Court File and Parties

COURT FILE NO.: CV-09-5442 DATE: 20160420 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: DEEP FOUNDATIONS CONTRACTORS INC. Plaintiff

AND:

B. GOTTARDO CONSTRUCTION LTD. AND METROLINX, ALSO KNOWN AS THE GREATER TORONTO TRANSIT AUTHORITY Defendants

BEFORE: Ricchetti, J.

COUNSEL: E. Battiston, Counsel for the Plaintiff (“Deep Foundations”) T. Rotenberg, Counsel for David Gottardo (“David Gottardo”)

HEARD: April 14, 2016

COSTS ENDORSEMENT

[1] On August 4, 2015, this court granted judgment in favour of Deep Foundations dismissing B. Gottardo Construction Ltd’s (“Gottardo”) counterclaim and dismissing Gottardo's cross motion. Cost submissions were to be submitted in writing.

[2] On August 13, 2015, a receiver was appointed over the business and assets of Gottardo. On August 28, 2015, Gottardo went into bankruptcy. A stay of proceedings went into effect. On January 6, 2016, the stay was lifted to permit this court to proceed with the determination of costs in this proceeding.

[3] Deep Foundations sought costs of its dismissal motion and Gottardo’s cross motion against Gottardo and David Gottardo on a joint and several basis. As a result, directions were given to permit David Gottardo to retain counsel, file materials and make submissions in court on the issue of personal liability of David Gottardo and, if necessary, the quantum of costs.

[4] On April 14, 2016 this court heard counsel for Deep Foundations and David Gottardo on the issue of costs. Gottardo, through the trustee in bankruptcy, chose not to attend and make any submissions.

THE BACKGROUND FACTS

[5] This was a Construction Lien action. Deep Foundations provided materials and services to a project where Gottardo was the general contractor. The project was the construction of the Brampton GO Station (“Project”). Deep Foundations completed its work on September 17, 2009. Deep Foundations was not paid its final invoice for the work on the Project. As a result, Deep Foundations registered a lien on October 29, 2009.

[6] Deep Foundations served and filed its Statement of Claim in December 2009 seeking payment of $471,227.70 plus interest and costs ("Deep's Claim"). Gottardo served and filed its Statement of Defence and Counterclaim on December 31, 2009 seeking a dismissal of Deep Foundation's Claim and counterclaimed for approximately $2,000,000 damages for delay by Deep Foundations.

[7] After several pre-trials in December 2012 and August 2013, the trial was scheduled for the January 2014 sittings in Brampton.

[8] By September 2013 Gottardo had not disclosed its financial statements and other financial documentation for the relevant period of time to support its claim for damages arising from the alleged delays by Deep Foundations. Gottardo had not retained or served an expert report with respect to its delay claim.

[9] On September 11, 2013, Deep Foundations requested, in writing, certain financial statements and documentation to permit its expert to properly deal with Gottardo’s delay claim at the upcoming trial. As a result of no response to the request from Gottardo, on October 2, 2013, Deep Foundations served a preliminary expert's report of David Burkes dated September 26, 2013. Much of Mr. Burkes’ report and an accompanying letter cited the need for the financial statements and documentation requested from Gottardo.

[10] It is hard to imagine how a "delay claim" could be advanced at trial without the production of a considerable amount of the financial documentation requested to prove Gottardo’s alleged damages and without an expert’s report who, upon review of financial documentation, could opine on the quantum of financial loss incurred by Gottardo as a result of the alleged delay by Deep Foundations.

[11] With the impending trial, on November 14, 2013, for the first time, Gottardo advised it would be preparing its own expert report to deal with its delay claim. Gottardo did not produce an expert report; it was simply notifying Deep Foundations of its intention to produce an expert report in the future. Given that the trial was only 6 weeks away at that time, Gottardo’s decision to retain an expert to prepare a damages report would, knowingly to Gottardo, result in the January 2014 trial date being vacated and a new trial date set. This is the first time the trial date was adjourned due to Gottardo’s failure to produce financial documentation.

