



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



De Cotiis v. Hothi,









2021 BCCA 60




Date: 20210202

Docket: CA47112

Between:

Vito De Cotiis

Respondent

(Plaintiff)

And

Gurdaver Singh
Hothi and Paramjit Singh Hothi

Appellants

(Defendants)

And

Paramjit Singh Hothi
and Ghassan Batal also known as Gus Batal,
and Angell, Hasman & Associates Realty Ltd.

Respondents

(Third
Parties)

And

Paramjit Singh
Hothi and Gurdaver Singh Hothi and Davinder Hothi

Respondents

(Fourth
Parties)




Before:



The Honourable Madam Justice DeWitt-Van Oosten

(In Chambers)




On appeal from: An
order of the Supreme Court of British Columbia, dated
October 20, 2020 (
De Cotiis v. Hothi
, 2020 BCSC 1545,
Vancouver Docket S145068).

Oral Reasons for Judgment




Counsel for the Appellants (via teleconference):



D.J. Barker





Counsel for the Respondent, Vito De Cotiis (via teleconference):



S.A. Griffin

L.E. Burgess

K. Marsh





Place and Date of Hearing:



Vancouver, British
  Columbia

January 26, 2021





Place and Date of Judgment:



Vancouver, British Columbia

February 2, 2021








Summary:

The appellants applied for
leave to appeal a special costs order made following a 50‑day trial in
the British Columbia Supreme Court. Held: Application for leave to appeal dismissed.
The appellants have not established it is in the interests of justice that
leave be granted.

[1]

DEWITT-VAN OOSTEN J.A.
: The appellants, Gurdaver Singh
Hothi and Paramjit Singh Hothi, seek leave to appeal from an October 20,
2020 order for special costs, indexed as
De Cotiis v. Hothi
,
2020 BCSC 1545 (RFJ).

[2]

The order followed a 50‑day trial held before Justice Burke of the
British Columbia Supreme Court:
De Cotiis v. Hothi
, 2018
BCSC 2271. The trial arose out of a failed purchase and sale agreement
from 2014 involving a property on Marine Drive in West Vancouver. The
appellants were the vendors. At trial, the respondent purchaser, Vito De Cotiis,
obtained an order for specific performance of the sale. The appellants
appealed; however, this Court dismissed the appeals in December 2019:
De Cotiis
v. Hothi
, 2019 BCCA 472.

The
appellants subsequently sought leave to appeal to the Supreme Court of Canada
(SCC). The SCC denied leave in July 2020:
De Cotiis v. Hothi
,
[2020] S.C.C.A. No. 60.

[3]

At the trial, the judge granted the parties leave to speak to
costs. Oral submissions were heard after the SCC denied leave. Justice Burke
awarded the respondent special costs. She found that the appellants engaged in
reprehensible conduct during the litigation. They fabricated a defence based
on facts they knew to be untrue (RFJ at para. 19). In addition, they:

[19]      ...

a.   concealed and suppressed
critical documents;

b.   disobeyed court orders for
document production;

c.   swore false evidence in
affidavits filed in the litigation; and

d.   deliberately provided false
evidence throughout the course of trial.

[20]      The [appellants] .
fundamentally misled the court and abused court processes in doing so. ...

[4]

The judge ordered that the appellants pay the respondent his special
costs of [the] proceeding on a fully indemnity basis (RFJ at para. 55).
The respondent requested that the judge assess the costs. She declined and,
instead, directed that a registrar conduct the assessment.

Positions of the Parties

[5]

The appellants allege that the trial judge made several errors in
ordering special costs. Specifically, they contend that:

a)

the bases provided for special costs were either not supported by the
findings made at trial or inconsistent with them;

b)

the judge wrongly considered the conduct of a non‑party witness;

c)

the appellants litigation conduct did not meet the threshold for
reprehensibility; and

d)

the judge erred
by ordering special costs payable on a full indemnity basis.

[6]

Specific to the last of the alleged errors, the appellants say the
Supreme
Court Civil Rules
[
SCCR
] do not allow for the type of order made
here. Giving effect to a full indemnity order will likely result in costs that
exceed the purchase price$1,250,000of the property underlying the dispute. As
at September 2020, the respondent estimated his legal expenses at $1.4 million.
The appellants say this will result in an injustice and the appeal is necessary
to avoid that from occurring.

[7]

The underlying litigation has been resolved and the appellants have
exhausted all appeals on the merits. In those circumstances, the parties agree
that the special costs order is a limited appeal order within the meaning of
Rule 2.1(f) of the
Court of Appeal Rules.

