Court File and Parties

COURT FILE NO.: CV-23-2709-0000 DATE: 2024 12 13

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

JOGINDER ATHWAL, AMRITPAL ATHWAL and RANJIT ATHWAL Plaintiffs

• and -

8529710 CANADA LTD BAHNIWAL, PARDEEP GILL, NARINDER GILL, SANDEEP Defendants

COUNSEL: Paljinder Mahaar, for the Plaintiffs Monty Dhaliwal and Adam Ostermeier, for the Defendants

HEARD: In Writing

Reasons for Judgment

LEMAY J.

[1] On October 4th, 2024 I heard the Defendants’ motion for further particulars in this matter. I dismissed that motion with oral reasons given from the bench at the conclusion of the Defendants’ arguments. I finalized written reasons, which are reported at 2024 ONSC 5673. I am now required to fix the costs of the matter.

Positions of the Parties

[2] The Plaintiffs, as the successful party, seek costs on a full indemnity basis in the sum of $6,463.02. I believe that this amount is inclusive of HST and disbursements, but counsel’s Costs Outline does not make that clear. The basis for full indemnity costs is that the Defendants should not have brought this motion, filed extra cases the morning of this motion and made no effort to settle the motion.

[3] The Plaintiffs also seek additional costs of $1,000.00 for the preparation of the costs submissions. Those costs are sought on the basis that the Defendants did not accept the Plaintiff’s offer that the Defendants should pay $6,000.00 to settle the costs of the motion. The Defendants object to the Plaintiffs disclosing these discussions to me as they are privileged.

[4] The Defendants are also opposed to the Plaintiffs’ request for substantial indemnity costs. The Defendants argue that the costs should be in the cause on the basis that the delays in this case can be laid at the feet of both parties, that the Plaintiffs’ costs are disproportionate and that the motion was dismissed on the basis of “evolving Rules reforms”. In the alternative, the Defendants argue that the costs should be limited to $1,500.00 plus HST.

The Issues

[5] These positions raise three issues that I need to address, as follows:

a) Is the Defendants’ assertion that the dismissal of this motion was on the basis of “evolving Rules reforms” justified and does it support an award of no costs? b) If the Plaintiff is entitled to costs, is it appropriate to award those costs on a substantial indemnity basis? c) Are the costs sought proportional to the issues in the motion?

[6] I will deal with each issue in turn.

Issue #1: The “Evolving Rules Reforms”

[7] In his costs argument, counsel for the Defendants argues as follows:

12. Per the Court’s oral reasons (transcript not yet available) the Motion was dismissed in part due to evolving Rules reforms, including that it is the goal of the Court to eliminate non dispositive motions. The Court’s direction in this respect is well noted but was not known to the Defendants in the course of bringing this Motion. The motion was brought in good faith. It is respectfully requested that the Defendants not be admonished via costs on these grounds.

[8] In my oral reasons, I referenced the Phase One Report of the Civil Rules Review Task Force that had been established by Chief Justice Morawetz. The point I made in reference to this report was the long-established concern that the Courts have had about the culture of delay in civil litigation.

[9] These concerns have been discussed in other decisions going back years. For example, in Innocon Inc. v. Daro Flooring Constructions Inc., 2021 ONSC 7558, Myers J. stated (at para 48):

[48] Instead of reasonable people agreeing on procedural issues to move the matter forward toward resolution on its merits, it’s motion, motion, motion. Delay, delay delay. Costs, costs, costs. Is this what the clients should expect when they litigate their civil disputes in Toronto?

[10] Over the past number of years, there have been innumerable calls for a “culture shift” in civil litigation and to focus on the merits of decisions. This motion did not do that.

[11] Regardless of whether the motion was brought in good faith or not, it was still a motion that was unnecessary. It also asked for unnecessary relief. For example, it sought further particulars about the type of work that a mechanic was doing. Regardless of whether one concludes that the intention of this motion was delay, the effect of the motion was certainly to delay the adjudication of the merits of this matter.

[12] Further, Rule 57.01 makes it clear that costs should generally be awarded to the successful party. There is nothing in the Defendants’ submissions that would support any result other than that the Plaintiffs should be awarded costs for this motion. The question is the quantum of costs, and I now turn to that issue.

Issue #2- The Scale of Costs

[13] The Plaintiffs seek substantial indemnity costs. There is no basis for that request. Substantial indemnity costs are rarely awarded unless a party achieves a result that is better than their Rule 49 offer. In this case, the Plaintiff’s offer to settle the costs for $6,000.00 does not amount to a Rule 49 offer, much less a Rule 49 offer that the Plaintiff has beaten.

[14] Beyond the ambit of Rule 49, the decision in S & A Strasser v. Richmond Hill (Town), (1990) 1 O.R. (3d) 243 (C.A.) sets out that the circumstances in which elevated costs awards should be given are very limited. Those circumstances were expanded on by the Court of Appeal in Davies v. Clarington (Municipality) et. al. 2009 ONCA 722, (2009) 100 O.R. (3d) 66. At paragraphs 28-31, the Court stated:

[28] The first issue is whether the trial judge erred in relying on the February 2005 offer as justification for an elevated costs award. This court, following the principle established by the Supreme Court, has repeatedly said that elevated costs are warranted in only two circumstances. The first involves the operation of an offer to settle under rule 49.10, where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in behaviour worthy of sanction.

