SUPERIOR COURT OF JUSTICE - ONTARIO
DIVISIONAL COURT
RE: MARTIN HEADLAND and LIZ SHAUGHNESSY AND ASSOCIATES (CALEDON) LTD.
Moving Parties/Plaintiffs
- and -
WILLIAM A. McQUAKER a.k.a. MAC McQUAKER, CRAIG COLLINS and EQUESTRIAN MANAGEMENT GROUP INC.
Responding Parties/Defendants
BEFORE: Justice A. Hoy
COUNSEL: Hugh M. MacKenzie, for the Moving Parties/Plaintiffs
Timothy S.B. Danson, for the Responding Parties/Defendants
DATE HEARD: November 24, 2011
ENDORSEMENT
1The plaintiffs, Martin Headland and Liz Shaughnessy and Associates (Caledon) Ltd., seek leave, pursuant to s. 133 of the Courts of Justice Act, R.S.O. 1990, c. C.43, to appeal the September 23, 2011 costs award of Justice Low, awarding costs on a substantial indemnity scale in the amount of $40,000 in favour of the defendants, William A. McQuaker, Craig Collins and Equestrian Management Group Inc., to the Divisional Court.
2Leave to appeal a costs award is not to be granted unless there are strong grounds on which the appellate court could find that the judge erred in the exercise of her discretion. Such leave is granted only sparingly. Peterborough (City) v. Kawartha Native Housing Society Inc. (2010), 2010 ONCA 705, 325 D.L.R. (4th) 426 (C.A.).
3I completely agree with the motions judge that costs on a substantial indemnity scale were warranted in this instance. I am, however, satisfied that leave should nonetheless be granted.
4At issue before the motions judge was whether a claim by a corporation – Tournament of Champions Incorporated (“TOC”) ‑ which the plaintiffs knew had been voluntarily dissolved, could be maintained against the defendants. The plaintiffs’ motion for the revival of TOC was adjourned, and it is the intention of the remaining plaintiffs to have their action transferred to the Commercial List and seek an order reviving TOC as relief on an oppression application. The parties ultimately resolved the defendants’ motion to strike on consent, and TOC’s claim against the defendants was dismissed. The remaining plaintiffs’ claims against the defendants were not struck.
5In lengthy cost submissions, the defendants sought full indemnity costs allocable to their response to the claim against them by TOC, their motion to dismiss TOC’s claim and full preparation for the plaintiff’s motion seeking to have TOC revived, which was adjourned. The defendants submitted that $38,500 of the total of $69,290 of the fees they incurred were allocable to the foregoing. In addition, they claimed HST on such amount and disbursements.
6In their cost submissions, the defendants characterize the plaintiffs’ claims as really constituting claims by TOC. On the statement of claim as it was drafted, I agree. They also characterize TOC’s claim as sure to fail, given that it had been voluntarily dissolved, yet they indicate that they had proceeded to file a defence, serve an affidavit of documents (which principally related to TOC) and prepare for discovery. Time was spent by the defendants considering whether to proceed with a summary judgment motion or proceed to discovery. They also describe the considerable work they had undertaken to respond to the plaintiffs’ motion to revive TOC, which they describe as doomed to fail.
7I would grant leave to appeal the costs award because:
− The full amount of the disbursements ($1,898.68) incurred by the defendants, and not a proportionate share, was allowed.
− While there is no question that having regard to the nature of the allegations made by the plaintiffs, the matter was of great importance to the defendants, given the defendants’ accurate “certain to fail” characterization of TOC’s claim against them, was it reasonable for them to take so many steps before bringing their motion?
− As the plaintiffs’ motion was adjourned, and not heard, the defendants in the usual course would be entitled to costs thrown away as a result of the adjournment, with the balance of their costs to be dealt with following the disposition, withdrawal or abandonment of the motion. While the defendants’ view of the plaintiffs’ chance of success may be accurate, the matter has not yet been disposed of.
Hoy J.
DATE: November 25, 2011