Court File and Parties

CITATION: 1658586 Ontario Inc. v. Can-Am Lubricants Inc., (Costs) 2014 ONSC 3975

COURT FILE NO.: 56/14

DATE: 20140708

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: 1658586 Ontario Inc., Yuan Sheng Ou Yang and Ming Zhu Zhuang Appellants/Respondents by Cross-Appeal

AND:

Can-Am Lubricants Inc. Respondents/Appellants by Cross-Appeal

BEFORE: Aston, Sachs and Edwards JJ.

COUNSEL: Andrea M. Habas, for the Appellants Daniel F. Chitiz and Tamara Ramsey, for the Respondents

HEARD: In Writing

COSTS ENDORSEMENT

[1] On May 5, 2014, we dismissed the appeal and cross-appeal, except as they related to a claim for triple rent, the remedies ordered in relation to the claim for additional rent for the period between November of 2005 and November of 2010 and the remedies ordered to rectify the accounting irregularities We requested that the parties provide us with written submissions as to costs. We have received and reviewed those submissions.

[2] The appellants argued that they ought to be awarded their costs of the appeal/cross-appeal and their costs in the court below, both on a partial indemnity basis. They did so on the basis of a submission that as a result of our decision, they had enjoyed substantial success, both at the appellate stage and in the court below.

[3] The respondent’s position on costs is that as success was divided on the appeal, there should be no order for the costs of that aspect of the proceeding. However, with regard to the proceeding below, the respondent argued that it continued to enjoy “significant success” on the issues that the parties had agreed to have determined on that application, even after accounting for the outcome of the appeal. Therefore, the costs order made by the judge below should not be disturbed.

[4] With respect to the costs of the appeal and cross-appeal, we agree with the respondent that success was divided. In coming to this conclusion, we view the finding that there had been oppressive conduct on the part of the appellants as a very significant one for the litigation as a whole. While we did vary other aspects of the application judge’s order, we upheld that finding. Therefore, it is our view that there should be no costs of the appeal.

[5] On the application below, the application judge found that the respondents had been substantially successful and awarded them $25,000.00 for costs and $14,790.00, plus HST for its accounting fees. In view of the outcome of the appeal, it can no longer be said that the respondent’s success in the proceeding below was “substantial”. Success was divided and, thus, with the exception of the accounting fees, the order with respect to costs below is set aside and there are to be no costs of that application.

[6] When it comes to the accounting fees, we accept that, given the result of the proceeding, it was reasonable for the respondent to incur those costs. Further, it was the conduct of the appellants that made it necessary for the respondent to retain accountants. For these reasons, we find that the order below awarding the respondent $14,790.00, plus HST for accounting fees should stand.

ASTON J.

SACHS J.

D. EDWARDS J.

Date: 20140708