[29] In Young v. Young, [1993] 4 S.C.R. 3, [1993] S.C.J. No. 112, at p. 134 S.C.R., McLachlin J. described the circumstances when elevated costs are warranted as "only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties".

[30] The same principle was expanded upon in Mortimer v. Cameron (1994), 17 O.R. (3d) 1, [1994] O.J. No. 277 (C.A.), at p. 23 O.R., where Robins J.A., speaking for the court, set out the restricted circumstances in which a higher costs scale is appropriate with reference to Orkin, at para. 219. [page75]

An award of costs on the solicitor-and-client scale, it has been said, is ordered only in rare and exceptional cases to mark the court's disapproval of the conduct of a party in the litigation. The principle guiding the decision to award solicitor-and-client costs has been enunciated thus:

[S]olicitor-and-client costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings, which makes such costs desirable as a form of chastisement.

[31] The narrow grounds justifying a higher costs scale were further reinforced by Abella J.A. in McBride Metal Fabricating Corp. v. H. & W. Sales Co. (2002), 59 O.R. (3d) 97, [2002] O.J. No. 1536 (C.A.) where, at para. 39, she said: Apart from the operation of rule 49.10 (introduced to promote settlement offers), only conduct of a reprehensible nature has been held to give rise to an award of solicitor and client costs. In the cases in which they were awarded there were specific acts or a series of acts that clearly indicated an abuse of process, thus warranting costs as a form of chastisement.

See, also, Walker v. Ritchie, [2005] O.J. No. 1600, 197 O.A.C. 81 (C.A.), at para. 105, vard 2006 SCC 45, [2006] 2 S.C.R. 428, [2006] S.C.J. No. 45. [Footnote omitted.]

[15] In this case, there is no conduct that would justify an order of enhanced costs. The Defendants brought a procedural motion. They were unsuccessful in that procedural motion. While the Defendants pursued this motion vigorously, there was no egregious conduct in bringing the motion and nothing that would fall within the grounds set out in Davies.

[16] I note that Counsel for the Defendants has argued that he brought the motion in good faith. I am not prepared to go as far as that in my assessment of the case. It is quite possible that the Defendants brought the motion to delay the matter, but even if I made that finding it would not be sufficient to justify an order for substantial indemnity costs. As a result, the costs in this case will be awarded on a partial indemnity basis.

Issue #3- Proportionality

[17] The third issue concerns the quantum of costs, and whether the amount sought by the Plaintiff is proportional to the issues that were in dispute. In considering this issue, I am mindful of the factors that are set out in Rule 57.01(1). In this case, the issues are the complexity of the matter, the steps taken by a party that tended to shorten or lengthen the matter and the reasonable expectations of the parties. I will deal with each of those issues.

[18] I should begin, however, with an observation about the Plaintiffs’ counsel disclosing the offer to settle. I appreciate the Defendants’ counsel’s concern in this regard, in that the costs issues were not resolved. Therefore, it was not appropriate for the Plaintiffs’ counsel to disclose his proposed settlement of the costs issue.

[19] That being said, the disclosure does not have an effect on the outcome of this case for two reasons. First, as I have set out above, the Plaintiffs are not entitled to substantial indemnity costs. As a result, the offer that the Plaintiffs have made is not going to influence the disposition of this matter. Second, in any event, I am not going to provide the parties with a further opportunity to make costs submissions on the costs submissions. That would be unjustifiable even after a complex trial. In these circumstances, it is completely unrealistic.

[20] This brings me back to the three key points. I start with the complexity of the matter. This was a short motion. However, Defendants’ counsel used a full half-hour to argue this matter as well as providing a full factum and detailed case-law. In the circumstances, the motion was moderately complex, and it justifies a heightened award of costs.

[21] Second, the Defendants pursued the particulars issue well beyond what was justifiable on the facts. In addition, I am not persuaded that the Plaintiffs made a significant contribution to the delay in having this matter heard. As a result, this is also a factor that favours a heightened award of costs for the Plaintiff.

[22] Finally, there are the reasonable expectations of the parties. In this case, the costs outlines submitted by both parties show costs in the range of $6,000.00 on a full indemnity basis. In my view, that indicates that a reasonable amount of costs on a partial indemnity basis would be about $4,000.00, inclusive of HST and disbursements.

[23] Counsel for the Defendants argues that the time spent by Plaintiffs’ counsel was disproportionate to the dispute and that the time spent was unreasonable. The Defendants point to the issue of a cross-motion that the Plaintiffs’ counsel threatened to bring as well as the claim that the Plaintiffs spent time preparing a motion record.

[24] In my view, neither of these issues justifies any reduction in the costs that would otherwise be payable for this motion.

[25] For the foregoing reasons, the Defendants are to pay the Plaintiffs the sum of $4,000.00, inclusive of HST and disbursements as the costs of this motion within thirty (30) days of today’s date. The Defendants are jointly and severally liable for those costs.

LEMAY J. Released: December 13, 2024