CITATION: 1623242 Ontario Inc. v. Great Lakes Copper Inc. 2016 ONSC 1002

COURT FILE NO.: 571/12

DATE: 2016-02-09

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

1623242 ONTARIO INC.

Gregory Govedaris, for the Plaintiff

Plaintiff

• and -

GREAT LAKES COPPER INC., 3072453 NOVA SCOTIA COMPANY, WOLVERINE TUBE, INC., WOLVERINE TUBE CANADA LIMITED PARTNERSHIP, and TIM WATKIN

Defendants

Milton A. Davis and Robert B. Macdonald, for the Defendants

HEARD: January 28, 2016, at Brampton, Ontario

Reasons for Order

Price J:

Nature of the Proceeding

[1] The plaintiff, 1623242 Ontario Inc. (“162”), which purchased an industrial property contaminated by PCBs in 2005, and gave a mortgage to the vendor for a portion of the purchase price, later sued the vendor, and the related company to which the vendor later assigned its vendor-take-back mortgage, and another related company, Great Lakes Copper Inc. (“GLC”), which eventually cleaned up the contamination, for fraud, alleging that the defendants had conspired to defraud 162 by:

(a) selling the property to it by concealing the contamination;

(b) charging 162 for the costs of clean-up; and

(c) acquiring the property back from 162 by foreclosure, and thereby passing the costs of the clean-up to it.

[2] After four years of litigation, 162 produced records it had obtained from the Ministry of the Environment (“MOE”), which the defendants say disclosed that 162 was aware of contamination of the property in 2009, three years before it commenced its fraud action, and that the action was therefore stature barred. 162 then sought to secure a discharge of its mortgage or assign it to another, by paying to 307 all amounts owing to it, and to discontinue its fraud action and fraud counterclaim against the defendants.

[3] 162 now moves for leave to discontinue the fraud action, and its counterclaim in 307’s foreclosure action, and to settle an earlier order as to the amounts it must pay to secure a discharge of its mortgage or to assign it. The court must determine whether the fraud action and counterclaim should be discontinued or dismissed, and must determine the amount that 162 must pay to 307 to obtain a discharge of its mortgage or to assign it to another, and the amount of costs that it must pay to all of the defendants in the fraud actions and in its counterclaim in the foreclosure action, which were based on the same allegations of fraud.

[4] These reasons are being released contemporaneously with supplementary reasons in 162’s motion for leave to discharge or assign its mortgage, and 307’s motion for leave to discontinue its foreclosure claim, which were heard in December 2014, the initial reasons in which were released April 24, 2015, and corrected June 2, 2015. I am additionally revising and settling the form and content of the order initially made in 162’s motion for leave to discharge or assign its mortgage, as the assessment of certain of its costs was completed on October 8, 2015, and the remainder can now be fixed to enable 162 to discharge its mortgage on February 12, 2016, as it intends to do.

Background Facts

a) Events Giving Rise to the Litigation

[5] In 2005, 162 purchased a 25.3 acre industrial property at 865 Gartshore Street, in Fergus, Ontario, from Wolverine Tube Canada Inc. (“Wolverine”) for $1.35 million. It paid $337,000 to Wolverine on closing and financed the remainder of the purchase price with a vendor-take-back mortgage, which Wolverine later assigned to a related company, 3072452 Nova Scotia Company (“307”).

[6] At the time of 162’s purchase, the property was contaminated by seven transformers containing PCB’s (“the first contamination”). At some point, it was further contaminated by the stripping of copper wire from one of the transformers, which caused PCBs to leak into a lake on the property (“the second contamination”).

[7] The principal issue in this litigation has been the extent to which 162 was aware of the contamination when it bought the property. 162 alleges, in its fraud action, that it was not aware of the contamination, and that the vendor’s intentional non-disclosure of the fact to it amounted to fraud. The defendants allege that 162 was told of the contamination. They rely, in this regard, on the following facts, among others:

(a) The Agreement of Purchase and Sale provided for a purchase of the property “as is”; and

(b) The purchase price was substantially lower than it would have been had there been no contamination.

[8] In 2009, the Ministry of the Environment (“MOE”) asked 162 to remove the transformers, and 162 obtained an estimate of the cost of removal from an electrician. The defendants say that 162 failed to disclose these facts to them until July 28, 2014, because they knew that they proved that 162’s action was statute-barred, since the action was begun in July 2012, more than two years after 162 asked the electrician for the estimate.

[9] In April 2010, MOE ordered the present and past owners of the property to remove the contaminants from the property. When 162 would not remove them, GLC removed the transformers and invoiced 162 for the work.

[10] On December 3, 2010, a month before the renewal date of 162’s vendor take-back mortgage, which the vendor had since assigned to 307, 162 stopped making its mortgage payments to 307.

[11] On March 23, 2011, when 162 would not pay its invoice for the $290,191.93 cost of removing the transformers, GLC began a construction lien action against 162 for that amount.

[12] GLC later removed the contamination from the leaked PCB’s and invoiced 162 for the further $347,920.16 cost of this additional work. When 162 did not pay, GLC commenced a second lien action on July 4, 2012, for that amount. In both lien actions, GLC claims the amount by which it says 162 was unjustly enriched by the clean-up, which enhanced the value of the property.

[13] Later the same month, on July 26, 2012, 162 issued a Notice of Action against the defendants, including Wolverine Tube, GLC, and 307, alleging that they had conspired to defraud 162 by selling the property to 162 without disclosing the contamination, cleaning up the contamination, charging 162 for the cost, and seeking to recover the property, at its enhanced value, back from 162, thereby passing the cost of the clean-up to 162.

[14] On October 24, 2012, a year and ten months after 162 stopped making payments on its mortgage, and three months after GLC began its second lien action against 162 and 162 began its fraud action against the defendants, 307 began an action against 162 and its principal, Krishan Judge, for foreclosure of its mortgage. 162 and Mr. Judge delivered a Statement of Defence and Counterclaim, in which they repeated the fraud allegations 162 had made in its fraud action against the defendants.

[15] On April 16, 2013, on a motion by 162, the court ordered that all four actions be tried together, and that 307’s foreclosure action be transferred from London to Guelph for this purpose. I have since case managed the actions.

[16] In support of its request for a trial date, the defendants point out that 162 began its fraud action almost four years ago, in July 2012, and has made no mortgage payments since December 2012. The defendants characterize the entire litigation as a strategy by 162 to defer making payments on its mortgage. They point to the following steps by 162, which they characterize as delay tactics:

(a) In December 2013, 162 moved to remove the defendants’ solicitor on the ground of an alleged conflict of interest. The motion was heard on January 6, 2014, and dismissed on February 3, 2014, with costs.

(b) On June 16, 2014, 162 advised the defendants that it would claim privilege over 3900 documents which it had received from the MOE in response to a Freedom of Information Request. A month later, on July 28, 2014, it produced copies of the documents to the defendants.

(c) On July 17, 2014, 162 moved for leave to discharge or assign 307’s mortgage on a “without prejudice basis”, and to pay a lower amount of costs than 307 claimed in a mortgage discharge statement to 162. It also obtained an order, on consent, permitting it to increase its damages claim from $10 million to $110 million based, it said, on its recent discovery of the further contamination that had been caused by the leak of PCBs from one of the transformers.

(d) On August 13, 2014, 162 delivered an Amended Notice of Motion in which it sought to pay $664,732.745 into court in exchange for a discharge or assignment of 307’s mortgage. Before the court decided that motion, 162 replaced its motion with another, by which it sought leave to pay a reduced amount of $529,890.94 into court or, alternatively, to 307, on a “without prejudice basis”, in exchange for an assignment of its mortgage.

(e) On November 26, 2014, 162 delivered a further Notice of Motion, by which it sought to redeem its mortgage “with prejudice” in the mortgage foreclosure action, but “without prejudice” to its right to prosecute its fraud action, in which it continued to alleged that 307 had obtained its mortgage by fraud.

[17] On December 3, 2013, I ordered that the actions be set down for trial within a year. 162 failed to set its fraud action down for trial by December 3, 2014. Instead, on December 12, 2014, the court heard 162’s final motion to redeem its mortgage, and 307’s cross-motion for leave to discontinue its claim for foreclosure. In the meantime, cross-examinations in the constructive lien actions, and examinations for discovery in the fraud and foreclosure actions, were completed between January 26 and February 3, 2015.

[18] On February 6, 2015, based on documents that had been produced on July 28, 2014, and answers given at the examinations from January 26 to February 3, 2015, the defendants delivered a Notice of Motion seeking summary judgment dismissing the fraud action. The defendants later abandoned their intention to pursue that motion.

[19] On February 13, 2015, the parties held a case conference at which I ordered that, before the defendants proceeded with their summary judgment motion, the parties would comply with undertakings arising from the examinations, so that the court would have a complete evidentiary record for the motion, and the parties would finalize their pleadings, so that the court could base its determination of the summary judgment motion on the final form of pleadings.

[20] The court set April 29, 2015, as the date when motions for compliance with undertakings would be heard. The parties later complied with their undertakings, with the result that their motions did not proceed. The court set a deadline for 162 to deliver its amended pleading and for the defendants to deliver their amended defence.

[21] On April 24, 2015, I released reasons, later corrected on June 2, 2015, in the two motions (162’s motion for leave to discharge or assign its mortgage, and 307’s motion to discontinue its foreclosure claim) which I had heard on December 12, 2014. I ordered 307’s costs to be assessed to help determine the amount 162 would be required to pay, in addition to principal and interest on its mortgage, to secure a discharge or assignment of its mortgage. I held that 307 could recover, as part of its costs of enforcing its mortgage, its costs of defending the fraud action, in which 162 disputed the validity of its mortgage, but not GLC’s costs of the construction lien actions. I dismissed 307’s motion to discontinue its claim for foreclosure. I directed that there be no costs in either motion, as each party had been successful in one of the motions.

[22] On April 13, 2015, the defendants’ counsel wrote to 162’s counsel asking why recently discovered evidence disclosing that 162 had sought an estimate in 2008 for the removal of the contaminated transformers, which the defendants alleged was material to whether 162’s action was statute barred, had not been disclosed earlier. 162 did not reply to this inquiry. Instead, on April 17, 2015, it delivered a list of the 44 witnesses that it intended to call at trial, including 11 officers or employees of GLC, 4 of GLC’s lawyers, and several MOE officers who, according to the defendants, are statutorily non-compellable.

