Court of Appeal for Ontario

Date: 2017-01-12 Docket: C61469; C61468

Judges: Cronk, Rouleau and Huscroft JJ.A.

Between

RJM56 Investments Inc. Applicant (Appellant)

and

Kevin Kurnik and Canada Revenue Agency Respondents (Respondents in Appeal)

Application under Rule 14.05(3)(d) and (g) of the Rules of Civil Procedure

And Between

Kevin Kurnik and the Kurnik Family Trust Plaintiffs (Respondent)

and

Martin McCarthy, the McCarthy Family Trust, RJM56 Investments Inc. (formerly R.J. McCarthy Limited), RJM56 Holdings Inc. (formerly R.J. McCarthy Holdings Inc.), 1434669 Ontario Inc. and 214CO Investments Inc. (formerly 2140831 Ontario Inc.) Defendants (Appellant)

Counsel

Melvyn L. Solmon and David M. Sherman, for the appellant

Michael R. Kestenberg, for the respondent

Andrew Kinoshita and P. Tamara Sugunasiri, for Canada Revenue Agency

Heard: September 21, 2016

On appeal from the judgment of Justice Suhail A.Q. Akhtar of the Superior Court of Justice, dated November 10, 2015.

Costs Endorsement

[1] On November 4, 2016, this court issued its decision allowing the appeal in part. We allowed the appellant's appeal from the judgment granting partial summary judgment but dismissed its appeal of the lower court's dismissal of its application. The appellant was awarded its costs of the appeal fixed in the amount of $15,000 inclusive of disbursements and applicable taxes. The decision also provided that if the parties could not agree on costs in the court below, they were to make brief written submissions. These have now been received.

[2] The appellant seeks costs in the court below on a partial indemnity basis from the commencement of the application up to the date of its offer to settle and on a substantial indemnity basis thereafter under rule 49 of the Rules of Civil Procedure, for its original application and for defending against the respondent's motion. In the alternative, the appellant seeks partial indemnity costs for the proceedings in the court below fixed in the amount of $57,031.43, inclusive of disbursements and HST. It also seeks costs of the appeal on a substantial indemnity basis based on the offer to settle that was made in the context of its application.

[3] The costs of the appeal were fixed in our original decision and we see no basis on which to review that decision.

[4] With respect to the costs of the original application and motion, we agree with the respondent's submission that the offer to settle referred to by the appellant is of no relevance to the issue of costs. It was made as an offer to settle the appellant's own application and that application has been dismissed. We also agree with the respondent's submission that the result on appeal, and as a consequence in the court below, was mixed. This is because the appeal was allowed strictly on the basis of the motion and the appeal of the dismissal of the application was dismissed as moot.

[5] In our view, the $57,031.43 being sought by the appellant in partial indemnity costs for the original application and motion is excessive. In the court below, the respondent, who had initially been successful on both the application and the motion, received a costs award of $28,565.99. In our view, taking into account the fact that the appellant's application was not successful but that the appellant was successful on appeal with respect to the motion and specifically on the critical issue of its obligation to pay additional amounts to the respondent, a reasonable amount for costs in the court below is the same amount originally awarded to the respondent, that is, $28,565.99.

[6] In conclusion, costs of the application and motion in the court below are awarded to the appellant fixed in the amount of $28,565.99, inclusive of disbursements and applicable taxes.

"E.A. Cronk J.A."

"Paul Rouleau J.A."

"Grant Huscroft J.A."