ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JANET LOUISE HILSON
Mr. Howard W. Reininger, for the Plaintiff
Plaintiff
- and -
1336365 ALBERTA LTD., 1336367 ALBERT LTD., 1336364 ALBERTA LTD., 1320950 ALBERTA LTD., 1336366 ALBERTA LTD., ROSS CHARLES LIGHTLE and BARBARA LIGHTLE
Mr. Jonathan Rosenstein, for the Defendants
Defendants
CITATION: Hilson v. 1336365 Alberta Ltd. et al, 2015 ONSC 1564
COURT FILE NO.: 11-31827
DATE: 2015-03-10
HEARD: February 27th, 2015
REASONS FOR JUDGMENT ON COSTS
LOFCHIK, J.
[1] This is a motion by the plaintiff with respect to costs of a motion brought by the defendants to set aside a default judgment and for costs thrown away by the plaintiff as a result of the default judgment being set aside with respect to the individual defendants.
[2] The motion was dismissed as it related to judgment against the corporate defendants.
[3] The plaintiffs claim in this action was for payment of the amount due under 25 separate charges, five charges from each corporate defendant, and for payment from the individual defendants as guarantors of all 25 charges
[4] The defendants originally retained counsel and filed a statement of defence.
[5] The individual defendants decided to represent themselves after the filing of the statement of defence and served a notice of intention to act in person on or about June 7th, 2012.
[6] Counsel for the corporate defendants obtained an order removing themselves as lawyers of record for the corporate defendants on or about June 21, 2012.
[7] Prior to the individual defendants choosing to represent themselves and prior to the corporate defendants’ lawyers removing themselves as lawyers of record for the corporate defendants, counsel for the plaintiff and counsel for the defendants had agreed to a Discovery Plan requiring delivery of affidavits of documents by June 8th, 2012.
[8] The plaintiff delivered her affidavit of documents on or about May 11th, 2012. The defendants failed to deliver an affidavit of documents and a motion was brought by the plaintiff to strike out the statement of defence on the defendants.
[9] The Notice of Motion to strike out the statement of defence was served on the individual defendants at the address shown on their notices of intention to act in person and on the lawyers for the corporate defendants who were still lawyers of record at the date the Notice of Motion was served.
[10] The defendants have acklowedged that they received the plaintiffs motion to strike out their statement of defence but they made a deliberate decision not to respond to the motion.
[11] As a result, no-one appeared on the motion to strike out the statement of defence and on June 28th, 2013, an order was obtained from Mr. Justice Parayeski striking out the statement of defence.
[12] After the defence was struck out, the defendants were noted in default and on motion supported by affidavit evidence, the plaintiff obtained judgment against the defendants on July 26th, 2013.
[13] The plaintiff subsequently took steps to register the judgment obtained in British Columbia, where the individual defendants reside, obtained and filed a writ of seizure and sale in British Columbia and began enforcement proceedings in British Columbia.
[14] It was only after the plaintiff began enforcement proceedings in British Columbia that the defendants brought the motion seeking to set aside the default judgment obtained against them.
[15] By reasons issued August 7th, 2014, I ordered that the default judgment against the individual defendants be set aside and that they be allowed to deliver an amended statement of defence.
[16] By reasons delivered February 27th, 2015, I ordered that the motion in respect of the default judgment against the corporate defendants be dismissed.
[17] The plaintiff, though only partially successful on the motion to set aside the default judgment, seeks costs of the motion.
[18] As prior to the hearing of the motion, the plaintiff delivered an offer to settle that provided for the same disposition for the setting aside of the default judgment as my reasons, the plaintiff seeks costs on a solicitor-client basis.
[19] As the offer of settlement included a number of items that were not achieved by the plaintiff upon the hearing of the motion, I find that solicitor-client costs are not in order.
[20] The defendants say that as success was divided each party should bear their own costs of the motion. They acknowledge that some costs thrown away are in order but dispute the quantum sought by the plaintiff.
[21] While they originally defended the action, the defendants made a conscious decision not to participate any further in the court proceedings prior to any examinations for discovery. It was only when the bailiffs started to seize their assets in British Columbia that they realized that they had made a mistake.
[22] The defendants not only sought the court’s indulgence to set aside the default judgment, but they also sought to amend their statement of defence.
[23] Their main defence up to the time of the motion was that they were duped by fraud and misrepresentation of others, including the plaintiff, into entering into the unit purchases of real estate that gave rise to the mortgages and the guarantees which are the subject matter of the action. I concluded with respect to the corporate defendants that this was not an arguable defence on the facts of the case.
[24] The defences they sought to raise on the motion were related to whether in fact the personal defendants executed the guarantees being sued on in their personal capacity, and whether the same limitation period applied to the guarantees as to the mortgages.
[25] These defences were novel to this case at the time of the bringing of the motion and it is not unreasonable that the plaintiff defended the motion requiring the defendants to prove that they had an arguable defence. The actions of the defendants necessitated the motion and compelled the plaintiff to incur certain costs. The individual defendants sought and were granted indulgences by the court. I find that this is one of those cases where “the price of a granted indulgence is the payment of the costs of those who have sought unsuccessfully to prevent its being granted.” (see Fox v. Bourget (1987), 17 CPC (dd) 94 (ONT. Dist. Ct.); Alifirs v. Parfeniuk (1985), 1 C.P.C. 41, 9 O.A.C. 215 (ONT. C.A.).
[26] Costs of the motion are payable by all defendants to the plaintiff. The plaintiff submitted a bill of costs to which defence counsel did not take serious objection. Costs of the motion are fixed in the amount of $27,866.65 inclusive of disbursements and H.S.T.
[27] The defendants are also responsible to the plaintiff for costs thrown away. These include any costs reasonably incurred during the time they believed that their judgment was unchallenged, which I find to be up to February 21, 2013.
[28] The recoverable costs thrown away include the following:
Motion to strike the statement of defence fixed at $1,553.75.
Motion for judgment $1,500.00.
Accounts of Doak Shirreff, plaintiff’s British Columbia counsel, $5,295.97.
North Central Bailiffs Limited $10,000.00.
Total $18,349.72
I find the account rendered by the bailiffs excessive and I have allowed their claim at 50%.
[29] I see no reason why the plaintiffs should be out the money which they have expended while this litigation rumbles along. Costs of the motion and costs thrown away to be paid within 30 days of the date hereof, failing which the motion of all defendants shall be deemed to be dismissed.
[30] The individual defendants to have 30 days from the date hereof to deliver an amended statement of defence. Plaintiff to have 20 days from the delivery of the amended statement of defence to deliver an amended reply, if any.
LOFCHIK, J.
Released: March 10th, 2015
CITATION: Hilson v. 1336365 Alberta Ltd. et al, 2015 ONSC 1564
COURT FILE NO.: 11-31827
DATE: 2015-03-10
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JANET LOUISE HILSON
Plaintiff
- and –
1336365 ALBERTA LTD., 1336367 ALBERT LTD., 1336364 ALBERTA LTD., 1320950 ALBERTA LTD., 1336366 ALBERTA LTD., ROSS CHARLES LIGHTLE and BARBARA LIGHTLE
Defendants
REASONS FOR JUDGMENT ON COSTS
TRL:vt
Released: March 10th, 2015