Vastis v. Kommatas, 2024 ONSC 4759

CITATION: Vastis v. Kommatas, 2024 ONSC 4759

DIVISIONAL COURT FILE NO.: 621/22

COURT FILE NO.: CV-20-00644241-00CL

DATE: 20240028

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

BETWEEN:

GEORGE VASTIS and HELEN VASTIS, Plaintiffs/Appellants

AND:

CHRISTOS KOMMATAS and CALLDRON GAS BARS LTD. and 1195705 ONTARIO INC. carrying on business as OLD PRO DRIVING RANGE, Defendants/Respondents

BEFORE: Leiper J.

COUNSEL: Counsel to the Plaintiffs/Appellants: Kevin W. Fisher, James Beesley, Eli Bordman

Counsel to the Defendant/Respondent, James M. Wortzman and Catherine E. Allen

HEARD: In writing April 26, 2024

ENDORSEMENT

[1] The parties made submissions on costs after the appellants abandoned their appeal from an order of a judge appointing a liquidator to wind up the parties’ business and to dispose of the assets. The respondents seek their costs for work done prior to the appellants’ service of the notice of abandonment. The appellants submit that no costs should be ordered by virtue of Rule 61.14(4) of the Rules of Civil Procedure because the respondents had not yet responded to the appeal by serving and filed a factum.[^1]

[2] The respondent submits that this is an overly technical application of the rule, because he had undertaken significant preparation, including preparing a factum and a motion to adduce fresh evidence. He asks the court to consider all of the circumstances and make an order for their costs in the amount of $32,764.35 all inclusive, on a partial indemnity basis. This total arises from the claimed costs of the abandoned appeal of $28,757.03 plus $4,007.32 in costs incurred to obtain his costs.

[3] For the reasons below, I award no costs to the respondent for the abandoned appeal.

Background

[4] This appeal arose from an order made by Justice Dietrich, on October 11, 2022, appointing a liquidator to wind up the operations of the two corporations which were owned equally by the appellants and the respondent.

[5] On November 9, 2022, the appellants served a notice of appeal, and a motion to seek a stay. The respondent responded to the motion seeking the stay. According to the costs submissions, the stay materials were voluminous.

[6] In January and February of 2023, there was a flurry of activity. The appellants perfected their appeal and served the trial transcripts, appeal book and compendium on January 19, 2023. They also served a stay motion factum. The respondent prepared material for the stay motion including: two supplementary responding records and a responding factum on the stay. The respondent also prepared material for an anticipated motion to adduce fresh evidence on appeal.

[7] Then, on March 10, 2023, the appellants abandoned their stay motion. They accepted the respondent’s Rule 49 offer which included the costs of the abandoned motion. They paid the costs settlement amount to the respondents. From that point on, no further materials were exchanged on the motion. The appellants cooperated with the liquidator. Between March of 2023 and October of 2023, with the cooperation of the parties, the liquidator delivered a first report, listed the properties and sold machinery associated with the business.

[8] Practically, in giving up the stay motion and cooperating with the liquidation, the appellants did not appear intent on pursuing the relief they sought on appeal, that is to set aside the order appointing the liquidator. However they did not formalize their intentions until October 16, 2023, when the respondent’s lawyer wrote to ask if the appellants were going to continue with the appeal and if so, what relief they would be seeking.

[9] On October 19, 2023, the lawyer for the appellants wrote to say they were seeking instructions from their clients.

[10] On October 25, 2023, the lawyer for the respondents wrote a letter which said:

If we have not hear [sic] from you next week, our instructions are to serve and file our material. As noted below, we assume that your clients are no longer pursuing the entire appeal and it would be ideal if we could deliver material only responding to the matters in issue, however, we do not want to leave the matter outstanding any longer and will file material responding to all issues if required.

