Even where rates charged are discounted partial indemnity costs should be about one-third less than substantial indemnity costs

790668 Ontario Inc. v. D'Andrea Management Inc., 2015 ONCA 557:

[20]       The appellants argue that the motion judge made three errors in principle and was plainly wrong in making the cost order. First, the motion judge failed to give any or sufficient weight to the losing party's reasonable expectations as to costs. She awarded substantially more than the 60 per cent of the actual rate (amounting to $210 per hour) that the third parties had obtained on a previous partial indemnity costs award, on which they based their reasonable expectations. 

[21]       The motion judge noted, at para 6, that the LawPro hourly rates were "roughly two thirds of those charged by lawyers practising in this area with comparable experience." She declined, at para. 7 to apply a "double discount", and, at para. 10, awarded partial indemnity costs in the full amount of the actual rates charged by counsel to LawPro. In doing so she relied on Mantella v. Mantella,[2006] O.J. No. 2085 (S.C.), at para. 7, and on Geographic Resources Integrated Data Solutions Ltd. v. Peterson, 2013 ONSC 1041, [2013] O.J. No. 717 (Div. Ct.), at para. 13, in which the courts awarded partial indemnity costs in an amount to up to the party's actual costs.

[22]       In Wasserman, Arsenault Ltd. v. Sone, 38 C.B.R. (4th) 119, [2002] O.J. No. 3772 (C.A.) at para. 3-5 and in Boucher v. Public Accountants Council for the Province of Ontario, (2004), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.) at para. 36, this court said that it is an error in principle to award partial indemnity costs that amount to substantial/full indemnity. See also Kim v. Rezai, 2015 ONSC 3140, where the successful defendant sought full indemnity, as explained at para 25: "given the low hourly rates charged by the Defendant's counsel." Justice Faieta refused to follow Mantella and Geographic Resources in light of this court's decisions.

[23]       In my view, it was an error in principle for the motion judge to award partial indemnity costs in the full amount of the actual costs paid. While a court has discretion to determine the size of the discount to a party's actual costs when awarding partial indemnity costs, with due consideration of the factors set out in rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, I am unable to see, on the facts in this record, a basis to depart from the ordinary rule of thumb that partial indemnity costs should be about one-third less than substantial indemnity costs