ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HARBOUREDGE MORTGAGE INVESTMENT CORPORATION
Plaintiff (Responding Party)
– and –
COMMUNITY TRUST COMPANY as TRUSTEE and in its individual corporate capacity, TIMBERCREEK MORTGAGE INVESTMENT CORPORATION, 2212740 ONTARIO LIMITED, R. BLAIR TAMBLYN, UGO BIZZARRI, MARCUS PARMEGIANI, ANDREW JONES, CHRIS HUMENIUK and CANADIAN REAL ESTATE STRATEGIES INC., c.o.b. as CANADIAN MORTGAGE STRATEGIES & INVESTMENTS
Defendants (Moving Parties)
Michael A. Polvere, for the Plaintiff (Responding Party)
Ivan Y. Lavrence, for the Defendants (Moving Parties)
HEARD: By written submissions
REASONS FOR DECISION ON COSTS
DiTOMASO J.
INTRODUCTION
INTRODUCTION
1The defendants (moving parties) brought a motion requesting an order to discharge the Certificate of Pending Litigation registered against the subject property located on Lake Rosseau in the Township of Muskoka Lakes. They were unsuccessful. For reasons set out in my decision dated January 18, 2016, the defendants’ motion was dismissed.
2The parties agreed that costs would be determined by way of written submissions. I have reviewed those written submissions together with my Reasons for Decision dated January 18, 2016.
POSITIONS OF THE PARTIES
POSITIONS OF THE PARTIES
Position of the Plaintiff, HarbourEdge
Position of the Plaintiff, HarbourEdge
3The successful party, HarbourEdge, claims partial indemnity costs in the amount of $38,559.37, paid within 30 days.
Position of the Defendants, Community Trust Company et al
Position of the Defendants, Community Trust Company et al
4The unsuccessful defendants, Community Trust et al, concede that HarbourEdge is entitled to some costs for the motion as HarbourEdge was ultimately successful. Community Trust disputes the amount of quantum. Community Trust relies on Boucher v. Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 188 O.A.C., 201 (C.A.) and Healy v. Pilot Insurance Co. (2004), 129 A.C.W.S. (2d) 462 regarding the payment of costs on a partial indemnity scale.
ANALYSIS
ANALYSIS
5HarbourEdge is the successful party on this motion and as such, is entitled to costs following the event on a partial indemnity scale.
6The principle issue between the parties is one of quantum. An award of costs is discretionary pursuant to s. 131 of the Courts of Justice Act, considered together with the factors enumerated in Rule 57.01(1) of the Rules of Civil Procedure.
7The defendants, Community Trust et al were critical of the claim for costs by HarbourEdge on the basis that those costs were excessive. It was submitted that the time spent was far in excess of what it should have been for a motion of this sort. In mounting its challenge, the defendants, Community Trust et al identified certain and discrete steps which ought to have attracted less time spent and fees. There was also a challenge in respect of a limited amount for disbursements appropriate only in the amount of $700.
8I disagree with the submissions made on behalf of the defendants, Community Trust et al. I considered the conduct of the defendants, as did Justice Goodman. Justice Goodman was live to the triable issues giving rise to the claim of improvident trust, improvident sale, constructive trust, tracing and fraudulent conduct on behalf of the various defendants. Justice Goodman had before him a sufficient evidentiary record on which he to grant an ex parte order for a CPL.
9This court was also concerned about the transfer/sale of the property to related parties for a nominal amount. Further, the defendants refused to reveal why they needed the removal of the CPL at this time. I was satisfied that there were triable issues raised regarding an improvident and/or fraudulent sale of the property. I found that HarbourEdge was entitled to a CPL on the property to protect its interest in the property. For the reasons stated in my decision, I dismissed the defendants’ motion and ruled that HarbourEdge’s Certificate of Pending Litigation should not be discharged.
10There were compelling reasons for HarbourEdge vigorously opposing the motion brought by the defendants to remove the CPL from the property. In addition to the triable issue relating to an interest in the property, this court found that there was no non-disclosure of material facts.
11I find that the plaintiff, HarbourEdge submitted a detailed and thorough brief in respect of costs. The same cannot be said for the submissions of Community Trust.