[12] As a result of Gottardo’s decision to retain an expert and the need to vacate the January 2014 trial date, Deep Foundations brought a motion for judgment for the amount of its claim. Deep Foundations also sought an order with respect to the production of Gottardo's expert report and the financial documentation. This motion was heard on December 5, 2013. Gottardo did not oppose Deep Foundations’ motion to pay out the full amount of Deep Foundations’ claim but did dispute the amount of interest payable on Deep Foundations’ claim and costs. On December 5, 2013, this court made an Order:

a) vacating the trial date of January 2014, and rescheduling the trial for the sittings in May 2014;

b) for payment to Deep Foundations of its entire claim of $471,227.70 plus interest at 4% per annum without prejudice to Deep Foundations’ claim to "2% per month on the outstanding balance". This issue was to be dealt with at trial;

c) that costs of Deep Foundations’ lien action was to also be determined at the trial;

d) that Gottardo’s expert report was to be served by February 7, 2014 with any documents relied on by Gottardo's expert to be served within 7 days thereafter; and

e) permitting further discoveries before the end of March 2014.

[13] The requested financial documentation was no longer an issue. It was expected that Gottardo’s expert would review Gottardo’s financial documentation and the financial documentation would be produced to Deep Foundations in accordance with the December 5, 2013 Order.

[14] Gottardo’s Counterclaim was amended on December 10, 2013 to increase the amount to $2,500,000.

[15] In early 2014, Gottardo paid the amount owing to Deep Foundations for its claim under the December 5, 2013 Order.

[16] Gottardo's expert report was dated February 7, 2014 and prepared by Richard Fogarasi, ("Fogarasi Report"). The damages for the delay were determined by Mr. Fogarasi to be “Head Office Overhead and Profits” damages of $988,906.38 and “Site Establishment Costs” of $300,155.02. The Fogarasi Report was delivered on February 12, 2014 to Deep Foundations.

[17] Gottardo did not provide Mr. Fogarasi with the requested financial statements and documentation. Gottardo provided limited financial documents to Mr. Fogarasi for his review and preparation of his report.

[18] Gottardo took the position that, because Mr. Fogarasi had not received the requested financial statements and documentation, it need not produce the documentation requested by Deep Foundations.

[19] On February 25, 2014, Deep Foundations served Gottardo with its further expert’s report and a letter, which repeated Deep Foundations’ expert’s need for the requested financial statements and documentation from Gottardo. Simply put, Deep Foundations’ expert could not complete a final report without the requested financial statements and documentation from Gottardo. Again, Deep Foundations requested the financial statements and documentation be produced by Gottardo.

[20] Deep Foundations’ request for the additional financial documentation went without response.

[21] In early March 2014, Deep Foundations advised this court that it would bring a motion to compel Gottardo to produce the requested financial statements and documentation. The parties attended a case conference to deal with this production issue. On March 14, 2014 directions were provided for Deep Foundations’ motion and the May 2014 trial date was vacated. The trial was rescheduled for January 2015 pre-emptory on both parties. This was the second time that the trial date was adjourned because of Gottardo’s failure to produce the requested financial statements and documentation.

[22] Subsequently, Gottardo's counsel requested additional time to file its materials delaying this issue even further. Deep Foundations’ motion was scheduled for September 29, 2014.

[23] In its factum on the disclosure motion of September 29, 2014, Gottardo conceded that it would produce the underlying financial documents for its "Site Establishment Costs" counterclaim. With respect to its Head Office and Overhead claim, Gottardo agreed to produce some, but not all, of the financial documents requested by Mr. Burkes. After an entire year of refusing to produce the requested financial statements and documentation, Gottardo now conceded that a substantial amount of the financial documentation requested by Deep Foundations should and would be produced by Gottardo.

