Bougadis Chang LLP v. 1231238 Ontario Inc., 2012 ONSC 6409

CITATION: Bougadis Chang LLP v. 1231238 Ontario Inc., 2012 ONSC 6409

DIVISIONAL COURT FILE NO.: 406/12

DATE: 20121115

SUPERIOR COURT OF JUSTICE - ONTARIO

(DIVISIONAL COURT)

RE: BOUGADIS CHANG LLP v. 1231238 ONTARIO INC., c.o.b. BILLY’S SOUVLAKI PLACE

BEFORE: Justice Swinton

COUNSEL: David M. Mayzel, for the Defendant (Moving Party) Boris Goryayev for the Plaintiff (Responding Party)

HEARD AT TORONTO: November 13, 2012

ENDORSEMENT

[1] Assuming that I have jurisdiction to grant leave to appeal a “no costs” order in the Small Claims Court pursuant to s. 133 of the Courts of Justice Act, R.S.0. 1990, c. C.43 (“CJA”), I would, nevertheless, refuse to grant leave to appeal.

[2] Leave to appeal a costs order should be sparingly granted, and only if there has been an error in principle, or the costs award is clearly wrong. Moreover, the proposed appeal should raise an issue of some importance to the administration of justice that goes beyond the interests of the parties (Poulin v. Poulin, [2007] O.J. No. 4987 (S.C.J.) at para. 22). These considerations are particularly important in the present case, given that an appeal of a final order of the Small Claims Court can be brought only if the amount in dispute exceeds $2,500 excluding costs (see s. 31 of the Courts of Justice Act, and O. Reg. 626/00, s. 2).

[3] Deputy Judge Prattas granted a motion brought by the defendant (the Moving Party) to dismiss the plaintiff’s claim on the basis that the claim did not disclose a reasonable cause of action due to the expiry of a limitation period. He went on to say, “Costs are discretionary to the motions judge. I would therefore exercise my discretion and award no costs in this matter” (at para. 29).

[4] The Deputy Judge should have given the parties an opportunity to make submissions on costs. However, I am not satisfied that a “no costs” award for the motion was wrong or based on an error in principle. Rule 15.07 of the Small Claims Court Rules provides that the costs of a motion shall be $100 exclusive of disbursements, absent special circumstances.

[5] The defendant argues that there were special circumstances, as there were three earlier appearances at which the costs of the appearance were reserved, twice to the trial judge and once to the motion judge. As well, the Deputy Judge failed to hear submissions on offers to settle the motion and the claim, in each of which the defendant offered to pay $1.00 and consent to a dismissal of the motion or the claim respectively.

[6] The defendant has not demonstrated that the Deputy Judge made an error in principle, or that his costs award for the motion was clearly wrong.

[7] With respect to the costs of the motion, the offer to settle does not give rise to costs consequences under Rule 14.06, as that rule deals with offers to settle a claim. Moreover, there is no real element of compromise in the offer to settle either the motion or the claim that would, in my view, warrant costs sanctions to the plaintiff under the rules.

[8] The defendant submits that the Deputy Judge erred in not making an order for costs of the claim as a whole. However, it is not evident from the reasons that the Deputy Judge was dealing with the issue of costs of the claim, as well as the motion. In my view, the appropriate response is not to grant leave to appeal, but rather to leave it to the defendant to seek a determination of the costs of the claim by the Deputy Judge on the basis of submissions from the parties. The Deputy Judge is in the best position to assess the parties’ submissions on costs of the claim.

[9] In any event, the proposed appeal does not raise any issue of public importance that warrants consideration on an appeal. Realistically, the maximum amount in issue appears to be less than $2,500 (at most $400 for the motion and $1,500 for the claim, in accordance with s. 29 of the CJA). That is less than the prescribed amount for a Small Claims Court appeal in s. 29 of the CJA.

[10] Accordingly, the motion for leave to appeal the costs order is dismissed.

[11] The parties indicated that offers to settle the present motion for leave had been made, and therefore, they could not make submissions on costs at the end of the hearing. If the parties cannot agree on costs, they are to make brief written submissions within 21 days of the release of this decision, through the Divisional Court office.

Swinton J.

Released: November 15, 2012