[11] On October 26, 2023, the appellants abandoned their appeal the following day on October 26, 2023, by way of service of a Notice of Abandonment. Although the respondent had not filed or served any material in response to the appeal (other than on the stay motion, which had been settled and costs paid relative to the stay motion), the respondent had clearly done work to prepare for the appeal.

[12] On November 15, 2023, the respondent served and filed a motion record seeking its costs of the abandoned appeal. The affidavit in the motion record included the respondent’s appeal factum as an exhibit and dated as of April 2023. The appeal factum had not been finalized or signed. This was the first time the appellants had received a copy of this factum.

[13] Each party submits that the other has been “tactical”: the appellants by sitting on the appeal until asked for an update, and the respondents by seeking costs of the appeal when it should have been clear that the appeal was not going ahead as a practical matter.

Analysis

[14] As a starting point, the court has jurisdiction to award costs after an appeal has been abandoned: see 31 Kingsbury Inc. v. Delta Elevator Company Limited, 2021 ONCA 656. I am further guided by Rule 64.14, which as worded permits the court to order “otherwise.” This is the issue: should the court order costs where no response to the appeal has been filed, but where work was done in responding to a stay within the appeal and on the appeal proper?

[15] Fairness would dictate that the respondent should have his costs of preparing for the stay in cases where the appeal was later abandoned. This is time consuming work that will include arguments as to the issues on appeal, prejudice and a balancing of the impact of a stay on the parties. Comprehensive stay materials, as were prepared here, will often cover much of the same information that is required to argue the ultimate appeal.

[16] In the chronology of this appeal, the issue for the appeal diminished as the liquidator went about the work of selling the assets of the business. Once the stay was settled, the next meaningful act in the litigation was the appellants’ delivery of the notice of abandonment, in response to the respondent’s request.

[17] At the time of the stay preparation, counsel was clearly looking ahead to the appeal in February of 2023. I say this because the material shows that the respondent prepared but did not complete a certificate of time for the oral argument dated February of 2023. The draft factum, which was unsigned, is dated April of 2023. It is a reasonable inference that much of the work for the appeal factum would have been done to complete the factum for the stay. To adequately draft those facts, the review of the transcripts and summaries might also have been done prior to finalizing the stay factum.

[18] The respondent’s bill of costs for the stay motion is dated March 22, 2023. It shows 35 hours of work for senior counsel and 6 hours of work for co-counsel on the file.

[19] The respondent’s bill of costs for the appeal is dated November 13, 2023. It shows approximately 29 hours of work for senior counsel, 26 hours of work for co-counsel and approximately 22 hours of work for junior lawyer, called in 2021. The work descriptions do not appear to overlap as between the description of work done on the stay and the work done on the appeal, however a granular analysis as to efficiencies obtained as between the work for the stay and the work on the appeal factum are not possible given the general nature of the two bills of costs. Further there is a total absence of dates for when the work was done, on either the stay materials or any of the appeal materials. That is important information because of the available efficiencies for the stay work and appeal work. For example, as is with all the most junior counsel’s time spent reviewing transcripts and preparing summaries. If this work took place prior to the preparation of the stay factum, one might infer that this work served both the stay and the appeal factum. No such granular analysis is possible given what is in the bills of costs for the respondent.

[20] When I consider the trajectory of the litigation, the lack of time detail in the costs outline for both the appeal and on the stay motion, coupled with the fact that the respondent received his costs for all of the work required to defend the stay motion, I am not persuaded I should deviate from the starting point principle in Rule 61.14 that no costs are payable where the responding party has not responded to the appeal.

[21] I decline to award costs of the abandoned appeal in favour of the respondent.

Leiper, J.

Released: August 28, 2024

[^1]: Subrule 61.14(4) provides: (4) The abandonment or deemed abandonment of the appeal or cross-appeal shall be without costs if the respondent or appellant, as the case may be, did not file a response to the appeal or cross-appeal, unless a judge of the appellate court orders otherwise. O. Reg. 82/17, s. 11 (2).