CITATION: 2250898 Ontario Inc. v Mukelova, 2022 ONSC 6512
COURT FILE NO.: DC 312/22
DATE: 2022 11 22
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
2250898 ONTARIO INC. O/A FERRARI & ASSOCIATES INSURANCE AND FINANCIAL SERVICES
Plaintiff (Respondent)
- and -
TAMILIA MUKELOVA, MARIANA MICHAEL, RAMI MICHAEL and TAMARA SERGIE
Defendants (Appellants)
COUNSEL:
J. Van Wiechen and S.N. Zeitz, for the Plaintiff (Respondent)
C.L. Spry and Z. Pringle, for the Defendants (Appellants)
HEARD: In Writing
COSTS ENDORSEMENT
[On appeal from a Decision of Associate Judge R. Frank dated May 20th, 2022.]
LeMay J.
[1] The Appellants had appealed a decision of Associate Judge Frank granting leave to the Respondent to amend its' Statement of Claim to add a Revenue Misrepresentation claim. The Associate Judge found that the Revenue Misrepresentation claim was encompassed within the Statement of Claim and that the agreement between the parties did not impose a limitations period on the action. The result of the Associate Judge's decision was that the Appellants did not have any defence to the Revenue Misrepresentation Claim under the Limitations Act, 2002, S.O. 2002, c. 24, Sch B.
[2] These findings were appealed, and I heard the appeal on September 29th, 2022, and released my reasons on October 28th, 2022 (see 2022 ONSC 6107). In my reasons, I allowed the appeal to the extent that I set aside the finding of the Associate Judge that the Revenue Misrepresentation claim was encompassed within the original Statement of Claim. The appeal of the remaining issues was dismissed.
[3] Both parties had filed bills of costs for the appeal that had a very similar quantum on them. At the hearing, I asked counsel whether they were prepared to agree on the costs of the appeal. Counsel for the Appellants advised that she was prepared to agree on $20,000.00 inclusive of costs and disbursements to the successful party. Counsel for the Respondent took instruction and advised the Court office shortly afterwards that he was prepared to accept the same amount as being paid to the successful party.
[4] The appeal was allowed in part. At this point, each party is now arguing that they should be entitled to the costs that were agreed as being payable to the successful party. The Appellant argues that they now have a viable Limitations Act defence that did not exist prior to the appeal. The Respondent argues that the Appellants were completely unsuccessful because their Notice of Appeal did not ask for the Court to set aside the finding that the Revenue Misrepresentation claim was encompassed within the original Statement of Claim. Instead, the Respondents argue that the Appellants were only successful on an issue that the Court raised for the first time at the hearing of the appeal.
Analysis and Decision
[5] There are no arguments between the parties as to the reasonableness of the costs. The only question that I have to determine in setting the costs for this appeal is who was the successful party. That is a simple question that requires the Court to consider who got what they asked for. Scipione v. Scipione, 2015 ONSC 5982, Sco-Terra v. The Corporation of the Town of Mono, 2019 ONSC 1725.
[6] I start with the observation that neither party was entirely successful in this appeal. The Appellants wanted to have the Revenue Misrepresentation claim dismissed on the basis of the Limitations Act arguments or, in the alternative, on the basis of the contract between the parties. I rejected both arguments. Therefore, the Appellants were not entirely successful on this appeal.
[7] However, the Respondents were also not entirely successful on the appeal. The Respondents now must deal with a Limitations Act defence to their claim. That is a significant change in the litigation landscape. As I noted at paragraph 47 of my reasons:
[47] I appreciate the Appellants' argument that it is difficult to square the Associate Judge's conclusion that there is "conflicting evidence" on the limitations issue with Mr. Ferrari's January 31st, 2019 e-mail reproduced at paragraph 14, above. That difficulty is exacerbated by Mr. Ferrari's discovery testimony, which also supports the view that Mr. Ferrari was well aware of the Revenue Misrepresentation Claim by no later than January of 2019, more than two years before he raised it at discoveries.
