1629749 Ontario Ltd. v. Ontario Motor Vehicle Industry Council, 2013 ONSC 2967

CITATION: 1629749 Ontario Ltd. v. Ontario Motor Vehicle Industry Council, 2013 ONSC 2967

DIVISIONAL COURT FILE NO.: 446/12

DATE: 2013/05/22

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: 1629749 Ontario Ltd. o/a “Coast 2 Coast Cars”, Jaqstan Consulting Inc. o/a “AutoLoans4You”, Paul Shapiro, Jason Shapiro and Jacqueline Rabinowitz, Plaintiffs

AND:

Ontario Motor Vehicle Industry Council, Registrar, Motor Vehicle Dealers Act, Louise Cohen, Davie Wilson, Laura Halbert, Stuart Sherman, Mary Jane South and Pat Cubellis, Defendants

BEFORE: Herman J.

COUNSEL: Paul Shapiro, for himself, 1629749 Ontario Ltd. o/a “Coast 2 Coast Cars” and Jaqstan Consultaing Inc. o/a “Auto Loans4You”, Plaintiffs/Appellants

Bernard C. LeBlanc, for the Ontario Motor Vehicle Industry Counsel, Registrar, Motor Vehicle Dealers Act, Louise Cohen, David Wilson, Laura Halbert, Stuart Sherman, Mary Jane South, Defendants/Respondents (“the OMVIC defendants”)

HEARD: May 14, 2013

ENDORSEMENT

[1] The plaintiffs seek leave to appeal the costs order of Matlow J., dated September 4, 2012, awarding costs of $12,500 to the OMVIC defendants. The plaintiffs submit that the judge erred when he awarded costs in the face of an agreement between the parties that the action would be discontinued on a without costs basis. Furthermore, the judge did not address the issue of the agreement in his reasons.

[2] As a preliminary matter, Mr. Paul Shapiro, one of the plaintiffs, sought leave to represent the two corporate plaintiffs. Mr. Shapiro indicated that he was authorized to represent the corporations. However, he did not provide any evidence of authorization.

[3] Mr. Shapiro’s children, Jason Shapiro and Jacqueline Rabinowitz, also plaintiffs in this action, are the principals of the two corporations. They were not present in court.

[4] In the interests of avoiding the time and costs of an adjournment, I granted Mr. Shapiro leave to argue the motion for leave to appeal on behalf of the corporate plaintiffs, subject to him providing the necessary authorization within seven days. I received the necessary authorization on May 15, 2013.

The background

[5] Mr. Shapiro included in his Factum and his submissions numerous instances of what he submits was unfair treatment against him and members of his family by the Ontario Motor Vehicle Industry Council. While these submissions provide a background with respect to what led up to the costs order, the focus of this motion for leave to appeal must be on the costs order of September 4, 2012.

[6] The plaintiffs commenced this action on March 24, 2011.

[7] The OMVIC defendants advised the plaintiffs of their intention to bring motions to dismiss the action. They delivered a motion record on September 15, 2011 and delivered their factum on December 9, 2011.

[8] After that date, there was correspondence between counsel for the parties with respect to settling the action. The plaintiffs take the position that the parties agreed that the plaintiffs would discontinue the action on a no costs basis. The OMVIC defendants’ position is that there was no agreement.

[9] In any event, the plaintiffs discontinued their action on February 28 2012. In the result, the only issue to be determined on the return of the motion was costs.

[10] The parties made written cost submissions.

[11] On June 21, 2012, the judge ordered costs in favour of the defendant, Mr. Cubellis, in the amount of $7,500, noting that no cost submissions had been received on behalf of the OMVIC defendants. In his endorsement, the judge stated that the amount sought by Mr. Cubellis was grossly unreasonable. He indicated that it was not a case in which substantial indemnity costs should be awarded. He further noted that the award of $7,500 was fair and reasonable and in accordance with the reasonable expectations of the parties.

