SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-14-499932

MOTION HEARD: March 4, 2015

Re: DAVID DVOSKINE

Plaintiff

v.

2155710 ONTARIO LTD. operating as BLOOR & KENNEDY FLOWER SHOP, ORDEN INVESTMENTS LTD., JOHN DOE EMPLOYEE. JOHN DOE SECURITY GUARD and JOHN DOE SECURITY COMPANY

Defendants

COURT FILE NO.: CV-14-512073

Re: DAVID DVOSKINE

Plaintiff

v.

2155710 ONTARIO LTD. operating as BLOOR & KENNEDY FLOWER SHOP, ORDEN INVESTMENTS LTD., DONG GO LEE, PANNONIA MEAT AND FINE FOODS INC. operating as PARKLAND MEAT & DELI, JOHN LUBOMYR DOZORSKY, OLGA SOPHIE DOZORSKY and CITY OF TORONTO

Defendants

BEFORE: Master Lou Ann M. Pope

APPEARANCES: James Pedro, Rachlin & Wolfson LLP, for moving defendant, Orden Investments Ltd.

Fax: 416-367-1820

Rachelle Mitri, Grillo Barristers P.C., for plaintiff

Fax: 416-614-6082

REASONS FOR ENDORSEMENT

[1] The defendant, Orden Investments Ltd. (“Orden”), seeks costs of the plaintiff’s discontinuance of the above two actions pursuant to rule 23.05 of Rules of Civil Procedure, R.R.O. 1990, Reg. 194 .

Background

[2] This action arises out of an incident that occurred on November 5, 2011 when the minor plaintiff and the defendant, Dong Go Lee (“Lee”) were allegedly involved in an altercation on Bloor Street, in the City of Toronto. It is alleged that Lee chased the plaintiff down Bloor Street because he was stealing from his store and at one point grabbed the plaintiff’s arm violently and broke it. The plaintiff sued for damages for personal injuries.

First Action

[3] The plaintiff commenced action number CV-14-499932 (“first action”) on March 10, 2014.

[4] The defendant, 2155710 Ontario Ltd, operating as Bloor & Kennedy Flower Shop (“flower shop”), is located at 2195 Bloor Street, the location of the alleged assault. The defendant, Orden Investments Ltd., is the registered owner of the property where the flower shop operates, such that the flower shop is Orden’s tenant.

[5] In this first action, it is alleged that the incident took place outside the flower shop by an unknown employee of the flower shop and that the plaintiff’s injuries were caused by the negligence of the defendants. The plaintiff seeks non-pecuniary general damages of $1,000,000 and punitive damages of $500,000.

[6] Orden was served with the statement of claim on March 13, 2014. Between March and July 2014 plaintiff’s counsel had discussions with the insurer for the flower shop. On July 31, 2014, Orden’s counsel requested a waiver of defence which was granted by the plaintiff. In early September, 2014 Orden’s counsel formally requested a dismissal of the action. At that time, Orden provided plaintiff’s counsel with a copy of the lease agreement between Orden and the flower shop, a statement given by Lee to Wawanesa Insurance, a letter from the defendant, Parkland Meat & Deli (“Deli”) and a Notice of Intent To Defend. Ultimately, Orden did not deliver a statement of defence as the plaintiff unilaterally discontinued the action against all defendants on September 14, 2014.

Second Action

[7] Two days prior to filing the notice of discontinuance in the first action, the plaintiff commenced a second action naming additional defendants than in the first action.

[8] In the second action, the defendant Lee, is alleged to have been an employee of the flower shop and the person who assaulted the plaintiff.

[9] The description of the alleged incident is different in this action than in the first action. It is alleged that the plaintiff and Lee had become engaged in a verbal dispute outside of the Deli, and as the dispute escalated, Lee chased the plaintiff down the sidewalk in the direction toward the flower shop. At that point, Lee allegedly grabbed the plaintiff’s left arm and broke it and the plaintiff fell to the ground and hit his head.

[10] It is alleged that either John Lubomyr Dozorsky or Olga Sophie Dozorsky, or both of them, as owners of the Deli, and the City of Toronto are liable in negligence for the incident as owners or occupiers of the sidewalk where the incident occurred.