[23] At a conference on May 26, 2015, I ordered a timetable for the delivery of materials for the assessment of 307’s costs, scheduled to take place before Assessment Officer Stevens on September 10 and 11, 2015, and a timetable for the defendants’ motion for summary judgment.

[24] On July 21, 2015, 162 delivered a Notice of Change of Lawyers, appointing Lax O’Sullivan Lisus Gottlieb LLP to represent them. On September 10 and 11, 2015, the assessment of costs proceeded before Assessment Officer Stevens. After a mediation requested by 162’s owner, Krishan Judge took place from early July to October 2015, and concluded unsuccessfully, Assessment Officer Stevens released his oral decision on October 8, 2015. He assessed 307’s costs in the amount of $444,748.37, being 97.8% of, and $10,000 less than, the amount 307 had claimed.

[25] The amount at which the Assessment Officer assessed 307’s costs was greater than a $375,000 amount that 307 had offered to accept from 162 in an Offer to Settle delivered on September 8, 2015, two days before the assessment. 162’s then-counsel wrote to 307’s counsel, in response to the offer, indicating that 162 was prepared to accept the $375,000 in settlement of all costs claimed in 307’s Bill of Costs dated June 13, 2015, which amounted to $454,748.37. Defendants’ counsel replied on September 9, 2015, reserving GLC’s right to claim the remaining costs of $79,748.37 (the difference between the $454,748.37 it was claiming and the $375,000 it was offering to accept) that it had incurred in the construction lien actions. This was not acceptable to 162, which therefore did not accept 307’s Offer.

[26] On October 19, 2015, 162 re-appointed Mr. Govedaris as its solicitor of record in the four actions. On the same day, it delivered objections to Assessment Officer Steven’s decision, although his predecessor, Lax Sullivan, had not asked Mr. Stevens to withhold his assessment, as required by Rule 58.10(1) of the Rules of Civil Procedure. On October 27, 2015, 307 delivered its response to 162’s objections.

[27] In January 2016, 307 asked the court to convene a conference on January 22, 2016, so that it could ask the court to set a trial date. At the beginning of the case conference, 162’s counsel, Mr. Govedaris, advised the court that his client had instructed him to discontinue the fraud action and 162’s and Mr. Judge’s counterclaim, based on fraud, in 307’s mortgage foreclosure action.

[28] The court adjourned the conference to January 28, 2016, to enable Mr. Govedaris to take the steps necessary to implement his client’s instructions to seek leave to discontinuance its fraud action and counterclaim based on fraud, and its intended discharge or assignment of its mortgage on February 12, 2016. The court appointed a further conference to take place on February 17, 2016, to set a trial date in the event that 162 failed to discharge or assign its mortgage by February 12, 2016.

[29] On January 25, 2016, pending the resumption of today’s conference, 162 delivered a withdrawal of its objections to the assessment by Assessment Officer Stevens, together with motions seeking the following:

(a) Leave to discontinue its fraud action and its counterclaim in 307’s mortgage foreclosure action;

(b) Directions concerning any as yet-unassessed costs of the defendants in the fraud action and counterclaim; and

(c) An order directing the defendants to serve a statement of account supporting their claim for costs not awarded by the assessment officer.

[30] On the eve of the resumption of the conference on January 28, 2016, the defendants delivered their statements of account for their costs of the assessment and their post-assessment costs, as well as their response to 162’s motions for leave to discontinue. They opposed discontinuance and requested a dismissal of the fraud action and a determination of the defendants’ costs of the assessment before Assessment Officer Stevens and of their post-assessment costs.

[31] At the hearing on January 28, 2016, Mr. Govedaris stated that his client required a determination of the amount it would be required to pay in order to discharge or assign its mortgage, and asked the court to dispense with approval of his draft order arising from the court’s reasons dated April 24, 2015, and corrected June 2, 2015, in the motion and cross-motion heard December 14, 2014. He took the position that 307 and the other defendants should not be entitled to recover any costs beyond those that Mr. Stevens had assessed.

[32] At the request of the parties, I have treated their respective conference briefs as part of the evidence in the motions.

ISSUES

[33] The court must determine the following issues on the motions:

a) Should 162 be permitted to discontinue its fraud action, and the counterclaim of 162 and Mr. Judge, based on fraud, in 307’s foreclosure action, or must its action and the counterclaim be dismissed?

b) Are the defendants, upon the discontinuance or dismissal of 162’s action and counterclaim, entitled to the costs assessed by Assessment Officer Stevens, and the costs of that assessment, and the defendants’ post-assessment costs of those proceedings?

c) What amount of costs should 162 and Mr. Judge be required to pay?

THE PARTIES’ POSITIONS

[34] In its motions, 162 seeks leave to discontinue its fraud action and its counterclaim in the foreclosure action, and an order relieving it of the obligation to pay further costs of those proceedings, or to fix such additional costs in a lower amount than the defendants claim. In support of its request, it re-asserts the objections that it made to Assessment Officer Steven’s assessment, and later withdrew.

[35] The defendants seek an order refusing 162’s requests for leave to discontinue and, instead, dismissing 162’s action and the counterclaim of 162 and Mr. Judge in the foreclosure action. They ask the court to assess the defendants’ post-assessment costs on a full indemnity scale, principally for the reasons it set out in its response to 162’s objections to Assessment Officer Steven’s assessment.

[36] 162 submits that none of the defendants in the fraud action will suffer any prejudice if 162 is granted leave to discontinue the fraud action. It further submits that once it has obtained a discharge or assignment of its mortgage, there should be no costs left to be paid in the fraud action as those costs were assessed by Assessment Officer Stevens. It repeats the objections it made to Mr. Steven’s assessment, which can be summarized as objections that the assessment included the following costs not properly assessed:

(a) Costs for 307’s motion to discontinue its foreclosure claim and 162’s motion for leave to discharge or assign its mortgage, contrary to my reasons dated August 26, 2015, in which I had directed that there would be no order for the costs of those motions;

(b) Costs set out in accounts dated January 12, February 10, and March 9, 2015, incurred by GLC in relation to examinations pertaining to the construction lien actions, which I held, in my reasons dated April 24, 2015, and corrected June 2, 2015, were not properly recoverable by 307 as costs of enforcing its mortgage.

(c) 307’s costs for preparing and attending the examination for discovery of Tim Watkin, the individual defendant;

(d) Costs set out in their account dated March 2, 2015, and in as yet unbilled accounts, including costs of the intended motion for summary judgment, which I had directed, in my reasons dated August 26, 2015, was not to proceed until the assessment was completed; and

(e) Costs of 307 and GLC for GLC’s constructions lien actions, which I had directed, in my reasons dated April 24, 2015, and corrected June 2, 2015, 307 was not entitled to recover as part of its costs of enforcing its mortgage, and which costs were to be segregated from 307’s other costs before the assessment.

[37] The defendants assert that the fraud action, and the counterclaim in the foreclosure action, are without merit and, in any event, are out of time, as the limitation period for them has passed. The defendants further submit that the defendants and, in particular, Tim Watkin, have suffered a burden, financially and emotionally, by reason of the fraud allegations, and that they should be protected from further litigation arising out of the issues by a dismissal of the fraud action and the counterclaim in the foreclosure action. Unlike discontinuance, a dismissal will support a later plea of res judicata that would bar a subsequent action based on the same cause or causes of action.

[38] The defendants acknowledge that all of their costs, up to the date of the assessment, were addressed by Assessment Officer Stevens’ decision. They state that 307 was entitled to include in its costs, for purposes of the assessment, costs not awarded to them in the actions, as I directed in my reasons dated April 24, 2015, corrected June 2, 2015, that it could claim them as a contractual entitlement pursuant to Article 8 of the Standard Terms of its mortgage. The defendants state that they did not include in the costs submitted for assessment any costs associated with GLC’s construction lien actions, or any costs associated with their motion for summary judgment following the order I made directing that the said motion was not to proceed until the assessment was completed.

[39] The defendants acknowledge that all of their post-assessment costs are accounted for in the statement of account which they delivered on January 27, 2016, which they ask the court to settle at this time.

[40] As for the defendants’ assessed costs, they submit that 162, by failing to request that Assessment Officer Stevens withhold his assessment, and by withdrawing its objections to his assessment, waived its right to object to his decision now. 307 claims its costs of the assessment, and the defendants claim their post-assessment costs, on a full indemnity scale based on Article 8 of the Standard Charge Terms in 307’s mortgage, and based on 162’s unsubstantiated allegations of fraud. It submits that it has claimed only the costs it incurred in defence of the fraud action, and in prosecuting its mortgage foreclosure action and defending the counterclaim in that action, and not costs incurred in relation to GLC’s construction lien actions.

ANALYSIS AND EVIDENCE

(a) Should 162 be permitted to discontinue its fraud action, and 162 and Mr. Judge be permitted to discontinue their counterclaim, based on fraud, in 307’s foreclosure action, or must they proceed with the action and counterclaim to a dismissal, or be granted leave to discontinue on terms?

[41] For the reasons that follow, 162’s action against the defendants, and the counterclaim of 162 and Mr. Judge in the foreclosure action, will be discontinued on terms that prevent them from re-litigating, in the future, claims arising from 162’s purchase of the property and that were, or could have been, asserted in the present action.

[42] The discontinuance of an action is governed by rule 23.01 of the Rules of Civil Procedure. It provides:

23.01(1) 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 a statement of claim a notice of discontinuance (Form 23A) and filing the notice with proof of service:

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

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

(2) If a party to an action is under disability, the action may be discontinued by or against the party only with leave of a judge obtained on motion under rule 7.07.1.[^1] [Emphasis added]

[43] In the present case, the pleadings are closed and the defendants do not consent to discontinuance. The court is therefore called upon to exercise its discretion as to whether or not to grant 162 and Mr. Judge leave to discontinue.

[44] The defendants’ concern is that 162 and/or Mr. Judge will commence another claim against them in the future, such that the defendants would be deprived of “the prospect of peace and a cessation of litigation.”[^2] They submit that allowing 162 and Mr. Judge to discontinue the action and counterclaim on terms that would allow them to re-litigate would be unfair to the defendants, having regard to the expense they have incurred defending the allegations made in the present action.

[45] A discontinuance brings an action against a defendant to an end, but does not bar a subsequent claim based on the same cause or causes of action unless terms are imposed which do so.[^3] Rule 23.04 provides, in this regard:

23.04(1) The discontinuance of all or part of an action is not a defence to a subsequent action, unless the order giving leave to discontinue or a consent filed by the parties provides otherwise.

