Ontario Superior Court of Justice

Court File No.: CV-23-82314
Date: 2025-04-17

Between

Tara-Lee Daniel, Applicant
and
Michael Angelo Rizzo, Steve Dumanski, Michael Dibden, Karen Smith, Edward Hood, and Carol Hood, Respondents

Samuel Nash, counsel for the Applicant
Barry Yellin, counsel for the Respondent Michael Rizzo
Ken Rosenburg and K. Fan, counsel for the Respondents S. Dumanski, M. Dibden, K. Smith, E. Hood and C. Hood

Heard: In writing

Costs Decision

Justice L. Sheard

Overview

[1] The applicant, Tara-Lee Daniel (“Daniel”), brought an Application pursuant to ss. 2 and 3 of the Partition Act, R.S.O. 1990, c. P.4, for an order directing the listing and sale of two properties she owned with the respondent, Michaelangelo Rizzo (“Rizzo”). The Application was heard on January 23, 2025.

[2] The properties were:

1. A home located at 7429 Jonathan Drive, Niagara Falls, Ontario (“Jonathan Dr.”); and
2. A cottage in Trent Lakes, Ontario (the “Cottage”).

Collectively referred to as “the Properties”.

[3] On January 22, 2025, Rizzo agreed to the sale of Jonathan Dr. as per Daniel’s Offer to Settle. As a result, when the hearing began on January 23, 2025, the issues to be decided on the Application related to whether to order the sale of the Cottage and, if so, on what terms.

[4] When Daniel and Rizzo bought the Cottage, the agreement of purchase and sale required them to sign a Schedule (“Schedule C”), by which they acknowledged that there “may be a driveway through the northeast corner” of the Cottage, which provided access to three neighbouring properties. They also agreed that, “if in fact” there was such a driveway, provided that by November 17, 2024 the other affected property owners—the respondents on the Application other than Rizzo, defined herein as “the Neighbours”—paid the costs of a survey and the Planning Act process applicable to grant a permanent right-of-way, Daniel and Rizzo “for themselves and successors in title” would cooperate “expeditiously and bona fide at all times to grant a deeded and surveyed right-of-way” (the “ROW”) to one or all of the Neighbours.

[5] In March 2023, the Neighbours commenced an action in the Superior Court of Justice in Toronto, suing Daniel and Rizzo for specific performance of Schedule “C” and other relief (the “Toronto Action”). The Neighbours claimed that Rizzo and Daniel breached their obligations under Schedule “C” by refusing to execute the consent Planning Act Application documents, required to obtain and register the ROW.

[6] The Neighbours settled the Toronto Action as against Daniel, in return for which she agreed that the Neighbours could be added as intervenors on this Application. Also, Daniel agreed that she would ask that any court-ordered sale of the Cottage include a term that any prospective buyer be required to sign a Planning Act application and cooperate expeditiously, and, in good faith at all times, to take all other steps necessary to grant a deeded and surveyed permanent right-of-way for persons, animals, and vehicles over the areas included in the planning application. This term was set out at para. 1.e. of the sale order proposed by Daniel.

[7] On consent, and by Order of Carpenter-Gunn dated April 18, 2024, the Neighbours were granted intervenor status. The Neighbours were added as respondents to this Application for the limited purpose of allowing the Neighbours to make submissions that, should an order be made for the sale of the Cottage, it would include terms of sale similar to what is set out in para 1.e.

[8] Partway through the hearing of this Application, Rizzo withdrew his opposition to the sale of the Cottage and agreed to the sale terms proposed by Daniel save and except for those set out at para. 1.e. of Daniel’s proposed draft order. As a result, the only remaining issue to be decided on the Application was whether para. 1.e. would be included in the order for the sale of the Cottage.

Reasons for Decision

[9] On February 19, 2025, I granted Judgment in favour of Daniel (the “Reasons”) and ordered that para. 1.e.[^1] be included in the order directing the sale of the Cottage.