[11] Again in this action the flower shop and Orden are named as defendants and are sued in negligence as in the first action.

[12] The quantum of damages is the same in both actions.

[13] Orden was served with the statement of claim on October 2, 2014. Thereafter, Orden’s counsel sought a dismissal of the action and a full and final release.

[14] By October 24, 2014, plaintiff’s counsel was prepared to discontinue the action without costs but refused to provide a full and final release. Given that this plaintiff had commenced two actions, Orden requested a full and final release to give Orden the protection that the plaintiff could not pursue damages against it again in the future. On the other hand, the plaintiff wished to preserve his right to claim against Orden in the future should new evidence come forth as plaintiff’s counsel was continuing to investigate the circumstances that led to the alleged incident.

[15] On November 7, 2014 Orden served a statement of defence, crossclaim and jury notice. It also filed a motion for summary judgment and therefore the motion was assigned to the civil practice court on December 2, 2014.

[16] On November 12, 2014, the plaintiff unilaterally discontinued this action against Orden. The plaintiff also discontinued the action against the Deli, John and Olga Dozorsky and the City of Toronto.

[17] On December 8, 2014, Orden served the subject two motions seeking costs of discontinuance in both actions.

[18] The plaintiff states that due to the ongoing investigation into this incident, and having learned that the incident occurred differently than as described in the first action, he decided to discontinue the first action and commence a second action, rather than amend the first statement of claim. There was no issue regarding expiration of the limitation period as the plaintiff was a minor. However, as of the hearing of this motion, the plaintiff is no longer a minor.

Law

[19] Orden brings these motions pursuant to rule 23.05(1) which states:

If all or part of an action is discontinued, any party to the action may, within thirty days after the action is discontinued, make a motion respecting the costs of the action.

[20] Subrule 23.01(1) provides that a plaintiff may discontinue all or part of an action against any defendant,

(a) before the close of pleadings, by serving on all parties who have been served with the statement of claim a notice of discontinuance and filing the notice with proof of service;

(b) after the close of pleadings, with leave of the court; or

(c) at any time, by filing the consent of all parties.

[21] There is no issue between the parties that the plaintiff served both notices of discontinuance before the close of pleadings pursuant to subrule (1)(a).

[22] Both parties rely on Digiuseppe v. Todd, 2012 ONSC 1028 (S.C.J.), wherein McCarthy J. stated at paras. 22-23 that the starting point for any consideration of a defendant’s entitlement to costs of a discontinued action is the bona fide test, which developed under a line of cases decided under the former rule 23.05(1). The court referred to the test at paragraph 48 of Provincial Crane Inc. v. AMCA International Ltd. (1990), 44 C.P.C. (2d) 46 (Ont. H.C.), as follows:

In order to establish that it ought to be relieved of costs in the courts discretion it is my opinion that, at this early stage of the action the plaintiff must satisfy the court that the material filed discloses a bona fide cause of action, that is not frivolous or vexatious and which the plaintiff had some justification to commence . . . .

[23] The onus is on a plaintiff discontinuing an action to demonstrate the bona fides of his pleading in order to escape cost consequences. (para. 23)

[24] McCarthy J. held that in applying the bona fide test the court is required to consider the general principles under rule 57.01 in exercising its discretion on the matter of costs. Other considerations relevant to the issue of costs include how long the action progressed, number of court appearances if any, and conduct of the plaintiff that tended to unnecessarily shorten or lengthen the proceeding or whether any step in the proceeding was improper, vexatious, unnecessary or taken through negligence, mistake or excessive caution. (paras. 23-27)

[25] In Diguiseppe, the court ordered the plaintiff to pay the defendant’s costs of the action despite a finding that the plaintiff had a bona fide claim. The plaintiff refused to answer a demand for particulars which forced the defendant to bring a motion for particulars. The court found that the plaintiff’s refusal to answer the demand for particulars unnecessarily prolonged the action.