(3) Where a plaintiff has discontinued and is liable for costs of an action, and another action involving the same subject matter is subsequently brought between the same parties or their representatives or successors in interest before payment of the costs of the discontinued action, the court may order a stay of the subsequent action until the costs of the discontinued action have been paid.

23.07 Rules 23.01 to 23.06 apply, with necessary modifications, to counterclaims, crossclaims and third party claims. [Emphasis added]

[46] A discontinuance pursuant to rule 23.04(1) brings an action against a defendant to an end, but does not, by itself, give rise to a plea of res judicata that would bar a subsequent claim based on the same cause or causes of action.[^4] That is, the discontinuance is not a defence to a subsequent action by the plaintiff, unless the order granting leave to discontinue provides otherwise.

[47] On a motion for leave to discontinue, a court has a discretion to grant or withhold leave to discontinue. In the exercise of its discretion, a court may allow discontinuance on terms, including a term that the plaintiff may not commence another action for the same causes of action that were asserted, or could have been asserted, in the action that is sought to be discontinued.[^5] In exercising its discretion, the court considers a variety of factors including: the state of progress of the action; the prejudice suffered by either party should leave be granted or refused; and the court’s ability to neutralize prejudice by imposing terms.[^6]

[48] The circumstances in which the court might refuse to grant leave to discontinue are illustrated by the case of Simanic v. Ross, in 2004. In that case, Low J., dismissed the plaintiff’s appeal from the Master’s order dismissing his motion for leave to discontinue his action against his former solicitor for breach of fiduciary duty. The plaintiff had requested leave to discontinue the action so that he could prosecute a later action that he had commenced against the solicitor in St. Kitts for the same relief. Justice Low stated:

It is thus common ground that on a motion for leave to discontinue, the court is to balance and weigh the rights and interests of the parties. It is to consider the prejudice that would befall the plaintiff in not being permitted to discontinue against the prejudice to the defendant if leave were granted, taking into account in each case the court's ability to neutralize prejudice through the imposition of terms.[^7] [Emphasis added]

[49] Justice Low found that the Master, in accordance with the jurisprudence, had entered upon a balancing of the parties' respective interests and took into account, among other things, the stage the action had reached.[^8] The Master had concluded that the fact that the action had not progressed very far in 18 months was not determinative of the outcome of the motion. The plaintiff argued that the Master was wrong in that view, and that because the plaintiff had advised the defendant just a few days after the close of pleadings that he did not wish to continue the Ontario action, and nothing had taken place in the litigation between the date the pleadings were deemed close and the date of the plaintiff’s notification, that it was wrong for the Master not to exercise her discretion in his favour and permit him to continue his action in St. Kitts.

[50] Counsel for the plaintiff relied on Blum v. Blum, a 1964 case in which the Court of Appeal reversed the decision of Haines J., who, as trial judge on the eve of trial, had granted leave to the husband to discontinue his action without prejudice to his right to bring a new action in the future.[^9] Low J. stated:

…The trial judge granted leave to discontinue upon payment of costs but declined to dismiss the action or to restrain the plaintiff from bringing a new action. On appeal, the Court of Appeal cited Schlund v. Foster (1908), 11 O.W.R. 175, [1908] O.J. No. 540 (H.C.J.) at para. 13 for the applicable principles, per Riddell J.:

. . . this action is carried on so far that the plaintiff is no longer dominus litis, but the defendant has acquired rights and is entitled to a judicial declaration as to the merits between himself and the plaintiff; the plaintiff must submit to such a judicial declaration, unless he is released from such necessity by an order of the Court; he is now appealing to the Court to be released from such necessity and to be allowed to deprive the defendant of his right to such declarations; the defendant is not asking for any favours from the Court or from the plaintiff, but pursuing the regular course to have his rights determined. . . .[^10] [Emphasis added]

[51] In my reasons dated April 24, 2015, corrected June 2, 2015, I dismissed 307’s motion for leave to discontinue its foreclosure claim in its action against 162 and Mr. Judge on the ground that the foreclosure claim, once made, had caused 162 to take positions and incur costs that would result in prejudice to it if 307 were permitted to discontinue. I held that once a mortgagor elected to pursue the remedy of foreclosure, it could not resile from its position, and the mortgagee was entitled to redeem its title by paying the amount due and obtaining a discharge of, or assigning, its mortgage. I stated:

[118] I find no justification for permitting 307 to discontinue its foreclosure action for the sole purpose of defeating 162’s right, as mortgagor, to redeem its title by paying the amount now due under the mortgage. 307 has not articulated any prejudice it will suffer if the foreclosure claim is not discontinued and 162 is allowed to redeem….[citation omitted]

[52] Although the position of 162, as plaintiff in a fraud action, is not identical to that of 307, as a mortgagor in a foreclosure action, 162 has used its fraud action to dispute the validity of its mortgage, and its action has caused the defendants to take positions, in their pleadings and examinations, and to incur expenses. It would prejudice them if 162 and Mr. Judge were granted leave to discontinue the action and counterclaim without prejudice to their right to advance their causes of action in another action in the future.

[53] In Simanic v. Ross, Low J. cited Lerner J. in Sampson v. Kingston, in 1981, in which the plaintiff stated at the opening of trial that his action was restricted to his claims for a declaration, and that he was discontinuing his claims for damages, and when the trial was completed, the trial judge denied the plaintiff’s motion for leave to discontinue his claims for damages without prejudice to his right to pursue those claims in the future. Low J. stated:

[31] Lerner J. held that at trial, the plaintiff is not entitled to discontinue as of right but must obtain the consent of the trial judge, which consent is discretionary. He held that rule 320(5) was designed to prevent the plaintiff being able to bring an action the second time on the same cause, and that this purpose should underlie any decision by the trial judge. He held that the burden is on the plaintiff to adduce evidence why the action should be discontinued, rather than dismissed and that if a trial judge has no such evidence before him, it is an error in principle to allow discontinuance rather than dismissing the action of right. Finally, even if discontinuance is permitted, the trial judge has the discretion to impose the term that the same cause of action shall not be brought again.[^11] [Emphasis added]

[54] In Simantic, Low J. distinguished National Bank of North America v. Ross, in 1982, in which Reid J., of the High Court of Justice, dismissed the defendant’s appeal from a county court judge who had granted the plaintiff leave to discontinue his Ontario action, without prejudice to his right to continue an action, based on the same cause of action, that he had commenced later in New York State.[^12] In the National Bank case, the plaintiff, at the early stages of the action, (after the exchange of pleadings, and appointments for discovery), learned that the defendant had moved permanently from Ontario to Florida, and had concerns regarding the enforceability of an Ontario judgment in Florida. The county court judge in Ontario granted the plaintiff leave to discontinue the Ontario action without prejudice to its right to pursue the similar action it had begun later in the State of New York. Reid J. dismissed the defendant’s appeal, holding that the potential prejudice to the plaintiff if the court denied it leave to discontinue without prejudice to its right to continue its action in New York outweighed the potential prejudice to the defendant that would result from the discontinuance of the Ontario action at the early stage of the proceeding. Low J. stated:

Reid J.'s comments at p. 135 C.P.C. about the acquisition of "rights" by the defendant, as expressed by Riddell J. in Schlund v. Foster, supra, is particularly relied upon by the plaintiff. Reid J. cited Blum v. Blum, in which McLennan J.A. had referred to the right of a defendant to have an issue tried. Reid J. stated:

On applications for leave to discontinue, it is obvious that a number of factors have been considered by the courts and must be considered by me. One of those is what has been called a "right" in a defendant to have an issue tried in the Court the plaintiff selected. An example of that is Blum v. Blum. In the course of giving the decision of the Ontario Court of Appeal, Mr. Justice McLennan referred with approval to the decision of Mr. Justice Riddell [page169] in Schlund v. Foster, who referred to an action being ". . . carried on so far that the plaintiff is no longer dominus litis, but the defendant has acquired rights and is entitled to a judicial declaration as to merits between himself and the plaintiff; . . ." (see p. 178)

I think the operative phrase in that reference is "carried on so far". That draws attention to the stage the action has reached when the plaintiff seeks to break it off. The proceedings had gone along a substantial way. . . .[^13] [Emphasis added]

[55] In Simantic, Low J. stated:

… The reality is that the more prolonged and the more contentious the litigation is, the greater the accumulation of incompensable inconvenience and prejudice to the defendant. Costs do not compensate the defending party for the expenditure of his own time and efforts. As the action moves toward trial and as the defendant is obliged to engage himself increasingly in the litigation, the equities will accumulate in favour of his obtaining a termination of the action that will shield him from being vexed by the matter anew -- whether by a judicial determination on the merits, a dismissal of the claim or a discontinuance on terms that no new action may be brought on the same cause.[^14]

[56] In Simantic, Low J. noted that how long an action has progressed is an important factor, but not the only one, that the court must consider in exercising its discretion as to whether to grant leave to discontinue without prejudice to the plaintiff’s right to begin or continue a similar action at another time or place. Justice Low cited, among other factors that might cause the court to grant such leave, a circumstance, such as the impending expiry of a limitation period, that affords the defendant security against future litigation, or a mistake on the part of the plaintiff or his solicitors in commencing the Ontario action, or a change of circumstances that has resulted in Ontario ceasing to be the convenient forum for trial, or that is likely to result in a lack of enforceability of an Ontario judgment against the defendant.[^15]

[57] In the present case, I find that the potential prejudice to the defendants from granting 162 and Mr. Judge leave to discontinue their action and counterclaim without prejudice to their right to litigate the same causes of action against the defendants in the future outweighs the potential prejudice to 162 and Mr. Judge from imposing terms that will prevent them from doing so. 162 has offered no evidence that it commenced the present action by mistake, or that an action commenced elsewhere will be more convenient or afford it greater enforceability of a judgment. Additionally, while 162 may have argued that its late discovery of the extent of the contamination of its property is an answer to the defendants’ limitation defence, it could hardly make a similar argument in a future action.

