Court File and Parties

COURT FILE NO.: CV-11-434473 DATE: 20160412 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ONE-WAY DRYWALL INC. Plaintiff – and – LOMAX MANAGEMENT INC., JEAN DANILKO and RICHARD JEFFREY Defendants

COUNSEL: Nicholas C. Tibollo for the Plaintiff Catherine Willson for the Defendants

HEARD: In writing

BEFORE: Perell, J.

Reasons for Decision - Costs

[1] This is a costs endorsement after a failed partial summary judgment motion.

[2] Richard Jeffrey is the President and Jean Danilko is the Vice-President of Lomax Management Inc. (“Lomax”), which is a construction management company. In June 2010, Lomax hired One-Way Drywall Inc. (“One-Way”) to provide drywall services for a hotel construction project in Toronto. In September 2011, after One-Way was not paid for all its work, it sued Lomax for breach of contract claiming $260,420.30, and it sued Lomax, Mr. Jeffrey and Ms. Danilko for breach of the trust provisions of sections 8 and 13 of the Construction Lien Act. Lomax, Mr. Jeffrey, and Ms. Danilko denied any breach of trust and Lomax asserted a counterclaim in excess of $540,853.89 for defective workmanship. Four-and-a-half-years later, in what I described as an audacious motion under Rule 20 or alternatively under rule 25.11 of the Rules of Civil Procedure, Lomax, Mr. Jeffrey, and Ms. Danilko sought to have the breach of trust claims struck from One-Way’s Amended Statement of Claim. I dismissed the motion for summary judgment. See One-Way Drywall Inc. v. Lomax Management Inc., 2016 ONSC 1462.

[3] One-Way now requests costs of $45,318.65, all inclusive, on a full indemnity basis, $33,340.65, all inclusive, on a substantial indemnity basis, or $24,357.15, all inclusive, on a partial indemnity basis.

[4] The Defendants submit that costs should be in the cause, or alternatively if costs are awarded against them, they submit that those costs should be on a partial indemnity basis. The Defendants provided a costs outline for their counsel’s work on the summary judgment motion, which outline described a costs claim of $9,503.85, all inclusive, on a substantial indemnity basis and $6,195.78 on a partial indemnity basis.

[5] I award One-Way costs of $33,340.65, all inclusive, on a substantial indemnity basis.

[6] Rule 20.06 of the Rules of Civil Procedure provides that the Court may fix and order payment of the costs of a motion for a summary on a substantial indemnity basis if the party acted unreasonably by making the motion or if the party acted in bad faith for the purposes of delay. I find as a fact that the Defendants acted unreasonably by making their audacious summary judgment motion.

[7] I also find as a fact and alluding to rule 1.04, I conclude that in its execution, the Defendants’ unreasonable summary judgment motion was a tactical maneuver that turned out to be the opposite of the most expeditious and least expensive determination of the construction lien action on its merits. Either advertently or inadvertently, the Defendants’ summary judgment motion has delayed procedural and substantive justice in this construction lien action.

[8] The disruptive and dysfunctional effect of the Defendants’ maneuver persists into the parties’ voluminous and argumentative costs submissions. One-Way submitted cost submissions of 234 pages (including 10 decisions) and a reply submission of 9 pages. The Defendants submitted costs submissions of 210 pages (including 8 decisions) and a sur-reply of 38 pages (including 1 decision). These submissions are largely a re-argument of and meta-argument about the summary judgment motion on its merits.

[9] The Defendants’ summary judgment motion was poorly executed and it was and would have been ineffective to narrow the issues in the action because the proffered confession of judgment on the breach of trust claim was all of confusing and conditional.

[10] The Defendants’ summary judgment motion was unreasonable and it was unsuccessful.

[11] In its costs submissions, One-Way asks the court to find that the conduct of the Defendants was dilatory, egregious, reprehensible and ballsy and ought not to be condoned. Having found that the Defendants’ summary judgment motion was unreasonable under rule 20.06, I need not decide whether apart from rule 20.06, there are other grounds for awarding costs on a substantial indemnity basis, and I simply say that for present purposes I need not go outside rule 20.06 to support an award of substantial indemnity costs.

[12] This conclusion focuses the analysis of the parties’ costs submissions to the normal questions of whether One Way’s substantial indemnity claim of $33,340.65 can be justified for the summary judgment motion in the particular circumstances of this case.

[13] In my opinion, having reviewed the voluminous submissions of the parties and considered the well-known factors that guide the court’s discretion in awarding costs, an award of $33,340.65, all inclusive, is fair and reasonable for the Defendants to pay in the circumstances of the immediate case.

[14] Order accordingly.

Perell, J. Released: April 12, 2016