Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20221003 DOCKET: C69657 & M53390

Strathy C.J.O., Sossin and Favreau JJ.A.

DOCKET: C69657 BETWEEN Ivylin Ricketts Hume and Weston Rodney Hume Applicants (Respondents) and 11534599 Canada Corp. Respondent (Appellant)

DOCKET: M53390 AND BETWEEN Ivylin Ricketts Hume and Weston Rodney Hume Applicants (Moving Parties) and 11534599 Canada Corp. Respondent (Responding Party)

Counsel: Arnold H. Zweig, for the appellant (C69657) / responding party (M53390) Elaine Peritz, for the respondents (C69657) / moving parties (M53390)

Heard: in writing

On appeal from the order of Justice Kendra D. Coats of the Superior Court of Justice, dated June 28, 2021, with reasons at 2021 ONSC 4565.

Costs Endorsement

[1] On August 5, 2022, in a decision reported at 2022 ONCA 575, this court dismissed the respondents’ motion to quash the appeal and allowed the appeal in part. At the conclusion of the judgment, the court invited written submissions on costs if the parties were unable to reach agreement.

[2] Evidently, the parties were not able to reach an agreement and they take diametrically opposed positions in their submissions on costs.

[3] The appellant submits that it should be entitled to its costs of the motion to quash and appeal before this court, and the application below, all on a full indemnity basis. In making this submission, the appellant relies on its position that it was successful on the appeal, that the terms of the mortgage agreement provide for full indemnity costs and that the respondents allegedly made unsubstantiated allegations against its in-house counsel.

[4] In contrast, the respondents submit that they should receive their partial indemnity costs of the appeal and the motion to quash, and that there should be no change to the costs order made in their favour on the application below. They also seek their costs of other proceedings before this court that were left for this panel to decide, namely a motion for a stay decided in the respondents’ favour and an adjournment of the appeal requested by the appellant.

[5] Accordingly, based on the parties’ submissions, it is necessary to address (1) the costs of the appeal, (2) the costs of the motion to quash, (3) the costs of the motion for a stay, (4) the costs of the adjournment and (5) the costs of the application below.

[6] Before addressing each set of costs at issue, we address the appellant’s submission that it should recover all of its costs on a full indemnity basis based on the terms of the mortgage agreement. As held in Bossé v. Mastercraft Group Inc., 123 D.L.R. (4th) 161 at paras. 62-69, and Chong & Dadd v. Kaur, 2013 ONSC 6252, [2013] O.J. No. 4531, at para. 40, the entitlement to costs in proceedings involving a mortgagor and mortgagee are not always to be based on the terms of the mortgage agreement. In circumstances such as here where, as reviewed below, the appellant’s success was very moderate, in large part based on its own conduct, we find that it is appropriate not to apply the contractual provision to the award of costs.

[7] Therefore, in exercising our discretion on the issue of costs, we have applied the factors set out in r. 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, including the parties’ relative success in the proceedings and their conduct.

[8] With respect to the appeal, in our view, there should be no costs. The appellant raised many grounds of appeal, but ultimately only pursued the issue of whether it had taken lawful peaceable possession of the property and the payment of its management fees. On those issues, the appellant was successful in obtaining a declaration that it had taken peaceable possession of the property and an order for a moderate increase to the amount payable by the respondents attributable to management fees. However, as detailed in the decision, the appellant had persistently refused to comply with court orders, which led to our conclusion that the respondents were entitled to an assignment of the mortgage despite the finding that the appellants had taken peaceable possession of the property. In the circumstances, the appellant’s success was very limited due in large part to its own conduct, and, in our view, this justifies an order of no costs.

[9] With respect to the motion to quash, again there should be no costs. While we dismissed the motion, the motion was prompted by the appellant’s failure to comply with court orders. The respondents had tried other strategies, without success, to get the appellant to comply with the orders. It was reasonable for the respondents to bring the motion and, while this court did not grant the motion, we ultimately addressed the appellant’s conduct through the remedy on appeal. In the circumstances, the respondents should not be required to pay costs of a motion that arose due to the appellant’s non-compliance with court orders.

[10] With respect to the application below, we would not award any costs to the appellant, but we would reduce the costs payable by the appellant to the respondents by 25%. The respondents were successful on many issues on the application. The appellant did not challenge those aspects of the decision on appeal. Most notably, the application judge found that the appellant’s notice of sale was invalid and disallowed a significant portion of the amounts sought by the appellant to discharge the mortgage. The appellant’s moderate success on appeal only justifies a modest reduction in the costs it is to pay to the respondents; it does not justify a reversal of the costs order or a requirement that the respondents pay costs to the appellant. Therefore, the costs award of $37,016.37 on the application is reduced by 25% to $27,762.27.

[11] With respect to the stay motion, the respondents were successful on the motion and should be entitled to their costs. The respondents seek their costs on a substantial indemnity basis. We see no justification for awarding costs of the motion on an elevated scale. Accordingly, the respondents are entitled to their costs of the motion on a partial indemnity basis in the amount of $13,130.60.

[12] With respect to the adjournment, again the respondents should receive their costs thrown away. The adjournment was caused by the appellant’s change in counsel. Accordingly, the respondents are entitled to their costs on a partial indemnity basis in the amount of $6,486.20.

[13] Accordingly, we make the following order:

a. There are no costs payable on the appeal or the motion to quash the appeal;

b. The costs payable to the respondents from the application below are reduced by 25% to $27,762.27;

c. The appellant is to pay costs to the respondents for the stay motion in the amount of $13,130.60; and

d. The appellant is to pay costs to the respondents for the costs thrown away of the adjourned appeal in the amount of $6,486.20.

“G.R Strathy C.J.O.” “L. Sossin J.A.” “L. Favreau J.A.”