Court File and Parties

NEWMARKET COURT FILE NO.: CV-15-123188-SR DATE: 20160617 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Malka Gafny and Ron Gafny, Plaintiffs AND: Tzahi Vainshtein, Defendant

BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN

COUNSEL: R. Grad, Counsel for the Plaintiffs D. Anthony, Counsel for the Defendant

HEARD: By written submissions

Costs Endorsement

[1] The plaintiffs were unsuccessful in their summary judgment motion seeking payments against the defendant in proceedings being conducted under the simplified procedures set out in Rule 76 of the Rules of Civil Procedure. The defendant, the successful party upon the motion, now seeks her costs. As the Bill of Costs sets out, the substantial indemnity rate claimed is $10,045.67 for fees, disbursements and HST, or partial indemnity costs for $6,840.14 for fees, disbursements and HST.

Position of the Defendant

[2] The defendant submits that it is entitled to substantial indemnity costs, as this was not the type of action that was amenable to summary judgment. Further, various offers submitted to the other side could have led to minutes of settlement with respect to this matter. However, I pause to note that the submissions made did not provide any basis for determining that any offers were Rule 49 compliant. I therefore see no basis for awarding substantial indemnity costs. Substantial indemnity costs are the exception to the rule, and generally are only warranted when there is egregious conduct by the other side warranting an elevate costs sanction.

The Position of the Plaintiff

[3] The plaintiff submits that it is appropriate to reserve costs to the trial judge when a motion for summary judgment is dismissed. As the plaintiff points out at para. 13 of its submissions:

[13] As in the case as cited above, the present case has the following characteristics:

(i) The merits of the present case have yet to be adjudicated (ii) All of the productions, affidavits and other work product have further use as part of the evidentiary record at trial; (iii) The credibility of the parties in this case and conflicting evidence is to be resolved at trial where cross-examination on the parties’ affidavit evidence can take place; (iv) Plaintiffs had a reasonable chance to prevail on a motion for summary judgment. Upon the cross-examination at summary trial, the Plaintiffs may yet prevail; (v) The alternative to reserving costs of this motion to the trial judge is to order costs against the Plaintiffs only to potentially have them receive a damages award from the Defendant a few months later.

Analysis

[4] In Urbanski v. Corporation of the Township of Ramara, 2016 ONSC 1799, DiTomaso J. gave the following overarching comments with respect to costs:

[10] Costs are in the discretion of the court: see s. 131, Courts of Justice Act, and Rule 57.01 of the Rules of Civil Procedure. Generally, costs follow the event and are payable within 30 days on a partial indemnity basis. However, in the appropriate circumstances, discretion can be exercised by the court to depart from this general rule.

[5] In Smith (Estate) v. National Money Mart Co. (2008), 92 O.R. (3d) 224, Perell J. considered just such an exception for an unsuccessful partial summary judgment. As Perell J. noted at para. 14, “In these circumstances, I think it is a just and fair exercise of my discretion to order that the costs of the summary judgment motion be in the cause.”

[6] In Marsales v. Cole, 2016 ONSC 1814, Perell J. noted at para. 12, “One value of an order for costs in the cause is that the order sustains the value of a party’s investment in his or her litigation until the outcome.”

[7] The outcome of this case may very well depend on the trial judge’s determination of credibility issues between the parties. In D.S.L.C. Capital v. Creditfinance, 2013 ONSC 1844, Master Hawkins noted the credibility issues and concluded, “I have therefore decided to reserve the costs of this motion to the judge resolving those issues of credibility, whether on a motion for summary judgment or at trial.”

Conclusion

[8] I am satisfied that this case falls within the exceptional class of cases where costs in the cause is warranted. Although the defendant was successful in opposing the summary judgment motion, the plaintiff may yet succeed at trial. Accordingly, I order costs in the cause.

MULLIGAN J. Date: June 17, 2016