DIV. COURT FILE NO.: 325/O4
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ANTORISA INVESTMENT LTD. – Plaintiff
- and -
172965 CANADA LIMITED et al – Defendants
BEFORE: Ground J.
COUNSEL: Alan J. Lenczner for the Plaintiff/Moving Party
Donald Hanna for the Defendants/Responding Parties
MOTION
HEARD: September 24, 2004
E N D O R S E M E N T
1By Order dated September 29, 2003, Whalen J. dismissed the Defendants’ motion for summary judgment in the within action. By Order dated June 7, 2004 Whalen J. reserved to the trial judge the questions of entitlement to, and quantum of, costs and whether there should be an assessment of costs. In his Endorsement with respect to costs Whalen J. stated:
In the instant case, I conclude that the Plaintiff’s claim is the probable the (sic) “long shot”, and its chances of success are not high. By contrast, the Defendants have strong factual and legal arguments, and not just “some” reason to support success either at the summary judgment level or trial. From this perspective, the Defendant’s motion was not unreasonable. Therefore the higher scale of costs is inappropriate and will not be ordered.
I also conclude that this is an exceptional situation where costs should be reserved. While the Plaintiff survived the summary judgment challenge, it is not by much. The ultimate awarding of costs on a partial indemnity basis is best left to the trial judge, depending on the outcome of the trial.
2The Plaintiff seeks leave to appeal the Costs Order of Whalen J. pursuant to Section 133 of the Courts of Justice Act R.S.O. [1990] ch. c.43 (“CJA”) and pursuant to Rule 62.02 (4)(a) and (b).
3The principle issue on this motion is whether there are “conflicting decisions” on the matter involved in the proposed appeal. It is the submission of the Plaintiff that, once the motions judge has found that the bringing of the motion for summary judgment was reasonable although unsuccessful, the provisions of Rule 20.06(1) are mandatory and the judge must fix costs on a partial indemnity basis and order them payable forthwith. It is the position of the Defendants that, once the motions judge has found the bringing of the summary judgment motion was reasonable, he or she is no longer compelled to fix costs on a substantial indemnity basis and order them payable forthwith but has total discretion as to how he or she deals with costs and that it was perfectly appropriate for Whalen J., in exercising his discretion, to refer the whole matter of costs to the trial judge.
4The Plaintiff maintains that the judicial decisions in this province dealing with the disposition of costs on a summary judgment motion where the motions judge has found that although the moving party was unsuccessful, it was reasonable for the motion to have been brought, establish that the court invariably fixed costs on a partial indemnity basis and ordered them payable forthwith and that this line of cases is illustrated by this decision of Sharpe J. in Rosedale Motors Inc. v. Petro Canada Inc. [2000] O.J. No. 938 (S.C.J.) where Sharpe J. stated at page 3:
“It is apparent that the Defendant is responsible for the costs of its unsuccessful cross motions. The issue is whether these costs should be assessed on a solicitor and client basis pursuant to Rule 20.06(1). The Defendants have satisfied me that in the circumstances of this litigation it was reasonable for it to bring the motion for summary judgment… The motion was based on a legal proposition I rejected but which, in my view, was not an unreasonable one. Accordingly, the Defendants are responsible for the costs of the unsuccessful motions but only on a party and party basis”.
5It is implicit in the submissions of the Plaintiff that Rule 20.06(1) is a specific exception to the general discretionary power of a judge with respect to costs as set out in Rule 57. The Plaintiff maintains that the departure from this line of cases was the decision of Nordheimer J. in Marini v. Muller [2001] O.J. No. 259 (S.C.J.) where Nordheimer J. did fix the amount of the costs although the determination of entitlement to costs was reserved to the trial judge and stated as follows in paragraph 6:
In my view, in a case such as this where the result of the summary judgment motion was what might fairly be referred to as a “close call”, the appropriate result is to leave the costs in the cause. There are two very distinct positions taken by the parties here. One or the other is going to be successful at trial. If the plaintiff’s position is ultimately successful then there is some merit to the suggestion that it ought to have had its summary judgment in the first instance. If, on the other hand, the defendant is ultimately successful, then it clearlyment in the first instance. If, on the other hand, the defendant is ultimately successful, then it clearly
6The decision of Nordheimer J. was referred to by Winkler J. in Risorto v. State Farm Mutual Automobile Insurance Co., [2003] 64 O.R. 3rd 135 although not followed and was followed by Pitt J. in M.F. v. Sutherland [2001] O.J. No. 4020 (S.C.J.) and in Mahmood v. Royal Bank of Canada [2002] O.J. No. 1502 (S.C.J.) although without detailed reasons in either case. Counsel for the Plaintiff submits that these decisions together with the decision of Whalen J. in his Endorsement on costs in the case at bar constitute decisions conflicting with the line of cases represented by Rosedale Motors, supra. Counsel for the Plaintiff further submits that the law in this area has become unsettled as a result of the more recent decisions referred to above and that accordingly, it is desirable that leave be granted to have the matter determined by an Appellate Court.