[24] There still remained certain financial statements and documents which Gottardo continued to refuse to produce. As a result, the motion had to proceed. On September 29, 2014 an order was made which required Gottardo to produce: the financial documents it no longer objected to produce and the majority of the financial statements and documentation it had objected to produce. Once again, given the production order, the trial date for January 2015 had to be vacated and rescheduled for the Brampton sittings in May 2015 ("September 29, 2014 Order"). This is the third trial date vacated because of Gottardo's failure or refusal to produce the financial statements and documentation. Discoveries were ordered to take place before the end of January 2015.

[25] At the September 29, 2014 motion, Gottardo’s counsel had submitted it would take approximately 2 weeks to produce the financial statements and documentation ordered. The September 29, 2014 Order had not been not appealed or varied.

[26] The production of the financial statements and documentation within two weeks came and went with no production.

[27] As of the end of 2014, the financial disclosure ordered by the September 29, 2014 Order remained outstanding.

[28] No financial statements or documentation have ever been produced by Gottardo despite the September 29, 2014 Order.

The Motion to Dismiss Gottardo's Counterclaim and Gottardo's cross motion

[29] It is the costs of this motion that are the subject of this ruling.

[30] In early 2015, a telephone case conference was scheduled as Deep Foundations indicated it wished to bring a motion to dismiss Gottardo’s counterclaim for failing to comply with the September 29, 2014 Order.

[31] Deep Foundations' motion was scheduled for April 30, 2015.

[32] Deep Foundations’ motion materials were served as directed well in advance of the return date.

[33] On April 29, 2015, despite being in breach of the September 29, 2014 Order, Gottardo brought a cross motion to:

a) vary the September 29, 2014 Order to delete production of only certain financial documents; and

b) reschedule the trial date from the May 2015 sittings to the January 2016 sittings;

[34] Because of Gottardo's cross-motion and Deep Foundations inability to respond to it, Deep Foundations' motion could not be heard on April 30, 2015. Responding materials would have to be filed and cross examinations take place.

[35] The May 2015 trial date had to be vacated. This is the fourth trial date which had to be vacated because of Gottardo's failure to produce the financial statements and documentation, this time in complete disregard of the September 29, 2014 Order.

[36] A conference was held on May 26, 2015 for the scheduling of materials for Gottardo’s cross-motion, cross examinations and a date for the hearing of the motion. The hearing date was scheduled for June 26, 2015.

[37] As of the motion date on June 26, 2015, Gottardo had still not made any financial disclosure as required by the September 29, 2014 Order. Gottardo remained in breach of the September 29, 2014 Order.

[38] By reasons dated August 4, 2015, Deep Foundations motion for a dismissal of Gottardo’s counterclaim was granted and Gottardo’s cross motion was dismissed.

David Gottardo

[39] David Gottardo, despite having been given an opportunity to file materials on Deep Foundations’ claim for costs to be paid by him personally, chose not to file additional materials.

[40] David Gottardo had filed an Affidavit dated April 29, 2015 for the June 26, 2015 motion. The significant statements in David Gottardo's sworn affidavit are:

a) He identifies himself as the General Manager of Gottardo;

b) He made the decision to not produce the financial documentation despite the September 29, 2014 Order;

c) He explained that it was not in Gottardo’s interest to produce the financial documentation; and

d) He explained that he could produce some of the financial statements or documentation by June 18, 2015, but only if the court agreed to vary the September 29, 2014 Order.

[41] The only conclusion that one can infer from the many sworn statements of David Gottardo in his affidavit is that he is a principal and one of the controlling minds (if not the sole principal and controlling mind) of Gottardo and it was his decision to wilfully disobey the September 29, 2014 Order.

THE POSITION OF THE PARTIES

[42] Gottardo has not filed any materials or made submissions in writing or orally on Deep Foundations claim for costs.

[43] Both Deep Foundations and David Gottardo agree that costs of $7,500 for the attendance for cost submissions is a reasonable amount.