[58] In the present case, 162’s action has proceeded beyond pleadings, productions, and examinations for discovery. 162 brought its motion for leave to discontinue at the beginning of a case conference that the defendants had requested for the purpose of asking the court to set a trial date. In these circumstances, I find that the action has reached a stage where the defendants have acquired the right either to a determination of the issues on their merits or to a discontinuance on terms that will protect them from future litigation arising from the causes of action that could have been raised in the present action and counterclaim.

c) Are the defendants, upon the discontinuance or dismissal of 162’s action and counterclaim, entitled to the costs assessed by Assessment Officer Stevens, the costs of the assessment, and the defendants’ post-assessment costs?

[59] The defendants, in opposing 162’s motion for leave to discontinue its fraud action and the counterclaim of 162 and Mr. Judge in the foreclosure action, seek an order requiring 162 and Mr. Judge to pay the costs which the defendants have incurred in the defence of those proceedings. Rule 25 provides, in this regard:

23.05(1) 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.

[60] Where a plaintiff discontinues an action, the defendants are presumptively entitled to recover their costs. Justice Dambrot, in Mele v. Riddell., in 1997, stated:

By commencing an action, a plaintiff compels a defendant to incur litigation expenses. Only when there is a judicial determination that the plaintiff’s action was appropriately brought does the responsibility for the litigation costs logically shift to the defendant. Where an action is discontinued by the plaintiff, there is no such judicial determination. In such a case, absent some showing of exceptional circumstances, the defendant should be entitled to recover its costs.[^16] [Emphasis added]

[61] Where an action is dismissed on its merits, defendants are typically entitled to costs, although the court retains its discretion to deny costs. Rule 23.05 takes the same approach when an action is discontinued without a ruling on its merits. Under rule 23.05, where a plaintiff discontinues, the defendant is entitled to the costs of the action unless the court orders otherwise. Normally, a discontinuance will expose the plaintiff to paying costs, but the court retains its discretion as to costs, and may allow a discontinuance without costs.[^17]

[62] Before making an order that a discontinuance will be without costs, the court considers the usual purposes of costs awards, as well as the criteria for the exercise of the court’s discretion with respect to costs, as set out in the Rules of Civil Procedure and the jurisprudence.

[63] To be relieved of costs, the plaintiff must satisfy the court that:

(a) the material filed discloses a bona fide cause of action;

(b) the action was not frivolous or vexatious; and

(c) the plaintiff was justified in commencing a law suit.[^18]

[64] 162 has not established these facts in the present case. In any event, those are necessary, but not sufficient, facts to justify an order that a discontinuance be without costs. I find that the defendants are entitled to their costs up to the date of the assessment by Assessment Officer Stevens, in the amount assessed by him, and to the costs of the assessment, and to the costs of steps taken since the assessment, including the costs of the conferences on January 22 and 28, 2016, and of 162’s motions for leave to discontinue its fraud action and the counterclaim of 162 and Mr. Judge in the foreclosure action.

c) What additional costs should 162 and Mr. Judge be required to pay?

[65] In fixing the defendants’ costs of the assessment by Assessment Officer Stevens and their post-assessment costs, I am mindful of the fact that I am fixing those costs, not assessing them. Precision is neither possible nor expected in the fixing of costs.[^19]

[66] The defendants submit that 162 and Mr. Judge waived their right to object to the amount of costs assessed by Assessment Officer Stevens by failing to request that Mr. Stevens withhold his certificate for seven days or such other time as he directed, in order to allow 162 and Mr. Judge to serve objections on 307 and file them with the Assessment Officer, specifying the grounds for their objections, as required by rule 58.10(1) of the Rules of Civil Procedure.

[67] I do not regard the failure of 162 and Mr. Judge to request that Mr. Stevens withhold his certificate, by itself, as determinative of their right to assert their objections. I am mindful of the fact that they underwent a change of solicitors at the conclusion of the assessment, which may have prevented them from taking the procedural steps provided for by the rules in this regard.

[68] Of more importance is the fact that 162 and Mr. Judge withdrew their objections to the assessment prior to the hearing of their motion to discontinue 162’s fraud action and the counterclaim in 307’s foreclosure action. However, I do not regard this, either, as precluding them from asserting the same arguments in relation to the defendants’ claim for their post-assessment costs.

[69] 307 is entitled to its costs beyond those awarded to it in the proceeding, based on Article 8 of The Standard Charge Terms, incorporated into 307’s mortgage. Those terms entitle 307 to payment of:

“costs, charges, legal fees (as between solicitor and client) and expenses incurred ... generally in any other proceedings taken in connection with or to realize upon the security given in the Charge…., with interest at the rate provided for in the Charge, a charge upon the land in favour of the Chargee pursuant to the terms of the Charge….”

[70] In my reasons dated April 24, 2015, and corrected June 2, 2015, I affirmed 307’s entitlement to claim those additional costs when I stated, at paragraphs 130 and 131:

[130] 162 argues that it should not be required to pay the costs of its unsuccessful motion to remove Davis Moldaver as 307’s solicitor of record, beyond the amount that the parties agreed upon, and that was incorporated into the order made disposing of that motion. I do not agree. In Merry v. Wright, D.S. Ferguson J., in awarding the plaintiff his costs of a proceeding on a substantial indemnity scale, held that he was not precluded from seeking additional costs of a motion in relation to which an award of costs on a partial indemnity scale had been ordere4d by the motion judge. He stated:

I see nothing wrong with the trial judge awarding additional costs relating to a motion which on its merits warranted only partial indemnity costs. The issue before the trial judge concerning substantial indemnity costs is much broader and involves considering many matters which are not relevant to the fixing of costs at the time of the motion.

[131] The same principle applies here. 307, if successful, could be entitled, pursuant to the standard charge clause of the mortgage, to recover its costs of the proceedings on a full indemnity scale. It should not be limited to the amount the parties agreed upon as in settlement of costs that would, in the normal course, have been awarded on a partial indemnity scale. Conversely, if 162 is successful in its Fraud Action, it could recover additional costs of its motion for a trial of the actions together on a substantial indemnity scale, in an amount exceeding the amount awarded to it at the time of the motion on a partial indemnity scale.

[132] For the foregoing reasons, it is ordered that:

(a) 1623242 Ontario Inc. and/or Krishan Judge has leave in action no. 640/13, to pay/redeem its title to Fergus Property by paying the amount of $529,890.94, being the principal balance claimed by 3072453 Nova Scotia Company as of November 3, 2010, $140,947.64, being the interest claimed as of October 30, 2014, and legal costs incurred to date in the foreclosure action, and in its defence to the Fraud Action, to be assessed by an assessment officer, in exchange for an assignment of the mortgage debt and a conveyance of the mortgaged property to any third party as 1623242 Ontario Inc. and/or Krishan Judge directs, and 3072453 Nova Scotia Company is bound to assign and convey accordingly. [Emphasis added]

[71] My statement that 307’s mortgage might entitle it to claim costs, including costs on a full indemnity scale, beyond those awarded in 162’s motion to remove Mr. Davis as 307’s solicitor of record on the ground of conflict of interest, was not determinative, of course, of the entitlement of 307, much less of the other defendants, to their costs on a full indemnity scale. It was simply an acknowledgement that 307’s contractual entitlement to costs could entitle it to claim costs beyond those ordered in the action.

[72] I accept the defendants’ statement that none of their accounts dated January 12, 2015, February 10, 2015, or March 9, 2014, as contained in 307’s Bill of Costs, were incurred in relation to examinations for discovery for the construction lien actions. They state that those invoices include solely costs of examinations relating to the foreclosure action and the fraud action, which 307 is entitled to recover pursuant to Article 8 of the Standard Charge Terms and para. 132(a) of my reasons dated April 24, 2015, corrected on June 2, 2015.

[73] 307 does not dispute the fact that its costs are not interchangeable with those of GLC in the construction lien actions. It states that it removed any time not attributable to 307’s prosecution of the foreclosure action or to its defence of the fraud action, as I directed, and that it has not claimed for GLC’s costs. It notes that while 162 implies that 307 claimed costs properly attributable to GLC, 162 does not identify which entries in 307”s Bill of Costs should be so characterized.

[74] 307 states that it incurred $40,896.41 in legal costs that were not included in the Bill of Costs. It’s counsel issued accounts dated June 5, 2015, July 17, 2015, and August 19, 2015, which were not included in the Bill of Costs that were before the Assessment Officer.

[75] 162 and Mr. Judge have not submitted a Bill of Costs of their own, which might enable the court to compare their costs with those of 307 in determining the reasonableness of the latter. This court has held that when one party attacks another’s costs as excessive, but does not put its own dockets before the court, the attack “is no more than an attack in the air.”[^20] In Risorto v. State Farm Mutual Automobile Insurance Co., (2003), Winkler J., then a motion judge, stated:

The attack on the quantum of costs, insofar as the allegations of excess are concerned, in the present circumstances is no more than an attack in the air. I note that State Farm has not put the dockets of its counsel before the court in support of its submission. Although such information is not required under Rule 57 in its present form, and the rule enumerates certain factors which would have to be considered in exercising the discretion with respect to the fixing of costs in any event, it might still provide some useful context for the process if the court had before it the bills of all counsel when allegations of excess and “unwarranted over-lawyering” are made. In that regard, the court is also entitled to consider “any other matter relevant to the question of costs”. (See Rule 57.01(1)(i). In my view, the relative expenditures, at least in terms of time, by adversaries on opposite sides of a motion, while not conclusive as to the appropriate award of costs, is still, nonetheless, a relevant consideration where there is an allegation of excess in respect of a particular matter.[^21] [Emphasis added.]

[76] While 162 complains that 307’s Bill of Costs does not sufficiently particularize which costs relate to which action, 162 abandoned its motion for particularization of 307’s Bill of Costs, and should not be permitted to advance the same complaint now.

[77] 307 is entitled to recover the costs of Tim Watkin, whom 162’s Statement of Claim in the fraud action characterized as follows:

9. The defendant, Tim Watkin (“Watkin”), is an indeivisdual, and all material times was the Corporate Controller of Wolverine Tube (Canada) Inc. and also the President of 307. At all material times, Watkins was/is the current officer/manager for 307 in the Province of Ontario, whose address is listed as 101 Clarke Road, London, Ontario.

10. At all material times, Watkin had the authority to bind the Corporate Defendant(s). The Corporate Defendant(s) are vicariously liable for all acts and omissions of Watkin. The Plaintiff pleads that Watkin, being the human agent of the Corporate Defendant(s), participated in a fraud and breached his fiduciary duty owed to the Plaintiff and therefore this is an appropriate case for piercing the corporate veil. [Emphasis added]

[78] 307 is entitled to recover the costs of its summary judgment motion up to the date when I made my ruling regarding the order of proceedings. It has stated that it has not claimed any costs incurred since my ruling in relation to the summary judgment motion and, in fact, has abandoned its intention to pursue that motion. The costs up to that point are among the “costs in defence of the fraud action” which I held that 307 was entitled to recover, in my reasons dated April 24, 2015, and corrected June 2, 2015.

