Smith v. Strickland, 2022 NSSC 362

SUPREME COURT OF Nova Scotia Citation: Smith v. Strickland , 2022 NSSC 362 Date: 20220815 Docket: SYD No. 464829 Registry: Sydney Between: Lawton Smith and Livingston Smith Plaintiffs v.

Robena Strickland and James Strickland Defendants Cost Decision Judge: The Honourable Justice Patrick Murray Written Submissions: March 10, 2022 and March 15, 2022 W ritten Decision: August 15, 2022 Counsel: Sean MacDonald for the Plaintiffs Alan Stanwick for the Defendants By the Court: Introduction [ 1 ] This is a cost decision in respect of a trial held to determine entitlement by way of unjust enrichment and ownership of real property, pertaining to the business known as Robena’s Bakery and Restaurant. [ 2 ] In that decision the Court held that the Plaintiffs would receive compensation for their contribution to the business over the years, and further held that the Defendants were entitled to ownership of 43 Holic Avenue, North Sydney, by way of resulting trust.

The Position of the Plaintiffs [ 3 ] Based on the trial decision, the Plaintiffs say there was no clear winner or loser as both parties were to some extent, granted the remedies they sought. [ 4 ] Accordingly, costs should not be awarded to one or the other and each party should bear their own costs. The Plaintiff submits the case of Unisys v. Pineau-Panda , 2021 NSSC 348 , is instructive in this regard. The Position of the Defendants

[ 5 ] On the issue of the Plaintiffs claim of 50% of the sale proceeds of the business, which was located at 266 Commercial Street, North Sydney, the Plaintiffs were awarded the sum of $40,000, which was substantially less than the amount sought by them.

The Defendants acknowledge that the Plaintiffs were successful in defending the counterclaim and say that costs on this issue should be borne equally. [ 6 ] On the second issue in relation to the ownership of 43 Holic Avenue, the Defendants submit that Robena Strickland was entirely successful and should be awarded costs in accordance with Tariff A. [ 7 ] The Defendants submit they are entitled to costs on this issue and “the amount involved” should be determined by valuing the real property itself. This they submit was the approach taken by Justice Keith in the recent decision of Layton v.

Layton , 2022 NSSC 60 . Rule 77 – Costs [ 8 ] The Primary consideration of the Court in determining costs is to arrive at an amount that will do justice between the parties. In addition, there are other guiding principles which include:

i) costs follow the result, meaning the successful party is normally entitled to costs; ii) costs are in the general discretion of the trial judge (Rule 77.02); iii) costs shall be in accordance with the Tariff of Costs and Fees included in Rule 77; iv) costs shall constitute a substantial but incomplete indemnity of the successful parties legal costs;

v) tariff costs maybe increased or decreased based on certain factors, examples of which are contained in rule 77.07; vi) when reasonable approaches to the tariff fail to achieve an appropriate cost award, a lump sum maybe imposed (Rule 77.08); and vii) the Court should not impose both the tariff cost and a lump sum (Rule 77.08). Analysis [ 9 ] It was the Plaintiff Livingston Smith who helped finance the business; he was willing to hold title, sign and renew mortgages, and sign a deed of conveyance for the sale of the property.

From a legal point of view, without his involvement none of the operations of the business owned by Robena and James Strickland would have been possible. The evidence indicated his involvement was necessary given the financial status of his in-laws, the Defendants. [ 10 ] Mr. Smith was compensated to some degree for his contribution in the trial decision, but in my view, this is still a consideration in deciding whether to award costs against him and the Plaintiff, Lawton Smith, whom I found also contributed to the restaurant business in a significant way.

She too received compensation over the years in various forms from her parents, Robena and James Strickland. [ 11 ] In its submission on costs, Ms.

Strickland’s counsel stated Rule 77.06 mandates that costs be assessed on a party and party basis in accordance with Tariff “A”. [ 12 ] The Defendant relies on the case of Layton in support of its position that there are not factors present to justify a “shift” or departure from Tariff A costs. [ 13 ] With respect to the case at hand, the Defendant argues the issue in Layton was similar, in that it involved a determination of ownership of real property. [ 14 ] Although the remedy awarded to the Defendants was not reduced to a dollar value, the Defendant submits there is a method where a monetary value can be assigned to 43 Holic Avenue, for the purpose of determining an “amount involved” for Tariff”A”. [ 15 ] Mr.

