that costs of $2,000 to $3,000 are reasonable and appropriate in the circumstances.
4Costs of a motion are discretionary. My discretion under s. 131 of the Courts of Justice Act, RSO 1990, c. C.43 and rule 57.01 of the Rules of Civil Procedure, RRO 1990, Reg 194 (the “Rules”) is quite broad, permitting me to fashion a costs award that I deem fit and just in the circumstances of this motion. Subrule 1.04(1.1) is also applicable. It requires that I make orders that are proportionate to the importance and complexity of the issues and to the amount involved in the proceeding.
5There is no dispute that the defendant unequivocally accepted the plaintiff’s offer to settle the motion. The terms of that offer are clearly stated. By accepting it, the defendant agreed to consent to an order to answer all outstanding undertakings by January 5, 2024, to answer 4 of the 15 questions under advisement by January 5, 2024, to reattend a further examination by March 5, 2024, and to pay partial indemnity costs of the motion, less $500, within 60 days of acceptance.
6The timeline of events is important to my costs disposition. The key dates in the chronology of the parties’ communications are as follows:
(a) The plaintiff’s 3-page notice of motion was served and filed on November 28, 2022. The return date was admittedly not canvassed with defendant’s counsel before it was booked and the notice of motion served. The notice of motion does not append a refusals and undertakings chart.
(b) Based on the record before me, the plaintiff did not prepare and serve a refusals and undertakings chart until 11 months later on October 20, 2023.
(c) On October 30, 2023, defendant’s counsel confirmed that the defendant was agreeable to providing answers to undertakings by January 5, 2024.
(d) The plaintiff’s offer to settle was made on October 31, 2023, identifying the same date already confirmed by defendant’s counsel for answers to undertakings, among the other terms.
(e) On November 1, 2023, defendant’s counsel sought clarification on the under advisements, which was provided, and then confirmed he would get back to plaintiff’s counsel “shortly”.
(f) The next day, on November 2, 2023, the plaintiff served its motion record and factum. On the same day, defendant’s counsel advised that his client was agreeable to an order compelling answers by January 5, 2024 (as previously stated), but that he was awaiting instructions on answering the 4 advisements and re-attending for a further examination.
(g) The next day, on November 3, 2024, the offer to settle was accepted by the defendant.
7Importantly, at no time prior to the plaintiff’s motion materials being prepared (and thereby the costs incurred) did the defendant provide any indication that he would oppose the motion. To the contrary, even prior to the plaintiff’s offer to settle, the defendant had expressed his agreement to answer undertakings by January 5, 2024. There was ongoing communication about resolving the motion. Defendant’s counsel sought to adjourn the motion because he was unavailable and had no record of the motion date (albeit that the notice of motion had been served on him in November 2022). Despite the date having been unilaterally booked, the adjournment request was refused. The defendant ultimately accepted the plaintiff’s offer to settle the motion within three days of it being made. No responding materials were prepared and served.
8I agree with the defendant that the costs incurred by the plaintiff are not within reasonable expectations. The plaintiff tendered a 4-page affidavit (184 pages with exhibits) and a 17-page factum (excluding schedules). The costs outline discloses over 120 hours of aggregate lawyer, student, and clerk time in bringing this motion. I am frankly at a loss for how the plaintiff ran up such significant costs in such a short time given the defendant’s cooperative position. In my view, the plaintiff’s costs claim is entirely disproportionate in context of the parties’ communications and well beyond reasonable expectations for a refusals and undertakings motion of this nature.
9The plaintiff submits that much of its costs had to do with preparing the refusals and undertakings charts due to the sheer number of questions and the need to correlate each question to specific paragraphs in the pleadings. That is argued to have involved significant work largely done by an articling student to keep costs down. That assertion is belied by the costs outline, which discloses a total of only 17.0 hours of student time as compared to 87.9 hours of lawyer time. Even if I accept that the motion record and moving factum had to be completed because the defendant had not provided a position on the advisements and further examination, the need for such substantial lawyer time in the circumstances of this case has not been explained. There is no breakdown of the lawyer time. A single, large block entry has been provided for all time incurred on the motion, which makes it impossible to assess how time was spent and, thereby, the reasonableness of the time claimed. Dockets were offered at the hearing to address the defendant’s challenge in that regard, but they were not provided with the costs outline and had not been provided when the plaintiff made its costs submissions.
10In my view, the time and expense incurred by the plaintiff for this motion could have been avoided entirely (or, conversely, demonstrated to be necessary) by the plaintiff preparing and serving its refusals and undertakings chart well prior to preparing full blown motion materials, including a factum. I acknowledge that subrule 37.10(10)(a) does not formally require a moving chart until seven days before the hearing. Nevertheless, no cogent explanation was provided for why a chart was not or could not have been served at any point in the 11 months after the notice of motion was served. I accept that the parties were engaged in settlement discussions and attended a mediation, but the plaintiff booked and bought the motion. Its position was that the motion was always going to proceed if settlement was not reached. In my view, it was thereby incumbent on the plaintiff to take appropriate steps to advance the motion.