[79] 307 is entitled to its costs of the assessment before Assessment Officer Stevens. It has a contractual entitlement to those costs pursuant to Article 8 of the Standard Charge Terms. Additionally, 162 and Mr. Judge failed to accept 307’s Offer to Settle the costs assessment for $375,000, which would have been more favourable to them than the outcome of the assessment. While 162 and Mr. Judge offer the explanation that the defendants refused to waive their costs in connection with GLC’s construction lien claims, I find that it was not reasonable for 162 and Mr. Judge to demand that 307 waive those costs as a condition of 162’s accepting the offer to settle the costs of the fraud and foreclosure actions.

General principles

[80] Boswell J. set out the general principles governing costs assessments in George v Landels. He stated:

The award of costs is governed by section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43 and by Rule 57.01 of the Rules of Civil Procedure. Section 131 provides for the general discretion to fix costs. Rule 57.01 provides a measure of guidance in the exercise of that discretion by enumerating certain factors that the court may consider when assessing costs. In addition, the Court must always be mindful of the purposes that costs orders serve. As Perell J. summarized in 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (S.C.J.), at para. 10:

Modern costs rules are designed to advance five purposes in the administration of justice: (1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements (internal citations omitted).[^22]

[81] Ultimately, in determining an amount for costs, the overriding principles are fairness and reasonableness.[^23] In assessing what is fair and reasonable in the circumstances, the court does not engage in a mechanical exercise, but takes a contextual approach, applying the principles and factors discussed above to settle on a figure that is fair and reasonable in all the circumstances.[^24]

[82] The court, in exercising its discretion as to the amount of costs to be paid, is guided by the factors set out in Rule 57.01(1) of the Rules of Civil Procedure. The court may consider, among other factors, the following:

(a) The complexity of the proceeding;

(b) The importance of the issues;

(c) The conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(d) Any offers to settle;

(e) The principle of indemnity;

(f) The concept of proportionality, which includes at least two factors:

(i) The amount claimed and the amount recovered in the proceeding; and,

(ii) The amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(g) Any other matter relevant to the question of costs.

Importance and complexity of the motion

[83] The action was important to the parties. The fraud action initially entailed a claim for $10 million. The claim was amended during the proceeding to increase the amount claimed to $110 million. It was later further amended to reduce the claim to $5 million.

[84] The action was also important to the public. It involved contamination of soil, as well as allegations of fraud. In paragraph 81 of my reasons dated April 16, 2013, for ordering that the actions be tried together, I stated:

[81] In the present case, the events that gave rise to the actions took place in Fergus, in Wellington County. That is where the subject property and the community most interested and most affected by the outcome, are located. Contamination of soil is a matter that can be expected to arouse greater local interest that a routine slip and fall of the kind that was involved in Klotz v. Kitchener (City). This gives greater weight to the factors set out in rule 13.1.02(2)(i), (ii), (iii), and (iv), that is, that Wellington County is where a substantial part of the events that gave rise to the claim occurred, where a substantial part of the damages were sustained, where the subject-matter of the proceeding is located, and where any local community’s interest in the subject-matter of the proceeding will be greatest. [Emphasis added]

[85] The action was at least moderately complex. In para. 41 of my reasons April 16, 2013, for ordering that the actions be tried together, I stated:

Whether the issues in one action are relatively straight forward compared to the complexity of the other actions

[41] While some of the issues in the foreclosure action and the construction lien action are straightforward, such as the terms of the mortgage and the payments made, and the work that was done and the amounts invoiced, are straightforward, the critical issues, such as the representations that Wolverine Tube 1 made to 162, and the knowledge it had of the contamination, and the relatedness of the defendants, are more complicated. Since these latter issues are common to all the actions, it will not add to the complexity of any of the trials for the actions to be tried together, or one following the other. [Emphasis added]

Reasonableness and offers to settle

[86] The general rule is that costs follow the event and will be awarded on a partial indemnity scale.[^25] In special circumstances, costs may be awarded on a higher scale, but those cases are exceptional and generally involve circumstances where one party to the litigation has behaved in an abusive manner, brought proceedings wholly devoid of merit, and/or unnecessarily run up the costs of the litigation.[^26] Substantial indemnity costs are the exception, not the rule.

[87] Rule 57.01(4) provides that nothing in this rule or in the other costs rules affects the authority of the court to award all costs on a substantial indemnity scale or in an amount that represents full indemnity. The court has the discretion to order these costs, but it should exercise that discretion sparingly, in special and rare cases.

[88] Unfounded allegations of fraud typically attract an award of costs on a substantial indemnity scale.[^27] In Young v. Young, in 1993, McLachlin J. (as she then was) for a majority of the Supreme Court of Canada, held that solicitor-and-client costs (the predecessor of substantial indemnity costs) "are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties".[^28]

[89] In 2004, the Supreme Court of Canada set out the principles governing awards of substantial indemnity costs in Hamilton v. Open Window Bakery Ltd.:

An 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". However, allegations of fraud and dishonesty are serious and potentially very damaging to those accused of deception. When, as here, 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 (as Wilkins J. found), costs on a solicitor-and-client scale are appropriate: see, generally, M.M. Orkin, The Law of Costs (2nd ed. (loose-leaf), at para. 219.[^29] [Emphasis added.]

[90] In the present case, 307 is presumptively entitled to its costs on a substantial indemnity scale pursuant to Article 8 of the Standard Charge Terms of its mortgage. The other defendants, also, are entitled to their costs, at least on a substantial indemnity scale, by reason of 162’s unproven allegations of fraud against them.

[91] Justice Dambrot, in Mele v. Riddell, in 2010, stated:

Where unfounded allegations of fraud or improper conduct seriously prejudicial to the character or reputation of a party are made in an action, a court may depart from the usual scale of costs and award costs on a solicitor-and-client scale. The authorities establishing this principle are conveniently collected and analyzed by Adams J. in Murano v. Bank of Montreal (1995), 41 C.P.C. (3d) 143 (Ont. Gen. Div.). A plaintiff who proceeds in this manner must be prepared for these cost consequences if the allegations turn out to be unfounded.

[92] A dilemma arises when the plaintiff commences an action in which it alleges fraud, and later withdraws the allegations or discontinues the action before a judgment is rendered. It can be inferred from the withdrawal of the allegations or discontinuance of the action that the allegations of fraud were unfounded. Because of this, the action rightly attracts an award of costs on a substantial indemnity scale until the allegations are withdrawn or the plaintiff discontinues the action. Justice Dambrot, in Mele v. Riddell, held that the plaintiff’s withdrawal of his fraud allegations in his opening address to the court did not completely absolve him from costs thereafter. On that basis, he awarded costs to the defendant on a substantial indemnity scale until the allegations were withdrawn, and on a partial indemnity scale thereafter. He stated:

There are two factors drawn to my attention by Mr. Thomson which require further consideration. The first is that both allegations were specifically abandoned by him on behalf of all of the plaintiffs in his opening address. This, he says, should tell against an award of costs on the higher scale. I agree that this is an appropriate reason not to award solicitor-client costs in respect of the proceedings after that date. The withdrawal of unfounded allegations is encouraged by such an approach. But the allegations stood in the public record and over the heads of the defendants for ten years. To completely absolve this plaintiff of responsibility for unfounded allegations of this withdrawal at the courtroom door would fail to deter reckless allegations from being pleaded in the first instance, or maintained after they are known to be without foundation. [Emphasis added]

[93] Justice Horkins, in Lewis v. Cantertrot Investments Limited, in 2010, awarded costs on a substantial indemnity scale based on unsubstantiated allegations of fraud. She stated:

There is ample case law to support the principle that unfounded claims of fraud and other serious conduct justify a costs award on a substantial or full indemnity basis: Réno-Dépôt v. Wonderland Commercial Centre Inc. 2008 ONCA 786; 131843 Canada Inc. v. Double "R" (Toronto) Ltd.,[1992] O.J. No. 3879, 7 C.P.C. (3d) 15 (Gen. Div.); Re Bisyk (No. 2) (1980), 1980 1843 (ON SC), 32 O.R. (2d) 281 (H.C.J.); Unisys Canada Inc. v. York Three Associates Inc., [2000] O.J. No. 3622, 100 A.C.W.S. (3d) 31 (S.C.J.), aff'd 2001 7276 (ON CA), [2001] O.J. No. 3777, 150 O.A.C. 49 (C.A.); Mele v. Thorne Riddell (1997), 1997 12124 (ON SC), 32 O.R. (3d) 674, [1997] O.J. No. 443 (Gen. Div.); Toronto-Dominion Bank v. Berthin, [1994] O.J. No. 2590 (Gen. Div.); DiBattista v. Wawanesa Mutual Insurance Co. (2005), 2005 41985 (ON SC), 78 O.R. (3d) 445;McNaughton Automotive Ltd. v. Co-Operators General Insurance Co., 2008 ONCA 597, [2008] O.J. No.5040 (C.A.)[^30]

[94] In Mazzon v. Wentworth Condominium Corporation No. 102, in 2012, the Court of Appeal set aside an award of costs on a full indemnity scale following a successful motion by the defendant for summary judgment, where the plaintiff had alleged fraud and the judge had agreed that the defendant was entitled to substantial indemnity costs on that basis, but had mistakenly awarded costs on a full indemnity scale, based on the defendant’s bill of costs, in the mistaken belief that those costs represented substantial indemnity costs.[^31]

[95] While there is discretion in the court to award costs on a full indemnity scale, such awards should be reserved for the most egregious cases. Such awards are appropriate, for example, where the court is punishing a litigant for falsifying documents submitted to the court, or intentionally making false allegations of fraud.

[96] In Moreira v. Dasilva, in 1977, Callon J., of the Ontario High Court of Justice, described the type of case in which the court seeks to indemnify the successful litigant fully, and punish the unsuccessful party, by an award of costs that was then described as “solicitor and her own client costs”, the predecessor of costs on a full indemnity scale:.

