CITATION: Lacroix v. Dompierre, 2016 ONSC 6931
COURT FILE NO.: 11-51396
DATE: 20161109
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SYLVAIN LACROIX, carrying on business as S & L MECHANICAL PLUMBING AND HEATING
Plaintiff
– and –
ROBERT DOMPIERRE on behalf of LEXUS MECHANICAL INC.
Defendant
Cheryl Gerhardt McLuckie, for the Plaintiff
Margot Pomerleau, for the Defendant, Robert Dompierre only
AND IN THE MATTER OF:
BETWEEN:
SYLVAIN LACROIX, carrying on business as S & L MECHANICAL PLUMBING AND HEATING
Plaintiff
– and –
ROBERT DOMPIERRE
Defendant
Court File No.: 15-65289
HEARD: February 16, 17, 18, and 19, 2016
beaudoin j.
decision on costs
Lacroix’s position
[1] There were two actions tried. The first was the Plaintiff, Sylvain Lacroix, carrying on business as S&L Mechanical Plumbing and Heating, (“Lacroix”)’s claim under the Construction Lien Act in which the Plaintiff was awarded judgment against Lexus Mechanical Inc. (“Lexus”) but was unsuccessful in maintaining the lien. The second was Lacroix’ claim for breach of trust against Robert Dompierre (“Dompierre”) which action was unsuccessful.
[2] The first action was commenced on May 19, 2011. In November 2014, some three years later, Lexus became bankrupt. Up to that point in time, Lexus was taking the position that Lacroix was owed nothing on the lien claim given its claim for set-offs. The breach of trust claim was commenced on August 6, 2015.
[3] Lacroix maintains that the timeliness of the registration of its claim for lien was raised for the first time in May 2015. On October 27, 2015, Dompierre brought a motion to be added as a defendant, and to discharge the lien. Lacroix brought a cross-motion to have undertakings answered and for the trial of the breach of trust claim to be heard at the same time as the action. Dompierre was added as a defendant but the lien was not discharged. Master MacLeod (as he then was) found that a trial of that issue is necessary. Undertakings were ordered answered and the two actions were ordered to be tried to together.
[4] Lacroix claims to have enjoyed greater success on the motion and seeks costs of those motions on a partial indemnity basis in the amount of $7,197. 56.
[5] Lacroix claims that he incurred a significant amount of costs because he was not informed of Lexus’ bankruptcy until late in the day. An order lifting the stay of proceedings was required to be obtained from a court in Québec. In contrast, Lacroix submits that Dompierre’s costs in relation to the breach of trust claim were very low. No additional examinations or productions were required.
[6] Since Lacroix was awarded judgment against Lexus, he submits that he is entitled to his costs from Lexus with those costs payable by Dompierre. When Dompierre was added as a party to this action, he was added not on his own right, but to step into the shoes of the defendant Lexus. As a consequence of this, Lacroix argues that Dompierre agreed to be personally bound to pay the costs of Lexus. He cites these comments from Master Polika in Royal Windsor Mechanical Inc. v. Toronto Catholic District School Board, 2010 ONSC 1849, at para. 61:
[61] Based on these authorities and section 57(2) I find that the court has the jurisdiction to add parties to a construction lien action, where an assignment in bankruptcy is made by a defendant and the party seeking to be added is the surety to the lien bond posted by the bankrupt defendant to vacate the lien in issue, that is stand as security in lieu of the land the subject of the improvement, but the right to be added is subject to the provisions of section 54. I also have not been presented with any basis which would limit the right to be added to a surety under a lien bond. An indemnifier of the surety, a director, a shareholder or a creditor of the bankrupt defendant would be in no different position. However, the court in allowing such parties to be added does so, on the basis that they are being added not in their own right but rather to step into the shoes of the bankrupt defendant to continue with the defence and counter claim as if they were the bankrupt defendant. Such addition, on the basis of the authorities relied upon by the moving parties, would be on terms which limit the rights of the added party in the action to those of the defendant. In addition, the party seeking to be added, depending on the stage of the action, must demonstrate that it can carry on with the action. For example, if the action is at the stage of discovery leave having been granted for discovery, the added party must provide discovery as if it were the defendant, that is, have access to the documents and to someone knowledgeable who can be examined for discovery. Lastly, the party seeking to be added must agree to be personally bound to pay the costs. The caveat, in all instances, is that the party seeking to be added is put into the shoes of the defendant whatever state those shoes may be at the time of the addition. (emphasis mine)
[7] Lacroix offered to settle his lien claim on February 28, 2012 for $50,000 plus costs. Given that he had a better result at trial, Lacroix seeks his costs on a partial indemnity basis prior to February 28, 2012 and costs on a substantial indemnity basis after that date for the total amount of $59,195.23.
[8] He argues that an analysis of the factors listed in rule 57.01 favors his claim for costs.
Dompierre’s Position
[9] For his part, Dompierre claims that unnecessary costs were incurred by him as a result of the bootstrapped lien in the breach of trust action that was destined to fail. Had it not been for this, he claims that he would not have incurred any costs whatsoever and the plaintiff would have incurred much less.
[10] Dompierre takes no position as to whether S&L is entitled to costs from Lexus and submits that he was the successful party in that the lien claim and the trust were dismissed. He seeks costs in the amount of $33,008.43 in fees (including HST) and $1,314.32 (including HST) and disbursements.
