COURT FILE NO.: 206/04
DATE: 20050310
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LANE, HOWDEN and MOLLOY JJ.
B E T W E E N:
MARY ARHONTO SEARS
Joseph Markin, for the Appellant
Appellant (Applicant)
- and -
MARIE SEARS, PAUL SEARS, ATHENA MALLIOUX and THE CANADIAN IMPERIAL BANK OF COMMERCE MORTGAGES INC.
Eric Wredenhagen, for the Respondent CIBC Mortgages Inc.
Respondents (Respondents)
HEARD: March 8, 2005
BY THE COURT:
REASONS FOR DECISION
The Issue
[1] The issue raised by this appeal is when an order of the Court of Appeal fixing costs is payable. Specifically, when an order simply states that costs are fixed without stating when they are payable, and where the litigation itself will still be proceeding, are those costs payable forthwith, or not until the end of the litigation?
Background
[2] At the heart of the underlying litigation is a family dispute involving a Toronto residential property. Title to the property was transferred to Marie Sears as part of the settlement of a dispute about the validity of the will of her late husband Nicholas Sears. In that disputed will, Nicholas Sears had left the property to his daughter Mary Sears. As part of the estate litigation settlement, Mary retained some interest in the property, or in the proceeds of any sale of the property. Thereafter, Marie Sears transferred the property to her two other children (the respondents Paul Sears and Athena Mallioux) and a mortgage was obtained from CIBC Mortgage Inc to finance renovations. Mary Sears commenced this litigation seeking to set aside the transfer of the property to her two siblings on the grounds that it was a fraudulent conveyance, and also to set aside the mortgage.
[3] That litigation proceeded to trial before Jarvis J. on September 20, 2002. The case was argued on the basis of fraudulent conveyance and decided on that basis. Jarvis J. ruled that the burden was on the applicant, Mary Sears, to prove the property was transferred for less than market value. Since she led no evidence as to the market value, that burden was not discharged and the action was dismissed.
[4] Mary Sears appealed the decision of Jarvis J. to the Court of Appeal. For Reasons released on August 1, 2003, the Court of Appeal held that Jarvis J. correctly decided the matter of the alleged fraudulent conveyance, but that the case should have been considered based on trust principles rather than fraudulent conveyance. From a trust law perspective, the burden would fall on the trustee (Marie Sears) to establish: (1.) that there had actually been sale; and (2.) that the sale was at fair market value. In the result, the appeal was allowed and the Court directed a new trial on the two issues upon which Marie Sears had the burden (the fact of a sale and fair market value).
[5] The final paragraph of the Court of Appeal’s Reasons provides:
The appellant is entitled to her costs on appeal and below. Costs of the appeal are fixed at $6000.
The Order Now Under Appeal
[6] Mary Sears brought a motion to enforce various outstanding cost orders, including the costs of $6000 ordered by the Court of Appeal. She sought to strike the Respondents’ pleadings for failure to pay the cost orders. That motion was heard by Pepall J. on February 17, 2004 and decided by her in an endorsement released later that same day. It is from that order that this appeal is now brought, but only in respect of that portion of the order dealing with the costs ordered by the Court of Appeal.
[7] The portion of the motion judge’s endorsement dealing with the Court of Appeal costs states:
. . . the order [referring to the Court of Appeal Order] was silent on when the costs were to be paid. Absent a statement that the costs are payable forthwith or within a certain time such as 30 days, it seems to me that the costs are payable at the conclusion of the litigation: Wine v. Fisher (1998), 1998 5213 (ON CA), 42 O.R. (3d) 153.
[8] On February 23, 2004, counsel for Mary Sears wrote to John H. Kromkamp, advising that a judge of the Superior Court had determined the costs ordered by the Court of Appeal were not enforceable until the entire matter was concluded and asking for his assistance in arranging a motion to obtain clarification from the Court as to its intention.
[9] On February 25, 2004, Mr. Kromkamp replied in writing, stating in part:
The panel has considered the material relating to this question and does not see the necessity to entertain a further motion.
In circumstances where the court intends the payment of costs be deferred, it makes express provisions in its endorsement. In other cases, including the present case, it is the intention of the court that the costs be paid forthwith.
