Fridays With Rogers Partners

At our weekly meeting, Chris MacDonald discussed a costs decision by the Superior Court in Gallo v 1884735 Ontario Inc., 2021 ONSC 4895.

Facts

The plaintiffs sought two million dollars in damages for demolition and construction costs of a partially constructed home that was left unprotected and damaged by weather.

The plaintiffs were successful at trial and awarded damages totalling over $500,000. The plaintiffs sought costs on a partial indemnity scale of approximately $100,000, inclusive of disbursements and HST.

The defendant agreed that the quantum of costs was generally reasonable and fair, but maintained that costs should be either sharply reduced or disallowed entirely due to one of the plaintiff’s failure to comply with his pre-trial discovery obligations and because he had claimed an amount which effectively quadrupled the amount he actually recovered.

Issue

The court considered whether it was appropriate in this case to reduce the quantum of costs sought by the plaintiff, despite the fact that he was the successful litigant.

Decision & Reasoning

Justice Sharma identified that, pursuant to s. 131(1) of the Courts of Justice Act, the court has broad discretion when determining the issue of costs. The overall objective of fixing costs is to determine an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount fixed by actual costs incurred by the successful litigants.

In its assessment of what costs award was reasonable in this case, the court noted that the plaintiff’s contractor could have been helpful to the court in determining the actual damages incurred. The contractor was involved in the demolition and reconstruction of the home, but refused to produce documents to support what the actual reconstruction costs were, notwithstanding having been served with a summons directing him to bring the relevant documents. The plaintiff also failed to produce relevant documents about quotes he had obtained from other companies regarding the reconstruction.

The court found that this lack of cooperation “made it impossible to assess whether [the contractor’s] reconstruction costs were reasonable”.  Instead, the damages award was primarily based on the defendant’s expert evidence about demolition and reconstruction costs.

The court stated that had the plaintiff and the contractor been cooperative and produced the relevant documents and information, settlement could have been achieved, or the four-day trial could have been shortened further.

On this basis, the court found that it was appropriate to reduce the quantum of costs sought by the plaintiff by $10,000, and ordered that the defendant pay approximately $90,000 in costs forthwith.