12I accept the submissions made on behalf of HarbourEdge that the amount of time expended by counsel on this motion was entirely reasonable in the circumstances and included counsel’s attendance at various cross-examinations and the court appearance, as well as preparation of the necessary responding materials and submissions for proper determination of the issues on this motion. My reasons disclosed that there was some complexity underlying what would appear to be a relatively straightforward motion on its face.
13The matter was originally returnable in Bracebridge but was transferred to be heard in Barrie. The plaintiff, HarbourEdge has absorbed any expense associated with preparation to travel regarding the original return of motion in Bracebridge.
14As for retaining London counsel in this matter, HarbourEdge was entitled to retain the counsel of its choice. For reasons not disclosed, the defendants, Community Trust initiated the process of removing the CPL, which involved a number of cross-examinations in Collingwood, Toronto, and London, with the eventual hearing of this motion in Barrie.
15The defendants’ criticism that the hours claimed for cross-examinations are excessive has no merit when one takes into account the hours of preparation, travel and voluminous document exchanges to address undertakings and refusals.
16With respect to the undertakings, the time spent in this regard does not appear to be unreasonable and I am not in a position to second-guess that time spent. See Fraleigh v. RBC Dominion Securities Inc., 2009 CarswellOnt 6737 at para. 13.
17Further, the defendants, Community Trust et al rely on Boucher in support of their argument that the discretion of the court must be exercised in light of specific facts and circumstances of the case in relation to the factors set out in Rule 57.01(1).
18Also, the reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable; see Rule 57.01(1)(0.b). The court should seek to balance the indemnity principle with the fundamental objective of access to justice.
19The defendants did not provide me with their own Costs Outline and Draft Bill of Costs. Rather, they provided me with a “suggested” Bill of Costs for the winning party instead of a Costs Outline for its own fees.
20The tactic of criticizing the winning party’s costs without providing any proof of their own costs has been the subject of adverse comment by our courts. See Risorto v. State Farm Mutual Automobile Insurance Company, 2003 CanLII 43566 (ON SC), 2003 CarswellOnt 934 at para. 10. Winkler C.J. (as he became) 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 r. 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 r. 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.
21In Fraleigh v. RBC Dominion Securities Inc., supra, Justice Newbould adopted the reasoning of Justice Winkler at para. 12. I agree with the reasoning of C.J. Winkler and Justice Newbould.
22Counsel for HarbourEdge also invites this court to draw an adverse inference which was drawn by Justice Festeryga in Cvokic v. Belisario, 2008 CarswellOnt 5008, at para. 8:
I agree with the approach taken by Justice Nordheimer in Hague v. Liberty Mutual Insurance Co., 2005 CanLII 13782 (ON SC), 2005 CarswellOnt 1361 (Ont. S.C.J.) para. 15, that in order to determine the reasonable expectation of the unsuccessful party with respect to costs the unsuccessful party ought to reveal their costs. The unsuccessful party in this case, the defendants, have not revealed what they would be charging their client. Therefore, that does not help me in determining the reasonable expectation of the defendants with respect to the payment of costs. Since that information is missing I draw the adverse inference that what the defendants are being charged are equal to or in excess of what the successful plaintiff is asking for.
23While drawing an adverse inference is an attractive proposition in our case, I am of the view that I need not go that far. The costs submissions on behalf of the unsuccessful party are totally rejected and do not come anywhere near supporting the proposition that HarbourEdge’s costs should be in the amount of $7,250 inclusive of fees, disbursements of about $700 and HST.
24I have reviewed the Bill of Costs of HarbourEdge. I am satisfied that on a partial indemnity scale, the time spent and fees claimed are fair, reasonable and proportional. I further find that the disbursements are also fair, reasonable and proportional. In all of the circumstances, this particular matter has not been over-lawyered or the subject of overkill. There was good reason for a Certificate of Pending Litigation to be ordered by Justice Goodman in the first place and I would maintain that there is equally good reason for the Certificate of Pending Litigation to remain undischarged pursuant to my Reasons for Decision.
DISPOSITION
DISPOSITION
25Accordingly, I fix costs in the amount of $38,559.37, all inclusive of fees, disbursements, and HST, payable by all of the defendants jointly and severally to the plaintiff, HarbourEdge Mortgage Investment Corporation on or before March 31, 2016.
DiTOMASO J.
Released: March 9, 2016