... it was the intention of the plaintiff to mislead the Court and to deceive it with respect to the material facts . . . no defendant should in those circumstances be put to any expense whatsoever in defending herself from such claims . . . [and] the defendant is entitled to her costs on a solicitor and [her] own client basis so that she will be completely indemnified for her costs of defending herself from the claims in this action.[^32] [Emphasis added]

[97] In Baryluk v. Campbell, in 2009, Hackland J. awarded full indemnity costs against a litigant who had made a reckless attack on the integrity of judicial officers, characterizing the conduct of judges of this court as “case-fixing, abuse of public office, dishonesty and deceit in circumstances where there was no basis on the facts pleaded or submissions made to the court to support such outrageous allegations.” Justice Hackland wrote:

There is ample authority for an award of full indemnity costs where unsubstantiated allegations of dishonesty, illegality, and conspiracy are advanced without merit. ...allegations made or conduct by a party that is ‘reprehensible, scandalous, or outrageous’ falls within the ambit of an award of full indemnity costs.[^33] [Emphasis added]

[98] In Pirbhai v. Singh, in 2011, Quinn J. awarded the plaintiff full indemnity costs after finding that the defendant had engaged in conduct which added twenty-five days to the evidence. There was incomplete documentary disclosure, fraudulent creation of documents, repeated lying under oath, and an attempt to perpetrate a fraud on the court.[^34] Quinn J. held that in these circumstances, the plaintiff “should not have to pay one cent of expense in his pursuit of justice”.

[99] In Party v. Party, in 2013, Howden J. awarded full indemnity costs against the defendant who he found had delayed the proceeding, both before and during the trial, by fraud in court, by changing the content of registered transfers, altering copies of letters from institutions or companies which were proffered to the court as exhibits, and forging or causing to be forged several of her many declarations of trust. “In other words, Ms. Gordon brought into the courtroom and into the judicial process her continuing course of conduct of fraudulent and dishonest behaviour.”[^35]

[100] In The Hearing Clinic (Niagara Falls) Inc. v. 866073 Ontario Limited, et al., in 2015, in 2015, J.W. Quinn J. awarded full indemnity costs of over $1 million against the plaintiff for 11 allegations of fraudulent misrepresentation in relation to which Justice Quinn found the evidence was deliberately fabricated and the plaintiffs’ principals had lied and deliberately attempted to mislead, and perpetrate a fraud upon, the court, over $21,000 in substantial indemnity costs for failed allegations, some of which would have constituted professional misconduct, if proved, and almost $170,000 in partial indemnity costs for allegations of breach of contract. Justice Quinn stated:

Counsel for the defendants argue that the collective weight of a number of factors makes full indemnity costs appropriate: (1) the defendants bettered their offers to settle; (2) the plaintiff made, and failed to prove, allegations of bad character, criminal misconduct, professional misconduct, quasi-criminal conduct and breach of fiduciary duty; and (3) the plaintiff (through Fridriksson and Klassen) was guilty of improper and vexatious conduct that greatly added to the length of the proceedings. As bad as all of that is, if the analysis ended there, I do not think that anything more than substantial indemnity costs would be warranted. But, it does not end there. Fridriksson, supported by Klassen, lied and fabricated evidence and did so on behalf of the plaintiff in a concerted effort to perpetrate a fraud upon the court. This was not a case about an honest difference of opinion concerning events or about a disagreement over the legal consequences flowing from an honest collection of facts.[^36] [Emphasis added]

[101] In the present case, 162 made allegations of fraud against the defendants, including Mr. Watkin. It failed to substantiate those allegations, but it must be borne in mind that the action has not proceeded to trial, where 162 would have an opportunity to present the evidence it relied in support of its allegations when it commenced its action. It was arguably irresponsible of 162 to make those allegations based on the evidence available to it at that time. However, for the following reasons, I am not persuaded that 162 intentionally misled the court:

(a) The defendants state that the price of $1.35 million that 162 paid for the property was low and reflected the contamination. The defendants were unable, however, to point to any evidence of the value the property would have had at the time of purchase had it not been contaminated.

(b) The defendants rely on the evidence of Michael Klein, the realtor who sold the property to 162, who states that he gave extensive environmental disclosure to 162 before the deal closed. Mr. Klein was retained by Wolverine Tube (Canada) Inc., one of the defendants, to market the property. At all material times, he took instructions from the Chief Financial Officer of Wolverine Tube Inc. He cannot fairly be described as an independent or impartial witness, both by reason of his relationship with the defendants and because if there was material non-disclosure, it could expose him to professional liability.

(c) Mr. Klein states in an affidavit sworn June 4, 2015, that the defendants tendered, in their motion record, evidence that Woverine Tube used the property as a manufacturing facility for many years and that, based on the existence of a number of environmental reports and related correspondence provided to him by Wolverine Tube, “it was reasonable to assume that the property might be environmentally contaminated to some extent.” It is not clear, from the evidence before me, the extent of Mr. Klein’s knowledge, and of his disclosure to 162, of the nature of the manufacturing that Wolverine Tube had conducted, or the extent of contamination of the property that it would have caused.

(d) Mr. Klein states that Wolverine Tube’s Chief Financial Officer instructed him to provide “all environmental documentation that Wolverine Tube had in its possession” to any potential purchaser would be made aware of any potential environmental issues with the property. He states that the CFO provided Mr. Klein with a list setting out the various reports and letters that Wolverine Tube had dealing with the various environmental issues relating to the property. A copy of the list is said to be annexed to the affidavit as exhibit “2” but it is not attached to the affidavit that was tendered before me.

(e) Mr. Klein states that he reviewed and compared the list of the various reports and letters with the copies of the actual documents that he received from Wolverine Tube, and after confirming that he had all the documents on the list, he prepared a package of the reports and letters entitled “Environmental Delivery Package”, which was provided to all potential purchasers. The package was not tendered and I have no evidence that would enable me to compare its contents with the 3900 pages of documents the defendants say 162’s counsel received from the MOE on February 28, 2014, in response to his Freedom of Information Request. In short, the evidence before me does not enable me to conclude that the defendants made adequate environmental disclosure to 162, or that 162 knew of the extent of the contamination before it purchased the property, or when it commenced its fraud action.

(f) Mr. Klein states that the initial Agreement of Purchase and Sale that 162’s principal, Krishan Judge, submitted, prepared by his son, Kapley Judge, was narrow in scope and contained few terms and conditions. The Offer was conditional for 30 days only on the buyer satisfying himself with a (general) inspection of the property. The Offer did not contain any environmental conditions. Wolverine Tube’s CFO regarded the Offer as too simplistic, and Mr. Klein prepared a new “Draft Offer” template to “help expedite the negotiations between the parties”. The new Draft Offer contained specific clauses which, in Mr. Klein’s opinion, “were necessary in order to advance any negotiations between the parties.” It contained an acknowledgement by the buyer that it “had received and reviewed all environmental information that was in the possession of the Seller”, and that the buyer would be purchasing the property on an “as is, where is” basis. It is not clear to me how 162 could have known what environmental information was in the possession of the vendor, in order to be able to acknowledge that he had received and reviewed it. More to the point, there is no evidence before me as to the extent to which the information 162 received at that time contained the information that later emerged from the MOE, and that was material to 162’s, or any purchaser’s, decision to buy the property.

(g) Mr. Klein further states that during a meeting with Krishan Judge and his son on February 15, 2005, before the revised Offer was presented, they “discussed the scope and magnitude of the environmental remediation that could be performed by Krishan Judge”. Mr. Klein says that he explained to Mr. Judge that Wolverine Tube required his personal guarantee, but was prepared to remove this requirement if the amount that Mr. Judge spent on remediating the environmental contamination on the property was “sufficient to provide adequate comfort to Wolverine Tube so as to make the guarantee unnecessary”. It is not clear from Mr. Klein’s evidence what amounts were discussed as likely to be necessary for any environmental remediation, or what amount Mr. Judge or 162 said they would spend on such remediation.

(h) Mr. Klein states that prior to purchasing the property, “Mr. Judge knew that the property might be contaminated, and that he was buying a potentially contaminated property at a severely discounted price.” No evidence was tendered before me to substantiate Mr. Klein’s opinion. In particular, no evidence was tendered as to the extent of Mr. Judge’s knowledge, or of the value which the property would have possessed had it not been contaminated, and as to the extent to which its price was, in fact, discounted in the revised Offer that was made, or in the Agreement that ultimately resulted.

(i) Mr. Klein denies Krishan Judge’s assertion that Mr. Klein told him that the property was “clean” and that there were no “environmental concerns”. He further denies that he is seeking to protect himself by stating that Mr. Judge was given the Environmental Delivery Package and was told that the property was contaminated. While the defendants may have established the truth of these assertions at trial, it does not afford a sufficient basis upon which I am able to conclude that 162 intentionally misled the court with its allegations of fraud.

(j) The defendants tendered the affidavit of Keith Gray, sworn May 19, 2015. Mr. Gray states that in October 2009, he was approached by Krishan Judge to provide a quote for the removal of PCB and askarel contaminated electrical transformers located on the property. Based on the information he was given by Mr. Judge, he understood that the MOE had required 162 to remove transformers from the property. Mr. Gray states that he delivered the quote to Mr. Judge on October 23, 2009. He further states that during one of his visits to the property, he noticed that one of the transformers located inside the building on the property was leaking contaminants onto the soil. It appeared to Mr. Gray that the transformer was leaking because the copper wiring had been stripped off of the transformer, which appeared to have torn the seal. He states that the leaking contaminant would have been visually apparent to anyone looking at the front of the transformer. While Mr. Gray’s evidence is relevant, especially to the issue of whether 162 knew of the contamination in October 2009, triggering the running of the limitation period, and rendering the action that it began on July 26, 2012, statute barred, it does not establish that Mr. Judge intentionally misled the court, even as to the date when he first had knowledge of the contamination. Mr. Gray fairly states that, based on his knowledge, Mr. Judge's allegation that he was unaware of the environmental contamination until late in 2010 “is incorrect, given that Mr. Judge consulted me about the removal of the PCB contaminated transformers in October 2009, specifically because the Ministry of the Environment had required him to do so”. His evidence, if accepted, may establish only that Mr. Judge was mistaken, and that the action was statute barred. It is not clear, from Mr. Gray’s evidence, when the leak that he refers to occurred, or what caused it, or whether Mr. Judge knew the extent of the contamination in 2005, when he purchased the property.

