Court File and Parties

Court File No.: CV-10-404463
Date: 2012-07-12
Superior Court of Justice - Ontario

RE: Salvatore Buttiglieri and Century 21 Polo Realty Inc., Plaintiffs

AND:
Benjamin Levinter, Frank Burns and Levinter & Levinter Professional Corporation Barristers and Solicitors, Defendants

Before: Goldstein J.

Counsel:
D. Saverino , for the Plaintiffs
M. Mednick , for the Defendants

Heard: July 11, 2012

Endorsement

[ 1 ] The defendants obtained, unopposed, an endorsement striking Century 21 Polo Realty Inc. from the Statement of Claim on the basis that it had no corporate capacity at the time the claim was issued and has not been revived.

[ 2 ] The defendants seek the costs of this motion as well as the costs of the action on a substantial indemnity basis against both the individual plaintiff and the corporate plaintiff.

[ 3 ] When the defendants discovered that the corporate plaintiff had been dissolved and had no capacity, they took steps to bring the issue to the attention of counsel for the plaintiff. The record reveals several attempts by counsel for the defendants to obtain answers to correspondence and a date for the motion. Counsel for the defendants did not respond on numerous occasions both to general correspondence from the defendant’s counsel and to requests for dates for a motion to strike the corporate plaintiff. Mr. Severino indicated, both in correspondence and in oral argument, that it was impossible for him to obtain instructions due to the illness and surgery of his client. He did not state his position regarding the motion until shortly before the hearing.

[ 4 ] Mr. Mednick pointed out that counsel for the defendants has never received any instructions from any other person in respect of this matter, and there is no indication that there was anyone else who could give instructions. Although Mr. Mednick’s point is well-taken, the only sworn evidence linking the individual plaintiff and the corporation is the corporation profile report, which names him as the director. This is not enough for me to fix costs against him and I decline to do so.

[ 5 ] That said, I cannot refrain from pointing out Mr. Severino declined to comment on the individual plaintiff’s relationship to the corporate plaintiff, yet he informed the court, without evidence, that his client was ill and unable to give instructions. I do not doubt Mr. Severino’s explanation and Mr. Mednick did not challenge him. Although it seems unfair to give the individual plaintiff the benefit of the doubt in one regard but not the other, awarding costs on a substantial indemnity basis is reserved for exceptional circumstances. Outside of consideration of a settlement offer, substantial indemnity costs are generally available where there is an unproven allegation of fraud, bad faith, or misconduct against another party ( Murano v. Bank of Montreal (1998), 1998 5633 (ON CA) , 41 O.R. (3d) 222 (C.A.) or where there has been improper conduct by a party during the course of litigation ( Foulis v. Robinson (1978), 1978 1307 (ON CA) , 21 O.R. (2d) 769 (C.A.)). The conduct of this litigation does not fall within the type of case for which substantial indemnity costs should be awarded.

[ 6 ] Accordingly, I fix costs on the motion at $5000.00 against the corporate plaintiff.

[ 7 ] The defendants also ask for costs of the action. For the reasons given above, costs on a substantial indemnity basis are inappropriate. The bill of costs provided to me indicates the totality of the action against both plaintiffs and many of those costs would have been incurred regardless of the capacity of the corporate plaintiff. As well, the bill of costs has at least one item that is question, being the drafting, serving, and filing of a statement of defence. The defence has not yet been served and filed. Accordingly, costs of the action against the corporate plaintiff are fixed at $2500.00.

Goldstein J.

Date: July 12, 2012