Ontario Provincial Council of Carpenters Benefit Trust Funds v. RES Canada Construction (Ontario) L.P., 2016 ONSC 6705
CITATION: Ontario Provincial Council of Carpenters Benefit Trust Funds v. RES Canada Construction (Ontario) L.P., 2016 ONSC 6705
BROCKVILLE COURT FILE NO.: 14-1011
DATE: 20161026
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ziggy Pflanzer as Trustee of the Ontario Provincial Council of Carpenters Benefit Trust Funds and as agent for all affected Members of the United Brotherhood of Carpenters and Joiners of America and its Locals, Plaintiff
AND:
RES Canada Construction (Ontario) L.P. and RES Canada Construction (Ontario) Inc. and Laari Construction Ltd. and 2309360 Ontario Limited a/o Helios Developments, Defendants
BEFORE: Madam Justice A.C. Trousdale
COUNSEL: Michael Mazzuca, Counsel for the Plaintiff and Aaron Rousseau, Co-Counsel for the Plaintiff
Marc A.J. Huneault, Counsel for the Defendant Laari Construction Ltd.
William Ribeiro, Counsel for the Lien Claimant SMS Rents, a Division of SMS Construction and Mining Systems Inc.
HEARD: In Chambers
ENDORSEMENT ON COSTS
[1] This was a motion by the Defendant, Laari Construction Ltd. (“Laari”) and the lien claimant, SMS Construction and Mining Systems Inc. (“SMS Rents”) for an order declaring that the Plaintiff’s lien had expired and dismissing the Plaintiff’s action on the grounds that the claim for lien had expired. Laari and SMS Rents claimed that the Plaintiff’s lien was improperly registered as the lien did not contain the names of the workers. I dismissed the motion as I found that the lien was properly registered.
[2] The motion was set for a one hour hearing. There were no cross-examinations on the affidavits. I find that a one hearing was unrealistically short given the voluminous material, factums and authorities submitted by the parties. In fact the parties took approximately six hours to argue the motion. The Plaintiff did alert Laari’s counsel in a letter dated December 1, 2015 that the issues could not be dealt with in the one hour time frame allotted and requested that the matter be adjourned to another date, which proposal was not agreed upon. At the hearing, the Plaintiff’s cross-motion was put over for a further hearing if necessary.
[3] In my decision on the motion I invited the parties to submit submissions as to costs of no more than four typewritten pages plus a Bill of Costs if they were unable to resolve the issue of costs themselves. Both parties made written submissions on the issue of costs.
[4] Although I had restricted the costs submissions to four typewritten pages, the costs submissions of Laari and SMS Rents were 11 pages in length plus substantial attachments. The Plaintiff seeks that I disregard pages 5 to 11 of those costs submissions as well as the 18 tabs of other material filed. In the alternative, if I consider the material filed by Laari and SMS Rents in excess of 4 pages, the Plaintiff has filed in reply a response to the submissions of Laari and SMS which it requests I consider. As Laari and SMS Rents did exceed the page limitation imposed, I did read and consider the Plaintiff’s reply in full.
[5] The Plaintiff seeks costs on the basis that the Plaintiff was successful in having the motion brought by Laari and SMS Rents dismissed.The Plaintiff filed submissions as to costs claiming costs on a substantial indemnity basis in the amount of $75,746.16 for fees and $4,278.68 for disbursements for a total of $80,024.84. In the alternative, the Plaintiff seeks costs on a partial indemnity scale in the amount of $69,278.04 for fees and $4,278.68 for disbursements for a total of $73,556.72.
[6] The Plaintiff claims that costs should be awarded on a substantial indemnity basis because of improper conduct on the part of Laari and SMS Rents, which caused unnecessary delay and costs.
[7] The Plaintiff argues that the motion was very important due to the amount of money involved (claim for lien of $144,000.00) and that the issues were complex due to the precedent that would be set if the motion were successful.
[8] The Plaintiff argues that the Plaintiff by letter of December 1, 2015 made an offer to settle that Laari abandon or withdraw its motion on a without costs basis, which offer was not accepted by Laari. In the alternative, the Plaintiff requested that the motion be adjourned to another date as the Plaintiff stated the motion could not be argued in the one hour set for it. The Plaintiff acknowledges that the offer to settle was not in strict compliance with Rule 49, but the Plaintiff argues that it should be given some weight by the court in exercising its discretion regarding costs.
[9] Laari and SMS Rents argue that the letter did not constitute an offer to settle as there was no element of compromise, and that if it did constitute an offer to settle, it was only open for acceptance for three days.
[10] Laari and SMS Rents argue that the matter was not complex and was a simple one hour motion on the issue of whether the Plaintiff’s lien had expired or not. Laari and SMS Rents argue that the Plaintiff made things more complicated by making a large number of arguments on the motion and by filing a number of repetitive affidavits.