[102] The defendants argue that the allegations of fraud that were made against Tim Watkin personally were reckless. They note that the defendants’ counsel informed 162 at an early stage of the proceeding that Mr. Watkin had no other involvement other than to sign the documents for the sale and mortgage of the property. In ScotiaMcLeod Inc. v. Peoples Jewellers Ltd., in 1995, Finlayson J.A., for the court, observed:

The decided cases in which employees and officers of companies have been found personally liable for actions ostensibly carried out under a corporate name are fact- specific. In the absence of findings of fraud, deceit, dishonesty or want of authority on the part of employees or officers, they are also rare. Those cases in which the corporate veil has been pierced usually involve transactions where the use of the corporate structure was a sham from the outset or was an afterthought to a deal which had gone sour. There is also a considerable body of case-law wherein injured parties to actions for breach of contract have attempted to extend liability to the principals of the company by pleading that the principals were privy to the tort of inducing breach of contract between the company and the plaintiff: see Ontario Store Fixtures Inc. v. Mmmuffins Inc. (1989), 1989 4229 (ON SC), 70 O.R. (2d) 42 (H.C.J.), and the cases referred to therein. Additionally there have been attempts by injured parties to attach liability to the principals of failed businesses through insolvency litigation. In every case, however, the facts giving rise to personal liability were specifically pleaded. Absent allegations which fit within the categories described above, officers or employees of limited companies are protected from personal liability unless it can be shown that their actions are themselves tortious or exhibit a separate identity or interest from that of the company so as to make the act or conduct complained of their own.[^37]

[103] While the allegations against Mr. Watkin have not been substantiated, it cannot be said, having regard to his position as Chief Executive Officer of the vendor and his signature on the sale and mortgage documents, that 162 intentionally sought to mislead the court in making its allegations of fraud against him. Having regard to the inter-relationship of Wolverine Tube, 307, and GLC, and the limited information available to 162 when it commenced the action, it may simply not have known the extent of Mr. Watkin’s involvement. A knowledge of the falsity of its allegations cannot reasonably be imputed to 162 based solely on the assertions that the defendants’ counsel made to its counsel at an early stage in the proceeding, before documentary productions and examinations for discovery.

[104] For the above reasons, I have concluded that the defendants should be awarded their post-assessment costs on a substantial indemnity, and not on a full indemnity, scale. That said, for the reasons that follow, it is unlikely that the defendants’ costs on a full indemnity scale exceed their costs on a substantial indemnity scale in any event.

Indemnity - The hourly rates charged

[105] In determining the appropriate hourly rates to be assigned to the lawyers involved in the motion, the court follows the approach taken by Aitkin J. in Geographic Resources.[^38] That is, the starting point is the successor of the Costs Grid, namely, the “Information for the Profession” bulletin from the Costs Sub-Committee of the Rules Committee (the “Costs Bulletin”), which can be found immediately before Rule 57 in the Carthy or Watson & McGowan edition of the Rules, sets out maximum partial indemnity hourly rates for counsel of various levels of experience.

[106] The Costs Bulletin suggests maximum hourly rates (on a partial indemnity scale) of $80 for law clerks, $225 for lawyers of less than 10 years’ experience, $300 for lawyers of between 10 and 20 years’ experience, and $350 for lawyers with 20 years’ experience or more.[^39] The upper limits in the Costs Bulletin are generally intended for the most complex and important of cases.

[107] The Costs Bulletin, published in 2005, is now dated. Aitkin J. considered adjusting the Costs Subcommittee’s hourly rates for inflation, as Smith J. did in First Capital (Canholdings) Corp. v. North American Property Group, in 2012,[^40]but the unadjusted rates of the lawyers in her case were only slightly less than the actual fees they charged, so she elected to use their unadjusted rates. Normally, however, it is appropriate to adjust the hourly rates in the Costs Bulletin to account for inflation since 2005.

[108] Based on the Bank of Canada’s Inflation Calculator, available online at http://www.bankofcanada.ca/rates/related/inflation-calculator/, the 2015 equivalent of the hourly rates in the Costs Bulletin are $94.05 for law clerks, $264.52 for lawyers of under 10 years’ experience, $352.70 for lawyers of between 10 and 20 years’ experience, and $411.48 for lawyers of over 20 years’ experience.

[109] The court is guided by the rates in the Costs Bulletin, as adjusted for inflation, not the actual hourly rates charged. The actual rates charged are relevant only as a limiting factor, in preventing the costs awarded from exceeding the actual fees charged. The Costs Subcommittee’s rates apply to all lawyers and all cases, so everyone of the same level of experience starts at the same rate.

[110] The court adjusts the hourly rate, or the resulting fees, to reflect unique features of the case, including the complexity of the proceeding, the importance of the issues, and the other factors set out in Rule 57.01(1). If an excessive amount of time was spent, or too many lawyers worked on the file, the court reduces the resulting amount of fees accordingly. As long as the resulting amount does not exceed the amount actually charged to the client, the actual fee that the client agreed to pay is irrelevant.

[111] Rule1 of the Rules of Civil Procedure defines substantial indemnity costs to mean "costs awarded in an amount that is 1.5 times what would otherwise be allowable in accordance with Part I of Tariff A" - i.e. 1.5 times the partial indemnity rate.[^41] Costs calculated on a substantial indemnity scale, obviously, may represent something less than full indemnity, but not always, depending on the seniority of the lawyers and their adjusted hourly rates, increased by 1.5. Courts have estimated substantial indemnity costs to be approximately 90% of costs on a full recovery basis,[^42] but this is not invariably so.

[112] With the exception of Robert B. Macdonald and the defendants’ law clerk, all of the defendants’ lawyers had practiced for more than 20 years when they became involved as counsel in this litigation. The defendants’ principal counsel, Milton A. Davis, was called to the bar in 1978, Peter B. Adams was called in 1982, Ron D. Davis and Stuart R. MacKay were called in 1984, and Ian N. Kady was called in 1987. Mr. Macdonald was called in 2011, and therefore had practiced law for four years.

[113] Based on the hourly rates in the Costs Bulletin, adjusted for inflation, the defendants were entitled to claim $411.48 per hour for their senior counsel on a partial indemnity scale, and 1.5 that amount, or $617.22, on a substantial indemnity scale. They are entitled to claim $264.52 for Mr. Macdonald on a partial indemnity scale, and $396.78 on a substantial indemnity scale. They are entitled to claim $94.05 for their law clerk on a partial indemnity scale, and $141.08 on a substantial indemnity scale. They claim $560 per hour for Milton Davis for the work he did in 2015, and $600 per hour in the current year, and claim rates ranging from $360 to $492 for their other senior counsel, and $272 for Mr. Macdonald. All of these rates are below those that they are entitled to claim on a substantial indemnity scale, and I find them to be reasonable. Their time will be allowed at the rates claimed.

[114] The hourly rate claimed for the defendants’ law clerk, at $208 in 2015 and $216 in the current year, is $67 and $75 higher, respectively, than permitted. The amount claimed for the law clerk’s 8.19 hours in 2015 will therefore be reduced by $550. The amount claimed for the law clerk’s 16.98 hours in the bill of costs for the assessment will be reduced by a further $1,137.66. I have disallowed the costs claimed in the defendants’ bill of costs for the motions to discontinue, as these costs appear to have been included in the “Unbillled dockets of Fogler, Rubinoff LLP” and its “Anticipated Costs” for their attendance on January 28, 2016 in their Post Assessment Bill of Costs, included in their motion record.

Indemnity - The time spent on the motions

[115] In reviewing a claim for costs, I need not undertake a line by line analysis of the hours claimed, nor should I second guess the amount claimed unless it is clearly excessive or overreaching. I must consider what is reasonable in the circumstances and, after taking into account all of the relevant factors, award costs in a global fashion.[^43] I have reviewed the time claimed in the defendants’ bills of costs, both for the assessment and for their post-assessment costs, and do not find it to be clearly excessive or over-reaching.

[116] 162 complains that the defendants have claimed for the costs of a mediation undertaken at the initiative of Mr. Judge. It submits that the defendants assured him that there would be no claim for costs in connection with the mediation. There is no evidence before me that such an assurance was given or relied upon.

[117] There is no reason why the defendants should not be entitled to recover their reasonable costs of the mediation. Modern costs rules are designed to foster three fundamental purposes:

(a) To indemnify successful litigants for the costs of litigation;

(b) To promote and encourage settlement; and

(c) To control behaviour by discouraging frivolous suits and defences that lack merit.[^44]

[118] Including time spent in negotiation or mediation in the costs of a proceeding is consistent with the purpose of promoting and encouraging settlement. Justice Allen, in Lakha v. Alloo, applied this principle in awarding a wife the costs of negotiations leading to a settlement of litigation involving child custody and spousal support.[^45] Allen J. stated:

Costs Incurred During Settlement Negotiations

The father also submits it is inappropriate for policy reasons for the court to consider costs for periods during which the parties were engaged in settlement negotiations, the concern being that this could have the chilling effect of discouraging parties from attempting to settle for fear that costs consequences will follow prolonged negotiations. In the father’s view, costs in this case should only be considered for trial preparation and trial time. I disagree with that position in the circumstances of this case.

Firstly, the Rules permit the court to consider the conduct of parties when deciding costs. Both the Family Law Rules and Rules of Civil Procedure permit the court to consider any unreasonable conduct of a party, the concern here being wasted time and expense resulting from that conduct. Rule 57.01(e) of the RCPs directs the court’s attention to any conduct that tended to shorten or lengthen a proceeding without specifically referring to conduct on a settlement. Rule 24(5) of the FLRs speaks to any unreasonable conduct of a party and specifically includes conduct in relation to settlement offers. That Rule requires the court to examine whether the party made an offer, the reasonableness of any offer the party made or whether the party withdrew or failed to accept an offer.[^46] [Emphasis added]

[119] In Nby Enterprises Inc. v. Duffin, in 2006, Tucker J. allowed costs “of this motion, the original motion, their settlement meetings and negotiations.”[^47] In Paradis v. McLaren, McCartney J., in granting costs to an Applicant for guardianship under the Substitute Decisions Act, observed:

The Application itself was commenced January 26, 2007, and the final Order was granted on March 14, 2007. The matter did not proceed to trial, so the costs clearly involve a considerable amount of settlement negotiations and preparatory work on the Application.[^48] [Emphasis added]

[120] 307 claims its costs of the assessment before Assessment Officer Stevens in the amount of $11,164.75 as claimed, consisting of $10,533 including HST, plus disbursements and HST of $631.75. I allow these costs in the amounts claimed, with the exception of $1,137.66 for the law clerk’s time (16.98 hours x $67 excess claimed for the clerk’s hourly rate) and HST of $148 on this reduction.

