Endorsement

Court File No.: CV-14-510796
Date: 2025-02-21
Ontario Superior Court of Justice

Between:
Luciano Butera, 1515404 Ontario Inc., operating as Niagara Mitsubishi, and Canterra Property Holdings Inc. (Plaintiffs)
– and –
Chown, Cairns LLP and Harry Korosis (Defendants)

Appearances:
Neil G. Wilson and Arlene Campbell, for the Plaintiffs
John D. Campbell, for the Defendants

Heard: In Writing

Judge: James Callaghan

Introduction

[1] This matter was scheduled for a 6 week trial. The parties settled the action on the eve of trial. However, they did not settle the issue of costs. Rather, the settlement provided that “The plaintiffs’ partial indemnity costs will be paid after assessment”.

[2] The plaintiff seeks the all-inclusive partial indemnity amount of $281,587. The bill of costs includes fees of $170,799 plus HST and disbursements of $78,655 plus HST.

[3] The parties are now disputing whether the assessment should be conducted by an assessment officer or by a member of this Court.

Background

[4] As this matter settled before trial, this Court has only a cursory knowledge of the facts. The action was a claim by the plaintiff against its solicitors in respect of advice given in the context of a commercial venture that became litigious. The underlying facts date back to 2002. The litigation in which the negligent advice was allegedly given was commenced in 2007 and was eventually dismissed in 2017 by the Court of Appeal, which dismissed the proceeding on a limitation period issue. This litigation then ensued. It too went to the Court of Appeal on an interlocutory dispute. Aside from addressing facts back to 2002, there is a long procedural history to this matter.

Positions of the Parties

[5] The defendant submits that it was the intention of the parties to have an assessment by an assessment officer and not have this Court fix the costs. Counsel points to Rule 57.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”) that provides that where the parties settle, and costs remain an issue, the assessment of any costs may be determined by an assessment officer. The defendant asserts that the assessment of these costs requires evidence both to appreciate the nature of the litigation, and to review the work of the nine lawyers who docketed on the file over many years.

In response, the plaintiff submits that the issue of costs is straightforward. It further asserts that the simplest, least expensive, and most expeditious process for fixing costs is for this Court to do so.

Analysis

[6] This is not a situation where this Court has made an award of costs and now must fix the amount: Rule 57.01(3). Rather, the parties specifically left costs to be assessed following the settlement of the proceeding. This falls squarely within Rule 57.04 which reads as follows:

57.04 Where a proceeding is settled on the basis that a party shall pay or recover costs and the amount of costs is not included in or determined by the settlement, the costs may be assessed under Rule 58 on the filing of a copy of the minutes of settlement in the office of the assessment officer.

[7] As is clear from Rule 57.04, the Rules Committee specifically contemplated this situation and assigned the task to the assessment officers who are imminently qualified.

[8] Nonetheless the plaintiff asks that I use my discretion to have a member of this Court fix the costs under Rule 57.03. In doing so, the plaintiff refers to Rule 57.01(7) and says the simplest, least expensive, and most expeditious process for setting costs would be if this Court does so. I disagree. When a court fixes costs, it has already reviewed the record, heard argument and is familiar with the matters in dispute. That is not this case. This Court, like an assessment officer, would have to start at square one.

[9] As the court noted in Boucher v. Public Accountants Council for the Province of Ontario, para. 38, assessing costs is not a formulaic exercise, but the relevant factors vary depending on the factual matrix of each case: Boucher at para. 38. I accept the defendant’s comments that a certain amount of evidence will likely be needed to determine what is a fair and reasonable award of partial indemnity costs in the circumstances. I accept that this may take several days, although the conduct of any assessment will be up to the assessor of those costs. To have this Court assign a judge for several days to address the assessment of this matter takes the judge away from the other tasks of this Court and undermines the division of labour contemplated in Rule 57.04.

Disposition

[10] Accordingly, I order that the costs of this matter are to be referred to an assessment officer to be assessed on a partial indemnity scale in favour of the plaintiff.

Policy Considerations

[11] In the often quoted statement from Sparling v. Southam Inc., 66 O.R. (2d) 225 (H.C.J.) (approved by the SCC in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, para. 11), the policy in favour of settlement was described this way:

... the courts consistently favour the settlement of lawsuits in general. To put it another way, there is an overriding public interest in favour of settlement. This policy promotes the interests of litigants generally by saving them the expense of trial of disputed issues, and it reduces the strain upon an already overburdened provincial court system. [p. 230]

[12] The settlement in this case has not fully embraced the policy in the above quote—the parties still seek to burden themselves with more costs and to increase the strain on our overburdened civil justice system. While I appreciate that the parties have settled a lengthy piece of litigation and that they are entitled to have an assessment officer assess those costs under Rule 57.04, it would have been better had they settled the entire dispute including costs. Before the parties embark on the assessment, I would ask the parties to reconsider if they can resolve the costs without the need for an assessment.

James Callaghan
Released: February 21, 2025