[26] In two other recent cases relied on by Orden, both decided by D. M. Brown J., His Honour referred to the appropriate test to be applied by the court in the exercise of discretion under rule 23.05 as the ‘justified action test.’ Under that test, the plaintiff must satisfy the court that it had a bona fide cause of action, that it was not frivolous or vexatious and that there was some justification for commencement of the claim. (Carriere Industrial Supply Ltd. v. 2026227 Ontario Inc., 2013 CarswellOnt 1539, 2013 ONSC 1016, at para. 9; Metropolitan Toronto Condominium Corp. No. 943 v. Channel Property Management Ltd., 2013 CarswellOnt 7383, 2013 ONSC 3278, at para 4).

[27] In Carriere, at paragraph 9, the court described the costs consequences of rule 23.05(1) as “presumptive”. Further, although the rule establishes a prima facie right to costs in favour of the defendant, it does not restrict the broad discretion of the court to determine costs on a case-by-case basis. Ultimately, the court held that whether or not a defendant should be awarded costs on a discontinuance of an action will require a “very fact-specific analysis” of the circumstances that gave rise to the action and the discontinuance.

Analysis

[28] Orden did not bring this motion within 30 days after the first action was discontinued on September 14, 2014. Service of this motion on the plaintiff was effective February 19, 2015. Both of these motions were brought after the second action was discontinued.

[29] In the present circumstances, the cause of action in both actions is the same. The difference in the two actions is additional defendants in the second action who, it is alleged, caused the injuries to the plaintiff as a result of the altercation. The plaintiff submits that they learned of the additional defendants as a result of further investigation into the incident after the first action was commenced.

[30] On October 31, 2013, approximately five months prior to the issuance of the first action, plaintiff’s counsel sent a notice letter to Orden and requested a copy of the rental/lease agreement between Orden and the Flower Shop. The plaintiff received no response from Orden to that letter prior to the commencement of the first action. It was not until two days before the second action was commenced that Orden produced the lease to plaintiff’s counsel.

[31] In the first action, it is alleged that the altercation and the resultant injuries to the plaintiff occurred “outside of” the Flower Shop which was operating on property owned by Orden. In both actions, the plaintiff pleads and relies on the provisions of the Negligence Act, R.S.O. 1990, c. N.1 and the Occupiers Liability Act, R.S.O. 1990, c.O.2.

[32] None of the defendants in the first action delivered a statement of defence; therefore, a determination of whether the material filed discloses a bona fide cause of action is limited to the statement of claim and the material filed on the motion.

[33] The plaintiff’s evidence is that two days before he discontinued the first action, Orden produced a copy of the lease between Orden and the Flower Shop. Having reviewed the lease and particularly clause 8, subsection 1(b), which is set out below, it was plaintiff’s counsel’s conclusion that liability of Orden remained in contention.

During the term of this lease and any renewal thereof the landlord shall maintain with respect to the premises, insurance coverage insuring against, liability for bodily injury or death or property damage sustained by third parties up to such limits as the landlord in its sole discretion deems advisable.

[34] It is also the plaintiff’s evidence that due to their further investigation into the alleged incident, they learned that the altercation first occurred in front of the Deli located at 2216 Bloor Street, and the name of the person who was involved in the altercation with the plaintiff; namely, Mr. Lee, who allegedly chased the plaintiff down the sidewalk in the direction of Orden’s property.

[35] The plaintiff’s evidence is that rather than amending the statement of claim in the first action and adding more defendants and eliminating others, the first action would be discontinued and the second action commenced. At this point, no defences had been delivered and no parties had been noted in default therefore pleadings were not closed.

[36] In my view, given the location of the incident as pled, the information known to the plaintiff at the time regarding the name of the registered owner of the property where the incident is alleged to have occurred, the name of the business operating on the said property, and the fact that plaintiff’s counsel requested a copy of the lease from Orden, it is reasonable to conclude that any of the defendants could be found liable for the incident. Therefore, the plaintiff had some justification for commencing the action. Further, there is no evidence that the first action was frivolous or vexatious or that any step taken by the plaintiff was frivolous or vexatious. Therefore, I find that the plaintiff had a bona fide cause of action against Orden when the first action was commenced.

