Ontario Superior Court of Justice
Court File No.: CV-22-86
Date: 2025-02-13
BETWEEN:
Pawan Gupta, Plaintiff/Responding Party
– and –
Eric Manirambona and Ural Link Ltd., Defendants/Moving Party
Appearances:
Martin Z. Black, for the Plaintiff/Responding Party
Nikolay Tenev, for the Defendant/Moving Party, Eric Manirambona
Heard: In writing
Reasons for Decision on Costs
Brian Holowka
Overview
1On January 3, 2025, I dismissed a motion to set aside the default judgment for foreclosure and the noting in default of the Defendant/Moving Party, Eric Manirambona. I was advised by the parties that Ural Link Ltd. played no part in the motion. My Reasons for Decision on Costs do not apply to Ural Link Ltd.
2At the conclusion of my Reasons for Decision, regarding the issue of costs, I stated:
The parties are encouraged to agree upon appropriate costs. If the parties cannot agree on costs, they may make brief written submissions. The submissions shall be a maximum length of three double-spaced pages plus a bill of costs. The Plaintiff may have 14 days from the release of this decision to provide his submissions. The Defendant shall have a further 14 days to respond. The Plaintiff, if necessary, may have a further 7 days for a brief reply. If I have not received any response or reply submissions within the specified timeframes after the Plaintiff's initial submissions, I will consider that the parties do not wish to make any further submissions and will decide based on the material that I have received.
3The Plaintiff/Responding Party’s Cost Submissions were served and filed on January 17, 2025. The Defendant/Moving Party had until January 31, 2025, to serve and file their Cost Submissions. No Cost Submissions have been received from the Defendant/Moving Party. In the circumstances, I conclude that it is appropriate to determine costs at this time.
4The Plaintiff/Responding Party now seeks costs on a substantial indemnity basis.
5The issues before me are as follows:
a. Are substantial indemnity costs appropriate in the circumstances?
b. What is the appropriate quantum of costs?
6For the following reasons, I have concluded that costs should be payable forthwith on a substantial indemnity basis by the Defendant/Moving Party to the Plaintiff/Responding Party. I fix costs payable to the Plaintiff/Responding Party in the amount of $28,000.00, including fees, disbursements, and HST, payable forthwith.
Position of the Parties
Position of the Plaintiff/Responding Party
7The Plaintiff/Responding Party submits that the following factors militate in favour of an elevated costs award:
a. The Plaintiff/Responding Party was entirely successful.
b. The Defendant/Moving Party did not accept the offer to settle made by the Plaintiff/Moving Party following the completion of cross-examinations. The offer to settle sought the dismissal of the motion and payment of $5,000 in costs by the Defendant/Moving Party.
c. The Defendant/Moving Party engaged in reprehensible, scandalous or outrageous conduct by:
i. Intentionally delaying the legal process, thereby suspending the Plaintiff/Responding Party’s rights and entitlement for more than 18 months after the judgment was signed; and
ii. Providing false and self-serving allegations. The Plaintiff/Responding Party points to numerous paragraphs in my Reasons for Decision where the evidence of the Defendant/Moving Party was rejected.
8Regarding quantum, the Plaintiff/Responding Party seeks $28,000.00, all-inclusive. This is based on both the principle of indemnity and the fact that these were costs that the unsuccessful party could reasonably expect to pay. The Plaintiff/Responding Party points to the Defendant/Moving Party’s Costs Outline for support for this position.
Position of the Defendant/Moving Party
9The Defendant/Moving Party has provided no Cost Submissions.
Analysis
Elevated Costs Are Appropriate
10Elevated costs may be warranted where the unsuccessful party has engaged in behaviour worthy of sanction.
11Where a party has engaged in reprehensible, scandalous, or outrageous conduct, a court may sanction this conduct through an award of elevated costs: Davies v. Clarington (Municipality), 2009 ONCA 722, at para. 28; Young v. Young, [1993] 4 S.C.R. 3, at p. 134. Substantial indemnity costs are to be awarded “in rare and exceptional cases to mark the court’s disapproval of the conduct of the party in the litigation”: Hunt v. TD Securities Inc. (2003), 66 O.R. (3d) 481 (C.A.), at para. 123.
12In my view, the conduct of the Defendant/Moving Party is worthy of judicial rebuke and ought to trigger an elevated costs award.
13The Defendant/Moving Party intentionally and inappropriately delayed the legal process—depriving the Plaintiff/Responding Party of the rights and entitlements that flowed from the judgment signed more than 18 months ago.
14Moreover, I rejected numerous factual assertions by the Defendant/Moving Party regarding his belief/state of mind regarding his obligations. These are outlined in the Plaintiff/Responding Party’s Cost Submissions in paragraph 3.
15The Defendant/Moving Party rejected a very reasonable offer to settle when there was little realistic chance of success, thereby necessitating the litigation of the motion, which was itself delayed.
16I conclude that costs should be awarded on a substantial indemnity basis.
Quantum of Costs
17The costs fixed by the court “should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant”: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.) (“Boucher”), at para. 24.
18The Plaintiff/Responding Party was entirely successful on the motion and is presumptively entitled to his costs.
19The motion was critically important to the Plaintiff/Responding Party. He was owed over $400,000, including considerable amounts spent on improving the property. It was important for the Plaintiff/Responding Party to defend his investment of time, effort and money.
20I find that the rates claimed for counsel for the Plaintiff/Responding Party are reasonable, considering his years of experience. I similarly find the disbursements claimed by the Plaintiff/Responding Party were properly incurred.
Conclusion
21For these reasons, the Plaintiff/Responding Party is entitled to costs on a substantial indemnity basis. In all the circumstances and having regard to the principles enunciated in Boucher and the factors listed in r. 57.01 of the Rules of Civil Procedure, I find that the fees and disbursements claimed by the Plaintiff/Responding Party on the present motion are fair and reasonable. Costs are to be paid by the Defendant/Moving Party, Eric Manirambona, in the total amount of $28,000.00, inclusive of disbursements and taxes, forthwith.
Brian Holowka
Released: February 13, 2025