[10] In the Reasons:

(a) I noted that in his factum, Rizzo had acknowledged that Daniel had a prima facie right to the partition and sale of Jonathan Dr. and the Cottage, yet maintained his opposition to any order for the sale of the Cottage until partway through the hearing of the Application; and

(b) I found Rizzo’s grounds to oppose the sale of the Cottage to be “devoid of merit”: (paras. 20 to 30).

Positions of Parties on Costs

(a) Daniel’s Position

[11] Daniel seeks her costs from Rizzo on a full indemnity basis, in the amount of $59,290.02.

[12] Daniel submits full indemnity costs are “reserved for especially egregious conduct, including where a matter should never have been brought before the court because the outcome was inevitable”, which, she submits, is the case here.

[13] Daniel relies on Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766, at para. 8, which reads, in part, as follows:

…There is a significant and important distinction between full indemnity costs and substantial indemnity costs. An award of costs on an elevated scale is justified in only very narrow circumstances – where an offer to settle is engaged or where the losing party has engaged in behaviour worthy of sanction: Davies v. Clarington (Municipality), 2009 ONCA 722, para 28. Substantial indemnity costs is the elevated scale of costs normally resorted to when the court wishes to express its disapproval of the conduct of a party to the litigation. It follows that conduct worthy of sanction would have to be especially egregious to justify the highest scale of full indemnity costs.

[14] At para. 9 of the case, the court agrees that full indemnity costs were warranted because the appellant had moved “funds out of the country in an effort to place them out of reach of the respondents” and fabricated evidence. However, the Court reiterated “that it is only in rare and exceptional cases where such a costs award is justified.”

[15] Daniel argues that Rizzo rejected Daniel’s reasonable offers, forcing her to bring the Application and then, on January 22, 2025, less than one full day before the hearing, Rizzo conceded that Jonathan Dr. should be sold. By that date, most of Daniel’s legal fees had been incurred.

[16] Daniel submits that in his evidence and factum, Rizzo misstated certain facts, in an attempt to mislead the court, and raised new allegations, not previously raised nor supported by any evidence.

[17] Daniel supports her request for elevated costs, in part, on the basis that she delivered two offers to settle. While Rizzo ultimately accepted Daniel’s offer to settle the Jonathan Dr. portion of the Application, the offer provides that costs are reserved to be “spoken to”. Daniel also asks the court to consider that the (accepted) offer to settle the terms of the sale of Jonathan Dr. is on the same terms as sought by Daniel in the Application.

[18] Rizzo did not accept Daniel’s offer to settle the Cottage issue, whose terms were more favourable to Rizzo than the order ultimately made by this court.

[19] Finally, Daniel submits that her costs are fair and reasonable: a junior lawyer was assigned to do much of the work on the file, so as to minimize costs, and that a senior lawyer was assigned to handle the examinations and submissions at the hearing.

(b) The Neighbours’ Position

[20] The Neighbours seek their costs from Rizzo on a substantial indemnity basis, in the amount of $58,412.85.

[21] They support that request by submitting that they were “entirely successful” on the sole remaining issue in the application: “whether a sale should be ordered subject to” the [disputed] right of way.”

[22] The Neighbours identify Rizzo’s actions that entitled the Neighbours to elevated costs. For example, Rizzo delivered an expert report that was based on misinformation. When the expert was cross-examined by counsel for the Neighbours, the expert conceded that his opinion was based on incorrect information, which had been provided to him by Rizzo.

[23] The Neighbours acknowledge that intervenors are not always awarded costs, but that courts have done so “‘where the intervener had a direct interest that was affected by the outcome of the proceeding’ and is successful on the merits”: 2356802 Ontario Corp. v. 285 Spadina SPV Inc., 2022 ONSC 4755, para 18.

