r v. Saunders, 2017 ONSC 1091

CITATION: Ramsahai-Whing v. Weenen 2017 ONSC 1091 DIVISIONAL COURT FILE NO.: 484/16 DATE: 20170215 SUPERIOR COURT OF JUSTICE – ONTARIO DIVISIONAL COURT RE: Natasha Ramsahai-whing and Michael whing, Plaintiffs/Respondents AND: david Weenen and David Weenen Design Build Inc., Defendants/Moving Parties BEFORE: Kiteley J. COUNSEL: Mark Wiffen, for the Plaintiffs/Respondents David S. Steinberg, for the Defendants/Moving Parties HEARD at Toronto: February 9, 2017 ENDORSEMENT [1] This is a motion on behalf of the Defendants for leave to appeal the final order as to costs made by Faieta J. dated September23, 2016.

For the reasons that follow, the motion is dismissed. [2] This case concerns a dispute between adjoining property owners. In reasons for decision released April 12, 2016, Faieta J.[1]granted

summary judgment in two respects: he held that the defendants were liable to the plaintiffs in trespass and the plea of necessityfailed because the defendants had failed to establish an imminent peril. Faieta J. adjourned the remedy portion of the motion todetermine whether a mandatory injunction was the appropriate remedy to address the continuing trespass.

He also dismissed thecounterclaim. [3] At the hearing of the motion the parties agreed to jointly retain a professional engineer to provide an opinion regarding thefeasibility, safety and cost of removing the mass of concrete (including any embedded steel or wood) from the plaintiff’s property. FaietaJ. noted that the engineer would provide his or her views on the potential interference with the use and enjoyment of the plaintiffs’property, including any safety issues that might result, if the concrete was not removed.

He ordered the parties to give instructions to theengineer within three weeks and he reflected his expectation that the engineer would make best efforts to deliver his or her report tocounsel within nine weeks. He scheduled a case conference by telephone with counsel on June 30, 2016. He ordered that the partieswould share equally the cost of the engineer’s services subject to further order. [4] In an endorsement dated September 23, 2016 Faieta J. ordered the defendants to undertake the approach recommended by anengineer and ensure that all work was completed within four months of the date of the order.

On costs, his endorsement indicated asfollows: The Plaintiffs seek their costs on a substantial indemnity basis in the amount of $32,536.04. This amount is well within the reasonableexpectations of the Defendants given that their costs, on a partial indemnity basis, are about $29,000.00. Substantial indemnity costs“are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties”:SCC Young v. Young (1993) (SCC), 4 S.C.R. 3. Conduct of the defendant before and after the action was commencedis relevant.

My views regarding the Defendants’ outrageous conduct is described in my Reasons for Decision, particularly the repeatedtrespass over the Plaintiffs’ property in the face of their refusal to grant permission. In short, as was the case in Tucker v. Saunders 2015ONSC 1398, the Plaintiffs were put to considerable legal expense as a result of the Defendants’ misconduct. The Defendants submitthat they made repeated offers for mediation or “MED/ARB” as an alternative to this proceeding or during this proceeding.

However, Ido not accept that the Plaintiffs claim for costs should be reduced because it refused to accept the offer of mediation or “med/arb”. First, the context in which those offers were made reasonably demonstrates that the Plaintiffs’ belief that such other proceedings wouldnot have been fruitful is reasonable. Second, there is no obligation to settle actions or to undertake what a party reasonably believes willbe unsuccessful dispute resolution. Funds are not unlimited.

A party is entitled to proceed to trial for a resolution on the merits, ratherthan undertake a mediation which it reasonably believes has little chance of success unless otherwise required by the Rules of CivilProcedure or this court. A further point in support of an award of substantial indemnity costs is that the Defendants failed to disclose a report dated June 3, 2015(prepared by a professional engineer on behalf of Haddad Geotechnical Inc. for the Defendant) on or before the hearing of this motionfor an injunction.

The report states the concrete overpour may cause a problem in the future for the Plaintiffs’ property and recommendsthat westerly portion within the Plaintiffs’ property be removed. Had such evidence been disclosed it may have obviated the need for theexp. Services Inc. report and this further attendance. In my view, given the above and the success of the Plaintiff on this motion, I find that the cost of the exp. Services Inc. report shall besolely borne by the Defendants.

I accept the Defendant’s submission that the Ghidoni report prepared by an engineering technician was not of value and no costs should be awarded in respect of such report. Accordingly, having regard to the circumstances described above, I find that it is “fair and reasonable” to award costs in the amount of $28,000 to the Plaintiffs. [ 5 ] The plaintiffs had filed a costs outline in which their substantial indemnity costs were stated to be $32,536.04 consisting of $24,003.54 in fees and $8,532.50 in disbursements.

