COURT FILE AND PARTIES

Court File No.: 12-56101
Date: October 8th, 2013

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: INTERRENT INTERNATIONAL PROPERTIES INC., Plaintiff

AND:

1167750 ONTARIO INC., Defendant

BEFORE: MASTER MACLEOD

COUNSEL:
Todd J. Burke, for the Plaintiff, moving party

Jaye E. Hooper, for the Defendant, responding party

HEARD: May 9th, 2013, costs submissions subsequently received in writing

COSTS AWARD

[1] On July 12th, 2013 I released reasons dismissing the motion by the plaintiff for leave to issue a Certificate of Pending Litigation over certain commercial property in Ottawa which is the subject of litigation. I invited counsel to make costs submissions in writing which they have now done.

[2] At the outset I commend the parties and their counsel for avoiding the need for two motions or for scheduling of an urgent motion. It was an exercise in common sense to argue one contested motion rather than moving ex parte and then having a contested motion to remove the CPL. It was equally an exercise in pragmatism for the defendant to agree it would not sell the property pending the return of the motion. This allowed both parties to research the facts, prepare material, cross examine on the evidence and present argument to the court in a much more efficient manner than might otherwise have occurred.

[3] The responding party has nevertheless been required to incur costs in responding to the motion which are according to the costs outline roughly $40,000.00. The partial indemnity costs sought by the defendant are $28,922.70. I agree with counsel for the plaintiff that this is not a case for substantial indemnity costs and I also agree that some of the costs incurred in responding to the motion are costs that would in any event be required in responding to the action.

[4] In Lukic v. Zaban[^1] I awarded modest costs of an unsuccessful motion for a CPL and recognized that much of the work done on the merits would be necessary for the successful prosecution or defence of the main action. A similar principle was adopted in the case of an unsuccessful motion for an injunction in Dragon Systems Inc. v. Kolvox Communications Inc.[^2] In the latter case, Brockenshire J. held that “a cost award on an interlocutory motion should provide some recompense for work done in relation to the motion and not for every bit of research and investigation since the case began.” This is one of the dilemmas with motions in which the merits are considered but which are not dispositive of the action. A party which loses a motion may ultimately prevail in the action. Even if that is not the case, the party which prevails in the action may find that it cannot recover costs for steps in the action because those costs have already been claimed and awarded at the time of arguing the motion.

[5] Rule 57.03 is the current rule regarding costs of motions. It requires that “unless the court is satisfied that a different order would be more just” costs of a motion should be fixed and payable within 30 days. Often described as the “pay as you go” rule, it is a rule designed to discourage unnecessary motions and to encourage settlement of motions. It replaced the old presumption that costs would generally be “in the cause” or “in any event of the cause” and only egregious conduct in bringing or resisting a motion would justify an order to pay costs forthwith. Rule 57.01 contains criteria that the court is to consider in awarding costs although ultimately the decision whether to award costs or not, the quantum of those costs and when they must be paid remain discretionary decisions governed by s. 131 of the Courts of Justice Act.

[6] While many of the factors I considered in Lukic are absent from this case, I agree that some of the time claimed towards the motion is really time spent researching the merits of the action or locating and reviewing documents. Moreover it is true that I granted some relief to the moving party as a term of dismissing the motion. Nevertheless the motion was reasonably complex, the outcome was important to both parties and the motion was hotly contested. The time actually spent does not appear unreasonable.

[7] Having regard to all of the applicable factors in Rule 57.01 and in particular those reviewed above, the defendant responding party shall have costs of the motion fixed at $20,000.00 on a partial indemnity scale. Those costs are to be paid within 30 days.

Master MacLeod

[^1]: 2013 ONSC 93

[^2]: (1996) 64 C.P.R. (3d) 406 (Gen.Div.) – apparently reported twice see also (1995) 1995 7329 (ON SC), 64 C.P.R. (3d) 357 (Gen.Div.)