



COURT OF APPEAL FOR ONTARIO

CITATION: Ehsaan v. Zare, 2018 ONCA 453

DATE: 201805015

DOCKET: C64797


Rouleau, Roberts and Fairburn JJ.A.

BETWEEN

Parnaz Ehsaan

Plaintiff
(Appellant)

and

Payam Zare and Erfan Zare

Defendants
(Respondents)

Sean N. Zeitz, for the appellant

Sam Rappos, for the respondents

Heard: May 9, 2018

On appeal from the judgment of
    Justice B. Glustein of the Superior Court of Justice dated December 7, 2017,
    with reasons reported at [2017] O.J. No. 5879, and the costs order dated March
    5, 2018.

REASONS FOR DECISION

[1]

The appellant obtained judgment against
    the respondents on a motion for summary judgment. The appellants action arose
    out of a failed transaction to purchase the respondents property, which the
    respondents refused to close.  The motion judge granted the appellant judgment
    in the amount of $118,954.95, including $43,000 for the difference in value of
    the property from the date of the agreement of purchase and sale to the closing
    date.  The motion judge ordered that there be no costs.

[2]

The appellants appeal is narrow: she
    takes issue with the amount of $43,000 awarded, submitting that the motion
    judge erred in taking the average between the parties respective property
    appraisals. She also seeks leave to appeal the motion judges order that she
    receive no costs of her action or motion for summary judgment.

[3]

With respect to the damages issue, at
    trial, there was a dispute between the parties as to the appropriate appraised
    value of the property. The appellants own appraisal evidence was that the
    value of the property was between $1.275 and $1.375 million as of the closing
    date. The respondents evidence appraised the property as of the closing date
    at a value of $1.375 million; however, they disputed that value and relied on
    the lower end of the appellants appraisal evidence. The motion judge concluded
    that there was no basis for the court to prefer one or other of the
    appraisals and determined that the reasonable conclusion would be to take
    the midpoint of the highest and lowest appraised values.

[4]

The appellant submits that the motion
    judge erred in failing to take $1.375 million as the value of the property;
    alternatively, the motion judge should have taken the midpoint between $1.275
    and $1.375 million, and then averaged that figure with the higher value of
    $1.375 million.

[5]

We do not accept these submissions.

[6]

The motion judges assessment and
    calculation of damages are entitled to deference. His explanation as to why he
    took the average of the figures submitted by the parties, including the absence
    of a basis to understand which appraisal was preferable, was reasonable on this
    record. We see no basis to interfere with it.

[7]

With respect to the costs appeal, the
    appellant first argues that the motion judges costs analysis was tainted by
    what is said to be unfair criticism about the manner in which costs submissions
    were filed by her counsel. The respondents maintain that their counsel was
    subject to the same criticism. The parties agree, and the record supports, that
    they were granted advance permission to file their costs submissions in the way
    that they did. Even so, we conclude that the motion judges apparent misperception
    about the manner of filing had no impact on his ultimate decision.

[8]

Second, the appellant maintains that
    the motion judge erred in principle in failing to award her costs. It is well
    established that a costs award should be set aside on appeal only if the motion
    judge erred in principle or the award was plainly wrong:
Davies v.
    Clarington
, 2009 ONCA 722, at para. 27.

[9]

We agree that the motion judge erred in
    failing to award any costs to the appellant and that the error justifies
    appellate intervention.

[10]

While an award of costs is always
    discretionary and the court has the discretion not to award any costs to the successful
    party, the latter discretion should be exercised sparingly. The general
    principle that a successful party is entitled to costs should not be departed
    from except for very good reasons.  Examples of the exceptional instances where
    such an order has been made include: misconduct of the parties; miscarriage in
    the procedure; or oppressive and vexatious conduct of proceedings. (See:
1318706
    Ontario Ltd. v. Niagara (Regional Municipality)
,
    [
2005]
O.J.
    No. 1907, at para. 50.)

[11]

Here, the motion judge erred by
    depriving the successful party of her partial indemnity costs for conduct that
    did not rise to the level of misconduct that would justify such a punitive
    order. Specifically, the motion judge concluded that the appellants conduct of
    not accepting the respondents non rule 49.10 compliant offers to settle and
    abandoning her claim for specific performance at the hearing of her motion for
    summary judgment justified denying her costs. The motion judge reasoned that
    the failure to accept the offers should be sanctioned by denying the appellant
    costs from the date the offers were made and by setting off the amount of the
    appellants partial indemnity costs to which she would otherwise have been
    entitled against the wasted costs incurred by the respondents.

[12]

While such conduct may have justified a
    reduction in the appellants costs, it did not warrant an order that there be
    no costs in the circumstances of this case, particularly where the appellant
    was entirely successful.

[13]

The motion judge did not factor into
    his analysis the undisputed fact that the Toronto real estate market was highly
    volatile between the date the cause of action arose and the date of the summary
    judgment motion. As a result, the appellants decisions to continue the
    specific performance claim until just before the hearing of the motion and to
    reject the respondents offers to settle were understandable and hardly
    unreasonable.

[14]

In our view, the motion judge lost
    sight of the principal objective of costs, to compensate the successful party.
    He did not give appropriate weight to the fact that the claim was vigorously
    opposed by the respondents, nor to the appellants success on her motion for
    summary judgment against the respondents for the breach of contract and on
    having the respondents motion for summary judgment dismissed. It was neither
    fair, proportionate nor reasonable for the motion judge to deprive the
    appellant of all of her costs.

[15]

Accordingly, we set aside the motion
    judges costs order.

[16]

The motion judge assessed the appellants
    partial indemnity costs in the amount of $38,652.81. We agree that there was no
    basis to award costs on a substantial indemnity scale. The respondents did not
    dispute that the fees incurred by the appellant in the action and for the
    preparation and hearing of the summary judgment motion was reasonable; indeed
    they were slightly less than the respondents costs.  We see no error in the
    motion judges assessment of the amount of the appellants partial indemnity costs.

[17]

Accordingly, we dismiss the appellants
    appeal with respect to the issue of damages. We grant leave to appeal and allow
    the appellants appeal with respect to costs. The appellant is entitled to her
    partial indemnity costs of her action and the motion for summary judgment in
    the amount of $38,652.81.

[18]

The appellant is entitled to her
    partial indemnity costs of the appeal in the net amount of $3,500.

Paul
Rouleau J.A.

L.B. Roberts J.A.

Fairburn J.A.