[24] The Neighbours further support their request for costs on the basis that Rizzo “insisted” on cross-examining three of the Neighbours: Mr. Dumanski, Ms. Hood, and Mr. Dibden, whose evidence ultimately played little role in the proceedings and less so in Rizzo’s written submissions on the Application.

[25] The Neighbours also submit that they offered not to intervene on this Application if Rizzo would agree to the relief that was ultimately granted on the Application.

[26] The Neighbours addressed the appropriateness of seeking to be added as intervenors when they had already commenced the Toronto Action. The Neighbours submit that their participation in this Application “facilitated an efficient and orderly resolution to this dispute” (which I interpret as reference to the dispute the Neighbours had with Rizzo concerning Schedule “C”). The Neighbours also ask the court to consider that by intervening they did not need to seek a Certificate of Pending Litigation (“CPL”), to which they believed they were entitled. Had a CPL been sought and granted, they say (and I accept) that would have had a negative impact on the ability to market and sell the Cottage, thereby interfering with Daniel’s rights in this Application.

(c) Rizzo’s Position

[27] Rizzo submits that the following general principles respecting costs apply:

(i) costs should be fixed in an amount that is fair and reasonable;

(ii) costs should be within the reasonable expectation of the unsuccessful party;

(iii) the unsuccessful party should not have to bear costs incurred when a “team approach to litigation” is used resulting in costs that are clearly excessive or show that the case was overly lawyered: Royal Group v. Core Precision, 2011 ONSC 5818, para 15; and

(iv) the principle of indemnity does not equate to an award of full or even substantial indemnity costs in most cases: Oppong v. Desaro Holdings Inc., 2020 ONSC 2872, para 12.

[28] Rizzo also submits that the costs claimed by Daniel and by the Neighbours are excessive, pointing to his own costs which, on a full indemnity basis, total $31,264.31, inclusive of HST and disbursements. He asserts that his lawyer did not use the “team approach” – there was one senior lawyer who spent 52.6 hours and one clerk who docketed 14.7 hours.

[29] Rizzo submits Daniel’s lawyers’ dockets show that a junior lawyer docketed 123.6 hours and the senior lawyer, 63.4 hours, as well as clerk time. Rizzo submits that by using this “team approach”, work was duplicated, involving two lawyers when one would suffice.

[30] Rizzo also submits that Daniel seeks recovery of costs incurred in respect of the intervenor motion, which was not permitted by Justice Carpenter-Gunn.

[31] Finally, Rizzo takes issue with the late delivery, filing and uploading to Case Center of Daniel’s Compendium.

[32] As to the Neighbours’ costs, Rizzo specifically submits that:

(a) the Intervenor Order does not address any right to seek costs and without that permission, no costs should be awarded;

(b) the Neighbours’ involvement would not have been required had they accepted Rizzo’s offer that if a court ordered the sale of the Cottage, the Order would include a provision that the purchaser be bound by Schedule “C” [to the APS accepted by Rizzo and Daniel] without prejudice to the rights of any prospective purchaser or of Rizzo in the Toronto action.

(c) The lawyers employed the “team approach”: senior counsel docketed 24 hours and junior lawyers, 55.5 hours which, given their respective hourly rates of $800 and $551.17, results in an excessive amount in fees;

(d) The Neighbours did not tender their Compendium and Bill of Costs within the required timelines; and

(e) Any costs award should take into account the costs that the Neighbours were ordered to pay to Rizzo in the Toronto Action and, also, Rizzo should be afforded the same time to pay any costs he is ordered to pay to the Neighbours, as they have taken to pay the costs they were ordered to pay him.

(d) Daniel’s Reply Submissions

[33] Without leave of this court, Daniel delivered a one-page reply submission. Daniel repeats her earlier submissions that her costs were driven up by the unreasonable position taken by Rizzo and that the late delivery of her Compendium was as a result of Rizzo’s last minute acceptance of her offer respecting Jonathan Dr. and did not affect the hearing.