[8]

Accordingly, before granting leave to appeal, I must ask myself:

(1)        whether the proposed appeal raises questions of
principle that extend beyond the parameters of the particular case;

(2)        whether the questions of principle are of
significance to the practice; and

(3)        whether the proposed
grounds for appeal are arguable.

Per Justice Hunter
in
Gichuru v. Pallai
, 2019 BCCA 282 (Chambers) at para. 10.
See also
Berthin v. Berthin
, 2020 BCCA 376 (Chambers) at para. 26.

[9]

The overarching consideration is whether it is in the interests of
justice that leave be granted:
Price v. Robson
, 2017 BCCA 419
(Chambers) at para. 48. The appellants bear the onus of establishing that
they meet the test for leave:
Price
at para. 47.

[10]

The respondent opposes the application for leave to appeal. He says the
appellants have tried to fashion errors in principle; however, what they are
really attempting to do is to challenge the findings of fact that justified the
special costs order. The respondent stresses that the threshold for appellate
intervention with a special costs order is stringent. Furthermore, the Court
must assess the strength of the grounds of appeal with that standard of review in
mind:
Price
at para. 50.

[11]

The respondent contends that the leave application does not come
remotely close to meeting the requisite test. Moreover, allowing this
litigation to carry on with yet another appeal is not in the interests of
justice. The respondent says it will only serve to prolong the dispute between
the parties and to add to their already considerable expenses. The property at
issue has now been transferred to the respondent, in accordance with the order
for specific performance.

Discussion

[12]

After reviewing the application materials, I am not persuaded by the
appellants that they should receive leave to appeal.

[13]

I have reached that conclusion recognizing that the special costs order
carries significant financial implications for them. However, the appeal is not
one that raises legal issues of interest beyond the four corners of the case.
Nor does it pose questions of general importance to practice. Finally, in my
view, the appellants have not presented arguable grounds of appeal.

[14]

With that, I will turn to the primary complaints about the order.

[15]

First, at the hearing of the leave application, the appellants accepted
that in awarding special costs, a trial judge is not restricted, as a matter of
law, to the credibility, reliability, and factual findings articulated in the
reasons for judgment on the merits of the action. (This was an argument made to
and rejected by the trial judge at the costs hearing. See paras. 6 and 26
of the RFJ.)

[16]

Indeed, a legal rule to that effect would make no sense. Deciding the
merits of the action and the issue of costs engages distinct adjudicative
functions and analytical frameworks. Although trial findings will undoubtedly
inform the costs determination, and there may well be overlap because of the
fact that they arise out of the same overarching context, a judge is entitled
to make additional findings in the costs analysis specific to the manner in
which the parties conducted the litigation. Some of those findings would not
have been necessary to resolve the factual and legal issues at trial. Moreover,
as correctly noted by the trial judge, reasons for judgment on the trial are
designed to address the matters at issue at trial. The matter of special costs
may arise, but is not necessarily dealt with in the [r]easons as this may
decrease efficiency in the court process (RFJ at para. 26).

[17]

However, the appellants say that in this case, the judges factual bases
for special costs went well beyond her findings at trial. Moreover, they contend
that she reconstituted her already existing findings to reflect a more serious
form of misconduct by the appellants. In that sense, say the appellants, the
findings relied upon to ground the special costs order were either not
supported by the evidence at trial or inconsistent with the judges previous
factual determinations.

[18]

In support of this argument, the appellants created a chart (filed as
part of their motion book), in which they listed and compared the trial
findings with the findings articulated in the reasons for special costs. I have
reviewed that chart and the excerpts from each set of reasons highlighted by
the appellants. I do not see factual inconsistencies or reconstituted findings,
let alone to the extent that would allow an appeal court to interfere with the
judges factual conclusions on grounds of palpable and overriding error.
Instead, it is clear from a reading of the RFJ as a whole that the trial judge
hearkened back to the findings she made at trial (see paras. 27, 28, 3132),
and then fleshed out, amplified or explained those findings, where necessary,
in light of the legal test for special costs and the analysis required. She
also made additional findings as necessary, for the specific purpose of the
costs determination. I see nothing wrong in that approach.

[19]

The appellants do not allege that the trial judge misdirected herself on
the legal framework for a special costs order or that she misapprehended the
evidence open for her consideration. Instead, I agree with the respondent that
what lies behind this aspect of the application for leave to appeal is the appellants
disagreement with the inferences drawn by the trial judge about their
litigation conduct, her interpretation of the evidence, and the findings of
fact she made in favour of a special costs order. That challenge does not raise
issues that extend beyond the facts of the case. Nor does it require anything
other than an individualized appellate analysis based on the evidentiary record
before the trial court. Nor is it likely that this Court would interfere with
the findings on appeal, in light of the highly deferential standard of review.
I find that this ground of appeal has no reasonable prospect of success.

