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Civil Litigation Dicta - Costs - Partial/Substantial/Full Indemnity. Investigation Counsel PC v. Dorrett
In Investigation Counsel PC v. Dorrett (Div Court, 2024) the Divisional Court cites a leading case on 'substantial indemnity' cost awards:[39] In my view, the high test for substantial indemnity costs, as set out in S & A Strasser v. Richmond Hill (Town) (1990), 1990 CanLII 6856 (ON CA), 1 O.R. (3d) 243 (C.A.), has not been met. . Mascia v. Tri-Star Disaster Recovery Inc.
In Mascia v. Tri-Star Disaster Recovery Inc. (Div Court, 2024) the Divisional Court largely dismissed an appeal against a quantum meruit home renovation case, with a high substantial indemnity costs award.
Here the court considered a substantial indemnity costs award where the plaintiff had alleged fraud:[62] It is not our role to re-weigh the factors balanced by the trial judge in the exercise of his wide discretion. He relied on clear authority supporting a costs penalty against a party who alleges fraud and fails to prove it at trial.
[63] Moreover, the threat sent by counsel to Anthony Mascia just days before the trial commenced was reprehensible. The fraud claim so aggressively asserted could not even survive the first week of trial. Yet it was maintained for seven years and brandished as a weapon right up to the end. It deserves sanction in costs if not more. . Shannon v. Hrabovsky
In Shannon v. Hrabovsky (Ont CA, 2024) the Court of Appeal considers the proportions when assessing 'substantial indemnity' versus 'partial indemnity':[6] However, we are not satisfied that the amount the respondent seeks in costs is justified, even on an enhanced basis. The respondent appears to have calculated the figure she seeks by using a substantial indemnity rate that is the same as or higher than her counsels’ actual billing rates. As this court noted in Akagi v. Synergy Group (2000) Inc., 2015 ONCA 771, 128 O.R. (3d) 64, at para. 57:[C]osts awarded on a substantial indemnity scale are to be determined on the basis of applying a factor of 1.5 to the amount of the partial indemnity costs as fixed (or that would otherwise have been fixed) in accordance with the Rules and Tariff A. See also r. 1.03 of the Rules of Civil Procedure, O. Reg. 575/07, s. 6(1). Since partial indemnity costs are ordinarily calculated using an hourly billing rate that is around 60 percent of counsel’s actual rate, and since the amounts awarded must generally be adjusted further to take into account the factors in r. 57.01(1) of the Rules, costs awards that are made on a substantial indemnity basis typically fall short of full indemnity recovery.
[7] In our view, it is appropriate in this case to estimate substantial indemnity costs as 80% of full indemnity costs: see Yan v. Hutchinson, 2024 ONCA 158, at para. 4. Therefore, we fix the respondent’s costs at $80,000 all inclusive, to be paid by the appellants.
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