ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Tranquilli J.

BETWEEN:

Deltro Electric Ltd.

Applicant/Moving Party

– and –

Coldbox Builders Inc.

Respondent

Michael Muzzuca, Jordan Routliff, for the Applicant/Moving Party

Brian Kuchar, for the Respondent

HEARD IN WRITING: March 14, 2024

1By reasons released January 3, 2024, this court dismissed the applicant’s motion for leave to apply for judicial review from the order of Adjudicator Pendlebury dated January 11, 2023 is dismissed.

2The parties have not resolved costs.

3The respondent seeks costs of $13,803.13, comprised of partial indemnity costs of $11,684.38 for the motion for leave and full indemnity costs of $2,118.75 for the cost submissions. The respondent submits their time spent was reasonable given the voluminous materials filed by the applicant that required careful review. The applicant further complicated the matter through its failure to address the proper test on leave as set out in Anatolia Tile & Stone Inc. v. Flow-Rite Inc., 2023 ONSC 129. The respondent argues that had the applicant addressed the proper test, the inevitable failure of the motion would have been apparent and the motion unnecessary. As to costs, the respondent submits full indemnity costs for its submissions justified given the applicant’s rejection of the respondent’s cost outline.

4The applicant submits that either no costs should be ordered or that costs are more reasonably in the range of $1,500 to $2,000. The applicant notes there are conflicting decisions in this relatively new area of law under the Construction Act and submits its motion for leave was reasonable in those circumstances. Moreover, the respondent’s cost outline demonstrates “over-lawyering” of the file, with multiple counsel and excessive time by senior counsel. This is particularly unreasonable where the respondent did not file a record, only a factum.

Analysis

5The exercise of this court’s discretion in awarding costs is guided by s. 131 of the Courts of Justice Act, the factors under rule 57.01 of the Rules of Civil Procedure and the overarching principles as articulated in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ONCA). The fixing of costs is not a mechanical exercise. The objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the proceeding: Boucher, para. 26.

6The court is satisfied the respondent is entitled to costs as the successful party. The applicant did not address and did not appear to contemplate the high threshold for leave to commence judicial review as set out in Anatolia Tile. However, while the applicant’s materials were voluminous, the court acknowledges the concern that the respondent’s claimed time was excessive. If, as submitted by the respondent, it was obvious the applicant’s motion was doomed per Anatolia Tile, why would three lawyers and a law clerk spend that much time in reviewing and responding to the matter. The court accepts that diligence required the respondents to review the applicant’s material, particularly given the financial stakes; the question is what was reasonable in the circumstances.

7To that end, the court notes that the applicant’s partial indemnity costs on the motion were $4,468.80, which is less than half of the respondent’s partial indemnity claim. The applicant was the one to generate the voluminous record and written submissions. A comparison of rates gives insight to the amount of costs the unsuccessful party could reasonably expected to pay. As such, it is not surprising the respondent’s costs outline was unacceptable to the respondent. In those circumstances, the court will not consider full indemnity costs for the applicant’s cost submissions.

8Notwithstanding the leave test recently articulated in Anatolia Tile, the court also acknowledges that the “prompt payment regime” under the Construction Act is relatively new and unsettled. The court will therefore not conclude that the applicant’s conduct throughout was manifestly unreasonable.

9The court acknowledges the respondent’s advice as to decisions which fixed costs in the range of $1,500 to $2,000; however, in each of those decisions that was the very sum sought by the successful party. At the same time, it is observed that costs in Anatolia Tile were fixed at $1,800, although the relative positions of the parties and whether costs were in issue, were not addressed.

10In all the circumstances, in my view a fair and reasonable sum is $5,000, inclusive of fees, disbursements and HST, encompassing both the motion for leave and submissions as to costs.

11The applicant shall pay the respondent’s costs of this motion for leave, including cost submissions, fixed in the amount of $5,000, inclusive of HST.

Justice K. Tranquilli

Released: March 18, 2024

CITATION: Deltro Electric v. Coldbox Builders, 2024 ONSC 65