Stanwick provided an amount for the value of the real property by estimating the amount of the mortgage at various times (ie, $150,000 in 2007, based on a mortgage of $130,000). The Defendants further estimated that the property would in all probability, increase from 2007 to 2022 such that “the market value of the property would be $250,000 today”.

[ 16 ] Further estimates were given for the balance owing on the mortgage from time to time. No payout statement or account balance is in evidence for the mortgage, which the Defendant submitted would now be approximately $85,000, stating in her brief: Based on the foregoing, the amount involved would be $165,000 ($250,000 – 85,000). Applying Tariff “A” Scale 2 (Basic) the costs would be $16,750. There were 4 days of trial. It is submitted it would be reasonable to attribute 2 days of trial to the issue of 43 Holic Avenue.

Tariff “A” states that $2000 should be added to the amount calculated under the tariff for each day of trial. The Defendants seek an additional $4000. [ 17 ] Thus, Ms. Strickland seeks costs of $20,750, said amount to be deducted from the monies owed to the Plaintiffs. [ 18 ] In the Plaintiffs costs submission, they state costs should not be assessed by a “stringent calculation of the respective victories gained by each party” on each issue. [ 19 ] Lawton and Livingston Smith argue respectfully, there was no clear “winner or loser” in this proceeding.

Both parties had successes, a “clear 50-50 split” need not be achieved when assessing costs in a case where the results were mixed, as was the case here. The Plaintiffs say each party should bear their own costs. [ 20 ] The Plaintiffs submitted a calculation in the event the Court decided to award costs to the Defendants. The Plaintiffs suggest a set off approach: If, however, your Lordship chooses to grant the Defendants’ request for costs, it is submitted that a set-off approach should be applied in the assessment of any costs payable.

For example, if we accept the “amount involved” under Tariff “A” being $40,000 for the Plaintiff’s successful unjust enrichment claim, and $10,000 for the Plaintiff’s successful defence of the Counterclaim, then a total amount of $7,688 (plus $2000 for each day of trial) should be set off against any costs award to the Defendants. [ 21 ] Adding $2,000 for 4 days of trial would bring the Plaintiffs’ claim for costs to $15,688, leaving a difference of $5,062.00 if set off were to be applied ($20,750 – 15,688). The Court recognizes that the Defendants’ claim is based on adding only two (2) days of trial ($4000.).

If four days were added ($8000.) the difference would be $9,062. Decision [ 22 ] There is merit in the Plaintiff’s submission that there was mixed success. The Defendants acknowledge this to a point, in stating that each party should bear their own costs on the unjust enrichment claim for half the proceeds, and their claim for return of the tax credit. [ 23 ] At the same time, I am not satisfied the issues at trial should be separated when it comes to assessing costs.

Rather, I think costs should be determined based upon the issues in the case as a whole. [ 24 ] The Defendants were successful in their claim to 43 Holic Avenue, but not successful on the Counterclaim, and not wholly successful in defending the Plaintiffs’ claim for unjust enrichment. [ 25 ] The Plaintiffs were successful, in part, on the unjust enrichment claim, and successful in the Counterclaim, but not in retaining title to 43 Holic Avenue. [ 26 ] If the Court adds up the numbers and had to pick, it might be said the Defendants were more successful. [ 27 ] Having reviewed my reasons for decision at trial however, it is not simply a matter of calculating the values, and especially

estimated values, in the case of the real property. [ 28 ] It should be clear from reading the trial decision, that the Plaintiffs took a significant monetary risk in order for the restaurant to continue in business. The current value of the building is derived, at least in part, from that risk for which liability continues to this day, as the mortgage remains outstanding. [ 29 ] It is also clear that Robena Strickland, as Defendant, was the “mainstay” behind the business.

It was a family business, a successful business, which had unfortunate consequences when it was sold, resulting in this litigation. [ 30 ] For these same reasons, the remedy the Court imposed was flexible in nature, so as to arrive at what it deemed was a just result. [ 31 ] Ms. Robena Strickland received both the house at 43 Holic Avenue and rightly retained most of the proceeds of the sale of the business. [ 32 ] In my respectful view, it would be unjust for costs to be awarded to her against the Plaintiffs. In all of the circumstances, I conclude it would be just for each party to bear their own costs.

Murray, J.