[37] Regarding the second action, the plaintiff pled that the dispute escalated outside of the Deli when the defendant, Lee, chased him “down the sidewalk in the direction towards” the Flower Shop. An exact location of the alleged assault by Lee is not pled. These are the types of facts that are the subject of questioning at examinations for discovery. Obviously, any liability of a party will depend on the strength of the evidence regarding the exact location of the incident and any statutory responsibility.

[38] It is also pled in paragraph 11 of the statement of claim that the incident was caused by the negligence of defendant, Lee, or alternatively, the negligence of Lee for whose negligence the Flower Shop and/or Orden are responsible.

[39] Orden submits that the plaintiff pled that the incident occurred on the sidewalk outside of its property. I respectfully disagree with that submission upon review of the statement of claim in the second action.

[40] Given the lack of evidence regarding the exact location of the incident, the recently obtained information regarding the landlord and tenant relationship between Orden and the Flower Shop, and the term of the lease requiring Orden to maintain liability insurance, it is reasonable to conclude that Orden may be found liable for the plaintiff’s injuries. For those reasons, I find that the plaintiff had a bona fide cause of action against Orden when the second action was commenced.

[41] Similarly with the first action, there is no evidence to conclude that the second action was frivolous or vexatious or that any step taken by the plaintiff was frivolous or vexatious.

[42] The plaintiff criticised Orden for having delivered a statement of defence, crossclaim and jury notice in the second action rather than requesting a waiver of defence as Orden did in the first action. After being served with the second statement of claim, Orden advised that it was intending on bringing a summary judgment motion. There were also discussions regarding the plaintiff’s proposal to discontinue the second action without costs and Orden’s proposal of a dismissal order with a full and final release. The plaintiff wished to preserve the plaintiff’s right to recovery against Orden if further evidence was obtained later in the action.

[43] With respect, I disagree with the plaintiff that Orden can be criticized for having delivered a defence given the history of these two actions and Orden’s position throughout that it had no liability as the incident occurred on the sidewalk outside his property and the legal responsibility of the City of Toronto to maintain its sidewalks.

[44] In any event, the plaintiff decided to discontinue the second action against Orden despite the plaintiff’s position that Orden may be found liable, rather than proceeding to examinations for discovery and thereafter reassessing the possibility of Orden’s liability and whether to continue the action against Orden at that time.

[45] In my view, there is no evidence upon which this court can find that the conduct of the plaintiff tended to unnecessarily shorten or lengthen the proceeding. The fact that two actions were commenced did not, in my view, lengthen the proceeding when one considers the time and effort involved in amending a statement of claim that involves deleting and adding new parties.

[46] In conclusion, for the above reasons and having considered the factors set out in rule 57.01(1), I am granting costs of both actions to Orden. Had the second action not been commenced, I would not have granted Orden its costs of the first action given that no defence was delivered, its minimal involvement, and the fact that it did not bring a rule 23.05(1) motion within 30 days after the action was discontinued. It is obvious that Orden did not intend on seeking costs of the first action. However, considering that Orden had produced its lease with the Flower Shop prior to the commencement of the second action and the plaintiff’s position having reviewed the lease that Orden may still be liable, it is difficult to understand why the plaintiff discontinued the second action against Orden less than two months after it was commenced. Although I found that the plaintiff had bona fide causes of action against Orden when both actions were commenced, the fact that the plaintiff discontinued both actions has put Orden to inordinate expense for which it ought to be compensated.

[47] Orden’s Bill of Costs for the first action claims for delivering a statement of defence and preparing and attending a summary judgment motion. There is no evidence that these steps occurred in the first action; therefore, they are not allowed.

[48] The plaintiff shall pay Orden’s costs of the first action in the amount of $775, and the second action of $3,500 for a total of $4,275. Both amounts are inclusive of disbursements and HST and are based on a partial indemnity scale.

[49] The plaintiff shall also pay Orden’s partial indemnity costs of the two motions in the total amount of $2,500 inclusive of HST and disbursements.

April 29, 2015 ____(original signed) ___

Master Lou Ann Pope