Condominium Corporation No. 938
2015 ONSC 5459
COURT FILE NO.: CV-13-494886
DATE: 20151001
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PEEL STANDARD CONDOMINIUM CORPORATION NO. 935
Plaintiff/Moving Party
– and –
PEEL STANDARD CONDOMINIUM CORPORATION NO. 938, CITYTOWERS
PROPERTY MANAGEMENT INC., GEORGE SHALAMAY and BERT BERGER
Defendants/Respondents
Mark Willis-O’Connor, for the Plaintiff/Moving Party
Derrick M. Fulton, for the Defendants/Respondents
HEARD: August 27, 2015
G. DOW, j
reasons FOR JUDGMENT
[1] The original Motion Record of the plaintiff, Peel Standard Condominium Corporation No. 935 dated June 26, 2015 sought summary judgment against the defendant, Peel Standard Condominium Corporation No. 938 making an interim interlocutory injunction Order of Madam Justice C. J. Brown, dated January 23, 2014 permanent plus “general, compensatory, punitive, aggravated and special” damages in the amount of $150,000 plus interest and costs.
[2] However, on July 29, 2015, the defendant accepted an Offer to Settle made by the plaintiff on June 2, 2014 which proposed the interim interlocutory injunction Order become permanent and consent to “Judgment for the Plaintiff in the amount of $50,000.00 including all damages, costs and interest to date.”
[3] The plaintiff is seeking its costs of this motion and costs after June 2, 2014 on a complete indemnity basis. The defendant opposes the plaintiff’s revised motion on the basis its acceptance of the offer included a fixed sum of $50,000 for all damages, costs and interest. Counsel for the plaintiff submitted a Costs Outline for the action subsequent to June 2, 2014 in the amount of $16,121.26 and a Costs Outline for this motion in the additional amount of $4,977.06.
Facts
[4] Peel Standard Condominium Corporation No. 935 or Phase 1 was built first and included an “Amenity Unit” on the fifth level of the common area to both it and the subsequently built Peel Standard Condominium Corporation No. 938 also known as Phase 2. The Amenity Unit contained the property management office for both corporations. Until November, 2013, both the plaintiff and defendant used the same property manager. However, at that time the defendant switched to a different property manager (and staff) and began sharing the management office facility.
[5] On December 9, 2013, Peel Standard Condominium Corporation 938 and/or its Property Managers unilaterally and surreptitiously switched the locks on the management office excluding the property management staff of the plaintiff from their telephones, equipment, files and records which included confidential information. What was contained in the office was not returned until December 11, 2013 and then only in part.
[6] A Notice of Action was issued December 16, 2013 with an urgent motion prepared and served which resulted in the Order of Madam Justice C. J. Brown dated January 23, 2014 which has been in effect as of January 28, 2014.
[7] The President of Peel Standard Condominium Corporation No. 935 deposed the value of the loss of use of the office space for this 50 day period was $1,812.33. No other claims for special damages were itemized in the summary judgment material.
[8] After the order of Madam Justice C. J. Brown of January 23, 2014 and, according to the material filed, after service of the Offer to Settle June 2, 2014, plaintiff’s counsel received and reviewed a Statement of Defence and drafted a Reply. There were also brief emails between counsel from May 30 until July 22, 2014 with reference by counsel for the plaintiff to resolving the (only) perceived issue of damages “without further costs”.
[9] Counsel for the defendant submitted the Motion Record dated June 26, 2015 returnable August 27, 2015 is largely identical to the Motion Record used before Madam Justice C. J. Brown.
Issue – Application of Rule 49.07(5)(b)
[10] Counsel for the plaintiff emphasized that the phrase “$50,000 including all damages, costs and interest to date” means the offer is silent as to costs after the date of the offer.
[11] Counsel for the plaintiff submitted entitlement to additional costs based on Rule 49.07(5) which provides:
Costs
(5) Where an accepted offer to settle does not provide for the disposition of costs, the plaintiff is entitled,
(a) where the offer is made by the defendant, to the plaintiff’s costs assessed to the date the plaintiff was served with the offer; or
(b) where the offer was made by the plaintiff, to the plaintiff’s costs assessed to the date that the notice of acceptance was served. [Emphasis added]
[12] Counsel relies on Gupta v. Nguyen, 2006 17935 (ON SC), [2006] O.J. No. 2151, where Justice Wilton-Siegel awarded costs to the defendant, plaintiff by counterclaim, Nguyen, after his acceptance of the other side’s Offer to Settle for $5,000 on a condition the counterclaim and crossclaim be dismissed without costs. The exact wording of the offer is not disclosed. Justice Wilton-Siegel described the claim by Gupta as “completely unmeritorious” (at paragraph 11).
