Jack R. Armstrong

This decision addresses the issue of costs following a five-day trial concerning defaulted mortgages and construction costs.

The plaintiffs, Barrie Leasing Services Inc. and James Shirley, were found to be the successful parties, having been awarded judgment for outstanding mortgage and construction costs.

The court determined that the plaintiffs were entitled to partial indemnity costs, rejecting their claim for substantial indemnity costs and the defendants' argument that their Rule 49 offer should apply.

The court found that the trial was necessary to resolve live issues, including the distribution of funds held in trust.

The applicants sought an injunction to stay power of sale proceedings, a declaration that a Notice of Sale was invalid, and the release of trust funds to redeem a mortgage.

The respondent opposed, arguing the application should be stayed due to unpaid costs and that the trust funds were subject to a prior court order.

The court declined to stay the application for costs.

It ruled that the trust funds must remain in trust pending the judgment in a separate consolidated action concerning other mortgages.

The court found the respondent's Notice of Sale invalid because it was issued in breach of a forbearance agreement, but clarified that the respondent was free to issue a new, compliant notice.

The request to stay the power of sale proceedings was otherwise dismissed.

Following a successful motion for summary judgment and possession of land subject to a defaulted mortgage, the plaintiff sought substantial indemnity costs of $32,143.58.

The defendants argued for partial indemnity costs, noting a forbearance agreement was in place and there were live issues regarding the amounts claimed.

The court found the defendants' conduct did not warrant substantial indemnity costs and awarded partial indemnity costs.

Costs were fixed at $20,544.34, inclusive of fees, disbursements, and HST.