Court File Numbers

CV-13-2155-00
CV-24-1793-00

Date

2025-02-13

Ontario Superior Court of Justice

Between:

The Estate of Sulochana Shanthakumar by her estate trustee, Santha Kumar Mylabathula
Plaintiff
Counsel: Peter M. Callahan (pcallahan@pmclaw.ca)

• and -

Royal Bank of Canada, Siva Gurrappadi, William Sykes, Usha Radhakrishan, Sheila Wilson, Attorney General of Canada, Phillip Carver, Albert Yang, and The Attorney General for the Province of Ontario
Defendants
Counsel: Gregory W. Bowden (gwb@lbnfirm.com) for Royal Bank of Canada, Siva Gurrappadi, William Sykes, Usha Radhakrishan, and Sheila Wilson; Karen Watt (karen.watt@justice.gc.ca) for Attorney General of Canada, Phillip Carver, and Albert Yang; Niki Manwani (nmanwani@kmlaw.ca) for an interested party, LD Law LLP

And Between:

Royal Bank of Canada
Plaintiff
Counsel: Gregory W. Bowden

• and -

Shanta M. Kumar aka Shanthakumar Mylabathula aka Shantha Kumar Mylabathula aka Sulochana Shanthakumar aka Santha A. Mylabathula aka Santhakumar Mylabathula aka Santha Kumar Mylabathula aka Santha Mylabathula aka Santa Kumar Mylabathula and The Estate of Sulochana Shanthakumar by her estate trustee, Santha Kumar Mylabathula
Defendants
Counsel: Peter M. Callahan

And Between:

Santa Kumar Mylabathula and The Estate of Sulochana Shanthakumar by her estate trustee, Santha Kumar Mylabathula
Plaintiffs by Counterclaim
Counsel: Peter M. Callahan

• and -

Royal Bank of Canada and Gregory Bowden
Defendants by Counterclaim
Counsel: Gregory W. Bowden

Heard: In Writing

Reasons for Judgment

Henry S. Lemay

Introduction

[1] On December 31, 2024, I released reasons in this matter in which I granted the RBC parties’ motions to have the Estate’s counsel removed from the record and to strike out the counter-claims that had been made against Mr. Bowden and RBC. Leave was given to amend the claims against RBC only.

[2] It is now time to fix the costs for the motion.

Background

[3] This litigation has been going on for more than ten years. A detailed history is set out in my most recent decision (2024 ONSC 7253). I rely on that history, and will only outline the facts essential to understand my disposition of the costs issues.

[4] The underlying action concerned a claim for wrongful arrest made by the Plaintiff, and his late wife, Ms. Sulochana Shanthakumar. That action was ultimately dismissed by Ricchetti J. The costs of that action remain outstanding.

[5] However, while that action was still before the Courts, Ms. Shanthakumar died. After her passing, Mr. Mylabathula, her husband, transferred a property that Ms. Shanthakumar owned from her, through her estate and to himself. The property was transferred when there were costs orders outstanding. RBC alleged that this transfer was a fraudulent transfer and brought an action against Mr. Mylabathula.

[6] Mr. Mylabathula brought a counterclaim against RBC and against their lawyer, Mr. Bowden. That counterclaim included claims for general damages for harassment, intimidation, denigration, embarrassment, prejudice, intentional infliction of harm and racial discrimination. I reviewed those claims and determined that, as pled, none of them could survive. I struck out the claims against RBC but permitted leave to amend some of those claims on terms. I also determined that the action against Mr. Bowden could not survive in any circumstances, and I struck those claims without leave to amend.

[7] At the same time, there was an issue as to whether Mr. Callahan could continue as counsel. As I noted above, there had been some costs awards that had been unpaid when the property owned by the late Ms. Shanthakumar was transferred to her estate and then on to Mr. Mylabathula. Those costs awards were provided to Mr. Callahan when they were made by the Court. Mr. Mylabathula claims that he was not aware of the costs awards. As I set out at paragraph 56 of my reasons on this motion, Mr. Callahan’s evidence on what Mr. Mylabathula knew and when he knew it is almost inevitably going to be necessary to determine the merits of RBC’s claim. As a result, I determined that Mr. Callahan could not remain as counsel.

Positions of the Parties

[8] RBC and Mr. Bowden seek substantial indemnity costs in the sum of $29,577.75 inclusive of HST and disbursements. Those costs are sought on the basis of Mr. Mylabathula’s conduct in making baseless and inflammatory allegations, the refusal to admit established facts and the fact that there were unsubstantiated allegations of racism made by Mr. Mylabathula in his claim.