[34] Daniel’s reply submissions were unnecessary: there was no need to repeat her prior submissions and the late delivery of her Compendium had been explained to the court at the hearing of the Application.

The Law

[35] The court’s jurisdiction to award costs is found under section 131 of the Courts of Justice Act, RSO 1990, c C.43 and is subject to the Rules of Civil Procedure, RRO 1990, Reg 194, and the jurisprudence.

[36] Rule 57.01 reads:

(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer;

(h.1) whether a party unreasonably objected to proceeding by telephone conference or video conference under rule 1.08; and

(i) any other matter relevant to the question of costs.

[37] The relevant portion of Rule 49 reads as follows:

49.10 (1) Where an offer to settle,

(a) is made by a plaintiff[^2] at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the defendant,

and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.

[38] In 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, para 10, Perell J. reformulated the purposes of the modern costs rules as follows:

(1) to indemnify successful litigants for the costs of litigation, although not necessarily completely;

(2) to facilitate access to justice, including access for impecunious litigants;

(3) to discourage frivolous claims and defences;

(4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and

(5) to encourage settlements.

[39] Overall, the objective is to fix an amount that is fair and reasonable, having regard for, among other things, the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario, paras 26 and 38.

[40] A costs award should reflect what the court views as a fair and reasonable contribution by the unsuccessful party to the successful party rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier, para 4; Fehr et al. v. Sun Life Assurance Company of Canada, 2021 ONSC 8368, para 83.

Analysis

[41] I first consider r. 57.01(1)(0.b).

Costs that an unsuccessful party could reasonably expect to pay:

(a) Daniel’s Costs

[42] Rizzo understood that Daniel was seeking only to extricate herself from the properties and her liability as a co-mortgagor. Notably, notwithstanding any rights she had as a co-owner, Daniel was not seeking to share in any profit that might be realized on the sale of Jonathan Dr. or the Cottage. That concession is particularly significant as concerns the Cottage: Rizzo himself conceded that Daniel had a 50% legal and beneficial ownership.

[43] Rizzo also understood that while Daniel was waiving any right to share in the sale proceeds of the Cottage, she was seeking her costs of the Application: at paragraph of his factum, Rizzo acknowledges that Daniel “wants her costs in the Application”.

[44] In his affidavit of 23 September 2023, Rizzo undertook to pay “all of Daniel’s reasonable legal fees” and to indemnify her for the Toronto proceeding: B-1-255. He confirmed his undertaking when he was cross-examined: A779-A780.

[45] On a plain reading, Rizzo’s undertaking says that he will pay Daniel’s reasonable legal fees by which, I understand him to agree to pay her full indemnity fees, provided they are reasonable.

[46] As concerns Daniel’s costs, I find that the only issue to be determined is the quantum of Daniel’s reasonable legal fees.

Daniel’s Offers to Settle:

[47] Daniel made several r. 49 Offers to Settle (“OTS”). In addition, before she commenced the Application, her counsel wrote to Rizzo’s counsel asking for Rizzo to consent to the sale of the properties: letter, April 28, 2023 S. Nash to B. Yellin, follow-up email Nash to Yellin, May 6, 2023, Yellin email to Nash May 8, 2023 advising that Rizzo was “considering his options”.

[48] Daniel issued this Application on July 20, 2023.

[49] On July 25, 2023, Daniel served an OTS by which she offered to sell both properties that contemplated the parties’ cooperation in the listing and sale, and which provided that costs would be “spoken to”.

[50] On September 30, 2024, Daniel served a second OTS limited to the Cottage. This OTS required that the term of any sale agreement would require the new buyers to sign a Planning Act application and to otherwise cooperate in granting of a deeded right of way. This term was essentially the same term as ordered by this court.

[51] On September 30, 2024, Daniel served a third OTS limited to Jonathan Dr.

[52] Rizzo fully accepted the third OTS on January 22, 2025, the day prior to the hearing.