Deep Foundations

[44] Deep Foundations seeks costs of the motion dismissing Gottardo’s counterclaim on a full indemnity basis in the amount of $38,430.66 (all inclusive) against Gottardo and David Gottardo on a joint and several basis PLUS cost of $7,500 for preparation and attendance on the hearing.

[45] Essentially, Deep Foundations attributes the actions of Gottardo to David Gottardo and that David Gottardo's actions were a continuous and deliberate attempt to delay this matter and the deliberate and flagrant disregard of the September 29, 2014 Order.

[46] This Deep Foundations submits entitles it to costs against David Gottardo personally on a full indemnity basis.

Gottardo

[47] David Gottardo submits that there is no basis upon which David Gottardo incurred personal liability for costs.

[48] David Gottardo submits that David Gottardo was acting in the best interests of Gottardo when he decided not to comply with the September 29, 2014 Order.

THE ANALYSIS

The Potential Liability of David Gottardo

[49] There is no disagreement that costs against a non-party can be ordered, where appropriate in law, under s. 101 of the Courts of Justice Act or s. 86 of the Construction Lien Act. See paragraphs 9 and following in David Gottardo’s factum.

The Construction Lien Act

[50] The Construction Lien Act provides:

67(3) . Except where inconsistent with this Act, and subject to subsection (2), the Courts of Justice Act and the rules of court apply to pleadings and proceedings under this Act.

86. (1) Subject to subsection (2), any order as to the costs in an action, application, motion or settlement meeting is in the discretion of the court, and an order as to costs may be made against,

(a) a party to the action or motion; or

(b) a person who represented a party to the action, application or motion, where the person,

(i) knowingly participated in the preservation or perfection of a lien, or represented a party at the trial of an action, where it is clear that the claim for a lien is without foundation or is for a grossly excessive amount, or that the lien has expired, or

(ii) prejudiced or delayed the conduct of the action,

and the order may be made on a substantial indemnity basis, including where the motion is heard by, or the action has been referred under section 58 to, a master, case management master or commissioner.

[51] Much was made of the wording "agent" which was found in the prior version of s. 86(1) of the Construction Lien Act. In MHA Contracting Inc. v. Christie Mechanical Contractors Ltd., 2005 ONSC 4579, Justice Pardu considered the personal liability of the principal of the Plaintiff. Justice Pardu found Mr. Rostom liable as an "agent" under s. 86 but also found liability under s. 35 of the Construction Lien Act. The word “agent” has since been removed from this section. This decision does not assist this court in the circumstances of this case.

[52] David Gottardo is not a party to the action or motions.

[53] David Gottardo did not “represent” Gottardo in the action or the motions before this court. David Gottardo is simply a/the principal or directing mind of Gottardo at least as it relates to this proceeding, the production of the financial documentation and compliance with the September 29, 2014 Order.

[54] While s. 86(1) (a) or (b) do not apply, that does not eliminate the broad opening words of s. 86 (1) of the Construction Lien Act which state:

… any order as to the costs in an action, application, motion or settlement meeting is in the discretion of the court…

[55] There is nothing in s. 86 of the Construction Lien Act which limits the generality of these opening words particularly when these opening words are followed by the word “and”. I do not read s. 86 as limiting a court’s jurisdiction to award costs to the type of orders described in subsections (a) or (b).

The Courts of Justice Act

[56] Like Justice Pardu in MHA, costs against David Gottardo need not be based solely on s. 86(1) of the Construction Lien Act. Costs may also be ordered by this court under s. 131 of the Courts of Justice Act or under its inherent jurisdiction.

[57] Section 131 of the Courts of Justice Act provides:

131. (1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[58] Counsel for David Gottardo submitted in its factum that, while the court has jurisdiction to award costs against David Gottardo under s. 131 of the Courts of Justice Act, counsel submitted that the threshold for ordering costs personally against David Gottardo is very high and has been not established in this case.

