SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

Court File No. 10-CL-8871-00CL

RE: Nina Di Felice and Italo Di Felice, Applicants

AND:

1095195 Ontario Limited and Carmela Battista, Respondents

Court File No. 11-9193-00CL

AND RE: Nina Di Felice and Italo Di Felice, Applicants

AND:

721362 Ontario Limited and Aldo Di Felice, in his capacity as nominee of 721362 Ontario Limited, Carolina Di Felice, Aldo Di Felice and David Di Felice, Respondents

BEFORE: D. M. Brown J.

COUNSEL:
S. Schwartz, for the Applicants

R. Cohen, for the Respondent, Carmela Battista; Cost submissions for Carmela Battista were submitted by Neil Searles of the firm of Zuber & Company LLP

A. Di Felice, for himself, and Carolina Di Felice and David Di Felice

HEARD: October 31 and November 1, 2012; subsequent written cost submissions.

REASONS FOR DECISION - costs

I. Positions of the parties

[1] By Reasons dated January 4, 2013 (2013 ONSC 1), following a hybrid trial of issues, I ordered the court-supervised sale of the Yonge/Elmwood, Yonge/Cummer and Sheppard Properties.

[2] The parties have filed their cost submissions. The applicants seek partial indemnity costs. In respect of the First Application, 10-CL-8871 (Yonge/Elmwood Property), they seek partial indemnity costs of $69,230.25 against the respondent Carmela Battista. In respect of the Second Application, 11-9193-00CL (Yonge/Cummer and Sheppard Properties), they seek partial indemnity costs of $84,210.25 against all respondents on a joint and several basis.

[3] Carmela Battista submitted that she should not be responsible for any costs. In her view, the applicants’ position that all properties should be sold as a package “needlessly added” to the duration and complexity of the proceedings. She had no interest in the Sheppard Properties, and did not oppose the sale of the Yonge/Cummer property. In her cost submissions Carmela re-hashed matters of fact which I had decided in my Reasons. Frankly, I find that type of cost submission completely unhelpful. Cost submissions should focus on the factors set out in Rule 57.01; they should not try to transform, in some magical way, a loss at a hearing into a win. A reasonable reading of my Reasons would disclose that the applicants substantially succeeded on their applications.

[4] Carmela also submitted that the consideration of costs should be left until the end of the sales process because the process directed by the court “may result in less money realized by the parties than had the proceedings been resolved in accordance with offers proposed by Carmela.” I do not follow that submission. The sales process put in place is designed to maximize recovery by exposing the properties to the market. With respect, Carmela’s submission on this point made no sense.

[5] Carmela did not submit any critique of the specific cost items for which the applicants sought recovery.

[6] The respondents in the second application, Aldo Di Felice, Carolina Di Felice and David Di Felice (the “Carolina Respondents”), submitted that no costs should be awarded against them. On the contrary, they submitted that the applicants should pay some of their costs.

II. Analysis

[7] Although I rarely refer costs to an assessment, this is one of those cases in which I will. I heard two applications. The parties to the applications were not identical. Unfortunately, while the applicants’ bill of costs neatly organized the costs claimed in a chronological fashion, it did not break-out post-June, 2011 costs as between the two proceedings. As a result, I cannot conduct a proper analysis of the costs claimed in each action, and I am not prepared simply to “eye-ball” the costs for each application. Accordingly, pursuant to Rule 57.01(3.1) of the Rules of Civil Procedure, I refer the costs of both applications to an assessment before an assessment officer, subject to the following directions:

(i) The applicants substantially succeeded on the First Application, and they are entitled to their partial indemnity costs of that application against Carmela Battista;

(ii) I do not accept that applicants’ submission that they should be able to recover pre-litigation costs on the basis that they were necessary for the management of the Yonge/Elmwood Property. The applicants are only entitled to recover costs related to the litigation which they incurred in preparing the application and proceeding with it through the hybrid trial;

(iii) Roger Battista deposed in his February, 2012 affidavit that he did not oppose the sale of the Yonge/Cummer Property on the open market to a third party. He and Carmela had no interest in the Sheppard Property. Accordingly, I find that the applicants are not entitled to an award of costs against Roger and Carmela in respect of the Second Application;

(iv) Aldo, David and Carolina Di Felice did oppose the sales of the Yonge/Cummer and Sheppard Properties. The applicants succeeded in securing orders for the sale of those properties, and they were successful against the Carolina Respondents;

(v) Although the Carolina Respondents made an offer to settle dated June 10, 2012, that offer was withdrawn by virtue of the “non-negotiable bottom line” subsequent offer made by those respondents on September 2, 2012. Consequently, Rule 49 cost consequences are not in play; and,

(vi) The applicants are entitled to their partial indemnity costs of the Second Application against the Carolina Respondents, but only in respect of such legal work and disbursements which were reasonably necessary to initiate the Second Application and to respond to the opposition advanced by the Carolina Respondents to the relief sought by the applicants.

D. M. Brown J.

Date: March 13, 2013