CITATION: Gannes v. Chhabra, 2023 ONSC 2887
DIVISIONAL COURT FILE NO.: DC-9/23
DATE: 20230515
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Kassie R. Gannes and Zallema MootOo, Appellants/Responding Parties
AND:
Steffy Chhabra and Harmanpreet Singh, Respondents/Moving Parties
BEFORE: Nishikawa J. (in writing)
COUNSEL: Ethan Rogers, for the Appellants/Responding Parties
Rajiv Ranjan, for the Respondents/Moving Parties
HEARD at Toronto: May 15, 2023 (in writing)
ENDORSEMENT
Overview
[1] The Appellants, Kassie Gannes and Zallema Mootoo, commenced an appeal of the order of Regional Senior Justice Richetti dated January 25, 2023 (the “Order”) in which he declined to order costs to the Appellants (Defendants in the action) on their motion to set aside a noting in default. The parties had resolved the merits of the motion, and the only matter before the motion judge was costs.
[2] The Respondents, Steffy Chhabra and Harmanpreet Singh, bring a motion for an order that leave to appeal is required. The Respondents take the position that pursuant to s. 133(b) of the Courts of Justice Act, an appeal of the Order to this court requires leave because the appeal is only as to costs. In their notice of motion, the Respondents seek:
an Order that the Defendants (Appellants) must seek leave of the court to bring this appeal of the costs Order… which has been brought without leave, and such leave issue be determined before the appeal since there is no strong grounds upon which the appellate court could find that the judge erred in exercising his discretion or that there exists any palpable or overriding error of fact or law.
[3] The relief sought is somewhat unusual in that it is in the nature of a declaration as to the proper procedure to be followed. The usual course would be for the respondent to bring a motion to quash the appeal for failure to seek leave or, alternatively, to have the issue considered with the merits of the appeal.
[4] In any event, I have considered the issue raised by the parties and dismiss the Respondents’ motion without prejudice to the Respondents to raise the issue of leave on the merits of the appeal.
Analysis
[5] Section 133(b) of the CJA states as follows:
No appeal lies without leave of the court to which the appeal is to be taken,
(b) where the appeal is only as to costs that are in the discretion of the court that made the order for costs[.]
[6] The Appellants take the position that s. 133(b) of the CJA does not apply to their appeal because costs were not “in the discretion of the court” below. The Appellants rely on Rule 49.07(5) of the Rules of Civil Procedure, which states as follows:
(5) Where an accepted offer to settle does not provide for the disposition of costs, the plaintiff is entitled,
(a) Where the offer was made by the defendant, to the plaintiff’s costs assessed to the date the plaintiff was served with the offer; or
(b) Where the offer was made by the plaintiff, to the plaintiff’s costs assessed to the date that the notice of acceptance was served.
[7] Sub-rule 49.02(2) states that rules 49.03 to 49.14 also apply to motions, with necessary modifications. The Appellant submits that in this case, “plaintiff” in Rule 49.07(5)(b) would be replaced with “moving party”.
[8] The Appellants made an offer to settle the motion that contained no disposition as to cost and that was accepted by the Respondents. The Appellants submit that pursuant to Rule 49.07(5)(b), they were entitled to a mandatory order for costs to the date that notice of acceptance was served. The Appellants take the position that once an offer falls under Rule 49.07(5), there is no discretion to decline to award costs and that, as a result, the motion judge lacked jurisdiction to refuse to order costs.
[9] While I am not inclined to view the issue as one of jurisdiction, there is case law that finds that, unlike Rule 49.10, which includes the words “unless the court orders otherwise,” Rule 49.07(5) leaves the court with no discretion to depart from the presumptive costs disposition specified in the rule. See, e.g.: Atlas Holdings & Investments v. Vratsidas, [2009] O.J. NO. 823 (Div. Ct.) at paras. 12-14; Ontario (Attorney General) v. $19,570.00 in Canadian Currency (in rem), 2013 ONSC 3322.
[10] Given that the Appellants’ position raises an arguable issue, I am not satisfied that the relief sought by the Respondents should be granted at this preliminary stage. Accordingly, the motion is dismissed without prejudice to the Respondents to raise the issue of leave on the merits of the appeal.
[11] The case management order permitted the parties to seek costs of the motion. Given the outcome of the motion, costs of the motion are reserved to the panel hearing the appeal.
[12] The appeal is currently scheduled to be heard during the week of October 16, 2023. The parties should attempt to agree to a timetable for the exchange of material on the appeal, failing which they may seek the assistance of the case management judge.
“Nishikawa J.”
Date: May 15, 2023