[20]

The second challenge to the impugned order is that the trial judge
wrongly considered the conduct of a non‑party witness in ordering special
costs. The witness referred to here is Davinder Hothi. She is the spouse of the
appellant Paramjit Hothi. The appellants say the judges concerns about the
veracity of Davinder Hothis evidence, her conduct at trial and her role as a
witness carried significant weight in the special costs analysis (see paras. 3034
and 36 of the RFJ). From their perspective, the attention paid to Ms. Hothis
evidence is highly problematic because
[t]here
is no authority for the proposition that special costs can be awarded against a
litigant

as punishment for the conduct of
a third party (appellants memorandum of argument at para. 54).

[21]

With respect, the appellants submission on this ground of appeal
ignores the judges finding of a clear nexus between Ms. Hothis evidence
and direction given to her by her spouse, a party to the litigation.

[22]

In her trial judgment, the judge noted at para. 32 that:

Ms. Davinder Hothi denied
the suggestion from counsel that her husband Mr. Paramjit Hothi was
telling her what to say in evidence. She further denied that she was trying to
help him or his brothers in giving her testimony.
This denial was not
believable for a number of reasons, including her unwillingness to admit
anything adverse to her husbands interest
.

[Emphasis added.]

[23]

This Court declined to interfere with the judges credibility findings
in the appeal from the trial judgment (2019 BCCA 472 at para. 44).
That necessarily extends to the credibility findings in respect of Ms. Hothi.

[24]

At para. 36 of the RFJ on the special costs order, the judge held:

There is no doubt that in the
face of clearly contradictory evidence and documents,
Davinder Hothi was
prepared to lie under oath before the Court to assist the Hothi family in the
lawsuit
. As noted in the Reasons for Judgment, Paramjit Hothi effectively
ran the Hothi family business with administrative assistance from his wife,
Davinder.
Her false evidence was obviously calculated to ensure her
testimony was in line with the largely fictional narrative constructed by
Paramjit
. While Davinder was a sophisticated witness, the
inescapable
inference is that Paramjit pressured Davinder to give false evidence under
oathboth as to the underlying facts and then again regarding the cover‑up
and failure to disclose documents
.

[Emphasis added.]

[25]

I see no inconsistency between the two sets of findings and,
importantly, both of them connect the concerns about the veracity of Ms. Hothis
evidence with Paramjit Hothi. This is not a special costs order that finds its
factual basis in conduct unconnected to the litigation, or beyond the control
or influence of one or more of the parties. Instead, the trial judge found that
Ms. Hothi purposefully tailored her evidence to align with and support the
narrative put forward by the defence, at the direction or insistence of
Paramjit Hothi.

In that context, I agree with the respondent that this
second ground of appeal is factually specific, limited to the four corners of
the case, and carries no prospect of success.

[26]

That brings me to the third ground raised in the appellants written
argument, namely, that their litigation conductas assessed by the trial judgedid
not meet the threshold for reprehensible conduct, a necessary pre‑condition
to a special costs order. Counsel for the appellants did not press this issue
at the hearing. With good reason. The term reprehensible conduct encompasses
conduct that is scandalous or outrageous, as well as milder forms of misconduct
that are
nonetheless deserving of rebuke:
Garcia v. Crestbrook
Forest Industries Ltd.
(1994), 9 B.C.L.R. (3d) 242 (C.A.) at
para. 17.
Concealing and suppressing critical documents; disobeying
court orders for document production; and swearing and deliberately providing
false evidence for use at trial, as found by the trial judge, plainly meet that
standard (RFJ at para. 19). I see no realistic possibility of this
third ground of appeal gaining traction before a division of this Court.

[27]

Finally, the appellants fourth challenge to the order is that the judge
erred in making them pay the respondents special costs of [the] proceeding on
a full indemnity basis (RFJ at para. 55). At first glance, the wording of
the order troubled me. As the appellants correctly point out, this Court has
held more than once that the
SCCR
do not allow for a full indemnity
costs award. See, for example,
Tanious v. The Empire Life Insurance
Company
, 2019 BCCA 329:

[45]      Rule 14‑1 [of the
SCCR
] recognizes two
categories of costs under the statutory costs regime in British Columbia: party
and party costs and special costs, previously known as solicitor‑client
costs.
In awarding costs, a judge must stay within the statutory framework
and may not impose any other form of costs sanction
:
Gichuru v. Smith
,
2014 BCCA 414 at paras. 84, 89, 98, 102, leave to appeal refd [2014]
S.C.C.A No. 547.
The
Rules
do not provide for full
indemnity costs
.