7Although the Plaintiff’s motion record made reference to there being good reason to doubt the correctness of Whalen J.’s decision on costs, the Plaintiff’s counsel, on the hearing of this motion, did not strongly press that there was any reason other than the alleged conflict with earlier decisions nor did he strongly press that the proposed appeal involved matters of importance to the public, the administration of justice or the development of the law.
8The Defendants submit that the cases referred to by the Plaintiff as being in conflict with the Rosedale Motors, supra, line of cases are simply examples of situations where the motions judge, having determined that it was reasonable to bring the summary judgment motion, exercised the wide discretion under Rule 57 in determining the disposition of costs. The Defendants submit that the phrase “unless the court is satisfied that the making of the motion, although unsuccessful, was nevertheless reasonable” in Rule 20.06(1) must be read as modifying the verb “shall fix”. It is the position of the Defendants that, once a determination is made that the bringing of the summary judgment was reasonable, the motions judge then need not fix costs on a substantial indemnity basis and order them to be payable forthwith. The motions judge has at that point full discretion under Section 131 of the CJA and Rule 57 with respect to the disposition of costs and, accordingly, the decisions making dispositions of costs different from those made in the Rosedale Motors, supra, line of cases are samples of the exercise of such discretion and not conflicting decisions.
9It is the submission of the Defendants that, if the decisions reflect an exercise of discretion which leads to different results in different cases, this does not meet the requirement of conflicting decisions.
10As to it being desirable that leave should be granted, it is the position of the Defendants that appellate courts have traditionally been loathe to interfere with the exercise of discretion of a trial judge or motions judge with respect to costs. The Defendants also submit that there is no good reason to doubt the correctness of Whalen J.’s disposition as to costs and that the courts have traditionally regarded costs as a matter of importance to the parties but not to the public or the legal profession in general.
Analysis
11I am satisfied that the test for granting leave to appeal set out in clause (b) of Rule 62.02(4) has not been met. There appears to me to be no reason, other than the alleged conflict with earlier decisions, to doubt the correctness of Whalen J.’s Order.
12With respect to the test set out in clause (a) of Rule 62.02(4), I do accept the submission of counsel for the Plaintiff that, if there are conflicting decisions and the law in this area is unsettled, it would be desirable to have an appellate court determine the matter even though the appeal is directed to an issue of costs (see Intercontinental Florist Products S.A. et al v. Rugo et al), [2004] 69 O.R. 3rd 668 (S.C.J.)).
13The difficult question on this motion is whether the decisions referred to by counsel are in fact conflicting decisions. I have been referred to no decision where the motions judge has stated “I find that, although the moving party was unsuccessful, it was reasonable to bring the summary judgment motion and accordingly I have no choice. I must fix costs on a partial indemnity basis and order them payable by the moving party to the responding party forthwith”. I have also been referred to no decision where the motions judge has stated “I find that, although the moving party was unsuccessful, it was reasonable to bring the summary judgment motion. I am not required to fix the costs on a partial indemnity basis and order them payable forthwith but will exercise my discretion with respect to costs and will order that the entitlement to, and quantum of, costs be referred to the trial judge”. In other words, there are no decisions referred to by counsel which are conflicting with respect to the nature of the discretion of the judge under Rule 20.06(1) or the principles applicable to the exercise of such discretion or as to whether or not the motions judge, having found the bringing of the summary judgment motion to be reasonable, has or has not any discretion under Rule 26.06 with respect to costs.
14In my view, all of the authorities cited are instances of the motions judge exercising his or her discretion once it had been determined that the bringing of the summary judgment motion was reasonable. I do not read the decision of Sharpe J. in Rosedale Motors, supra, as determining that it is mandatory, in all cases where the motions judge has found the bringing of the summary judgment motion was reasonable, for the motions judge to fix the costs on a partial indemnity basis and order them payable forthwith. I read Sharpe J.’s decision as equally consistent with an exercise of his discretion that, in that particular case, the moving party should be responsible for the costs of the summary judgment motion on a partial indemnity. I also note that, in the result, Sharpe J. determined “In the circumstances, as the issues were intertwined and as it would be difficult to unravel the costs applicable to the various motions, I find that it is appropriate to regard this situation as a ‘wash’ and that there be no order as to the costs of any of the motions”. Sharpe J. did not fix the costs of the summary judgment motion on a partial indemnity basis and order them payable forthwith.
15Accordingly, I find that there are no conflicting decisions on the matter involved in the proposed appeal and that accordingly the test set out in clause (a) of Rule 62.02(4) has not been met.
16The motion is dismissed. Counsel may make brief written submissions to me as to the costs of this motion on or before November 19, 2004.
Ground J.
Released: October 27, 2004.