COURT FILE NO.: CV-09-13117CM

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hercules Moulded Products Inc., Plaintiff

AND:

Timothy C. Rogers, Glenn F. Ploughman and Iva Ploughman, Defendants

BEFORE: Master Lou Ann M. Pope

COUNSEL: Gregory D. Wrigglesworth, for the Plaintiff

Robert E. Houston, Q.C., for the Defendants Glenn F. Ploughman and Iva Ploughman

Timothy C. Rogers, acting in person

HEARD: Submissions in writing

endorsement on costs

[1] The defendants, Glenn F. Ploughman and Iva Ploughman (“Ploughmans”), are entitled to their costs of this action including the costs of the successful motion dismissing the action for delay (**2013 ONSC 5647**, at para. **43**).

[2] The plaintiff filed no submissions on costs.

[3] The Ploughmans seek substantial indemnity costs in the amount of $24,801.01, which includes legal fees and taxes, and $902.47 for disbursements.

[4] I reject the Ploughmans’ submission that this action was an abuse of process given the earlier action instituted in 2008 (“earlier action”). Clearly the statement of claim in this action seeks relief that was not sought in the earlier action, in particular, an interest in land. The damage claim of $600,000 in this action is the same monetary claim in the earlier action upon which the plaintiff obtained default judgment. The claim for damages of $600,000 in this action may have been struck out based on the principle of res judicata had the defendants brought such a motion; however, they did not and that issue is not before me now. Further, this action was not tried on the merits. Therefore, I do not accept that this action was an abuse of process.

[5] Substantial indemnity costs are sought given the allegations of fraud and fraudulent misrepresentation made against the Ploughmans.

[6] The Ploughmans rely on Hamilton v. Open Window Bakery, **2004 SCC 9**, [2004] 1 S.C.R. 303. In this case the Court of Appeal of Ontario overturned the trial judge’s award of solicitor and client costs.

[7] The Supreme Court of Canada in Hamilton cited at para. **26** its earlier decision in Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at para. **134**, wherein McLachlin J. (as she then was) held that solicitor and client costs “are generally awarded only where there has been [page 313] reprehensible, scandalous or outrageous conduct on the part of one of the parties.” She further stated that:

[A]n unsuccessful attempt to prove fraud or dishonesty on a balance of probabilities does not lead inexorably to the conclusion that the unsuccessful party should be held liable for solicitor-and-client costs, since not all such attempts will be correctly considered to amount to “reprehensible, scandalous or outrageous conduct.”

[8] The court in Hamilton held that “allegations of fraud and dishonesty are serious and potentially very damaging to those accused of deception.” It further held that costs on a solicitor and client scale are appropriate when “a party makes such allegations unsuccessfully at trial and with access to information sufficient to conclude that the other party was merely negligent and neither dishonest nor fraudulent” (para. 26).

[9] Here, the court did not assess the allegations of fraudulent misrepresentation and intent to defraud creditors as the dismissal of this action resulted from a status hearing and not trial. Further, the Ploughmans adduced no evidence of any damage they suffered as a result of the allegations.

[10] For the foregoing reasons, I decline to order substantial indemnity costs on the basis of the paragraphs one through four of the Ploughmans’ costs submissions brief.

[11] However, in support of their submissions for substantial indemnity costs, the Ploughmans rely on my findings that the delay in the prosecution of this action by the plaintiff was contumelious and that the plaintiff was responsible for the inexcusable and unexplained delay. In paras. 32 through 40 of my decision, I set out the basis for and my findings. In my view, the plaintiff’s actions and/or lack thereof as set out in those paragraphs are a valid basis for ordering increased costs. The fact that this action was ultimately dismissed due to the plaintiff’s delay and never tried on its merits caused the Ploughmans unnecessary costs. As such, the Ploughmans are awarded costs on a substantial indemnity basis based on these grounds.

[12] Further in support of their submissions for substantial indemnity costs, the Ploughmans submit that they served a Rule 49 offer to settle on September 29, 2009 that was never withdrawn. Given my above award for substantial indemnity costs, it is not necessary to address this submission. However, had I found that the offer was a valid Rule 49 offer that attracted enhanced costs, it is my view that the Ploughmans are entitled to substantial indemnity costs for the entire action for the reasons set out in the previous paragraph. On the other hand, had I found that it was not a valid Rule 49 offer, the court can consider any offer to settle as provided for in rule 57.01(1) and subrule (i).

[13] The Ploughmans claim legal fees, taxes and disbursements of $24,801.01 based on a substantial indemnity rate as set out in their bill of costs. In my view, the calculations set out therein are accurate. For the reasons above, the Ploughmans are entitled to payment of that amount by the plaintiff within 60 days.

Original signed “Master Pope”

Master Lou Ann M. Pope

Date: ** December 30, 2013 **