[10] This letter was brought to the attention of the motion judge but she declined to change her order, stating in a brief endorsement, “Even though my order has not been issued and entered, I am of the view that I have already disposed of this motion.”
Analysis
[11] The communication from the Court of Appeal as to the intention of the Court of Appeal’s cost order was provided to the motions judge before her order was issued and entered. It was therefore still within her jurisdiction to change her previous disposition on this point. In our view, she ought to have done so. The Court of Appeal, through its legal officer, had clarified its order and it was not open to a Superior Court judge to interpret it in a different manner.
[12] Mr. Wredenhagen, counsel for the respondent CIBC, submits that a letter from the senior legal officer of the Court of Appeal cannot be treated as an actual decision of the Court of Appeal and that the motions judge was bound to follow previous published case law from the Court of Appeal, specifically Wine v. Fisher (1998), 1998 5213 (ON CA), 42 O.R. (3d) 153.
[13] We disagree. Mr. Wredenhagen may have a valid point with respect to statements in Mr. Kromkamp’s letter as to when costs are payable generally, as a question of law. However, the situation is different with respect to the clarification of the particular costs award made in this case. Mr. Kromkamp advised that he had reviewed this with the panel, that the panel was of the view that a motion was not required, and that the panel had intended costs be payable forthwith. That is sufficient, in our view, to bind the motions judge.
[14] Further, in our opinion, the motions judge erred in applying Wine v. Fisher in this context. In that case, Osborne J.A. had been asked to clarify the meaning of his own costs order made following a motion in which he ordered security for costs of an appeal and fixed costs of that motion at $1750.00. Osborne J.A. first referred to the decision of Cory J. In Banke Electronics Ltd. v. Olvan Tool & Die Inc. (1981), 1981 1920 (ON SC), 32 O.R. (2d) 630 in which it was held that absent language such as “costs payable forthwith”, the costs of an interlocutory motion should be payable at the conclusion of the litigation when all of the costs of the proceeding are assessed. Next, he referred to Orkin on The Law of Costs which also referred to a general rule that costs of interlocutory proceedings are not payable until the end of the litigation unless the court directs otherwise. Osborne J.A. then noted that this general rule as to costs not being payable until the end of a proceeding had developed in the context of costs being referred for assessment rather than fixed by the motions judge and questioned its applicability to costs which are fixed. He stated his opinion that it is preferable that fixed costs be payable forthwith unless there is good reason to order otherwise. However, he was concerned there could be confusion if there was one presumption for costs to be assessed and a different presumption for fixed costs. He therefore held, at p. 156:
Absent language to the contrary, fixed costs of interlocutory proceedings should not be payable forthwith. This will avoid one payment rule for fixed costs and another where costs are not fixed.
(emphasis added)
[15] The decision of Osborne J.A. in Wine v. Fisher was in the context of an interlocutory motion, not a final disposition of the appeal. Further, his reasons repeatedly emphasize that the rule he was seeking to clarify applied to cost orders made on interlocutory motions.
[16] The Order of the Court of Appeal in this case was not an interlocutory proceeding. It was a final disposition of the appeal before the court. Therefore, the principle in Wine v. Fisher does not apply. It does not matter that other litigation between the parties will still be ongoing, as e.g. where a new trial has been ordered. If the appeal itself is finished, the order is a final one. This is so even where the appeal is from an interlocutory motion in an action. In Winnicki v. Forney Welding Equipment & Supplies Ltd., [1994] O.J. No. 231 (Gen.Div.), a defendant had obtained an order staying the plaintiff’s action, which the plaintiff successfully appealed. The Court of Appeal awarded the plaintiff costs of the motion and of the appeal, without specifying when those costs were payable. When the plaintiff sought to enforce the costs ordered by the Court of Appeal, the defendant relied on Banke Electronics v. Olvan Toole & Die Inc., supra, in support of its argument that the plaintiff was not entitled to the costs until the conclusion of the trial. West J. held, however, that the circumstances are different when costs have been awarded by the Court of Appeal. He stated, at paragraph 4 and 5 of his Reasons:
I agree with the position taken by the plaintiff. No matter what transpires in the action or no matter what order of costs is ultimately made the issue of costs of the motion and the appeal have been finally determined by the Court of Appeal.