Proportionality and the reasonable expectation of the unsuccessful parties

[121] The amount at stake in the proceeding ranged, from time to time, from $10 million to $110 million, and back to $5 million. I propose to fix the defendants’ costs at $516,395.23, consisting of the following:

(a) $444,748.37 assessed by Assessment Officer Stevens;

(b) $9,878.09 for the costs of the assessment ($11,164.75 claimed, less $1,137.66 for the excess claimed for the law clerk’s time, and $148 for HST on that amount);

(c) $61,768.77 for post-assessment costs ($62.390.27 less $550 for the excess claim for the law clerk’s time, and HST of 71.50 on that amount);

[122] I find these amounts to be proportionate to the amount at stake in the actions, and to the amount that 162 should reasonably have expected to pay if unsuccessful in the proceedings.

CONCLUSION AND ORDER

[123] For the reasons given above, it is ordered that:

1. 1623242 Ontario Inc. has leave to discontinue the present action (court file no. 571-12), and 1623242 and Krishan Judge have leave to discontinue their counterclaim in the foreclosure action by 307 against them (court file no. 640-13), upon payment of the defendants’ costs in the amount of $516,395.23 in the said proceedings, inclusive of the amount assessed by Assessment Officer Stevens on October 8, 2015, the costs of that assessment, and the defendants’ post-assessment costs, including their costs of the motions by 1623242 Ontario Inc. in the present action and, in action 640-13, by 1623242 Ontario Inc. and Krishan Judge, for leave to discontinue their counterclaim, provided that neither 1623242 Ontario Inc. nor Krishan Judge shall commence any future action against any of the parties to those actions based on the causes of action they asserted, or could have asserted, in the said proceedings.

Price J.

Released: February 9, 2016

CITATION: 1623242 Ontario Inc. v. Great Lakes Copper Inc. 2016 ONSC 1002

COURT FILE NO.: 571/12

DATE: 2016-02-09

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

1623242 ONTARIO INC.

Plaintiff

and –

GREAT LAKES COPPER INC. and 3072453 NOVA SCOTIA COMPANY WOLVERINE TUBE, INC., WOLVERINE TUBE CANADA LIMITED PARTNERSHIP, and TIM WATKIN

Defendants

REASONS FOR ORDER

Price J.

Released: February 9, 2016

[^1]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194

[^2]: Simanic v Ross (2004), 2004 66337 (ON SC), 71 O.R.(3d) 161 (S.C.)

[^3]: Simanic v. Ross (2004), 2004 66337 (ON SC), 71 O.R. (3d) 161 (S.C.J.).

[^4]: Simanic v. Ross (2004), 2004 66337 (ON SC), 71 O.R. (3d) 161 (S.C.J.); Lye v. McConnell (1905), 5 O.W.R. 326

[^5]: Schlund v. Foster (1908), 11 O.W.R. 175 aff’d (1908), 11 O.W.R. 314 (C.A.)

[^6]: Simanic v. Ross (2004), 2004 66337 (ON SC), 71 O.R. (3d) 161 (S.C.J.); Blum v. Blum,1964 285 (ON CA), [1965] 1 O.R. 236 (C.A.); Hennig v. Northern Heights (Sault) Ltd. (1980), 1980 1574 (ON CA), 30 O.R. (2d) 346 (C.A.); Sampson v. Kingston (City), [1981] O.J. No. 681 (H.C.J.); National Bank of North America v. Ross (1982), 25 C.P.C. 132 (Ont. H.C.J.); Schlund v. Foster (1908), 11 O.W.R. 175 (H.C.J.).

[^7]: Simanic v. Ross, at para. 25

[^8]: Blum v. Blum, 1964 285 (ON CA), [1965] 1 O.R. 236, 47 D.L.R. (2d) 388 (C.A.); Sampson v. Kingston (City), [1981] O.J. No. 681 (H.C.J.); and National Bank of North America v. Ross (1982), 25 C.P.C. 132, [1982] O.J. No. 292 (H.C.J.)

[^9]: Blum v. Blum, 1964 285 (ON CA), [1965] 1 O.R. 236, 47 D.L.R. (2d) 388 (C.A.)

[^10]: Simanic v. Ross, at para. 29

[^11]: Hennig v. Northern Heights (Sault) Ltd. (1980), 1980 1574 (ON CA), 30 O.R. (2d) 346, 17 C.P.C. 173 (C.A.), per Morden J.A., at p. 353 O.R.

[^12]: National Bank of North America v. Ross (1982), 25 C.P.C. 132, [1982] O.J. No. 292 (H.C.J.)

[^13]: Simantic v. Ross, at para. 33

[^14]: Simantic v. Ross, at para. 34

[^15]: Simanic v. Ross, at paras. 37 to 43

[^16]: Mele v. Thorne Riddell 1997 12124 (ON SC), [1997] O.J. No. 443, 32 O.R. (3d) 674, 1997 ON SC 12124 () (Ont. Gen. Div.)

[^17]: Economy Forms Ltd. v. Aluma Systems Corp. (2000), 50 C.P.C. (4th) 372 (Ont. S.C.J.); Provincial Crane Inc. v. AMCA International Ltd. (1990), 44 C.P.C. (2d) 46 (H.C.J.); Gianopoulos v. Olga Management Ltd., [2004] O.J. No. 4273 (S.C.J.).

[^18]: Golda Developments Inc. v. Dawe (2008), 64 C.P.C. (6th) 128 (Ont. S.C.J.); Gianopoulos v. Olga Management Ltd., [2004] O.J. No. 4273 (S.C.J.); Provincial Crane Inc. v. AMCA International Ltd. (1990), 44 C.P.C. (2d) 46 (H.C.J.).

[^19]: Ivicon Construction v. Rebecca Street Holdings et al, 2011 ONSC 3297, at para. 12

[^20]: Risorto v. State Farm Mutual Automobile Insurance Co. (2003), 2003 43566 (ON SC), 64 O.R. (3d) 135, at para. 10 (S.C.), per Winkler J., cited in Springer v. Aird & Berlins LLP (2009), 2009 26608 (ON SC), 74 C.C.E.L.(3d) 243 (Ont. S.C.), at paras. 12-17.

[^21]: Risorto, at para. 10

[^22]: George v Landels, 2012 ONSC 6608

[^23]: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); and Moon v. Sher (2004), 2004 39005 (ON CA), 246 D.L.R. (4th) 440 (C.A.)

[^24]: Gratton-Masuy Environmental Technologies Inc. (c.o.b. Ecoflow Ontario) v. Building Materials Evaluation Commission, 2003 8279 (ON SCDC), 2003 ONSC 8279 () (ON SCDC), [2003] O.J. No. 1658, at para. 17

[^25]: Bell Canada v. Olympia & York Developments Limited et. al. (1994), 1994 239 (ON CA), 1994 ONCA 239 (), 17 O.R. (3d) 135 (C.A.)

[^26]: Standard Life Assurance Company v. Elliott (2007), 2007 18579 (ON SC), 86 O.R. (3d) 221 (S.C.J.)

[^27]: Foulis v. Robinson 91 (1978), 1978 1307 (ON CA), 8 C.P.C. 198 (C.A.)

[^28]: Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p. 134

[^29]: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 26

[^30]: Lewis v. Cantertrot Investments Limited, 2010 ONSC 5679, at para. 76

[^31]: Mazzon v. Wentworth Condominium Corporation No. 102, 2012 ONCA 447, para. 17-20

[^32]: Moreira v. Dasilva, [1977] O.J. No. 1458, 5 C.P.C. 73 (Ont. H.C.J.), at para. 14

[^33]: Baryluk v. Campbell, 2009 CarswellOnt 3900,, at paras. 9 and 10

[^34]: Pirbhai v. Singh, 2011 ONSC 1366, 2011 CarswellOnt 1285 (SCJ)

[^35]: Party v. Party, 2013 ONSC Number 6406, 2013 ONSC 6406,

[^36]: The Hearing Clinic (Niagara Falls) Inc. v. 866073 Ontario Limited, et al., 2015 ONSC 1177, para. 87

[^37]: ScotiaMcLeod Inc. v. Peoples Jewellers Ltd., 1995 ON CA 1301 ()

[^38]: Geographic Resources Integrated Data Solutions Ltd. v. Peterson, 2013 ONSC 1041, paras. 7 and 11 to 16

[^39]: “Information for the Profession” bulletin (“the Costs Bulletin”) from the Costs Sub-Committee of the Rules Committee (that the Costs Sub-Committee of the Rules Committee issued to replace the Costs Grid, which it repealed in 2005). The Costs Bulletin has advisory status only and not statutory authority, as it was not included in the Regulation that repealed the Costs Grid.

[^40]: First Capital (Canholdings) Corp. v. North American Property Group, 2012 ONSC 1359, 2012 ONSC 1359 (S.C.J.)

[^41]: See Hanis v. University of Western Ontario, 2006 23155 (ON SC), [2006] O.J. No. 2763 (Ont. S.C.), per Power J.

[^42]: 680195 Ontario Ltd. v. 2169728 Ontario Limited o/a Stoneybrook Auto Service, 2010 ONSC 4064, para. 8, citing Hanis v. The University of Western Ontario et. al., 2006 23155 (ON SC), [2006] O.J. No. 2763 (S.C.J.), Power J., at para. 46.

[^43]: Fazio v. Cusumano, 2005 33782 (ON SC), 2005 33782 (Ont. S.C.), at para. 8.

[^44]: Fong v. Chan, 1999 2052 (ON CA), 1999 2052 (ON C.A.), (1999), 46 O.R. (3d) 330, 128 O.A.C. 2, 181 D.L.R. (4th) 614, 1999 2052, [1999] O.J. No. 4600, 1999 Cars­well­Ont 3955 (Ont. C.A.).

[^45]: Lakha v. Alloo, 2009 67667 (ON SC), 2009 ONSC 67667 ().

[^46]: Lakha v. Alloo, above, at paras. 15 and 16.

[^47]: Nby Enterprises Inc. v. Duffin, 2006 ONSC 26969 ().

[^48]: Paradis v. McLaren, 2007 ONSC 14922 ().