Court File and Parties

Court of Appeal for Ontario Date: 2022-05-19 Docket: C68121, C68122 & C68123

Before: Feldman, Lauwers and Trotter JJ.A.

Docket: C68121

Between: Heliotrope Investment Corporation Plaintiff (Respondent)

And: 1324789 Ontario Inc., Martha Lorraine Beach, Johnathan Gary Beach and 1073650 Ontario Inc. Defendants (Appellants)

And: 1324789 Ontario Inc., Martha Lorraine Beach, Johnathan Gary Beach and 1073650 Ontario Inc. Plaintiffs by Counterclaim (Appellants)

And: Canadian Western Trust Company (In Trust for RRSP Plan Number #10084752 and Plan #10084190), Heliotrope Investment Corporation, Magenta Capital Corporation and Magenta Mortgage Investment Corporation Defendants by Counterclaim (Respondents)

Docket: C68122

And Between: Canadian Western Trust Company (In Trust for RRSP Plan Number #10084752 and Plan #10084190) Plaintiff (Respondent)

And: 1324789 Ontario Inc., Martha Lorraine Beach, Johnathan Gary Beach and 1073650 Ontario Inc. Defendants (Appellants)

And: 1324789 Ontario Inc., Martha Lorraine Beach, Johnathan Gary Beach and 1073650 Ontario Inc. Plaintiffs by Counterclaim (Appellants)

And: Canadian Western Trust Company (In Trust for RRSP Plan #10084752 and Plan #10084190), Heliotrope Investment Corporation, Magenta Capital Corporation and Magenta Mortgage Investment Corporation Defendants by Counterclaim (Respondents)

Docket: C68123

And Between: Canadian Western Trust Company (Incorporation No. A46845), In Trust for RRSP Plan Number #10084189 and Plan #10084190 Plaintiff (Respondent)

And: 1324789 Ontario Inc., 1073650 Ontario Inc., Johnathan Gary Beach and Martha Lorraine Beach Defendants (Appellants)

Counsel: Bruce Marks, for the appellants Charles L. Merovitz, Denise Sayer and Eric Lay, for the respondents

Heard: February 18, 2021 by video conference

On appeal from the judgment of Justice Patrick Hurley of the Superior Court of Justice, dated February 5, 2020, with reasons reported at 2020 ONSC 810.

Costs Endorsement

[1] The panel dismissed the appeal for reasons reported at 2021 ONCA 589. The parties were unable to agree on costs and provided submissions to the court.

[2] The respondents claim costs in the total amount of $190,372, inclusive of disbursements and HST. The bulk of the claim relates to the costs of the main appeal, and to their response to the appellants’ second and third motions for the admission of fresh evidence heard by the panel. The rest of the claim for costs, about $40,000 in total, relates to procedural skirmishes leading up to the appeal, in what this court described in the reasons as “an obscuring blizzard of litigation”.

[3] The respondents argue that they are entitled to full indemnity costs because these are mortgage actions, and the charges have contractual language obliging the appellants to pay on that scale. In addition, the appellants made a number of scurrilous accusations against the respondents in the face of what one of the decisions in the court below termed the appellants’ “reprehensible conduct”. While we noted that these were not properly constituted issues on the appeal, they did form part of the context within which the respondents were obliged to prepare.

[4] The appellants argue that the respondents’ costs claims are simply excessive. They are duplicative, with too many lawyers involved doing too much work that was, in the end, not helpful. Comparatively, the appellants say, their substantial indemnity costs were about $50,000.

[5] The respondents explain that two law firms were involved in this appeal. Merovitz Potechin LLP was engaged only on the appeal. Paris & Company was engaged in the underlying actions and was necessarily present for the appeal in order to provide assistance and information to appellate counsel. There is nothing unreasonable in this arrangement.

[6] Even though this court will give effect to contractual language in a charge requiring full indemnity costs, the court also has an overriding discretion. In the circumstances of this difficult and overly complex litigation, the responsibility lies with both the appellants and the respondents, warranting some discretionary adjustment. In particular, procedural skirmishing should not be encouraged. We therefore fix costs payable by the appellants to the respondents in the amount of $170,000, all-inclusive.

“K. Feldman J.A.” “P. Lauwers J.A.” “Gary Trotter J.A.”