[13] In my view, the reasoning of Justice Wilton-Siegel and application of Rule 49.07(5)(b) can be distinguished from the case at hand given the reference to “costs” in the Offer to Settle and specifically as part of the $50,000.
[14] Similarly, there is also the decision of Rosero v. Huang, 1999 14806 (ON SC), [1999] O.J. No. 1964, where Justice Nordheimer reviewed a plaintiff’s acceptance of the defendant’s Offer to Settle of November 6, 1998, which provided payment of $5,000 in damages, pre-judgment interest and “costs to be assessed or agreed upon”. The acceptance of the offer was on December 6, 1998. With regard to costs payable to the date of the offer or to the date of acceptance, Justice Nordheimer concluded the earlier date applied. His reasons as I would summarize them were:
the ambiguity in the case before him ought to be resolved in a manner consonant with the provision of the Rule;
it was not logical or consistent with the purpose of settlement offers to interpret them as giving a party a “costs holiday” while they considered the offer also expending costs to which the other side was exposed;
allowing costs to the later date would discourage offers at an early stage rather than promoting the objective of having settlement occur as quickly as possible with the least expense incurred by the parties.
[15] I agree with this rationale. However, in my view, this Rule does not apply to the facts at hand given the plaintiff’s offer expressly stated and provided for costs. I am also reinforced in my conclusion by paragraph 3 of the Offer to Settle which states, “This offer to settle expires one (1) minute after the commencement of the hearing that disposes of this proceeding”. This surely contemplates the offer being available for acceptance until the hearing of the matter with an intention to use or argue the cost consequences set out in the balance of Rule 49 and particularly Rule 49.10.
[16] In addition (or if I am incorrect) on the basis my decision may be interpreted as endorsing a costs holiday for a party, it is my view this is overwhelmed by the fact it was always available to the plaintiff to clarify, withdraw or replace its offer. Once the offer was not accepted within a reasonable time and after allegedly incurring significant additional legal expenses, it was incumbent on the plaintiff and/or its counsel to review and determine if the Offer to Settle required clarification, revision or withdrawal. A belief that the offer would not be accepted after 13 months in the face of a motion for summary judgment is a risk that should be borne by the party making the offer. The party making the offer has complete control over the terms of the offer. It should go without saying care must be taken when and how Rule 49 offers are drafted and made. The plaintiff could have easily added words making clear the position it takes at this motion. The party receiving the Offer to Settle can only review it, consider the cost consequences and either accept, decline or make its own Offer to Settle.
[17] I am reinforced in this conclusion given it would appear little additional work was actually done by counsel for the plaintiff after the June 2, 2014 offer was made. The emails tendered were brief. The Motion Record for summary judgment logically would be a replication of the earlier material. There is no evidence of preparation, service or review of extensive affidavits of documents, or preparation for or attendance at examinations for discovery. As a result, the amount of costs being sought subsequent to the Offer to Settle is excessive. Further, even the amount claimed is significantly less than the $50,000 to be paid which suggests both when the offer was made and presently, much of the $50,000 is for costs.
[18] As a result, I conclude the defendant’s acceptance of the Offer to Settle results in its obligation to pay $50,000 to the plaintiff for “all damages, costs and interest”.
Costs of This Motion
[19] Counsel for the defendant did not provide a costs outline as required under Rule 57.01(6) but did not strenuously object to the amount of $4,977.06 sought by counsel for the moving party, Peel Standard Condominium Corporation No. 935. Counsel for the plaintiff also submitted the reciprocal Operating Agreement dated September 26, 2012 and particularly “Article XVII – Indemnification” applied and entitled his client (and thus in my view each side) to “all costs” or complete indemnity costs.
[20] Given my decision, it is the defendant, who is entitled to costs of this motion. As counsel for the defendant failed to tender a costs outline, I award the defendant only $3,400 inclusive of fees, HST and disbursements which equates to partial indemnity costs. This, in my view, is a fair and reasonable amount and would have been in the reasonable contemplation of the parties. This amount is consonant with the principles set out in Boucher et al. v. Public Accountants Council for the Province of Ontario et al., 2004 14579 (ON CA), [2004] O.J. No. 2634 and R. 57.
Mr. Justice G. Dow
Released: October 1, 2015
Condominium Corporation No. 938,
2015 ONSC 5459
COURT FILE NO.: CV-13-494886
DATE: 20151001
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PEEL STANDARD CONDOMINIUM CORPORATION NO. 935
Plaintiff/Moving Party
– and –
PEEL STANDARD CONDOMINIUM CORPORATION NO. 938, CITYTOWERS
PROPERTY MANAGEMENT INC., GEORGE SHALAMAY and BERT BERGER
Defendants/Respondents
REASONS FOR JUDGMENT
Mr. Justice G. Dow
Released: October 1, 2015