[11] Laari and SMS Rents submit that no reasonable party would expect the Plaintiff to spend 286.2 hours in preparation and attendance on this motion, and they argue the principle of proportionality. They object to the quantity of time expended as being excessive for the issue involved and they object to two counsel working on and appearing on the motion. Laari and SMS Rents argue that a range of between $5,000.00 and $8,000.00 for costs on a partial indemnity basis would be a reasonable amount for costs to be awarded to the Plaintiff. In making that argument, Laari and SMS Rents submit that this would be a proportionate amount related to the actual value of the holdback which they state is between $21,075 and $42,467 plus HST as the Defendant subcontractor Helios Developments has gone bankrupt.
[12] I find that the Plaintiff was successful in having the motion brought by Laari and SMS Rents dismissed and the Plaintiff is entitled to costs. I find that the costs awarded should be on a partial indemnity scale as I find no reason to award substantial indemnity costs.
[13] Rule 57.01 sets out some of the factors I may consider in determining the costs, which include the importance of the issues, and the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.
[14] I find that defence of the motion was very important for the Plaintiff as its claim for a lien was in jeopardy of being declared as expired and its action against Laari dismissed if Laari and SMS Rents were successful on the motion, and the Plaintiff was subsequently unsuccessful in its cross-motion requesting the court to exercise the curative provision of the Construction Lien Act, R.S.O. 1990, c.C30.
[15] The motion was similarly important for Laari because if the motion were successful, the Plaintiff’s action against Laari would be dismissed. For the lien claimant, SMS Rents, the motion was important because if the Plaintiff’s lien had expired, SMS Rents would probably recover its lien from the holdback which would not likely be the case if the Plaintiff’s lien had not expired, due to priority given to workers’ wages pursuant to the Construction Lien Act.
[16] The Plaintiff relies on a letter which it sent to Laari on December 1, 2015 which the Plaintiff states was an offer to settle that Laari abandon its motion without costs. The Plaintiff argues that this letter should be given some weight even if it did not comply strictly with Rule 49. The letter clearly sets out the Plaintiff’s position regarding what it would be arguing on the motion and states that the Plaintiff would also be giving notice to the province and the federal government of a constitutional issue. The Plaintiff asked Laari to abandon its motion or alternatively to adjourn its motion to a later date.
[17] On reading the letter, I find that the letter does not comply with Rule 49 as it was open for acceptance for 3 days. Further, the letter does not expressly state that the motion could be withdrawn or abandoned “without costs”. However, the letter can be considered when looking at the issue of costs, as the Plaintiff set out its arguments and the extent to which it felt it needed to go to defend the motion prior to actually expending considerably more legal fees to defend the motion.
[18] In Boucher v. Public Accountants Council (Ontario), (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.) the Court of Appeal set out the approach to follow in determining costs at para. 26 where it said:
Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.
[19] I have reviewed the costs outline submitted by the Plaintiff. I note that Laari and SMS Rents object to the costs outline submitted by the Plaintiff as being excessive but they did not submit a costs outline of the costs incurred by them in relation to this motion. They are not required to do so. However, without that costs outline to compare, it is more difficult to determine what Laari and SMS Rents would have expected to pay as the unsuccessful litigants as I do not know what they paid for their legal expenses on this motion.
[20] Some of the Plaintiff’s costs relate to preparation of and attendance at two case conferences and a settlement conference and other meetings and discussions with clients, which costs would not be dealt with in relation to this motion, but rather in the context of the whole proceeding. Those items should not be taken into account. Further, in determining what is partial indemnity costs, the actual rate charged by counsel for the Plaintiff which was less than their usual hourly rate should be used as the substantial indemnity rate, as opposed to the usual hourly rate.
[21] In taking into account the success of the Plaintiffs on the motion, the factors set out in Rule 57.01, the principle that the court should fix costs in an amount that is fair and reasonable for the unsuccessful parties to pay in the particular proceeding, and in the exercise of my discretion, Laari and SMS Rents shall pay costs on this motion to the Plaintiff fixed in the sum of $22,000.00 inclusive of disbursements and HST which sum shall be payable by Laari and SMS Rents to the Plaintiff within 30 days of the release of this endorsement.
Madam Justice A.C. Trousdale
Date: October 26, 2016
CITATION: Ontario Provincial Council of Carpenters Benefit Trust Funds v. RES Canada Construction (Ontario) L.P., 2016 ONSC 6705
BROCKVILLE COURT FILE NO.: 14-1011
DATE: 20161026
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ziggy Pflanzer as Trustee of the Ontario Provincial Council of Carpenters Benefit Trust Funds and as agent for all affected Members of the United Brotherhood of Carpenters and Joiners of America and its Locals
Plaintiff
- and -
RES Canada Construction (Ontario) L.P. and RES Canada Construction (Ontario) Inc. and Laari Construction Ltd. and 2309360 Ontario Limited a/o Helios Developments
Defendants
ENDORSEMENT ON COSTS
Madam Justice A.C. Trousdale
Released: October 26, 2016