[Emphasis
added.]

[28]

However, after hearing from counsel, I agree with the respondent that
the wording of the order presents no substantive concern.

[29]

It is readily apparent from the RFJ that the trial judge did not
make an order for full indemnity costs. Instead, she made a
special costs
order, the amount of which is to be assessed by a registrar.
That reality is also apparent from the entered order,
which provides that: Gurdaver Hothi and Paramjit Hothi on a joint and several
basis pay the Plaintiff his
special costs
of this proceeding on a full
indemnity basis (emphasis added).

[30]

In accordance with the language of Rule 14‑1(3)(a), and
consistent with recent
dicta
from this Court, the registrar only has
authority, in assessing the amount payable pursuant to the order, to allow as
special costs those fees 
that were proper or reasonably necessary to
conduct the proceeding
 (emphasis added).

[31]

On this point, see
West Van Holdings Ltd. v. Economical Mutual
Insurance Company
, 2019 BCCA 110:

[71]
On an assessment of special costs, a party is
entitled to those fees that were proper or reasonably necessary to conduct the
proceeding
. While there may be a close relationship between actual legal
fees and special costs,
they are not necessarily identical
.



[95]       a judge cannot impose costs sanctions that
are not authorized by the
Rules.

Full indemnity or
solicitor-and-own-client costs awards are not authorized by the
Rules
.

[Emphasis added.]

[32]

See also
567 Hornby Apartment Ltd. v. Le Soleil Restaurant Inc.
, 2020
BCCA 69 at paras. 36, 4041. In that case, the trial judge made
orders for special costs on a full indemnity basis: 2016 BCSC 1340 at paras. 2,
56. Notwithstanding the wording, in assessing those costs, the registrar
instructed himself in accordance with Rule 14‑1(3) and held that
under the Rule, parties are only entitled to their objectively reasonable
legal costs (2016 BCSC 1340 at para. 15). Moreover, [t]he fact that
a lawyer has billed a certain sum does not make the fee objectively reasonable
(2016 BCSC 1340 at para. 16, citing
Gichuru v. Smith
, 2014
BCCA 414 at paras. 104105).

[33]

In its review of an appeal arising out of the registrars assessment,
this Court did not take issue with the legal analysis applied by the registrar
on this point, confirming that on an assessment of special costs, a party is
entitled to those fees that were proper or reasonably necessary to conduct the
proceeding (2020 BCCA 69 at para. 41).

[34]

In light of these authorities, I agree with the respondent that the
trial judges reference to costs payable on a full indemnity basis adds
nothing to her special costs order, and, in its practical application, will
have no effect. Instead, Rule 14‑1(3) will guide the assessment. The
parties agree that the judges reference to the term full indemnity likely
originated from written material filed by the respondent. As I understand it,
there was no discussion in the court below about an entitlement to full
indemnification. Nor did the respondent seek costs on a solicitor‑client
basis.

[35]

At the hearing of the leave application, counsel for the respondent
informed the Court that when the respondent is before the registrar for
purposes of the assessment, a submission on full indemnification as a matter of
right will not be made, recognizing that the law does not allow for that.
Instead, as was the case in
Le Soleil
, the focus will be on the
objective reasonableness of the amounts claimed. The appellants would prefer to
have that commitment in writing; however, they agree that if such is the case,
their fourth ground of appeal raises no real issue.

[36]

Because of the discretionary nature of a special costs order, the test
for granting leave to appeal is particularly stringent:
Price
at para. 50.
In my view, the appellants have not met that test. Accordingly, notwithstanding
the significant financial implications of a special costs order, I do not
consider the interests of justice to weigh in favour of leave.

[37]

I see little (if any) chance of this Court interfering with the findings
of fact made by the trial judge, who was obviously in the best position to
appreciate the course of the proceedings and to assess the case‑specific
application of well‑established factors that are generally considered in
determining whether to make an order for special costs:
Price
at para. 51,
citing
Seminoff v. Seminoff
, 2007 BCCA 403 (Chambers) at para. 4.
Nor do I see the case raising novel or complex legal issues that require
analysis by this Court, or issues for which greater clarity is needed to the
benefit of practice.

Disposition

[38]

For the reasons provided, the appellants have not persuaded me that it
is in the interests of justice to grant leave to appeal. As such, I dismiss
their application.

The
Honourable Madam Justice DeWitt-Van Oosten


