Court File and Parties

COURT FILE NO.: CV-17-567678 DATE: 20240904 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: KATHIE DEBREN, Plaintiff AND: KEVIN ROMEO DEBREN, also known as KEVIN POWERS, also known as RYAN JAMES, MONTANA MAX DEVELOPMENT CORPORATION, KAWAGAMAJOE DEVELOPMENT CORPORATION and ANNE MARIE LINDQVIST, Defendants AND: MONTANA DEBREN, Third Party

BEFORE: VERMETTE J.

COUNSEL: J. Daniel McConville and Roshni Khemraj, for the Plaintiff and the Third Party Edward Sullivan, for the Defendants Kevin Romeo Debren, also known as Kevin Powers, also known as Ryan James, Montana Max Development Corporation and Kawagamajoe Development Corporation

HEARD: In writing

Endorsement as to Costs

[1] On July 15, 2024, I released Reasons for Judgment (2024 ONSC 3998) granting the action in part, dismissing the counterclaim and dismissing the third party claim.

[2] The parties were not able to agree on costs. The Plaintiff and the Third Party delivered costs submissions on July 29, 2024. The Defendants [1] did not deliver any responding costs submissions within the time set out in the last paragraph of my Reasons for Judgment. The Defendants were given a second opportunity to deliver costs submissions and were advised that if they did not do so by the new deadline, I would decide the issue of costs without their input. The Defendants have not delivered costs submissions. [2]

[3] This is my decision on costs.

1. Position of the Plaintiff and the Third Party

[4] The Plaintiff and the Third Party seek costs on a partial indemnity basis up to February 2, 2023, and costs on a substantial indemnity basis thereafter, in the total amount of $133,693.37.

[5] The Plaintiff and the Third Party state that they were wholly successful in the litigation and there is no good reason to depart from the normal rule that costs should follow the event.

[6] The Plaintiff and the Third Party submit that they should be awarded costs on a substantial indemnity basis from February 2, 2023 as a result of an offer to settle that they made on that date. Their position is that their offer meets all the requirements of Rule 49.10 and that they have achieved a result more favourable than the terms of the offer to settle.

[7] The offer to settle made by the Plaintiff and the Third Party contains the following terms:

1. The defendant Kevin Romeo Debren (“Kevin”) shall vacate the property municipally known as […] (the “Cottage Property”) within 90 days, and shall consent to the issuance of a writ of possession regarding the Cottage Property being issued in favour of Kathie [i.e., the Plaintiff], which shall not be enforced unless Kevin fails to vacate within 90 days. Kevin agrees that he has no interest in the Cottage Property aside from his entitlement to the payment in paragraph 2 below.
2. Kathie will sell the Cottage Property as soon as reasonably possible following Kevin vacating the Cottage Property. Upon completion of the sale, Kathie will pay Kevin $200,000.00 from the proceeds of sale in full satisfaction of any and all of Kevin’s claims against Kathie and Montana [i.e., the Third Party] and any interest he may have had in the Cottage Property.
3. Kathie and Montana and the remaining defendants including Kevin shall exchange full and final mutual releases releasing all adverse parties from all of the issues and claims that were raised or could have been raised in the pleadings exchanged in these proceedings, including the third party claim and application, to be negotiated and agreed between counsel acting reasonably.
4. Upon completion of the steps set out in paragraph 1 to 3, the parties shall dismiss or discontinue all current litigation between them in this proceeding including the claim, counterclaim and third party claim in Court File No. CV-17-567678 (third party claim file number CV-17-567678-00A1), and application bearing Court File No. CV-19-00616501, all on consent and on a without costs basis.
5. This offer to settle expires one (1) minute after the commencement of the trial in this matter.

[8] The Plaintiff and the Third Party argue that even if the offer to settle does not comply with Rule 49.10 or is a “near miss”, this Court has the discretion to consider the offer in assessing costs in accordance with Rule 49.13 of the Rules of Civil Procedure.

[9] The Plaintiff and the Third Party acknowledge that their costs and disbursements are higher than the Defendants’ costs and disbursements, based on their respective costs outlines. However, they state that it is generally understood that a plaintiff’s or moving party’s costs are usually higher than the costs of the responding party.

[10] The Plaintiff and the Third Party submit that the hours spent and costs incurred are reasonable given the complexity of the proceeding, the work done, and the result achieved.

2. Discussion

[11] The Plaintiff and the Third Party were successful in the action, the counterclaim and the third party claim and are entitled to their costs.

[12] With respect to the issue of the scale of costs, I agree with the Plaintiff and the Third Party that they are entitled to costs on a substantial indemnity basis from the date of their offer to settle. The judgment obtained by the Plaintiff and the Third Party is more favourable than the terms of the offer to settle – among other things, the Defendants were not awarded any damages or any interest in the relevant property.

[13] While it could be argued that the offer to settle does not trigger the costs consequences set out in Rule 49.10 because it contains a requirement for a release to be negotiated and agreed upon in the future [3] or for other reasons, the offer to settle served by the Plaintiff and the Third Party complied with the spirit of Rule 49, and its operative terms were clearly more favourable than the judgment. In such circumstances, the offer to settle should be given considerable weight in arriving at a costs award: see Elbakhiet v. Palmer, 2014 ONCA 544 at paras. 32-33 and Rule 49.13 of the Rules of Civil Procedure. Taking a holistic approach to the issue of costs under Rule 49.13, I find that this is an appropriate case to exercise my discretion to grant costs on a substantial indemnity basis to the Plaintiff and the Third Party from the date of their offer to settle, even if the offer to settle may fail to comply with Rule 49 for “technical reasons”.

[14] I now turn to the issue of quantum. I have reviewed the bill of costs of the Plaintiff and the Third Party. In my view, the hourly rates of the junior lawyers (called to the bar in 2022) are higher than what an unsuccessful party could reasonably expect, especially when compared to the hourly rate of the more senior lawyer on the file. Therefore, a reduction is required. In addition, with respect to the time spent, I find that it is appropriate to apply a small reduction to take into account the inevitable duplication of work between the timekeepers. I conclude that the appropriate quantum of costs for the Plaintiff and the Third Party is in the all-inclusive amount of $115,000.00.

3. Conclusion

[15] 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 Plaintiff and the Third Party is in the all-inclusive amount of $115,000.00 (representing costs on a partial indemnity basis up to February 2, 2023 and costs on a substantial indemnity basis thereafter). In my view, this is an amount that the Defendants should reasonably have expected to pay in the event that they were unsuccessful in the action, the counterclaim and the third party claim.

[16] The costs are to be paid by the Defendants to the Plaintiff and the Third Party within 30 days.

Vermette J. Date: September 4, 2024

Footnotes

[1] The references to the “Defendants” in this endorsement do not include the Defendant Anne Marie Lindqvist against whom the action was dismissed on consent on April 8, 2022.

[2] After my assistant contacted counsel about the absence of costs submissions from the Defendants, counsel for the Defendants advised that he had been unable to contact his client despite numerous attempts. I am satisfied that Mr. Debren is aware of the deadline for costs submissions and is choosing not to communicate with his counsel.

[3] See, e.g., Kidane v. City of Toronto, 2024 ONSC 4267 at paras. 13-16.