[11] He argues that the Royal Windsor Mechanical Inc. decision cannot be interpreted such that any liability on his part has to be limited to the costs of the action from the point in time when he was added as a party and that the decision cannot be interpreted as to provide for liability for retroactive costs.
[12] Dompierre seeks his cost of the actions from November 2014 forward on a substantial indemnity basis. In the alternative, he submits he is entitled to costs on a partial indemnity basis from November 2014 to January 11, 2016 and on a substantial indemnity basis thereafter. In the further alternative, he seeks costs of the actions on a partial indemnity basis from November, 2014.
[13] Dompierre maintains that he stepped into the shoes of Lexus because of the construction lien bond. Dompierre had agreed to indemnify the surety; for this reason, he had to defend the amount of the lien claim as well as the preservation of the lien.
[14] Dompierre submits that the only reason the matter proceeded past the bankruptcy of Lexus was the fact that Lacroix had improperly preserved a construction lien on title when he knew or ought to have known that he did not have a lien. In the absence of the indemnifier, Lacroix would have had no means to collect.
[15] Dompierre submits that Lacroix could have submitted proof of its claim that the trustee in bankruptcy could have achieved a better result than it achieved at trial. Not surprisingly, Dompierre argues that a consideration of the rule 57.01 factors favors his claim for costs.
[16] In particular, Dompierre maintains that he did nothing to delay the proceedings and notes that Mr. Lacroix was incarcerated for a period of time that delayed the action for over one year.
[17] As for the offers to settle, Dompierre submits that Lacroix’ offer to settle was not capable of acceptance since Lexus was bankrupt. No offers to settle were made by Lacroix to Dompierre. Dompierre made the three written offers to Lacroix and argues that he achieved a result at trial that was better than each of the three offers.
[18] Dompierre acknowledges that rule 49.10(2) states that when a defendant obtains a result as favorable or more favorable than an offer to settle, the plaintiff is entitled to partial indemnity costs until the date of the offer and the defendant is entitled to partial indemnity costs thereafter. He cites case law[^1] that gave a defendant partial indemnity costs at the outset of an action and substantial indemnity costs after an offer to settle in circumstances where the plaintiff did not recover a judgment of any value after trial. Dompierre says this is the same result here since Lacroix did not achieve a result that had any value. The judgment against the bankrupt Lexus had no value.
[19] Dompierre cites his success in his motion to be added as a party and argues that he should not be penalized for arguing the timeliness of the lien on the motion. As for the undertakings, Dompierre notes he was not a party at the date of the motion; he had not undertaken in his personal capacity to provide any documents and the documents were in the possession of the Trustee.
Disposition
[20] Pursuant to the provisions of s.131 of the Courts of Justice Act, R.S.O. 1990, c. C. 43, Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and s. 86 of the Construction Lien Act, R.S.O. 1990, c. C.30, an award of costs is in the discretion of the Court.
[21] In this case, there was a triable issue with respect to the registration of the lien. There had been a fire on the work site, and after that date, there was some confusion since Lacroix was completing work pursuant to its contract with Lexus as well as being directed to perform work by another contractor (Corix). In deciding the issue, I found Lacroix’ evidence as to the date on which he last supplied services or materials for Lexus to be unreliable.
[22] I agree with Dompierre that he cannot be personally liable for Lacroix’ costs of the lien action prior to the point in time when he stepped into the shoes of Lexus. Having done so, however, Dompierre forced Lacroix to prove all of his claims. Instead of calling evidence from Corix with respect to Lexus’ claims of set-off, Dompierre attempted to rely on inadmissible hearsay. That evidence consumed most of the trial time.
[23] I conclude that that there was equal success on the lien action. While Lacroix was substantially successful in proving the value of his claims, Dompierre was able to establish that the lien was registered out of time. For these reasons, neither party is entitled to costs of the motions or the trial of that action.
[24] As for the breach of trust claim, it was clearly out of time and that claim had no merit. I am satisfied that it was a weak attempt by Lacroix to avoid the consequences of Lexus’ bankruptcy and any failure on his part to register his lien on time. This claim did not require additional discoveries and this issue required little trial time. Having regard to Dompierre’s offer to settle that claim, I award Dompierre his costs of the breach of trust action which I fix in the amount of $10,000 inclusive of disbursements and HST.
Mr. Justice Robert N. Beaudoin
Released: November 09, 2016
CITATION: Lacroix v. Dompierre, 2016 ONSC 6931
COURT FILE NO.: 11-51396
DATE: 20161109
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SYLVAIN LACROIX, carrying on business as S & L MECHANICAL PLUMBING AND HEATING
Plaintiff
– and –
ROBERT DOMPIERRE on behalf of LEXUS MECHANICAL INC.
Defendant
AND IN THE MATTER OF:
Court File No.: 15-65289
BETWEEN:
SYLVAIN LACROIX, carrying on business as S & L MECHANICAL PLUMBING AND HEATING
Plaintiff
– and –
ROBERT DOMPIERRE
Defendant
decision on costs
Beaudoin J.
Released: November 09, 2016
[^1]: Mills v. Minto Developments Inc., 2015 ONSC 5753,