[8] This Limitations Act defence is entirely viable, and is based on significant evidence in the record before the Court. Counsel for the Respondent argues that the issue of allowing the Appellants to plead the Limitations Act was a matter first raised in oral argument. I disagree. It is an alternative argument that flows naturally from the positions of the Appellants and the reasons of the Associate Judge. The Appellants specifically raised both the Limitations Act and the question of whether there was a limitations period in the agreement between the parties. I also note the argument made in reply by the Appellants that this issue was previously canvassed before Corbett J. It is not necessary for me to resolve that issue in order to conclude that the issue of the Limitations Act defence is not a new issue.
[9] I also note that Respondent's counsel argued that these Limitations Act issues are, and should be, left to trial. While it is sometimes the case that the Court will have to leave controversial Limitations Act issues to trial, they are also dealt with on motions such as this.
[10] Indeed, in this case it was not unreasonable for the Appellants to raise the Limitations Act issues on this pleadings motion. As I set out at, inter alia, paragraph 47 of my reasons, there were concrete and ascertainable facts that supported the Appellant's position on the Limitations Act issue while the Respondent's position was supported by more general assertions.
[11] In the end, the Appellants acted reasonably in raising the Limitations Act issue both here and in the Court below. The Appellants were also successful on having the Limitations Act issue remain part of the pleadings. In my view, that is a very significant measure of success, and the Appellants are entitled to some costs for the appeal. They are not, however, entitled to all of the partial indemnity costs of the appeal.
[12] Given all of the foregoing, I have determined that costs payable by the Respondent to the Appellant should be fixed in the sum of $10,000.00, inclusive of HST and disbursements.
The Effects of My Decision
[13] There are two collateral issues that flow from my finding that the Appellants are entitled to some costs of the appeal. First, there are the costs of the motion below. The Associate Judge awarded costs in the sum of $13,000.00. Counsel for the Appellants asks for their costs of the motion at the hearing below, in part on the basis that the Respondent has been intransigent in the manner that it has litigated this action. In the alternative, counsel argues that each side should bear their own costs of the hearing below.
[14] Counsel for the Respondent argues that the costs award below should not be disturbed. That argument is based on his position that the Respondents were entirely successful on the appeal, a position that I have already rejected.
[15] In my view, the correct disposition of the costs from the appeal below is for each side to bear their own costs. Had the Associate Judge come to the same conclusions that I did, the result would have been that both sides got something significant out of the motion. The Respondents would have gotten the right to amend their Statement of Claim and the Appellants would have gotten the right to advance their Limitations Act defence.
[16] Then, there is the cost for the preparation of the costs submissions. Both counsel suggest that costs in the sum of $1,500.00 inclusive of HST and disbursements are appropriate for the preparation of the initial cost submissions. Given that the Appellants were successful in persuading me both to award them some costs for the appeal and to set aside the costs order in the Court below, they are entitled to their costs on the costs submissions.
[17] Counsel for the Respondent asked for an additional $1,800.00 inclusive of HST and disbursements for preparing the reply submissions. Counsel for the Appellant did not make a similar request. Given that I have determined that the Appellant's should be entitled to costs for the preparation of the costs submissions, it is not necessary for me to address the Respondent's additional request.
Disposition
[18] For the foregoing reasons, I am ordering as follows:
a) Each side shall bear its own costs of the motion before Associate Judge Frank.
b) The Respondent shall pay a total of $11,500.00 inclusive of HST and disbursements to the Appellants on account of the appeal and the costs submissions.
c) The costs in paragraph b are to be paid within thirty (30) days of today's date.
LeMay J.
Released: November 22, 2022
CITATION: 2250898 Ontario Inc. v Mukelova, 2022 ONSC 6512
COURT FILE NO.: DC 312/22
DATE: 2022 11 22
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
2250898 ONTARIO INC. O/A FERRARI & ASSOCIATES INSURANCE AND FINANCIAL SERVICES
Plaintiff (Respondent)
- and –
TAMILIA MUKELOVA, MARIANA MICHAEL, RAMI MICHAEL and TAMARA SERGIE
Defendants (Appellants)
COSTS ENDORSEMENT
LeMay J.
Released: November 22, 2022