The Court’s Inherent Jurisdiction

[59] In The St. James' Preservation Society v. Toronto (City), 2007 ONCA 601, the Court of Appeal stated the court has inherent jurisdiction to award costs against a non-party:

[52] The court clearly has authority, derived from its inherent jurisdiction to prevent an abuse of process, to award costs against a non-party who has proved to be the real person controlling the litigation but has put forward a “man of straw” to avoid liability for costs or other reasons: Alexanian v. Dolinski (1973), 2 O.R. (2d) 609 (C.A.); Re Sturmer and Town of Beaverton (1912), 25 O.L.R. 566 (C.A.). The making of such an order is, however, exceptional.

Is David Gottardo Personally liable for Costs?

[60] Whether the court’s jurisdiction to award costs against David Gottardo arises from the opening words in s. 86 (1) of the Construction Lien Act, s. 131 of the Courts of Justice Act or the court's inherent jurisdiction, it matters not.

[61] The question is whether this court should find personally liability of David Gottardo for costs of these motions.

[62] David Gottardo submitted no evidence and did not suggest that anyone other than himself was responsible for the decision to simply ignore the September 29, 2014 Order.

[63] As a result, the only evidence is that it was David Gottardo controlling this litigation, at least to the extent of the non-disclosure of the financial documentation and wilful disobedience of the September 29, 2014 Order. It is obvious from a reading of his affidavit that it was his decision to not comply with the September 29, 2014 Order. These actions are what led to the motion and cross motion.

[64] David Gottardo simply stated that disclosure was not in Gottardo’s interests because of the “highly competitive nature” of Gottardo’s business as his reason for refusing to comply with the September 29, 2014 Order. Conspicuously, he did not state why compliance with the September 29, 2014 Order would impact Gottardo’s competitive position given the confidentiality protection provided for in the said order or why other necessary confidentiality provisions could not be sought from this court.

[65] David Gottardo’s explanation for non-compliance of the September 29, 2014 Order is not a reasonable explanation for disregarding the said order.

[66] David Gottardo’s counsel submitted that wilful disobedience of a court order by a corporation does not necessarily amount to disobedience by its principal. I accept that this statement is generally true, however, the circumstances of each case will determine whether there is disobedience of the court order by the corporation and/or by its principal.

[67] David Gottardo submits that he was duty bound to balance his corporate duty to Gottardo against his duty to comply with the September 29, 2014. I disagree that David Gottardo could place his own perceived duty to Gottardo to wilfully disobey and disregard a clear and unambiguous court order.

[68] The time for David Gottardo to have raised Gottardo's concerns or reasons why the financial statements and documents could and should not be produced was prior to or at the September 29, 2014 motion. Once the September 29, 2014 Order was made, Gottardo and its principals, had no choice but to appeal the said order or comply with the said order. Wilful disobedience of the September 29, 2014 Order by David Gottardo was not an option. Attempting to negotiate a variation of the September 29, 2014 Order by promising to comply with other portions of the said order, was not an option.

[69] Dealing with the the lifting of a corporate veil to impose personal liability, in 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (ON CA) the Court of Appeal dealt with the circumstances which permit a court to pierce the corporate veil:

[67] Halasi and Krauss' second argument is that the trial judge disregarded well-known principles of corporate law in holding them personally liable. In my opinion, however, the trial judge took the correct view in concluding (at p. 298 R.P.R.) that "Krauss and Halasi cannot hide behind the corporate veil." To pierce the corporate veil is to disregard the separate legal personality of a corporation, a fundamental principle of corporate law recognized in Salomon v. Salomon & Co., [1897] A.C. 22, [1895-9] All E.R. Rep. 33. Only exceptional cases -- cases where applying the Salomon principle would be "flagrantly" unjust -- warrant going behind the company and imposing personal liability. Thus, in Clarkson Co. v. Zhelka, [1967] 2 O.R. 565 at p. 578, 64 D.L.R. (2d) 457 (H.C.J.), Thompson J. held that instances in which the corporate veil has been pierced "represent refusals to apply the logic of the Salomon case where it would be flagrantly opposed to justice". Similarly, Wilson J. observed in Kosmopoulos v. Constitution Insurance Co., [1987] 1 S.C.R. 2 at p. 10, 34 D.L.R. (4th) 208, that the law on when the corporate veil can be pierced "follows no consistent principle. The best that can be said is that the 'separate entities' principle is not enforced when it would yield a result 'too flagrantly opposed to justice, convenience or the intersts of the Revenue': L.C.B. Gower, Modern Company Law (4th ed. 1979), at p. 112".

[68] Typically, the corporate veil is pierced when the company is incorporated for an illegal, fraudulent or improper purpose. But it can also be pierced if when incorporated "those in control expressly direct a wrongful thing to be done": Clarkson Co. v. Zhelka at p. 578. Sharpe J. set out a useful statement of the guiding principle in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 at pp. 433-34 (Gen. Div.), affd [1997] O.J. No. 3754 (C.A.): "the courts will disregard the separate legal personality of a corporate entity where it is completely dominated and controlled and being used as a shield for fraudulent or improper conduct."

[69] These authorities indicate that the decision to pierce the corporate veil will depend on the context. They also indicate that the separate legal personality of the corporation cannot be lightly set aside. Yet, however restrictive corporate law principles for piercing the corporate veil may be, in the context of an undertaking to the court, the trial judge's findings support going behind Sweet Dreams and imposing personal liability.

(emphasis added)

[70] 642947 Ontario Ltd. was, in a construction lien context, followed in Canadian Affordable Roofing Limited v. Law, Winlaw et al, 2008 ONSC 87011 and Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc., 2009 ONCA 256.

[71] In my view, David Gottardo's actions to wilfully disregard the September 29, 2014 Order was to deliberately cause Gottardo to do a "wrongful thing" or engage in "improper conduct" on these motions, entitling this court to disregard the separate legal corporate entity for the purpose of assessing responsibility for costs of these motions. It would be unfair, unjust and contrary to the principles of equity to permit an individual who caused a corporation to disregard and wilfully disobey a court order and then hide behind the "separate corporate entity" to avoid personal liability the costs caused directly by his or her actions.

[72] Gottardo is now bankrupt. Payment of the costs of the motion and cross motion will likely not be paid if the costs are simply awarded against Gottardo. David Gottardo’s role in deliberately delaying, causing unnecessary expense and wilfully disregarding a court order would leave Deep Foundations without any recourse to the person directly responsible and who engaged in this wrongful or improper conduct.

[73] I am satisfied that this is an appropriate case that, to do justice in these circumstances, costs should be awarded against David Gottardo personally on a joint and several basis.

Rule 57

[74] Considering the factors in Rule 57, I consider the following factors to be relevant:

a) Gottardo's counterclaim was substantial, it involved a claim for $2,500,000;

b) Deep Foundations was wholly successful on its motion and the cross motion;

c) the issues were complex. To properly deal with Gottardo's cross motion, there was a cross examination of Deep Foundations's expert and counsel submissions regarding the methodology appropriate or necessary to deal with Gottardo's counterclaim. These were extremely complex motions involving a considerable amount of evidence (including a review of the entire proceeding) and expert evidence;

d) these motions were fundamental to the overall prosecution of Gottardo's counterclaim;

e) Gottardo and David Gottardo's conduct was to deliberately ignore the September 29, 2014 Order – the fundamental issue in these motions. After many months, on the eve of Deep's motion to dismiss the counterclaim, Gottardo's cross motion sought to produce the documents but only if the court would vary the September 29, 2014 Order. This delayed and extended the time and expense to deal with Deep Foundations' motion;