11Charts prepared in compliance with subrule 37.10(10)(a) of the Rules clearly outline the refusals and undertakings on which a party intends to move. Had the plaintiff served a proper chart well in advance of the motion and the defendant failed to provide a responding chart within a reasonable time (or, ideally, by an agreed deadline), the need for a fulsome motion record and moving factum would have been more readily justified.
12Frankly, that practice should be followed in all civil litigation. The timelines in subrule 37.10(10) for exchanging moving and responding refusals and undertakings charts are outside deadlines, not best practice. Refusals and undertakings motions should, in my view, only be pursued after the parties have exchanged positions on the refusals and undertakings that will actually be argued on a motion or, at a minimum, the moving party has served the required chart and the responding party has failed or refused to respond within a reasonable time. That moving chart should be appended to the notice of motion. Parties should then attempt to resolve the disputed refusals and undertakings or distill the scope of their dispute(s) for motion argument, all before full motion materials are served, not after.
13Motion materials prepared with the benefit of such discussions will inevitably be more targeted and thereby more helpful to the court. That process will also often narrow issues. That, in turn, will reduce costs of the motion on both sides and allow an appropriate amount of time to be booked for the motion or, if a motion has already been booked, allow unnecessary motion time to be released. Court time is currently at a premium. Litigants are clamouring to get before the court, but unable to do so in a timely manner because there is no available time, at least as far as the court knows. Released time from one motion can often be used by other litigants in other actions, so long as the court is given timely notice that the total booked time for a motion will not be required.
14I agree with the plaintiff that this motion was necessary to compel the defendant to comply with his obligation to answer undertakings. Ongoing settlement discussions is not, in my view, a legitimate reason for failing to answer undertakings (unless the parties have specifically agreed to stay the obligation to answer during those settlement discussions). The defendant’s examination took place on February 16, 2022 and June 1, 2022. By November 2022, when the notice of motion was served, answers to the 109 undertakings were long overdue.
15Nevertheless, the hours invested by the plaintiff in bringing this motion were not justified. The defendant never disputed his obligation to answer undertakings and promptly consented to an order when asked to provide a position. The plaintiff waited until the last minute to confirm its position on the undertakings and advisements that must be answered and to seek the defendant’s responding position. The 11-month delay left little time for defendant’s counsel to obtain instructions before the plaintiff had to serve motion materials in order to comply with the timelines for motion materials set out in the Rules.
16Unquestionably, the defendant was in default of his obligation to answer undertakings. The defendant ought to have provided answers sooner. Upon being served with the notice of motion, the defendant ought to have provided a position on the motion. The failure to do so, though, does not mean that the defendant lost any entitlement to a reasonable opportunity to provide a position on the motion before motion materials were prepared on the basis of it being opposed.
17For its own reasons, the plaintiff elected to do nothing to advance this motion beyond serving a basic notice of motion for 11 months. In doing so, the plaintiff significantly abridged reasonable opportunities to resolve the motion. Given the defendant’s position, I question the need for an appearance hearing at all. If on consent or unopposed, the motion would have required minimal materials and could have proceeded in writing.
18It is relevant to costs that, in the period between the plaintiff’s refusals and undertakings charts being served on October 20, 2023 and the plaintiff’s offer being accepted on November 3, 2023, defendant’s counsel was in regular communication about the motion. He confirmed that the defendant was agreeable to answering undertakings and sought clarification on the advisements so that he could obtain instructions. The defendant moved with reasonable promptness in providing a position. As already noted, the offer to settle was accepted within three days of being made.
19In all the circumstances, I find it neither fair nor just to compel the defendant to pay the partial indemnity costs claimed by the plaintiff. In my view, they are not reasonable partial indemnity costs having regard to the factors outlined in subrule 57.01(1). That said, I do not agree with the defendant that an award of $2,000 to $3,000 is fair or reasonable in all the circumstances. The defendant defaulted in his obligation to answer a significant volume of undertakings and only agreed to answer them in response to the plaintiff’s motion.
20For the above reasons, and having considered the factors in subrule 57.01(1) of the Rules, I fix the plaintiff’s recoverable partial indemnity fees of the motion in the amount of $5,000, plus HST. The only claimed disbursement is the motion filing fee. Partial indemnity costs for the motion are thereby fixed in the total amount of $5,989. Taking into account the $500 deduction agreed by the parties, the defendant shall accordingly pay to the plaintiff costs of $5,489, including HST and disbursements, payable within thirty (30) days. Order accordingly.
21My intention at the time of hearing the parties’ costs submissions was to sign a single order. When my reserved costs decision was initially delayed, I was remiss in not signing the draft order effecting the accepted offer as agreed by the parties at the time of the hearing, with a carve out for the reserved costs portion. I presume that the parties have proceeded in accordance with the accepted offer, with answers now given and further examination completed. I have nevertheless signed the order as agreed, amended so as to indicate the costs reserve. I have now also signed a separate order dealing with costs.
ASSOCIATE JUSTICE TODD ROBINSON
DATE: May 14, 2024