SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO: CV-11-441541
DATE: 20130125
RE: Heli-Transport Inc.
Plaintiff/Moving Party
- and -
Kingsview Iron Ore Limited
Defendant/Responding Party
BEFORE: The Honourable Mr. Justice Robert F. Goldstein
COUNSEL:
Isabella Massimi & Nicole Westlake,
for the Plaintiff/Moving Party
Robert M. Isles,
for the Defendant/Responding Party
HEARD: Written submissions
E N D O R S E M E N T
AS TO COSTS
[1] On November 22 2012 I dismissed a motion by Heli-Transport for summary judgment (see: Heli-Transport Inc. v. Kingsview Iron Ore Ltd., [2012] O.J. No. 5487, 2012 ONSC 6649) and invited the parties to make submissions with regard to costs.
[2] The motion centered on a claim for unpaid invoices and an equitable counterclaim. In dismissing the motion, I found that there was merit in Heli-Transport’s position and that, overall, it was a close call.
[3] Mr. Isles, for Kingsview, submits a bill of costs on a substantial indemnity basis in the amount of $36,592.55, inclusive of HST and disbursements. Ms. Massimi, for Heli-Transport, argues that there is no basis for awarding substantial indemnity costs, and, in any event, given that the motion was not complex and raised no new law that the amount claimed is excessive. Ms. Massimi also argues that where a decision dismissing a summary judgment motion is a “close call” costs should be in the cause.
[4] In Marini v. Muller, [2001] O.J. No. 259 (Sup.Ct.) Nordheimer J. considered the costs consequences of an unsuccessful motion for summary judgment:
3 In considering the disposition of costs on an unsuccessful motion for summary judgment, the starting point is rule 20.06(1). The interpretation of that rule has recently been considered by the Court of Appeal in Smyth v. Waterfall (2000), 2000 16880 (ON CA), 50 O.R. (3d) 481 where Borins J.A. said at p. 489:
"I agree with the interpretation of rule 20.06(1) discussed in these cases. Given that the object of the rule 20.06(1) is to discourage unmeritorious motions, the onus rests on the unsuccessful moving party to establish that its motion was reasonably brought. The inquiry that the court is to make must focus on the time when the motion was brought and whether it would be clear to the moving party, acting reasonably, on the basis of the information that it knew, or reasonably ought to have known, and the authorities which have interpreted Rule 20, such as Aguonie, 1998 954 (ON CA), 38 O.R. (3d) 161, supra; Irving Ungerman Ltd. v. Galanis (1991), 1991 7275 (ON CA), 4 O.R. (3d) 545, 83 D.L.R. (4th) 734 (C.A.) and Dawson v. Rexcraft Storage & Warehouse Inc. (1998), 1998 4831 (ON CA), 164 D.L.R. (4th) 257, 20 R.P.R. (3d) 207 (Ont. C.A.), that there existed a genuine issue for trial. If it reasonably appeared to the moving party that there was no genuine issue for trial, then the motion was reasonably brought."
4 As may be apparent from my reasons, I considered that this was a difficult motion to determine. There was considerable merit to the plaintiff's position but, in the end result, I concluded that the plaintiff had failed to meet the very high hurdle which was imposed on him to show that there was no genuine issue for trial. In such circumstances, it was entirely reasonable for the plaintiff to have brought the motion for summary judgment and to have pursued it through a hearing. I do not agree with the defendants that when they delivered their responding material the plaintiff ought to have recognized that there was a genuine issue for trial and, at that point, have "thrown in the towel" as it were. I do not therefore see any proper basis for awarding costs on other than a party and party scale.
5 Having dealt with the appropriate scale of costs, I now turn to the appropriate disposition of the costs. There are two standard rules that are applied to costs of interlocutory proceedings. One is that the successful party is normally entitled to its costs - see Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.). The other is that costs are normally payable forthwith - see Axton v. Kent (1991), 1991 7196 (ON SC), 2 O.R. (3d) 797 (Div. Ct.). Neither of these rules are absolute, of course, and can be departed from in appropriate cases.
6 In my view, in a case such as this where the result of the summary judgment motion was what might fairly be referred to as a "close call", the appropriate result is to leave the costs in the cause. There are two very distinct positions taken by the parties here. One or the other is going to be successful at trial. If the plaintiff's position is ultimately successful then there is some merit to the suggestion that it ought to have had its summary judgment in the first instance. If, on the other hand, the defendant is ultimately successful, then it clearly should have its costs of the summary judgment motion. I should say in this regard that I do not see any persuasive reason to leave the burden of the disposition of these costs to be dealt with separately by the Trial Judge when the appropriate disposition of them can simply flow from the trial decision itself.
[5] Rule 20.06 of the Rules of Civil Procedure deal with situations in which substantial indemnity costs may be awarded:
20.06 The court may fix and order payment of the costs of a motion for summary judgment by a party on a substantial indemnity basis if,
(a) the party acted unreasonably by making or responding to the motion; or
(b) the party acted in bad faith for the purpose of delay.
[6] In Combined Air Mechanical v. Flesch, [2011] O.J. No. 5431, 2011 ONCA 764, 108 O.R. (3d) 1, 2011 CarswellOnt 13515 (C.A.) the Court of Appeal briefly commented on the employment of substantial indemnity costs on an unsuccessful motion for summary judgment:
67 As a result of the amendments to rule 20.06, the onus is now on the party seeking substantial indemnity costs to convince the court that the other side acted unreasonably or in bad faith for the purpose of delay in bringing or responding to a motion for summary judgment. This amendment removes a disincentive to litigants from using Rule 20 by eliminating the presumption that they will face substantial indemnity costs for bringing an unsuccessful motion for summary judgment. However, as the jurisprudence becomes more settled on when it is appropriate to move for summary judgment, the reasonableness of the decision to move for summary judgment or to resist such a motion will be more closely scrutinized by the court in imposing cost orders under rule 20.06.
[7] I see no basis for awarding costs on a substantial indemnity basis. As noted, the motion was not without merit. Furthermore, in its costs submissions Kingsview has not attempted to justify an award of substantial indemnity costs except on the basis that it has been successful. I see no evidence whatsoever that Heli-Transport or their counsel acted unreasonably or in bad faith in bringing the motion. It is true that Heli-Transport lowered its estimation of damages after receiving Kingsview’s material, but that is not an example of bad faith. On the contrary, it is an example of reasonable behavior in the based on the evidence.
[8] Given that the motion was a close call, it is appropriate that costs be in the cause, and that costs be fixed by me as the judge hearing the summary judgment motion: Marini v. Muller, supra.
[9] The substantial indemnity amount of $36,592.55 sought by Kingsview is excessive. It represents fees of $31,275.00 plus costs and disbursements. The disbursements of $1,251.44 are reasonable. Fees on a partial indemnity basis are set out in the costs outline at $24,325.00. Heli-Transport says that fees in the range of $5,000.00 to $7000.00 are appropriate.
[10] Although the motion was not complex, there was certainly a significant amount of work involved, including extensive cross-examinations on the substantial affidavits that were filed. Certainly the motion was of great importance for both parties, but especially Kingsview. Taking into account the reasonable expectations of the parties, in my view an amount of $12,000.00 inclusive of HST and disbursements is reasonable.
DISPOSITION
[11] Costs of the motion are payable in the cause and fixed at $12,000.00.
GOLDSTEIN, J.
DATE: January 25, 2013