Roderick W. Johansen

Following dismissal of a summary judgment motion brought by the defendant, the court determined the appropriate costs award for the successful plaintiff.

The plaintiff sought substantial indemnity costs relying on an offer to settle and the complexity of issues involving trust funds under the Construction Lien Act and limitation periods.

The court held the offer did not meet the criteria of Rule 49.10 and found no unreasonable conduct justifying substantial indemnity costs.

Emphasizing proportionality, reasonableness, and the amount in dispute, the court reduced the requested amount.

Costs were awarded to the successful plaintiff in the sum of $10,500 inclusive of disbursements and HST.

Following the dismissal of a motion effectively seeking partial summary judgment, the court determined the appropriate costs award.

The responding party sought costs on a substantial indemnity basis under Rule 20.06 of the Rules of Civil Procedure, alleging unreasonable conduct in bringing the motion.

The court found the motion was not brought in bad faith or for delay, but that costs should follow the event on a partial indemnity scale.

Applying the reasonableness principles from appellate authority on costs, the court reduced the amount claimed due to excessive research time and fixed costs at a reasonable amount.

A mortgage lender brought a motion for summary judgment dismissing a contractor’s claim seeking a declaration that holdback funds from mortgage advances were held in trust for the contractor under the Construction Lien Act.

The court held that although the mortgagee was not obligated under the Act to maintain a statutory holdback because it was not a “payer,” the retained funds constituted trust funds for the contractor’s benefit.

The funds were deemed “received” by the property owner for the purposes of s. 7(1) even though they were held in trust by the lender’s solicitor.

The court also rejected limitation and res judicata defences, finding the claim was discovered only when the lender refused payment and that the earlier lien action involved different parties and causes of action.

The motion for summary judgment was dismissed.

The moving party contractor sought partial summary judgment declaring that funds held by the owner constituted trust monies under the Construction Lien Act and requested immediate payment.

The owner acknowledged the funds were subject to a statutory trust but asserted a right of set-off for alleged delay and deficiency damages under the contract.

The court examined the interaction between the trust provisions and the statutory holdback regime, holding that once lien rights of subcontractors have expired, funds may cease to be characterized as holdback and the owner may assert set-off rights against trust funds.

Because the validity and quantum of the set-off claim and the lien claim remained disputed, these issues constituted triable issues.

Partial summary judgment and immediate payment were therefore inappropriate.