Court File and Parties

COURT FILE NO.: 120/09 DATE: 20090417

SUPERIOR COURT OF JUSTICE - ONTARIO (DIVISIONAL COURT)

RE: SCOTT and PICHELLI, TRUSTEE OF THE ESTATE OF TABRCO MANAGEMENT LTD., A BANKRUPT (Plaintiff/Responding Party) - and - SUNDIAL HOMES (BRONTE) LIMITED et al. (Defendants/Moving Parties)

BEFORE: Justice Swinton

COUNSEL: James Wortzman for the Defendants/Moving Parties Brendan D. Bowles for the Plaintiff/Responding Party

HEARD AT TORONTO: April 16, 2009

E N D O R S E M E N T

[1] The Sundial Homes defendants (“Sundial”) seek leave to appeal from a decision of Ricchetti J. dated February 9, 2009. In that decision, he awarded costs of $15,000.00 payable to the plaintiff, the Trustee in Bankruptcy for Tabrco. He also ordered that two Brampton lien actions brought by subcontractors, previously scheduled for trial in May 2009, proceed peremptory to Sundial Homes (Sheridan) Limited, with any motion for adjournment to be heard by him. This order was made in a Toronto action following the dismissal of a Rule 21 motion brought by the Trustee.

[2] Sundial submits that the part of the order dealing with the trial schedule was made without jurisdiction in the Toronto action and gave relief sought by neither party. I would not grant leave to appeal this aspect of the order. It is an interlocutory order and, therefore, there can be no appeal from it, given s. 71(3)(b) of the Construction Lien Act, R.S.O. 1990, c. C.30. Moreover, the subject matter of the proposed appeal, the scheduling and adjournment of trial dates, does not raise an issue of sufficient general importance to warrant appellate attention.

[3] Pursuant to s. 133(b) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, leave to appeal an order of costs must be obtained from the court to which the appeal is to be taken. It is well established that leave to appeal on a question of costs should be granted sparingly and only in the clearest of cases (Yakabuski v. Yakabuski Estate (1988), 31 O.A.C. 257 (Div. Ct.) at para. 8).

[4] Sundial submits that the motions judge erred in awarding costs against it, as it was successful on the Rule 21 motion.

[5] The motions judge made that award because of his conclusion that Sundial had reversed an earlier position in which it consented to the Rule 21 motion. Specifically, Sundial and the Trustee had entered into Minutes of Settlement in December 2008 after a chambers meeting with the motions judge. Among other items, they agreed that a Rule 21 motion would be brought before the motions judge to determine the legal enforceability of set-off clauses found in construction agreements between Tabrco and Sundial companies. When the motion came on before the motions judge in early February, Sundial took the position that a Rule 21 motion was inappropriate, because there were serious factual issues in dispute.

[6] Sundial submits that the motions judge misunderstood what was agreed in the Minutes of Settlement and that it did not change its position. Moreover, counsel took the position he did because he found legal authority holding that it is inappropriate to determine a hypothetical question of law on a Rule 21 motion. The motions judge is said to have erred in awarding costs against the successful party in the absence of special circumstances or a finding of misconduct.

[7] The awarding of costs is discretionary. The motions judge made reference to the factors in Rule 57.01. Rule 57.01(2) permits an award of costs against a successful party “in a proper case”. Such an award can be made even where there is no misconduct on the part of the successful party (B.(R.) v. Children’s Aid Society of Metropolitan Toronto (1992), 1992 2831 (ON CA), 10 O.R. (3d) 321 (C.A.) at p. 30 (Quicklaw version)).

[8] Given Sundial’s agreement to proceed by a Rule 21 motion in December 2008, the motions judge found that costs were thrown away as a result of the argument in February that a Rule 21 motion was not appropriate and would not advance the proceedings. For this reasons, he ordered Sundial to pay the Trustee’s costs. Whether I would have exercised my discretion in the same manner is not the issue in this motion. I am not satisfied that he exercised his discretion improperly or made an error in principle, or that there is good reason to doubt the correctness of the decision.

[9] Therefore, the motion for leave to appeal is dismissed. Costs to the responding party, the Trustee, are fixed at $3,500.00, plus GST and disbursements, payable within 30 days.

Swinton J.

Released: April , 2009