SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-12-454709

DATE: 2013/02/20

RE: 2233782 Ontario Inc. v. Portwell Developments Inc.

BEFORE: Moore J.

COUNSEL:
Mark S. Shapiro and Thomas Arndt, for the Plaintiffs/Applicants

Thomas J. Dunne, Q.C. and Laura Van Soelen, for the Defendants/Respondents

ENDORSEMENT

[1] The Respondents successfully defended the Applicants’ request for injunctive and other relief and were awarded costs in an amount to be agreed upon or fixed by me. As the parties have not agreed on costs issues, I shall fix costs.

[2] The Respondents ask for costs on a substantial indemnity basis to be fixed at $114,883.82, inclusive of fee and disbursements claims and the $2,000.00 in costs awarded in the cause of the motion by Low J., in her Endorsement of 30 November 2012.

[3] Although costs are sought on a substantial indemnity basis, I am not prepared to award such costs. One ground for the claim to enhanced costs arises from the assertion that the Respondents offered to settle the motion on a basis more favourable to the Applicants than the outcome achieved in fact. That ground fails however as the settlement offer was not timely made as required by Rule 49.

[4] The Respondents also submit that the Applicants’ conduct with respect to this motion has been reprehensible, that the Court’s process has been abused and that an order should go requiring the Applicants to therefore pay substantial indemnity costs.

[5] The parties agree that substantial indemnity costs are reserved for “the rare and exceptional cases where a party’s conduct in the litigation is reprehensible and justifies the unusual sanction of substantial indemnity costs.”[^1] They disagree on the application of the well settled law on point to the facts of this case and the outcome arising therefrom.

[6] I am not satisfied that the Applicants’ conduct warrants an award of substantial indemnity costs. The Applicants made no allegations of fraud or other misconduct in their pleading or in their motion materials. I made no findings of misconduct in my decision on the motion.

[7] The Respondents characterized conduct such as delay in bringing the motion on and late filing of affidavit evidence as reprehensible but such things are common and far from being reprehensible conduct. That the Applicants sued or served correspondence upon the City of Toronto and/or Portwell’s lenders is characterized as abusive and reprehensible but no adverse consequences to the business activities of the Respondents flowing from such conduct has been demonstrated.

[8] Allegations of delay are made against the Applicants and delay was a factor in the outcome of the motion. I am not satisfied however that such delay warrants an award of substantial indemnity costs.

[9] The parties, having been directed to exchange costs demands before oral submissions on the motion, were aware of the financial jeopardy they might face in costs on a partial indemnity basis. The Respondents were content with the quantum claimed by the Applicants. The demands made by the Respondents were substantially higher.

[10] As is apparent from my reasons on the motion, the issue of entitlement to injunctive relief was important to the Respondents. The building is nearing completion and occupancy. The relief sought would complicate and could confound building construction timelines.

[11] The motion was not otherwise remarkable for complexity or amounts at issue.

[12] Parties are at liberty to populate a motion file with as many timekeepers as they wish to but much of the discrepancy between the size of the costs claims here arises from the decision made by the Respondents to assign two counsel to attend examinations and hearings. This was not necessary or warranted by the nature and complexity of the motion. No other valid reason has been tendered.

[13] The Applicants submit that their reasonable expectations for costs of the Respondents would be met by an award of $50,000.00.

[14] Having considered the factors included in Rule 57.01 and the need to award costs that are fair and reasonable in all of the circumstances of this particular case, a reasonably straight forward, interlocutory motion, I am persuaded that an award of costs, inclusive of fee, disbursements, H.S.T. and costs awarded in the cause by Low J., fixed in the amount of $50,000.00 is appropriate. So ordered.

Moore J.

DATE: 20 February 2013

[^1]: Hunt v. TD Securities Inc. (2003), 2003 3649 (ON CA), 66 O.R. (3d) 481 (Ont. C.A.) and Drouillard v. Cogeco Cable Inc., [2007] O.J. No. 2531 (Ont. C.A.) and 2176693 Ontario Ltd. Cora Franchise Group Inc., 2012 CarswellOnt 2992, upheld on appeal at 2012 CarswellOnt 8363 (Ont. C.A.).