Court File and Parties
COURT FILE NO.: CV-16-152902-00 DATE: 20160803 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MIKHAIL KOVTUN, ALEKSANDRA KOVTUN and VERONIKA MAZHUGA, Applicants AND: MARYNA SOBOLYEVA and VALERIYA SOBOLYEVA, Respondents
BEFORE: THE HON. MADAM JUSTICE M.E. VALLEE
COUNSEL: Mr. A. Bouchelev, Counsel for the Applicants Ms. A. Abramian, Counsel, for the Respondents
HEARD: By written submissions
COSTS ENDORSEMENT
[1] By endorsement dated April 26 2016, I set aside the ex parte order of Quinlan J. dated March 10, 2016 on the basis that the applicants had failed to make full and frank disclosure to the court, among other things. I noted that the evidence in the applicant’s affidavit in support of the ex parte motion was misleading and inadequate on material issues. Because there was some evidence that the respondents had spent funds improperly, I granted the applicants leave to bring the motion on notice so that the issues that were before Justice Quinlan could be argued.
[2] The respondents were successful in having the ex parte order set aside. They request substantial indemnity costs. They refer to several cases that state that failure to make full and frank disclosure may be a basis for awarding substantial indemnity costs. (see Rosenthal v. Mayfair Auto Collision Inc. , [1992] O.J. No. 55 , Tegrad Windsor 1988 Inc. v. WW Lodging Inc . [2009] O.J. No. 3249 and Delphi Solutions Corp. v. Sendrea, 2004 ONSC 1941 , [2004] O.J. No. 1941) The respondents request substantial indemnity costs of $9,351.31 all inclusive.
[3] The applicants state that the motion on notice has been scheduled. The costs should be reserved to the judge who hears that motion because the merits have not yet been determined. The applicants rely on Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation [2008] O.J. No. 3733 in support of this position. In Penn-Co, the plaintiff brought a motion for injunction orders relating to the construction of a school. Prior to the hearing of the injunction, the defendant brought a motion to vary a related agreement. The defendant requested costs for both motions. The court held that the motion to vary the agreement was a separate matter from the injunction motion. No costs were ordered on the motion to vary the agreement. Regarding the injunction motion, costs were reserved to the trial judge because its disposition did not determine the outcome of the action. An appeal of one of the injunction orders was pending.
Analysis
[4] In Penn-Co , the court noted that “there are different considerations which apply to motions for interlocutory injunction relief as compared to motions of other kinds of interlocutory remedies.” (see par 11) If a plaintiff was unsuccessful at trial, this could affect the level of costs to which the defendant would be entitled, including costs of the injunction.
[5] In the motion before me, the applicants had already obtained an ex parte order. The issue was whether it should be set aside. The respondents were successful. Whether the applicants are successful in obtaining a future order after arguing the merits of the motion is a separate issue in contrast to whether they made full and frank disclosure on the ex parte motion. They did not. They were not entitled to the ex parte order based on the materials filed. That issue was heard on its merits.
[6] I disagree with the applicants’ position that these costs should be determined by a future motions judge. Rule 57.03(1) of the Rules of Civil Procedure states that the court shall fix the costs on the hearing of a contested motion unless a different order would be more just. I am not persuaded in these circumstances that a different order would be more just.
[7] The court relies on parties who bring ex parte motions to make full and frank disclosure. Failure to do so can result in an unjust order. Based on the cases cited by the respondents and upon considering the factors set out in Rule 57.01 of the Rules of Civil Procedure as well as the principles articulated in Boucher v. Public Accountants, 2004 ONCA 14579 , 71 O.R. (3d) 291, I conclude that this is an appropriate case for costs on an elevated scale.
[8] The respondent requests substantial indemnity fees of $7,931 plus HST based on 20.6 hours at a rate of $385 per hour. The hours spent are appropriate for this motion, especially given the fact that the respondents obtained a copy of the ex parte order on March 15, 2016 and received the applicants’ related materials on March 16, 2016. The motion was heard the following day. The hourly rate is appropriate, given counsel’s nineteen years of experience. The disbursements listed which total $353.28 are justified.
Conclusion
[9] I conclude that the applicants shall pay the respondents costs of $9,315.31 all-inclusive within 30 days.