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Small Claims Court - Costs. Narayan et al. v. Dhillon
In Narayan et al. v. Dhillon (Div Ct, 2021) the Divisional Court set out basic principles of costs in Small Claims appeals:[5] Costs under Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, are guided by the principles of fairness and reasonableness: Boucher v. Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.); Moon v. Sher (2004), 2004 CanLII 39005 (ON CA), 246 D.L.R. (4th) 440 (Ont. C.A.). Proportionality is also important following Rule 1.04(1.1):Proportionality
(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding. [6] In my view, the following observation from Justice Rathushny in another Small Claims appeal matter is pertinent:
[7]… the principal factor influencing the quantum of costs is that this action arose in Small Claims Court and involved a damages award of $7,000. That, of course, is the factor of “the amount claimed and the amount recovered in the proceeding” referred to in Rule 57.01(1)(a).
[8] While it was the appellant’s right to appeal and it succeeded on grounds of errors of law on its appeal, in my view it is disproportionate to the original amounts in issue (Rule 57.01(1)(a)) and the degree of complexity in the proceeding (Rule 57.01(1)(c)) to claim, as the appellant has, a costs amount over three times greater than the $7,000 originally awarded.
Transport Training Centres of Canada v. Wilson, 2010 ONSC 2714, 263 O.A.C. 226 (Ont. Div. Ct.)
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[13] Under Rule 57.01, costs generally follow the event. This is the reasonable expectation. Only in rare and exceptional cases should the successful party be deprived of their costs: Georgian Bluffs (Township) v. Moyer, 2012 ONCA 700 (Ont. C.A.) at para. 21. Cause is required. In 1318706 Ontario Ltd. v. Niagara (Regional Municipality), 2005 CanLII 16071 (ON CA), [2005] O.J. No. 1907, 75 O.R. (3d) 405 (Ont.C.A.) the Court of Appeal adopting from Larter v. Universal Sales Ltd. (1991), 1991 CanLII 4077 (NB CA), 50 C.P.C. (2d) 66 (N.B. C.A.), at 67-68 said at para. 50 that cause includes, (1) misconduct of the parties, (2) miscarriage in the procedure, or (3) oppressive and vexatious conduct of proceedings. . Sloane Capital Corp. v. Beacon Holdings Ltd.
In Sloane Capital Corp. v. Beacon Holdings Ltd. (Div Court, 2023) the Divisional Court considered the cost rules that apply in the Small Claims Court where a corporate director represents a corporation (and, it concludes, is thus 'self-represented'):[50] The Deputy Judge awarded the Respondent costs in the sum of $5,250.00 plus disbursements of $422.00. The Respondent was self-represented. Given that the decision was a nullity, that costs award is set aside.
[51] However, I should address the issue of the appropriate quantum of costs for the hearing below. Mr. Freedman was representing his company and was not a lawyer. As a result, it appears that Rule 19.05 of the Rules of the Small Claims Court (“the Rules”) O. Reg. 258/98 apply. That rule states:19.05 The court may order an unsuccessful party to pay to a successful party who is self-represented an amount not exceeding $500 as compensation for inconvenience and expense. [52] Given that Mr. Freedman was self-represented, the Deputy Judge erred in law by awarding costs of $5,000.00 to Mr. Freedman. Costs should have been limited to no more than $500.00 for inconvenience. Mr. Freedman was, in my view, a self-represented litigant. . Sloane Capital Corp. v. Beacon Holdings Ltd.
In Sloane Capital Corp. v. Beacon Holdings Ltd. (Div Court, 2023) the Divisional Court considers R19.06 of the Small Claims Court Rules and cites law that the 'unreasonable' conduct standard (the court refers to it as a 'penalty') refers to conduct within the trial proceeding, not the underlying facts of the case:[53] Counsel for the Respondent argues that the award of costs was designed to sanction Beacon for its poor conduct under Rule 19.06 of the Rules. I reject this assertion. As noted in Stewart v. Toronto Standard Condominium Corp No. 1591, 2014 ONSC 795 (Div. Ct.) at para. 7:[7] In my view, rule 19.06, when it refers to “otherwise acting unreasonably”, must be interpreted as referring to the conduct of a party within the proceeding. The rule is not intended to give the Small Claims Court a broad and unfettered discretion to make awards of compensation regarding the conduct of a party that is unrelated to the matter over which the Small Claims Court has jurisdiction. This interpretation is also consistent with the wording of s. 29 of the Courts of Justice Act, to which all of the Small Claims Court rules are subject, that makes it clear that the conduct to be considered when assessing a penalty is conduct in the proceeding.
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