SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 1123/09
DATE: 20120622

RE: THE TORONTO WHOLESALE PRODUCE ASSOCIATION

Plaintiff

v.

1797066 ONTARIO INC., 1494203 ONTARIO INC.,

KEYSAR NASR, AMAL NASR and NAIFA ASHKAR

Defendants

BEFORE: CONLAN J.

COUNSEL:
Ian K. Latimer, for the Plaintiff
Ronald G. Chapman, for the Defendants

ENDORSEMENT ON COSTS

Background

[ 1 ] On June 5, 2012, this Court granted the Motion brought by the Defendants to set aside, on terms, the Default Judgment that had been granted in favour of the Plaintiff on September 26, 2011, as amended by a subsequent Order.

[ 2 ] The parties have been unable to settle the issue of costs. Thank you to counsel for the written submissions including the attachments.

Positions of the Parties

[ 3 ] The Defendants request a total of $25,156.08 in costs on a partial indemnity scale, for the following reasons. First, they were entirely successful on the Motion to set aside the Default Judgment. Second, the Plaintiff refused to consent to the setting aside of the Default Judgment. Third, that refusal was unreasonable as the Plaintiff suffered no prejudice in light of the security already in place for the Judgment. Fourth, the Plaintiff ought to have known that the Defendants were unaware of the Motion to strike the Statement of Defence. Fifth, the Plaintiff never bothered to advise the Defendants, after August 22, 2011, that they had been noted in default. Sixth, the Plaintiff never challenged the Affidavit evidence of the Defendants on the Motion to set aside the Default Judgment, through cross-examinations for instance.

[ 4 ] The Plaintiff requests a total of $23,006.23 in costs on a substantial indemnity scale, comprised of $10,172.93 for costs thrown away prior to the Motion to set aside the Default Judgment plus $12,833.30 for costs on the Motion to set aside the Default Judgment. The Plaintiff relies on the following. First, the Plaintiff was put through several unnecessary steps including repeated attempts to obtain Affidavits of Documents from the Defendants, the Motion to strike the Statement of Defence, the Motion for Default Judgment and then collection efforts. Second, awarding costs to the Plaintiff will provide some balance and achieve a fair result overall in compensating the Plaintiff for intentional delay on the part of the Defendants. Third, the terms imposed for setting aside the Default Judgment were suggested by counsel for the Plaintiff and consented to by the Defendants at the hearing of the Motion.

[ 5 ] The Defendants reply to those arguments by alleging that the terms imposed for the setting aside of the Default Judgment were already in place prior to the Motion being brought and were not part of the Motion which was limited strictly to setting the Default Judgment aside. The Defendants further complain that there is no explanation for the Plaintiff not having contacted the Defendants after the Defence was struck and before the hearing of the Motion for Default Judgment. Finally, the Defendants challenge the time dockets and amounts claimed by the Plaintiff as being excessive and suggest, in the alternative if costs are ordered in favour of the Plaintiff, $2,000.00 for the Motion to set aside the Default Judgment; nil prior to March 14, 2011 because the Order made that date included $1,000.00 in costs to the Plaintiff; and $1,000.00 for the Motion for Default Judgment.

Analysis

[ 6 ] Costs are discretionary. The exercise is not to be reduced to a scientific experiment. A Court may impose terms that are just for the setting aside of a Judgment obtained after default (Rule 19.08 of the Rules of Civil Procedure), and those terms may include costs.

[ 7 ] I have considered the general principles of costs as outlined in Rule 57.01 and the guidance on the costs of contested Motions as provided in Rule 57.03. I have reminded myself of the overarching principle that any costs Order must be fair, just and reasonable in all of the circumstances.

[ 8 ] I have considered the decisions that have been filed as well as the written submissions including the costs outlines and time dockets. The Defendants rely on the decision of Master Haberman in Memotec Communications Inc. v. Qnetic Computer Consultants Inc., [1999] O.J. No. 2369. The findings in that case make it too distinguishable from the one at bar to be of much assistance. In that case, it was found that the Motion to set aside the Default Judgment “ought not to have been necessary” for a variety of reasons, and it was further found that the case law relied upon by the Plaintiff’s counsel was “clearly irrelevant” (paragraphs 35 and 36). Neither conclusion applies here. The Defendants rely further on Glasstech Inc. v. Belle View Construction Corp., [2008] O.J. No. 3374 (S.C.J. – Maddalena J.). That decision is simply an example of costs being awarded to the successful Defendant on the Motion to set aside the Default Judgment and costs also being awarded to the Plaintiff for costs thrown away: a set-off.

[ 9 ] The Plaintiff relies on the decision in Skendos v. Igbinosun, 1998 CarswellOnt 748 (O.G.D. – Lax J.). I agree with Justice Lax that the Court may, depending on the circumstances, as part of the terms of setting aside a Default Judgment, award to the Plaintiff both costs thrown away and costs on the Motion to set aside the Default Judgment (paragraph 8). The other decision relied on by the Plaintiff, Collins v. 736653 Ontario Inc., 2009 CarswellOnt 1411 (S.C.J. – Ray J.), is not particularly relevant as, in that case, it was found that there was an “intentional default” and “intentional delay” on the part of the Defendant (paragraph 13). I do not make the same findings here.

[ 10 ] In the end, I conclude that the most fair, just and reasonable approach is to offset the costs as was done in Glasstech. The Defendants were successful on the Motion to set aside the Default Judgment. I see nothing excessive in the time dockets or costs outline provided by Mr. Chapman, although I am exercising my discretion to reduce the amount to reflect the fact that it was not at all unreasonable in my view for the Plaintiff to contest the Motion to set aside the Default Judgment. The request by the Defendants is for partial indemnity costs in the amount of $25,156.08. I am reducing that figure to $20,000.00.

[ 11 ] I see nothing unreasonable in the time dockets or costs outline provided by Mr. Tighe regarding the Plaintiff’s costs thrown away. The request for substantial indemnity costs in the amount of $10,172.93 is reasonable, with one caveat. The total fees for costs thrown away ought to be reduced by $1,000.00 as that amount was already ordered on March 14, 2011, assuming that amount has been paid by the Defendants. If that $1,000.00 has been paid, it should not be ordered again. If it has not been paid, then the full $10,172.93 is being ordered herein in favour of the Plaintiff for costs thrown away.

Conclusion

[ 12 ] This Court Orders that, within 30 days of the release of this Endorsement, the Plaintiff shall pay to the Defendants the amount to be calculated by counsel using this formula: $20,000.00 all-inclusive (awarded to the Defendants on the Motion to set aside the Default Judgment) less $10,172.93 all-inclusive (awarded to the Plaintiff for costs thrown away, subject to the caveat above as to whether the $1,000.00 has been paid or not).

[ 13 ] I thank counsel for their helpful written submissions on costs.

Conlan J.

DATE: June 22, 2012

COURT FILE NO.: 1123/09
DATE: 20120622

SUPERIOR COURT OF JUSTICE - ONTARIO RE: THE TORONTO WHOLESALE PRODUCE ASSOCIATION Plaintiff v. 1797066 ONTARIO INC., 1494203 ONTARIO INC., KEYSAR NASR, AMAL NASR and NAIFA ASHKAR Defendants BEFORE: CONLAN J. COUNSEL: Ian K. Latimer, for the Plaintiff Ronald G. Chapman, for the Defendants ENDORSEMENT ON COSTS Conlan J.

DATE: June 22, 2012