Court File and Parties

Court File No.: CV-12-468134
Date: 2013-10-10
Superior Court of Justice - Ontario

Re: 673830 ONTARIO LIMITED, Applicant

AND:

METROPOLITAN TORONTO CONDOMINIUM 673, HOWARD SHELDON, THOMAS BERARDO and JOHN MALMHOLT, Respondents

Before: Lederman, J.

Counsel:

Jonathan H. Fine, for the Applicant

Patrick Greco, for the Respondents

Heard: Written submissions

Costs Endorsement

[1] Having been successful on the application, the Respondents seek costs on a substantial indemnity scale in the amount of $22,551.59, or in the alternative, on a partial indemnity basis in the amount of $15,109.70.

[2] The Applicant, on the other hand, submits that there should be no costs, or alternatively, that costs not exceed $12,000.

[3] Substantial indemnity costs are sought because the Respondents submit that the Applicant was heavy handed in naming directors, alleging bad faith and oppression on their part and seeking damages against them personally. The Respondents argue that such allegations were unfounded and were made for purposes of intimidation only. Further, the Respondents submit that at issue was the rather small sum of $14,368.03 and that litigating this issue by way of an application of this nature was totally out of proportion to the amount at stake. It caused the Respondents great expense to respond to the number of matters raised. They submit the issue was a discrete one which could have been dealt with in a relatively simple manner.

[4] Moreover, the Respondents submit that the application could have been avoided entirely if the Applicant had accepted the proposal made to it by Respondents’ counsel in his letter of October 19, 2012 offering to return the Applicant’s cheque in the amount of $14,368.03 and credit an identical amount from the expropriation funds against Unit 13’s unit ledger which would then be applied to pay for the roof repairs. Rather than accepting this offer, the Applicant chose to proceed with this expensive application.

[5] The Applicant submits that the gravamen of the problem was the fact that as a purchaser it received what it believed was a “clear” Status Certificate but in the end was required to contribute to the cost of an undisclosed liability. It was required to contribute to the undisclosed roof replacement and its share of the reserve fund to the extent of the expropriation funds was depleted as a result thereof.

[6] Although the Applicant had an arguable point in this respect, it could have been asserted in a way that did not amount to overkill and did not entail allegations of personal misconduct on the part of directors, all of which required an appropriate response.

[7] As the Respondents were successful, they are entitled to their costs of the application. In fixing such costs, I have taken into account the factors set out in Rule 57.01(1) and in particular the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the application; the fact that unnecessary and serious personal allegations were made against the individual Respondents exposing them to significant damages; the fact that the Applicant made the issue more complex than was necessary; the Respondents’ offer; balanced against the principle of proportionality and the small amount truly in dispute. In the circumstances, I fix the Respondents’ costs at $15,000 all inclusive payable by the Applicant within 30 days.

Lederman J.

Date: October 10, 2013