[9] Mr. Mylabathula argues that there is no basis for making an award of costs in favour of RBC and that costs should be awarded in favour of the Plaintiff. In the alternative, Mr. Mylabathula claims that the costs sought by RBC and Mr. Bowden are overstated and that “the costs outline delivered by RBC is misleading and grossly misrepresents the scope of costs that RBC may be entitled to.” As a result, Mr. Mylabathula suggests an award of costs payable by RBC to himself in the sum of $6,000.00 inclusive of disbursements and HST.

Issues and Analysis

[10] The issues that I have to determine are:

a) Which party should be entitled to costs?
b) Whether the scale of costs should be on a partial or substantial indemnity basis.
c) Whether the costs sought by RBC are excessive.

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

a) Which Party Should be Entitled to Costs?

[12] Costs usually follow the outcome. Indeed, one of the factors that is considered in awarding costs is the question of who was successful. The question of success is, as noted in Scipione v. Scipione, 2015 ONSC 5982, the very simple question of who got what they asked for?

[13] In this case, RBC and Mr. Bowden were entirely successful. They should be entitled to costs. Mr. Mylabathula’s position that he should be entitled to costs is meritless, and RBC and Mr. Bowden are entitled to costs of both motions as they were entirely successful on both motions.

b) Scale of the Costs

[14] Costs are usually awarded on a partial indemnity basis. Indeed, that is the standard rule for costs: S & A Strasser Ltd. v. Richmond Hill (Town of). The only circumstances, other than success greater than an offer to settle, in which a party will be entitled to substantial (and not partial) indemnity costs is if the other party engaged in reprehensible, scandalous or outrageous conduct.

[15] In this case, RBC argues that the conduct of the Plaintiff justifies substantial indemnity costs for three reasons:

a. Mr. Mylabathula made unsubstantiated claims of serious misconduct that lacked evidentiary support.
b. Mr. Mylabathula refused to acknowledge established facts.
c. Mr. Mylabathula alleged racism but failed to establish those allegations.

[16] In support of this position, RBC relies on Said v. University of Ottawa, 2014 ONSC 771 and Hawley v. Bapoo. Those cases stand for the proposition that “allegations of fraud, misconduct, dishonesty, or racial animus have been recognized as sufficient basis to award costs on the substantial indemnity scale…” (Hawley, para. 21).

[17] The problem with these cases is that this was a pleadings motion. It was not a disposition of the issues on the merits and, indeed, Mr. Mylabathula has been given leave to amend his pleadings. In those circumstances, I do not see how the very high test for costs on a substantial indemnity basis can be met. While the allegations that Mr. Mylabathula has made may be scurrilous, I did not have to adjudicate that question. I only had to determine the question of whether Mr. Mylabathula’s claims were legally tenable.

[18] As a result, I am of the view that costs should be awarded to RBC and Mr. Bowden on a partial indemnity basis.

c) The Quantum of Costs

[19] Determining the quantum of costs requires a consideration of the factors under Rule 57.01 of the Rules of Civil Procedure. In this case, the most relevant of those factors are:

a. The amount claimed and recovered in the proceeding.
b. The complexity of the proceeding.
c. The importance of the issues.
d. The reasonable expectation of the parties.

[20] The amount claimed in this case by Mr. Mylabathula was $1 million. It is a significant amount and supports a higher award of costs.

[21] On the complexity of the proceeding, the motions decision was lengthy and the issues that I had to address were complex. There were a number of different claims that Mr. Mylabathula was advancing. Those claims required a review of considerable case-law. As a result, the complexity of the proceeding is a factor that favours a higher award of costs.

[22] Then, there is the importance of the issues. In this case, the issues were a claim of, inter alia, racial discrimination. This is also a factor that supports a higher award of costs.

[23] Finally, there are the reasonable expectations of the parties. I am not persuaded that Mr. Mylabathula’s claim for $6,000 inclusive of HST and disbursements is an indication of what a reasonable party would expect to pay in this matter. Indeed, in the absence of a bill of costs from Mr. Mylabahtula, the amount he is claiming is singularly unpersuasive as an indication of what a reasonable party would expect to pay.

[24] Having reviewed the bill of costs provided by RBC, it appears that the total amount of time spent on this matter was approximately forty (40) hours. I have no doubt that time was spent, and it is an amount of time that should have been within the reasonable expectations of the parties, particularly given the importance and complexity of the issues.

Conclusion

[25] For the foregoing reasons, I am ordering costs in the sum of $16,500.00 inclusive of HST and disbursements. Those costs are to be paid by Mr. Mylabathula to RBC within thirty (30) days of today’s date.

Henry S. Lemay

Released: February 13, 2025