[12] For some reason, the cost submissions of the OMVIC defendants had gone astray. The submissions were located. On September 4, 2012, the judge extended the time for the submissions of the OMVIC defendants and awarded costs to them of $12,500. His endorsement states “My endorsement of June 21, 2012, as it applied to the costs award to the defendant, Cubellis, shall apply, apart from quantum…”.

[13] It is that order that the plaintiffs now seek to appeal.

General principles

[14] Rule 62.02(4) provides that leave to appeal shall not be granted unless:

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

[15] Furthermore, leave to appeal a costs order should be sparingly granted, and only in obvious cases. The proposed appeal must raise an issue of general importance that goes beyond the interests of the parties (Poulin v. Poulin, [2007 O.J. No. 4987 (S.C.J.) at para. 22; Bougadis Chang LLP v. 1231238 Ontario Inc. (c.o.b. Billy’s Souvlaki Place), 2012 ONSC 6409, [2012] O.J. No. 5433 (Div. Ct.)).

Agreement between the parties

[16] The plaintiffs submit that the judge erred in awarding costs when there was an agreement between the parties that the action would be discontinued without costs. The OMVIC defendants’ position is that there was no agreement.

[17] The correspondence from counsel for the OMVIC defendants makes it clear that their agreement to a discontinuance on a without costs basis depended on three conditions being met. One of these conditions was that the plaintiffs reach an agreement with the other defendant, Mr. Cubellis, on a similar basis. The concern of the OMVIC defendants was that if they settled, but Mr. Cubellis did not, Mr. Cubellis could make a claim against them.

[18] The plaintiffs point to an e-mail, dated February 9, 2012, in support of their position that the parties had an agreement. In that e-mail, their counsel indicated that the OMVIC defendants’ proposal was agreeable. However, in reply, counsel for the OMVIC defendants wrote that the plaintiffs were not in a position to accept their terms without an agreement with Mr. Cubellis, including an agreement on costs.

[19] It is clear from subsequent correspondence that the plaintiffs’ counsel did not believe there was an agreement. On February 22, 2012, he made a formal offer to both the OMVIC defendants and Mr. Cubellis to settle the motion by way of a consent order dismissing the action without costs. Mr. Cubellis did not accept the offer.

[20] In my opinion, the evidence supports the conclusion that there was no agreement between the parties that the action would be discontinued on a without costs basis. I therefore cannot conclude that the judge erred in awarding costs to the OMVIC defendants.

Adequacy of reasons

[21] Mr. Shapiro submits that the judge erred by failing to refer to the issue of the agreement in his endorsement.

[22] As noted above, leave to appeal a costs order will not be granted unless it is clearly wrong. In awarding costs, the judge implicitly rejected the plaintiffs’ submission that there was an agreement between the parties. While it might have been preferable for the judge to refer to the issue in his endorsement, I cannot conclude that the result was clearly wrong or based on an error in principle.

[23] The judge had the parties’ submissions with respect to whether there was an agreement. In exercising the discretion to award costs, a judge is not required to refer to all the factors he considered in reaching his decision (Samson v. Tait, [2005] O.J. No. 1068 (S.C.J.) at paras. 14-15).

[24] Furthermore, nothing would be gained from granting leave on the basis of the inadequacy of reasons in view of the fact that the evidence supports the conclusion that the parties had not agreed to the discontinuance of the action on a without costs basis.

Conclusion

[25] Leave to appeal a costs order should only be granted in exceptional cases, that is, where there is an error in principle or the award is clearly wrong. The evidence supports the conclusion that the parties did not reach an agreement that there would be no costs. Accordingly, the judge did not err when he awarded costs to the OMVIC defendants.

[26] Furthermore, this motion does not raise an issue of importance that goes beyond the interests of the parties.

[27] The motion for leave to appeal is therefore dismissed.

[28] I would encourage the parties to settle the issue of costs. If they are unable to do so, they may provide written submissions. The OMVIC defendants’ submissions should be provided within 14 days. The plaintiffs have a further 14 days within which to provide responding submissions. The submissions should not exceed 3 pages in length, plus a costs outline.

Herman J.

Date: May 22, 2013