[53] In light of Rizzo’s undertaking to pay Daniel’s costs, the costs consequences that flow from Rizzo’s late acceptance of one OTS and his non-acceptance of the OTS concerning the Cottage, are not relevant to the scale of costs—Rizzo has undertaken to pay all of Daniel’s costs—but to a determination of what amount of costs is reasonable.

(b) The Neighbours’ Costs

[54] Rizzo opposes any order that he pay the costs of Neighbours. Rizzo asserts that the Intervenor Order is silent on the Neighbours’ right to seek costs and, therefore, the Neighbours ought not to be entitled to seek costs. I note that there is no suggestion that Rizzo sought to prohibit the Neighbours from being able to seek costs, a term that he might have asked to be included in the Intervenor Order.

[55] The Neighbours submit that they are entitled to claim costs, relying on 2356802 Ontario Corp. v. 285 Spadina SPV Inc.. In addition to the importance to the Neighbours of the issues on this Application, Rizzo chose to cross-examine three of them and the Neighbours cross-examined Rizzo’s expert. The latter examination resulted in the admission by the expert that his opinion was based on erroneous information provided to him by Rizzo.

[56] Based on the record presented, I conclude that Rizzo could reasonably have expected to pay costs to the Neighbours, and that the only issue left to be determined is the quantum of those costs.

Complexity of the Proceeding:

[57] This Application should not have been complicated: the law is clear as to the entitlement of a co-owner under the Partition Act. What complicated this case were the meritless arguments advanced by Rizzo, including his proffering of an expert report that was based on incorrect assumptions.

[58] Adding to the complexity of the Application was Rizzo’s unjustified refusal to abide by the contract that he and Daniel entered into when they bought the Cottage. His refusal led the Neighbours to commence the Toronto Action and to seek to intervene on this Application.

The Importance of the Issues:

[59] The issues in the Application were important to all involved: Daniel sought to be free of the mortgages she had signed to facilitate the purchase of Jonathan Dr. and the Cottage, the former of which she never inhabited or used and the latter of which she had stopped using when the parties’ relationship came to an end.

[60] Rizzo lived in Jonathan Dr. and used the Cottage for his personal use and to generate short-term rental income. Without Daniel as a co-mortgagor, he could not replace the mortgages and likely, the properties would have had to be sold.

[61] For the Neighbours, without a recognized right of way, and in view of the position taken by Rizzo, they were at risk of losing historical road access to their properties.

A party’s denial or refusal to admit anything that should have been admitted:

[62] In his factum on this hearing, and without an evidentiary basis, Rizzo asserted that there were material facts in dispute that required a trial, including that:

i) he had debilitating medical conditions such that Daniel’s request for the sale of Jonathan Dr. amounted to “oppression” – a basis to deny the relief sought;

ii) it was not clear that Daniel had any interest in the equity of either property (in cross-examination Rizzo conceded that Daniel was a 50% legal and beneficial owner of the Cottage);

iii) there was a business agreement between Daniel and Rizzo respecting the Cottage, the withdrawal from which would cause Rizzo “significant detriment”. In cross-examination Rizzo admitted the Cottage was intended as a family property. Also, Rizzo led no evidence to support the alleged significant detriment to him were the Cottage to be sold;

iv) there were pending issues concerning the Cottage such as a title insurance claim which, in fact, had been denied months prior to the hearing; and

v) the existence of the Neighbours’ right of way claim would leave a prospective buyer with uncertainty. In fact, as part of the Agreement of Purchase and Sale Rizzo and Daniel signed when they bought the Cottage, this was acknowledged at Schedule “C”. Rizzo reneged on that agreement.

The Conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding:

[63] As noted above, Rizzo acknowledged Daniel’s “prima facie right” to partition or sale of the jointly-owned properties, absent a “sufficient reason for the court to exercise its discretion to refuse the order.”

[64] As set out in the Reasons, the grounds raised by Rizzo to support his position that a sufficient reason existed to refuse to grant an order for the sale of Jonathan Dr. and the Cottage were found “to be devoid of merit”: Reasons, at para 20.