The plaintiff has been impeded in his action and the Court of Appeal has found this to be improper. In my view, the plaintiff is entitled to have his costs assessed and paid without awaiting the outcome of the motion.
[17] In any event, even with respect to interlocutory motions, the decision in Wine v. Fisher (which was decided in 1998) may now have been superseded by amendments to the Rules of Civil Procedure. Rule 57.03(1) now provides:
57.03 (1) On the hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall,
(a) fix the costs of the motion and order them to be paid within 30 days; or
(b) in an exceptional case, refer the costs of the motion for assessment under Rule 58 and order them to be paid within 30 days after assessment. O. Reg. 284/01, s. 16.
[18] The language of the Rule is mandatory. For all contested motions the court is required to make costs payable in 30 days, unless satisfied that a different order would be just. That requirement applies equally to costs which are fixed and those which are ordered to be assessed. The rationale underlying Wine v. Fisher was that assessed costs and fixed costs should be treated the same and that since there was a presumption that assessed costs would only be payable upon the completion of the litigation, the same presumption should be applied to fixed costs, unless a contrary intention was stated. Given the wording of the new Rule, it is no longer the norm that costs will not be recoverable until the end of the litigation. On the contrary, the norm is that all costs will be payable within 30 days. It seems to us that in the light of this mandatory language, if a judge fails to say anything about when costs are payable, the presumption will be that they are payable in 30 days since the judge is required to make that order absent reasons for doing otherwise. We note as well that such an approach is consistent with the general principle that an order speaks from the date upon which it is made. If an Order contains a provision for payment of a fixed amount, whether for costs or otherwise, it should be enforceable on its terms, without any need for an inquiry as to whether the litigation between the parties has been fully concluded.
Conclusion
[19] In the result, the appeal is allowed and the Order of Pepall J. is varied to provide that the costs ordered by the Court of Appeal are payable forthwith. By agreement of all parties, our order in this regard relates to the $6000.00 fixed as costs of the appeal and the additional $9000.00 in costs assessed for the trial before Jarvis J. (as ordered by the Court of Appeal).
[20] The trial of the issues directed by the Court of Appeal is now scheduled for April 18, 2005. In view of the imminence of the trial, we decline to order that the respondents’ pleadings be struck out in the event that those costs are not paid before the commencement of that trial, nor are the respondents to be prevented from fully participating in that trial by reason only of the non-payment of those costs. Our order in this regard presupposes the trial actually proceeding on April 18, 2005. If for any reason the trial does not proceed in April, the $15,000 shall be payable by April 30, failing which the pleadings of the respondents shall be struck out.
[21] Mr. Wredenhagen appeared on this appeal solely on behalf of the CIBC respondent, but advised that the other respondents supported the position he was taking before the Court. It would appear that the other respondents are no longer represented by counsel. The individual respondents have requested the opportunity to address the issue of costs of this appeal. Accordingly, we will deal with costs by way of written submissions. Those submissions shall be delivered by March 18, 2005. Mr. Wredenhagen has kindly agreed to convey this information and a copy of our decision to the individual respondents. We will entertain submissions on the costs of the leave to appeal motion and the costs of the appeal before us, including who should be liable for such costs, on what scale and in what quantum. Pepall J. has not yet decided the issue of costs of the motion before her. This Court is not in a position to decide those costs as a matter of first instance. That issue is remitted back to Pepall J. for her determination.
LANE J.
HOWDEN J.
MOLLOY J.
Released: March 10, 2005
COURT FILE NO.: 206/04
DATE: 20050310
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LANE, HOWDEN AND MOLLOY JJ.
B E T W E E N :
MARY ARHONTO SEARS
Appellant (Applicant)
- and -
MARIE SEARS, PAUL SEARS, ATHENA MALLIOUX AND THE CANADIAN IMPERIAL BANK OF COMMERCE MORTGAGES INC.
Respondents
REASONS FOR JUDGMENT
BY THE COURT
Released: March 10, 2005