f) In Gottardo's cross motion, Gottardo advised this court it could produce certain of the financial documents within short order if the court agreed to vary the September 29, 2014 Order. This conduct of negotiating with the court regarding the compliance with a court order, many months after the order was made and disregarded, deserves sanctioning by this court; and

g) Knowing that Gottardo had not and would not comply with the September 29, 2014 Order, Gottardo caused Deep Foundations to incur additional unnecessary costs such as the cross-examination of Mr. Burke (Deep Foundations' expert). This cost alone caused Deep Foundation to incur extra costs of approximately $7,000 for its expert fees.

Scale of Costs

[75] In Conforti (Re), 2015 ONCA 708, the Court of Appeal stated the situations where full indemnity costs are appropriate:

[18] An award of substantial or full indemnity costs may be based on conduct including circumstances where there has been “reprehensible, scandalous, or outrageous conduct on the part of one of the parties”: Young v. Young, [1993] 4 S.C.R. 3 at p. 134. As stated by Robins J.A. in Mortimer v. Cameron (1994), 17 O.R. (3rd) 1 (C.A.) at p. 23, such an award “is ordered only in rare and exceptional cases to mark the court’s disapproval of the conduct of the party in the litigation.”

[76] Considering the above factors, I am satisfied that full indemnity costs are appropriate. I recognize that this jurisdiction should be exercised sparingly. Gottardo and David Gottardo's actions were reprehensible and constituted outrageous conduct. After considerable delay after delay; submissions that the requested financial documentation would be available within two weeks of the September 29, 2015 motion date; deliberate refusal to comply with a court order for approximately 10 months; further delay in bringing the cross motion; and then "offering" to produce some documentation if the court would agree to vary an existing order, constitutes outrageous conduct in the conduct of this litigation.

[77] Gottardo could have abandoned its counterclaim after the September 29, 2014 Order and thereby avoided producing the financial statements and documentation since their relevance related only to Gottardo's outstanding counterclaim. It chose not to do so. Instead, David Gottardo caused Gottardo to engage in delay tactics, unnecessary conferences and court attendances and caused Deep Foundations to incur unnecessary substantial costs.

Quantum of Costs

[78] David Gottardo submits that full indemnity costs is $21,717 (excluding counsel's cost of the hearing of $7,500).

[79] I have reviewed Deep Foundations’ counsel’s Bill of Costs. All of the time prior to June 29, 2015 and time spent on cost submissions appear to be reasonable and all attributed to Deep Foundations’ motion and Gottardo’s cross motion particularly. The amount is very reasonable in light of the numerous attendances to telephone, the cross examination, the aborted motion date on April 30, 2015, the cross motion and hearing on June 26, 2015.

[80] David Gottardo takes issue regarding post June 29, 2015 counsel fees submitting these fees are not appropriate as they deal with the bankruptcy of Gottardo. I agree. The time related to the submissions on costs and such costs are reasonable and appropriate. Some time (approximately $2,000 in fees) deal with the bankruptcy of Gottardo and do not relate to the motion or cross motion. I have reduced Deep Foundations’ full indemnity costs to $36,430.66 (all inclusive) to take this into account.

CONCLUSION

[81] Gottardo and David Gottardo, jointly and severally, shall pay to Deep Foundations the amount of $36,430.66 (all inclusive) plus $7,500 plus HST for costs of the motion and cross motion.

Ricchetti, J.

Date: April 20, 2016

COURT FILE NO.: CV-09-5442

DATE: 20160420 ONTARIO SUPERIOR COURT OF JUSTICE RE: DEEP FOUNDATIONS CONTRACTORS INC. v. B. GOTTARDO CONSTRUCTION LTD. AND METROLINX, ALSO KNOWN AS THE GREATER TORONTO TRANSIT AUTHORITY BEFORE: RICCHETTI J. ENDORSEMENT Ricchetti J. Released: April 20, 2016