The motion judge awarded a total of $28,000 which counsel break down as $24,000 for fees and $4,000 for disbursements, after deducting the disbursement for the Ghidoni report, or 94% of the total in the costs outline. [ 6 ] The defendants were ordered to pay costs of the motions heard April 6, 2016 and the attendance on September 23, 2016 in the amount of $28,000; 100% of the exp. Services Inc. report or approximately $42,000; plus 100% of the remediation costs or approximately $81,000 plus HST. Analysis [ 7 ]

Section 133 of the Courts of Justice Act provides that leave to appeal is required where the appeal is only as to costs that are in the discretion of the court. [ 8 ] Counsel agree that leave to appeal from a final order for costs is granted in unusual circumstances and will be granted only in the most obvious cases and very sparingly. [2] For leave to be granted the moving party must show that the judge acted on a wrong principle, or misapprehended significant facts or made the determination in a non-judicial manner. [3] The overriding principle of reasonableness must govern the judicial exercise of fixing costs. [4] [ 9 ] Counsel agree that the motion judge identified the proper test in determining costs, namely “reprehensible, scandalous or outrageous conduct”.

Mr. Steinberg made four submissions: the motion judge failed to properly apply the principles of elevated costs; he effectively awarded full indemnity costs; the quantum ordered was out of proportion to the amount in issue; and the motion judge failed to account for the failure of the plaintiffs to meet the test for

summary judgment. [ 10 ] Counsel for the moving party takes the position the court will only award elevated costs if the conduct of the party is reprehensible and constitutes an abuse of process and increased costs is a form of chastisement. [5] [ 11 ] In his April endorsement the motion judge reviewed in considerable detail the conduct of the defendants. In that endorsement, he did not use the word “outrageous” to describe the conduct. In the September endorsement, the motion judge wrote that his views regarding the defendant’s outrageous conduct had been described in his first endorsement.

The motion judge did not have to describe the conduct as “outrageous” in the first endorsement because he was not dealing with costs. The fact that he described it as “outrageous” only in the second endorsement is of no moment. It is apparent from reading the first endorsement the conduct that he considered outrageous. In drawing that conclusion, he signaled his application of Young v.

Young and McBride Metal that referenced “reprehensible, scandalous or outrageous conduct” and that this was a case for more than partial indemnity costs. [ 12 ] Counsel for the moving party takes the position that unless the conduct of the party also constitutes an abuse of process that elevated costs cannot be ordered and therefor the motion judge made an error in principle by ordering 94% of full indemnity costs without a finding of abuse of process and on that basis leave to appeal ought to be granted. [ 13 ] I agree that courts have referenced abuse of process in some of the cases in which leave is granted to appeal from final orders as to costs.

But it does not follow that absent a finding of abuse of process, that elevated costs cannot be ordered. I am not persuaded that the motion judge erred in principle in his conclusion that elevated costs were fair and reasonable given the conduct of the defendants as well as the reasonable expectations of the parties reflected in the bill of costs of the defendants. [ 14 ] As indicated above, the motions judge made an order for costs in the amount of 94% of the claimed costs.

It is close to full indemnity but it is not full indemnity. [ 15 ] Counsel for the moving party stressed the need for proportionality particularly where the defendants were required to pay $28,000 and $42,000 while the total amount the defendant was also required to pay for remediation was $82,000. In other words, the costs including the expert’s report was within $12,000 of the amount of the “judgment”. I agree that proportionality is a factor in all decisions as to costs. But comparing $70,000 to $82,000 is not the appropriate comparator and is too simplistic in a case such as this.

The motion judge found that defendants had made repeated trespasses in an outrageous manner and should pay for the costs to remediate. The motion judge initially ordered each of the parties to pay 50% of the expert’s report and ultimately concluded that the plaintiffs ought not to pay any of that cost because it was necessary in order to decide on the remedy and then implement the remedy.

In the context of what was at stake, the motion judge did not fail to consider the principle of proportionality which is implicit in his conclusion that the costs he ordered were “fair and reasonable”. [ 16 ] The fourth submission is that the motions judge failed to appreciate that the plaintiffs had failed to meet the test for

summary judgment in that he was unable to decide the appropriate remedy at the initial hearing. I agree that the burden is on the plaintiffs to meet the burden, in this case for an injunction. The plaintiffs were successful on the findings of trespass and lack of necessity. Until the motion judge made those findings, it was not possible to fashion a remedy. The motion judge appropriately applied the approach in Hryniak v. Maudlin [6] and, having found no genuine issue requiring a trial as to trespass and necessity, he adjourned to hear further evidence as to remedy as indicated in paragraph 44.

That does not mean that the motion judge erred in awarding costs to the plaintiffs in connection with the determination of remedy. [ 17 ] This decision as to costs is one made in the hearing of a motion for an injunction. There is no aspect of it that makes it unusual. It is not an obvious case where leave should be granted. The moving party has failed to provide strong grounds on which the appellate court could find that the motion judge erred in the exercise of her/his discretion.

ORDER TO GO AS FOLLOWS: [ 18 ] The motion for leave to appeal is dismissed. [ 19 ] Defendants/moving parties shall pay costs of this motion to the plaintiffs/responding parties in the amount of $2,500. _______________________________ Kiteley J. Date: February 15, 2017