CITATION: Unimac-United Management Corp. v. St. Clare’s-Monaco Place, 2016 ONSC 4874
DIVISIONAL COURT FILE NO.: 110/15
DATE: 20160729
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: UNIMAC-UNITED MANAGEMENT CORP., Applicant
AND:
ST.CLARE’S-MONACO PLACE, 2295091 ONTARIO LTD. AND 2063889 ONTARIO LTD., Respondents
BEFORE: Then, Harvison Young, Lederer JJ.
COUNSEL: Osborne G. Barnwell, for the Moving Party Applicant
Robert A. Centa and Jodi J. Martin, for the Respondents, 2295091 Ontario Ltd. and 2063889 Ontario Ltd.
Priya Sarin,for the Respondent, St. Clare’s-Monaco Place
COSTS E N D O R S E M E N T
[1] The respondents, 2295091 Ontario Ltd, and 2063889 Ontario Ltd.,(together “229”) and St, Clare’s-Monaco Place seek their costs arising out of the applicant’s motion for judicial review of Master Albert’s decision to recuse herself from the construction lien proceedings with respect to which she was the case management master. This court dismissed the judicial review application as premature.
[2] Mr. Centa, on behalf of 229, took the lead role for the respondents in the judicial review application and claims a total of $39,994.47 on partial indemnity or $57,923.33 on a substantial indemnity basis inclusive of fees, disbursements and HST. These costs include its costs of a motion to stay the construction lien proceedings until the disposition of the judicial review which was granted, with costs reserved to the hearing of the judicial review application.
[3] St Clare’s claims costs in the amount of $5,350.55 all in.
[4] 229 asks the court to order costs on a substantial indemnity basis for a number of reasons. First, it notes that it offered to settle the application in March, 2015 on the basis that it would pay the applicant $3,000 in costs in exchange for a dismissal of the judicial review. Second, it submits that the behavior of the losing party has been “reprehensible, scandalous or outrageous” in that the application was based on unsubstantiated allegations which attacked a judicial officer and (it submits) were crafted to avoid the statutory prohibition on appeals of interlocutory orders under the scheme set out in the Construction Lien Act, RSO 1990, c. C. 30, s. 71(3). It submits that although the legal principles were straightforward, the underlying factual matrix was complex and that costs were increased by the additional two interlocutory motions brought by the applicant. The issues were important in that they engaged important systemic issues such as impartiality of a judicial officer and were very important to the respondents due to the fact that, had the application succeeded, the entire reference would have been required to start over, causing further delay and economic hardship for all the lien claimants.
[5] Both respondents submit that an elevated costs award is justified in light of the applicant’s conduct which they claim included “reckless” attacks on the integrity of a judicial officer and purposely delaying the determination of the underlying lien proceedings. Moreover, they claim that a request for an elevated costs award on a substantial indemnity basis is well within the reasonable expectations of the applicant because they knew that the respondents “were prepared to protect the administration of justice by responding to the application”. Despite repeated requests from 229, the applicant did not provide a costs outline to the respondents. 229 asks the court to draw an inference from this that the applicant’s costs would have been in the same range and that the costs it seeks are within the range of its reasonable expectations.
[6] Finally, the respondents submit that the fact that the parties prepared for a hearing on the merits should not foreclose a substantial indemnity costs award on the basis that the application was dismissed for prematurity. 229 specifically made written submissions on the prematurity issue and Mr. Centa made detailed submissions with respect to that issue. The respondents were nevertheless prepared to argue the application on its merits.
[7] The applicant submits that the respondents should not be entitled to any costs because the court dismissed that application on the basis of prematurity and not on the basis of the merits of the claim. It also submits that it should not be penalized for the delays in the construction lien matter because it was not solely responsible for those delays. It disputes the entitlement of the St. Clare’s to costs because it took a very minimal role in the judicial review.
Analysis
[8] Applying the factors reviewed by the parties and as set out in Rule 57.01(1), We would order costs in the amount of $30,000 payable by the applicant to 229 and $3000 payable to St. Clare’s. There is no reason not to apply the general principle that costs follow the event in this case. The judicial review application was dismissed. We are not satisfied, however, that an award of costs on a substantial indemnity basis is justified in this case.
[9] While there can be no question that attacking the integrity of a judicial officer is a serious matter, that issue was not finally determined on its merits because the application was dismissed for prematurity.
[10] This was an issue that was important to all the parties. The bias issue was complex and required extensive review of the record and history of proceedings before the Master. For this reason, the preparation required was considerable and the materials filed were voluminous. Unlike many matters heard in Divisional Court, this was not a mere restructuring of the issues that had been argued below. This was particularly so with respect to the prematurity question as applied to the context where bias has been raised before the first instance hearing has concluded.
[11] Turning to quantum, 229 claims costs for its unsuccessful stay motion. We do not see any basis for it to claim costs of that motion and accordingly such costs form no part of this order.
[12] While we are satisfied that it was necessary for 229 to be prepared to address all the issues that might arise, it is true that, as the applicant notes, the court did not finally determine the application on the merits. However, 229 did anticipate and address the prematurity argument in the thorough materials it prepared and filed on the motion. Both respondents were, quite properly, prepared to argue the application on its merits. The prematurity issue in itself required detailed submissions and the hearing nevertheless continued through most of the day.
[13] We also take into account the fact that parties such as these respondents, who respond to an allegation of bias against a judicial officer in a continuing matter, should not be penalized for doing so because without their submissions, a reviewing court would have only the applicant’s version of the circumstances of the bias allegations. Respondents such as small lien claimants may be in difficult situations when the construction lien process grinds to a halt while an interlocutory proceeding such as this runs its course when the lien claimant’s ultimate aim is simply to get paid for work it completed. Such claimants may simply be unable to afford such legal proceedings, a burden which adds to the burden of the delay that is caused by the original recusal motion.
[14] The quantum claimed is, however, excessive in light of the usual cost awards in Divisional Court. Taking all of the factors as set out in Rule 57.01 into account, we would order costs in the amount of $30,000 payable by the applicant to the respondent 229 and $3000 to the respondent St.Clare’s.
E.F. Then, J.
___________________________ A.L. Harvison Young, J.
T.R. Lederer, J.
DATE: July 29, 2016