R.C.M. Belsito

Following a trial and supplementary motion where the respondent was substantially successful, the court determined the quantum and scale of costs.

The respondent had made a Rule 49 offer to settle that was more favourable than the judgment obtained.

Applying the principles of Rule 49 and the Boucher factors, the court awarded the respondent costs on a partial indemnity basis up to the date of the offer, and on a substantial indemnity basis thereafter, fixed at $108,348.46 inclusive of HST and disbursements.

The applicant, 1605041 Ontario Limited (160), and the respondent, 2424033 Ontario Ltd. (242), were involved in a dispute concerning a property and a joint venture agreement. 160 sought to discharge 242's second mortgage, while 242 counter-applied for specific performance of its right of first refusal (RFR) to purchase the property and a determination of the mortgage amount owing.

The court found that 242 had a valid and enforceable RFR, which 160 had breached by attempting to sell the property to a third party without proper notice or honouring the RFR terms.

The court ordered specific performance, requiring 160 to transfer the property to 242 for $1,560,000.

The court also determined the amount required to discharge the second mortgage, disallowing several penalty fees claimed by 242 under the Interest Act, and denying 160's claimed set-offs for legal costs and first mortgagee default proceedings.

The joint venture agreement was terminated upon completion of the transfer.

The appellants appealed an order of the Superior Court refusing to enjoin the sale of a development property under power of sale.

The appellants sought to have the court find that the property was sold in bad faith and for an undervalue.

The Court of Appeal dismissed the appeal, finding that it was not open to the court to grant the relief sought as the appeal was from the order, not the findings of the application judge.

The court noted that the appellants could pursue an improvident sale action, which had been expressly left open by the application judge.

The court upheld the costs award to the respondent.