[65] Rizzo pursued that position with respect to both properties until January 21, 2025, when he agreed to sell Jonathan Dr. and, as to the Cottage, until mid-way through the hearing of the Application.

[66] Rizzo’s last-minute decision to accept Daniel’s OTS respecting Jonathan Dr., added to her costs relative to the Application to sell the Cottage—she had to revise the materials she sought to use on the Application.

[67] While Rizzo’s decision mid-way through the hearing to abandon his opposition to the sale of the Cottage (except for one term) may have somewhat reduced the length of the hearing, by that point, most of the costs had already been incurred.

[68] Rizzo was represented by capable, senior counsel and it is reasonable to assume, which I do, that Rizzo was properly informed of the law, and was aware of the weaknesses in his evidence and the arguments he sought to advance.

[69] Based on the evidence and the law, Rizzo ought to have conceded Daniel’s entitlement to an order for the sale of both properties, subject only to a court determination of the terms of the sales. He did not, which unnecessarily lengthened the proceedings.

Quantum Claimed

(1) Daniel’s Costs

[70] Rizzo submits that Daniel’s costs are not reasonable: the lawyers used the “team approach” which resulted in duplication of time and excessive fees. Rizzo also submits that the costs claimed include fees for the Intervenor Order, on which, Carpenter-Gunn directed that no costs would be awarded.

[71] The Bill of Costs submitted by Daniel does show some overlap of work as between the senior lawyer and the junior lawyer. However, I note that those fees were discounted by $11,300. In my view, that reduction takes into account any overlap or duplication.

[72] Having considered all the r. 57 factors, I find the fees claimed by Daniel to be reasonable and that Rizzo should pay them.

Disposition of Daniel’s Costs

[73] I order that Rizzo pay Daniel’s costs on a full indemnity basis in the total amount of $59,290.02, comprised of fees of $50,206.78, HST on the fees of $6,526.78 and disbursements with HST of $2,557.24.

(2) The Neighbours’ Costs

[74] Daniel’s assertions concerning the “team approach” taken by the Neighbours has merit. Despite the limited scope of the Neighbours’ entitlement to make submissions, their fees exceed those incurred by Daniel. A review of the Docket supporting the Bill of Costs reveals a great deal of overlapping time. For example, it appears that both lawyers spent time preparing and attending the cross-examination of Rizzo’s expert and three of the Neighbours. The total time relating to these examinations is close to 22 hours and that fees, before HST, total almost $16,000. Counsel for the Neighbours discounted their actual fees (before HST) of $61,025 by $4,284.46. In my view, however, that reduction is insufficient to mitigate the fees that were charged using the “team approach”. Having said that, I note that while both counsel attended the hearing, fees were claimed only for senior counsel.

[75] Based on the facts of this case, I find that the Neighbours are entitled to claim payment from Rizzo of some fees: Specifically, those fees that were caused by Rizzo—for example, his wish to cross-examine the Neighbours, and the cross-examination of Rizzo’s expert (which was necessitated by Rizzo’s actions).

[76] Having considered and applied the applicable costs principles, I conclude that the amount of costs that is “fair and reasonable” for Rizzo to pay to the Neighbours to be $22,000.00.

[77] Rizzo asks that any award of costs take into account that the Neighbours have failed to pay Rizzo the $10,000 in costs Akazaki J. ordered them to pay Rizzo on January 13, 2025 in the Toronto Action. I am unwilling to grant that relief.

Disposition of the Neighbours’ Costs

[78] I Order that Rizzo pay the Neighbours’ costs fixed in the amount of $22,000.00, all inclusive.

Justice L. Sheard
Date: April 17, 2025

[^1]: With a slight amendment: after the words: Schedule “A”, the words “as amended from time to time” were to be inserted.

[^2]: R. 49.01 defines plaintiff to include an applicant.