CITATION: MADISON HOMES CORNELL ROUGE LIMITED v. JIA LIN HUANG and PINGKAI WU, 2025 ONSC 2415
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Madison Homes Cornell Rouge Limited
Plaintiff
– and –
Jia Lin Huang and Pingkai Wu
Defendants
– and –
Edward Wong and Living Realty Inc. Brokerage
Third Parties (at the suit of the Defendant, Jia Lin Huang)
Shane Greaves, for the Plaintiff
Wen Wu, for Herself
Hans Engell, for the Third Parties
HEARD: November 18-20, 2024
COSTS ENDORSEMENT
Callaghan J.
1This is the cost endorsement following the trial in the above matter.
2The plaintiff was successful at trial in recovering $322,479.31. The defendant’s counterclaim was dismissed, as was her third party claim.
3Both the plaintiff and the third parties seek costs as against the unsuccessful defendant.
4The plaintiff and third party provided both their bills of costs and submissions as to their request for costs. Notwithstanding that the defendant was entitled to respond to the cost submissions, she has not done so, even though it is well past the time set out in the reasons for doing so.
Analysis
5The general rule on costs is that the successful parties should be entitled to partial indemnity costs from the unsuccessful party. In the case of the plaintiff, Rule 49(10) provides that the plaintiff may obtain the higher substantial indemnity scale if it has served an offer which is the same or better for the defendant than the trial award.
Plaintiff’s Cost Request
6The plaintiff seeks partial indemnity costs up to the date of a Rule 49 offer which it beat at trial and substantial indemnity costs thereafter. The plaintiff made an offer on September 12, 2024 in the amount of $225,000 which was less than the trial award of $322,479.31.
7Rule 49(10) provides that where a plaintiff does better at trial than its formal offer, then the plaintiff is entitled to the higher scale of costs from that day forward, provided the offer is not rescinded prior to trial. The rule is intended to encourage settlement and to reward those who make reasonable offers that are rejected but then go on to do better at trial. In this case, the plaintiff is entitled to substantial indemnity costs from September 13, 2024, onward.
8I have reviewed both the hourly rates and the time expended by the plaintiff’s counsel. The total fees attributable to the action, less the summary judgment motion, which is discussed below, was $42,627.50. Utilizing the partial indemnity rate of the actual fees prior to September 13, 2024 and the substantial indemnity rate of the actual fees after September 13, 2024, the total claim for costs is $31,500. The plaintiff also seeks disbursements of $1,640.
9Having reviewed the bill of costs, I find both the hours expended and the rates charged to be reasonable. The bill of costs excluded the time expended on the summary judgment motion referred to below.
10The plaintiff also seeks an award of $15,000 arising from Justice Belobaba’s decision in respect of a summary judgment motion. In dismissing the plaintiff’s motion and ordering this matter to proceed to trial, His Honour awarded costs to the defendant but expressly provided that some of the cost reflected work that could be used at trial. Accordingly, he ordered that $15,000 of costs were to be paid to the successful party at trial. Having been successful, the plaintiff is entitled to these costs.
11Having regard to the two scales applied and the costs reserved by Justice Belobaba, I find that the fee of $46,500 is reasonable having regard to the complexity of the issues, importance of the issues and the amount in dispute. This was a three day trial with several witnesses. The hours incurred were proportionate to the importance and magnitude of the claim. In my view, $46,500 plus disbursements is an amount within the range of what an unsuccessful party in a trial such as this should reasonably expect to pay: see Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA).
12Accordingly, I order that the costs and disbursements owing from the defendant to the plaintiff is $48,000.
Third Parties’ Cost Request
13The third parties were also successful. There are no offers that impact this assessment of costs. The third parties are entitled to their partial indemnity costs.
14The third parties state that they incurred fees of $42,484 and seeks partial indemnity fees of $29, 068. I have no issue with the rates charged or the hours spent. However, the conversion to partial indemnity fees is high. Partial indemnity hourly rates are generally in the range of 55-60% of the client rate, assuming the client rate is reasonable. This was the express finding of the Court of Appeal in Inter-Leasing Inc. v. Ontario, 2014 ONCA 683, at para. 5. Using the mid-point, this would reduce the claimed partial indemnity fees to $24,215. The third party also requests $2,207 in disbursements and taxes. There is one entry of $1,101 for “Photocopying/ faxing/ postage/ courier/ sundry expenses/ levy surcharge”, without any further description or back-up. In the absence of any back-up or even a more detailed description, I am not prepared to award that amount.
15I would adjust the amount to be proportionate to the plaintiff’s costs. The plaintiff carried the bulk of the work. Accordingly, I would set the third party fees, taxes and disbursements at $22,000. This is in the range of half of the partial indemnity fees of the plaintiff plus the allowable disbursement. This reflects the relative contribution to the proceedings as between the plaintiff and third party.
16Again, it is important to consider whether this a reasonable amount having regard to the factors set out in Boucher v. Public Accountants Council for the Province of Ontario. In my view such an award is reasonable. First, it reflects that the bulk of the work was done by the plaintiff, not the third party, and the differential in the cost awards reflects this. Second, the award also reflects the relative seriousness of the action to the third parties and defendant. Third, it is an amount of costs that the defendant should expect to pay having failed to make out its claim against the third parties.
Conclusion
17Finally, I have had regard to the totality of the costs to be paid by the defendant to both the plaintiff and third parties. The total amount of costs is $70,000. The defendant and her mother were seeking to purchase a very expensive home. The plaintiff was awarded $322,479.31 in the main action; and the defendant’s Counterclaim which sought total damages of $729,452.29 was dismissed. $70,000 is an amount that is proportionate to the amounts in issue in this case. The defendant was seeking to purchase an expensive home and owns an expensive home. There is no reason for me to conclude that the costs award is not within the defendant’s ability to pay.
18Having regard to the factors in Boucher v. Public Accountants Council for the Province of Ontario, the total costs are reasonable, proportionate to the amount in issue, and within an amount that a defendant ought to reasonably expect to pay having regard to the amounts in issue and the action as a whole.
Disposition
19The defendant shall pay $48,000 to the plaintiff in respect of its costs.
20The defendant shall pay $22,000 to the third parties in respect of their costs.
21The above awards are entitled to post-judgment interest in accordance with the Courts of Justice Act.
22The parties may submit a draft order for review and approval.
Callaghan J.
Released: April 22, 2025