ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-14-505748
DATE: 20150828
IN THE MATTER OF the Construction Lien Act, R.S.O. 1990, c. C.30
BETWEEN:
INDUSTRIAL REFRIGERATED SYSTEMS INC.
Plaintiff
– and –
QUALITY MEAT PACKERS LIMITED, TORONTO ABATTOIRS LIMITED and TWO TECUMSETH STREET INC.
Defendants
Christopher Stanek for the Plaintiff
Matthew Alter and Mark St. Cyr for the Defendant, Two Tecumseth Street Inc.
HEARD: In writing
Perell, J.
REASONS FOR DECISION - COSTS
[1] The Defendant Two Tecumseth Street Inc. (“TT Street”) owns a property at 2 Tecumseth Street in Toronto, which it leased to the Defendant, Toronto Abattoirs Limited, which subleased the property to its sister corporation, the Defendant, Quality Meat Packers Limited (“Quality Meat”). Toronto Abattoirs operated a slaughterhouse on the property, and Quality Meat operated a meat-packing facility on the property. The Plaintiff, Industrial Refrigerated Systems Inc. (“Industrial”), provided refrigeration equipment under a contract to improve Quality Meat’s facilities. Quality Meat, however, did not fully pay Industrial for its goods and services.
[2] After both Toronto Abattoirs and Quality Meat went into bankruptcy, Industrial, although it has no contract with the landlord TT Street, registered a construction lien against TT Street’s freehold fee simple ownership interest. Thus, Industrial liened the freehold owner’s interest not the leasehold owner’s interest in the property. Industrial sued to enforce the lien, and it joined contract, quantum meruit, and unjust enrichment claims against TT Street.
[3] TT Street moved for summary judgment dismissing the action as against it and for an order discharging the registered construction lien. Industrial brought a cross-motion to have its dispute with TT Street referred to a Master for determination.
[4] For reasons reported as Industrial Refrigerated Systems v. Quality Meat Packers, 2015 ONSC 4545, I granted Industrial’s motion but on terms that struck out its claims for quantum meruit and unjust enrichment. I granted TT Street leave to bring a summary judgment motion, and I allowed its summary judgment motion, but only insofar as to dismiss Industrial’s claim in contract and its related claim to pierce the corporate veil. I concluded that there were genuine issues for trial about whether TT Street is an “owner” as that term is defined in the Construction Lien Act and about whether Industrial’s lien claim is timely. I granted Industrial’s request in its cross-motion that the action be referred to the Construction Lien Master in Toronto.
[5] Industrial seeks costs in the amount of $31,934.90, all inclusive, on a partial indemnity basis. Industrial submits that while TT Street was partially successful in having certain claims struck or dismissed, it failed to achieve a summary judgment on the issues of lienability (i.e. whether TT Street was an “owner”), the timeliness of the lien, and the quantum of the lien.
[6] TT Street seeks costs in the amount of $57,486.392, all inclusive, (80% of $71,857.99) on a partial indemnity basis. It submits that it was the substantially more successful party on the motions, and particularly so, because the effect of the issue estoppels and struck and dismissed claims, was to reduce its exposure to only that of a statutory owner, which, practically speaking, reduced its exposure by 80% from $746,345.23 to just $128,449.50 plus HST, its liability for a holdback under the Construction Lien Act, R.S.O. 1990, c. C.30.
[7] In the alternative, relying on my costs decision in Moak v. Haggerty, [2008] O.J. No. 607 (S.C.J.), TT Street submits that given the divided success on the motions, the costs should be in the cause and reserved to the Construction Lien Master to determine on the judgment of reference, which, as it happens, is the default costs Order that I mentioned in my Reasons for Decision.
[8] Industrial disputes that TT Street has reduced its exposure to liability and it submits that TT Street’s argument to this end is erroneous in law. For the reasons that follow, I shall not decide this point, which was not argued on the summary judgment motion, and I shall simply approach this matter on the basis that both parties were substantially successful; i.e. there was divided success.
[9] Having reviewed the submissions of the parties about the various factors that inform the court’s discretion about costs including the amount claimed in the proceeding, the complexity of the proceeding, the importance of the issues, the conduct of the parties that tended to shorten or to lengthen the duration of the proceeding, the hours spent, the experience of the lawyers involved, the outcomes, proportionality, and the predominate principles of fairness and the reasonable expectations of the parties, in my opinion, the appropriate order in the immediate case is different than any of the requests of the parties.
[10] In my opinion, the appropriate order is to wipe the slate clean of the costs of the summary judgment motion and the cross-motion.
[11] I can achieve this outcome by awarding both parties the same sum and then setting off the awards. Another way of achieving the same result is to order no costs for the motion and the cross-motion while making it clear that the costs of the motion and the cross-motion are not to be reclaimed in the cause.
[12] I come to these approaches, in part, because I thought that the quantum of Industrial’s claim for costs of of $31,934.90 was fair and reasonable, but I did not agree with only a 20% discount in TT Street’s $71,857.99 partial indemnity claim, even assuming that its exposure to liability argument was correct, which it may not be. I also thought TT’s Street’s claim was somewhat high in its quantum. Reducing TTC Street’s $71,857.99 claim and discounting it by 50% to reflect more fairly the divided success on the motion would yield a sum approaching Industrial’s claim for costs; i.e. a set-off.
[13] In other words, accepting that both parties could justify a claim for costs, the competing costs awards would set-off each other and the slate would be wiped clean.
[14] The balance of the costs unconnected to the motion and the cross-motion can be dealt with by the Master in the cause. In my opinion, this approach is preferable to ordering the costs of the motion and the cross-motion in the cause.
[15] Order accordingly.
Perell, J.
Released: August 28, 2015
COURT FILE NO.: CV-14-505748
DATE: 20150828
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
INDUSTRIAL REFRIGERATED SYSTEMS INC.
Plaintiff
– and –
QUALITY MEAT PACKERS LIMITED, TORONTO ABATTOIRS LIMITED and TWO TECUMSETH STREET INC.
Defendants
REASONS FOR DECISION – COSTS
PERELL J.
Released: August 28, 2015