Court File and Parties

Court File No.: CV-22-00679926
Date: 2025-03-17
Ontario Superior Court of Justice

Between:
Samuel Stern, Plaintiff
– and –
Mehran Moeinifar, Defendant

Appearances:
A. Paul Gribilas, for the Plaintiff
Daniel Litsos and Howard Manis, for the Defendant

Heard: February 26, 2025

Judge: Julie Papageorgiou

Overview

[1] On February 27, 2025, I granted the plaintiff summary judgment in the amount of $1,445,673.52, which is the amount due and owing with interest as of March 31, 2023, with pre- and post-judgment interest at the contractual rate of 8%.

[2] The plaintiff seeks costs in the amount of $75,772.55 on a full indemnity basis or $62,817.10 on a substantial indemnity basis. The defendant provided no response to the plaintiff’s costs submissions.

Decision

[3] For the reasons that follow, I award the plaintiff its costs on a substantial indemnity basis in the amount of $62,817.10.

Analysis

[4] Pursuant to s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, costs are in the discretion of the court. Rule 57 of the Rules of Civil Procedure sets out the factors which courts should have regard to when awarding costs. The overall objective is “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”: Zesta Engineering Ltd. v. Cloutier (2002), at para. 4; Boucher v. Public Accountants Council for the Province of Ontario (2004), at para. 26; Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, at para. 52; and G.C. v. Ontario (Attorney General), 2014 ONSC 1191, at para. 5.

[5] Courts will generally respect a contractual entitlement to costs, except where there is good reason not to do so, such as inequitable conduct or special circumstances that would make the imposition of costs unfair in the circumstances or unduly onerous: The Trustees of the Labourers’ Pension Fund of Central and Eastern Canada et al. v. Sino Forest Corporation et al, 2019 ONSC 4632 at para 36 citing, inter alia, Bosse v. Mastercraft Group Inc.. The Court always retains the discretion under s. 131 of the Courts of Justice Act to award costs on a partial indemnity scale even when the parties have agreed to substantial indemnity costs: Crystal Lakes Development Inc. v. Donqab Co. Inc., 2023 ONSC 2009 at para 8.

[6] The following justify an award on a substantial indemnity basis:

• The governing set of Standard Charge Terms of the mortgage and guarantee provide, at paragraph 8 thereof, as follows:
  “..., and that such payments, together with all costs, charges, legal fees (as between solicitor and client) and expenses which may be incurred in taking, recovering and keeping possession of the land..., and generally in any other proceeding taken in connection with or to realize upon the security given in the Charge...” [emphasis added]. As such, in accordance with the applicable Standard Charge Terms No. 200033, costs are to be payable on a substantial indemnity scale (the modern version of a solicitor and client scale).

• The plaintiff seeks full indemnity costs on the basis that the defendant’s conduct throughout was intentional and designed to delay the adjudication of this matter. Its efforts resulted in a delay of three years from the commencement of the matter until the arguing of the summary judgment motion even though the defendant had no defence and attorned to the jurisdiction.

  • This action was commenced on April 10, 2022. The defendant filed for bankruptcy the day this action was commenced so that the plaintiff had to bring a motion to lift the stay.
  • The plaintiff served a motion for summary judgment on January 20, 2023, and scheduled it to be heard on March 31, 2022.
  • The plaintiff brought a motion to lift the automatic stay by virtue of the filing for bankruptcy as well as leave for it to obtain judgment in the action and to domesticate and certify the judgment in Florida so as to enforce a foreclosure order against Property as defined in my February 27, 2025 endorsement. The defendant specifically obtained this date so that it could be heard prior to the summary judgment motion.
  • On the day of the hearing the defendant sought and obtained an adjournment to April 19, 2023, which was opposed but which was granted. This scuttled the summary judgment date.
  • After the bankruptcy decision arrived granting the plaintiff’s motion to lift the stay, a further six months had passed.
  • Following the bankruptcy decision the plaintiff obtained the first available date for the motion which was February 26, 2025.
  • The defendant raised factual, limitation and jurisdiction arguments in his responding materials and was cross-examined but then in his factum delivered days before the hearing, he indicated he would only be proceeding on the limitation and jurisdiction issues.
  • Then at the outset of the argument the defendant’s lawyer withdrew that limitation defence and argued only the jurisdiction issue resulting in waste and expense.

[7] I agree that the defendant’s conduct was intentional and designed to waste time and delay the inevitable outcome.

[8] Nevertheless, the plaintiff has not provided any caselaw regarding entitlement to full indemnity costs and the contract entitles it to substantial indemnity costs only.

[9] I have reviewed the rates and time spent which is reasonable and within the reasonable contemplation of the defendant. The defendant’s conduct resulted in wasted time and expense as noted. The amount claimed in this case by the plaintiff was significant and the costs are not disproportionate to the amount claimed. The matter was important to the plaintiff who seeks to enforce this judgment against property owned by the defendant in Florida which is also collateral. As I have indicated, the defendant’s conduct tended to lengthen the duration of this matter. It raised arguments, costs were expended to address them, and then it abandoned them altogether.

Order

[10] I award the plaintiff its full substantial indemnity costs in the amount of $62,817.10.

Julie Papageorgiou

Released: March 17, 2025