SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 10109/08
DATE: 2012-05-15

RE: P.R.W. Excavating Contractors Limited, Plaintiff

AND:

Cotton Inc. and S & G 1929 Holdings Inc., Defendants

BEFORE: The Honourable Madam Justice J. A. Milanetti

COUNSEL:
Mr. Gary Enskat, for the Plaintiff
Mr. Peter Mahoney, for the Defendants

COSTS ENDORSEMENT

[ 1 ] This was a relatively straightforward claim that became marginally more complicated by the ongoing business relationship between these parties. The plaintiff sued the defendant for amounts outstanding them. They were successful at trial before me obtaining a judgment for $57,475.00 plus interest (which I understand amounts to $10,286.92). This was the judgment that corresponded to the pleadings filed in the action.

[ 2 ] At the opening of trial I was asked by the defendant to amend their defence to add a counterclaim for fees acknowledged to be owed by P.R.W. to Cotton, referable to an outstanding account of $16,804.00. I did not allow this amendment given that the account was unrelated to this litigation and the plaintiff had no awareness of the request (which I perceived quite correctly to be a tactical one).

[ 3 ] As I have come to discover, from the various offers now before me, this tactical issue has been alive and well for some time – a piece of strategy utilized by two most shrewd lawyers.

[ 4 ] The plaintiff asks that costs follow the result – they won, they should get partial indemnity costs to the date of either of their offers to settle (February 22 nd , 2011 and August 31 st , 2011) and substantial indemnity costs thereafter.

[ 5 ] I am not in a position to accede this latter request as:

(a) The prior offers were withdrawn in writing on September 2 nd , 2012 and thus in advance of this trial that commenced September 7 th , 2011.

(b) I note that this latest offer to settle was not filed in time to be considered a valid Rule 49 offer. It did, however, withdraw all prior offers and said it included all of the “other items set out in the August 31 st , 2011 offer”.

(c) That August 31 st offer makes specific reference to the concrete account owed by P.R.W. to Cotton. The August offer purports to deal once and for all with all matters outstanding between the parties – the substance of P.R.W.’s claim and the monies owed by them to Cotton.

[ 6 ] Had I known of this linkage at the time of the motion to amend my decision may well have been different.

[ 7 ] P.R.W. effectively sought to set off the debt it owed Cotton against the debt it says Cotton owed it. As such, the amendment proposed by Cotton would have not prejudiced P.R.W. in any way.

[ 8 ] My final judgment reflects the acknowledgment by P.R.W. that they owed Cotton $16,804.00 plus interest for concrete. I cannot render a judgment for this amount as I have no pleadings before me in this regard. Cotton seems to have seen these accounts as different, likely the reason they did not counterclaim in the first place. I note that Cotton’s various offers to settle did not reflect this indebtedness either. The waters were muddied by P.R.W.

[ 9 ] It makes sense that P.R.W. should receive the money owed by Cotton pursuant to my judgment but that it be reduced by the money they owe Cotton together with interest on same. I will not grant two judgments. I will, however, reduce the costs of the plaintiff to reflect the varied shenanigans.

[ 10 ] The fees shall be payable on a partial indemnity basis. I accept the defence submissions that this more properly means reduction of the substantial indemnity rates by two-thirds or to approximately $11,500.00 (from $13,813.23).

[ 11 ] I will further reduce this sum to reflect the steps taken to clean up the pleadings (name change motion, discontinuance against S & G, and motions that did not proceed).

[ 12 ] I will not go so far as to have each of the parties bear their own costs based on the tactical argument that the plaintiff should have commenced its action under the Simplified Rules. (If you look at my award to P.R.W. less the amount owed to Cotton without reference to costs or interests.) I do not know why Cotton chose to proceed in the fashion it did, but it never raised the concrete debt at any point in the litigation. All of that being said, I will further reduce the plaintiff’s claim for costs from the $11,500.00 aforesaid to reflect the aforesaid muddying of the waters. Fees shall be payable to the plaintiff in the amount of $7,500.00 plus disbursements of $1,984.53 plus HST on both.

Released: May 15, 2012

MILANETTI J.