Jeremy Jordan Lum-Danson

This decision addresses the costs arising from a prior ruling where Salvatore Benedetto was unsuccessful against 2453912 Ontario Inc. Benedetto argued for no costs, claiming the legal issue regarding deposit forfeiture under s. 21(4) of the Business Corporations Act was "novel." 2453912 Ontario Inc. sought costs, including substantial indemnity based on a Rule 49 offer to settle.

The court rejected the "novelty" argument, finding existing case law provided adequate guidance.

It also declined substantial indemnity, noting the Rule 49 offer lacked compromise and the underlying issue, while complex, presented reasonable uncertainty.

Partial indemnity costs of $10,000 were awarded to 2453912 Ontario Inc.

The purchaser, Salvatore Benedetto, failed to close an Agreement of Purchase and Sale for three properties, having paid a $100,000 deposit held by Re/Max.

Benedetto had signed the APS "In Trust For A Company to be Incorporated without any Personal liabilities," relying on s. 21(4) of the Business Corporations Act to argue the deposit should be returned.

The vendor, 2453912 Ontario Inc., moved for summary judgment, seeking forfeiture of the deposit.

The court ruled that s. 21(4) prevents personal liability for contractual obligations but does not prevent the forfeiture of a deposit, which serves as an earnest to secure performance.

The court granted the vendor's motion, ordering the deposit released to the vendor, and dismissed Benedetto's claim for its return.