COURT FILE NO.: Divisional Court 397/02
02-CV-223309CM1
DATE: 20030409
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Marilyn Benlolo, Plaintiff, Respondent in Appeal;
and
Yuval Barzakay, Yapalot Communications Holdings Inc., et al.
Defendants, Appellants;
BEFORE: Lane, J.
COUNSEL: Mark Hartman, for the Defendants, Appellants;
David M. Golden and Jeffrey Simpson, for the Plaintiff, Respondent.
E N D O R S E M E N T
[1] By reasons released on February 19, 2003, I allowed an appeal by the defendants from the decision of Master Haberman refusing to set aside a default judgment obtained by the plaintiff for a portion of the claim. I ruled that the Master erred in not recognizing (it was not drawn to her attention) that the Registrar had no jurisdiction to grant the judgment as the claim was not for a debt or liquidated demand in money within the meaning of Rule 19.04. I set aside the judgment and the noting of pleadings closed and allowed the defendant to file a Statement of Defence. These are my reasons as to costs.
[2] The defendants were entirely successful on their appeal from the Master. They assert that they should have substantial indemnity costs of the motion before the Master, the motion before Swinton J. to stay enforcement of the judgment pending appeal and of the appeal.
[3] As to the motion below and the appeal, the defendants say they should have costs because the plaintiff wrongly invoked a jurisdiction that the Registrar did not have; and they were entirely successful on appeal. The costs should be substantial indemnity costs because of my finding that the plaintiff “wrongly” invoked Rule 19.04. I do not agree that this is the sort of wrongful conduct that attracts substantial indemnity costs. The plaintiff was wrong in law, but there is no evidence it was a deliberate wrong. There is no case here for substantial indemnity costs.
[4] As to the costs here and below, the plaintiff submits that the normal rule when a party has allowed a time limit to pass and requires the assistance of the court to remedy the effect of that default, is to require the defaulting party to pay the ‘costs thrown away’ of the opposite party, that is costs of steps taken as a consequence of the default, such as any fee for taking out the judgment set aside, etc. The disposition of the costs of the motion itself are, as usual, in the discretion of the court based on the circumstances.[^1] The plaintiff asks for those as well on the basis that the conduct of the defendants has been procedurally obstructionist. As well, the defendants did not raise before the Master the issue of jurisdiction upon which they were eventually successful on the appeal.
[5] The plaintiff further submitted that the Registrar should have refused if he did not have jurisdiction and the plaintiff should not have to bear any costs when the genesis of the whole problem was the default, after repeated warnings, of the defendants.
[6] It is true that the defendants’ failure to defend, despite plenty of warnings that default proceedings would be taken, lies at the root of all of these proceedings. The defendants did not raise the jurisdictional point before the Master and so permitted her to decide adversely to them, necessitating the appeal. In the light of these factors, the defendants are not entitled to costs. The plaintiff misunderstood the Rule and obtained a judgment she had no right to have, leading to the motion and the appeal. She also unsuccessfully opposed the motion before Swinton J. for a stay pending the appeal, and the costs were reserved to me. Contrary to the plaintiff’s submission, the phrase ‘debt or liquidated demand in money’ is not shrouded in obscurity, although the main learning on those words dates from before the introduction of the new Rules in 1985. Prior to that time the phrase in question was well known to every law student as the test for summary judgment under former Rule 33 and there are many cases on its meaning.
[7] In the light of all of the factors discussed, I am of the view that the fairest order is that there be no costs of the motion before the Master, the appeal or the motion for a stay. The defendants will pay the costs thrown away by the plaintiff, namely the costs of noting pleadings closed and signing and entering the default judgment. To bring an end to this matter, I fix them at $200 plus the $90 fee to the court office.
Lane, J
DATE: April 9, 2003
[^1]: See Rossi v. Rossi [2001] O.J. No. 1398, Nordheimer J., April 17, 2001 para. 5.