Yuanda Canada Enterprises Ltd. v Pier 27 Toronto Inc, 2017 ONSC 1892

COURT FILE NO.: CV-15-527309 DATE: March 15, 2017

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Yuanda Canada Enterprises Ltd. v. Pier 27 Toronto Inc., Aviva Insurance Company of Canada, The Bank of Nova Scotia, Cityzen Development Corporation, Fernbrook Homes Limited and Pier 27 (East) Toronto Inc. a Joint Venture between Cityzen Development Corporation and Fernbrook Homes Limited (excluding Aviva Insurance Company of Canada and The Bank of Nova Scotia, together the “Pier 27 Defendants”), CV-15-527309, the “Pier 27 Action;”

RE: Yuanda Canada Enterprises Ltd. v. Ferncastle (Front Street) Inc. (“Ferncastle”), CV-15-539650, the “L Tower Action;”

BEFORE: MASTER C. WIEBE;

COUNSEL: Bernie McGarva and Courtney Raphael for Defendants 1 and Defendant 2, the moving parties; Glenn Grenier and Laura Brazil for Yuanda Canada Enterprises Ltd. (“Yuanda”), the responding party;

HEARD: February 1, 2017.

REASONS FOR DECISION

I. INTRODUCTION

1The Pier 27 Defendants and Ferncastle bring two motions seeking orders requiring that Yuanda post security for their costs in these two construction lien actions. In the Pier 27 Action, the Pier 27 Defendants seek an order requiring Yuanda Canada Enterprises Ltd. (“Yuanda”) to post $527,067.64 in security for costs. In the L Tower Action, Ferncastle seeks an order requiring Yuanda to post $519,532.10 in security for costs. Yuanda opposes both motions in their entirety. I will refer to the Pier 27 Defendants and Ferncastle together as “the Defendants.”

2For the reasons stated herein, I dismiss the motions.

II. BACKGROUND

3The following facts that are not in dispute.

4Yuanda is a British Columbia company registered to do business in Ontario with a parent company based in China named Sheynyang Yuanda Aluminum Industry Engineering Co. Ltd. (“Yuanda China”), a huge curtain wall installer. Yuanda China appears to have another subsidiary based in the United States which I will call “Yuanda US.” Yuanda has in the past done business, including business in Ontario, as an exterior cladding installer.

5Ferncastle owns a property at 8 The Esplanade, Toronto on which it built a 58 storey condominium building containing 592 units (the “L Tower Project”). On November 19, 2010 Ferncastle entered into a contract with Yuanda whereby Yuanda was to supply and install the exterior cladding for the L Tower Project for a price of $13,604,225 plus tax. This contract will be called the “L Tower Contract.” Work proceeded. On August 11, 2015, Ferncastle terminated the L Tower Contract.

6Pier 27 Toronto Inc. (“Pier 27”) owns a property at 39 Queen’s Quay East, Toronto which it developed into a condominium building (the “Pier 27 Project”). On or about December 12, 2011, Pier 27 entered into a contract with Yuanda whereby Yuanda was to supply and install the exterior cladding for the Pier 27 Project for a price of $9,785,000 plus tax. Work proceeded. The Pier 27 Defendants allege that Yuanda abandoned its work in late March, 2015; Yuanda alleges it completed its work.

7On March 18, 2015 Yuanda registered a claim for lien on the Pier 27 Project in the amount of $3,118,616.16 plus tax. On March 25, 2015 a non-party, Dominus Construction Group (“Dominus”), obtained an order vacating the Yuanda claim for lien by posting a lien bond, which lien bond included $50,000 on account of security for costs. On May 1, 2015 Yuanda commenced the Pier 27 Action purportedly to perfect its lien. On September 11, 2015 the Pier 27 Defendants delivered a Statement of Defence and Counterclaim. The counterclaim is in the amount of $5,000,000 and concerns alleged deficiencies, “overruns” and delays.

8On August 20, 2015 Yuanda registered a claim for lien on the L Tower Project in the amount of $2,155,693.40 plus tax. On August 25, 2015 Ferncastle obtained an order vacating this claim for lien by posting cash security, which cash security included $50,000 on account of security for costs. On November 2, 2015, Yuanda commenced the L Tower Action purportedly to perfect its lien. On June 28, 2016 Ferncastle delivered a Statement of Defence and Counterclaim. The counterclaim is in the amount of $25,000,000. The bulk of this counterclaim (over $21,000,000) concerns an alleged delay by Yuanda to the L Tower Project of 633 calendar days.

9On June 28, 2016, Mr. McGarva, counsel for the Defendants, wrote a letter to counsel for Yuanda, Mr. Grenier and Ms. Brazil, seeking satisfaction that Yuanda had sufficient assets in Ontario to pay the costs of the Defendants. He stated that his clients had advised him that Yuanda no longer operated in Ontario, and possibly in Canada, and that Yuanda had moved its operations to Mexico or elsewhere in the world. He also pointed out that Yuanda was involved in litigation in Ontario concerning another project. This other litigation concerned a claim for lien in the amount of $2,922,309.40 that Yuanda registered in relation to its work from 2011 to 2013 on the Women’s College Hospital redevelopment. It perfected its lien by an action on July 12, 2013. It faces a counterclaim from the contractor of $8.5 million in damages.

10On July 12, 2016, Ms. Brazil responded with a letter. She enclosed statements for a Yuanda bank account with the Bank of China located in Vancouver, and pointed out that the accounts had balances of CDN $446,231.35 and US $9,822.29 and that the Canadian dollar account carried an average balance of CDN $554,662.49 for the previous six months. She pointed out that British Columbia enforces Ontario costs orders. She stated that Yuanda had outstanding bids on two projects in Ontario: the HUB project in Waterloo (bid price in excess of $5 million); and King Blue Condo in Toronto (bid price in excess of $25 million).

11This did not satisfy the Defendants. On September 6, 2016 they commenced these two motions. In the motion in the Pier 27 Action (“the Pier 27 Motion”), the Pier 27 Defendants delivered two affidavits: an affidavit of Sam Grignano, president of Cityzen Development Corporation and an officer of Pier 27 Toronto Inc. and Pier 27 (East) Toronto Inc; and an affidavit of John O’Keefe, an officer of Ferncastle. In the motion in the L Tower Action (“the L Tower Motion”), Ferncastle delivered the same affidavit of John O’Keefe. The motions were assigned to me and on October 9, 2016 I scheduled the motions to be argued on February 1, 2017. On November 10, 2016, Yuanda delivered responding motion records in both motions containing the affidavit of Yufang Li, a project manager with Yuanda. On December 8, 2016 cross-examinations on the affidavits took place.

III. ISSUES

12Having reviewed the facta, authorities and heard the arguments, I believe that the following are the issues to be determined:

a) Should leave under Construction Lien Act (“CLA”) s. 67(2) be granted for these motions? b) If so, has Yuanda shown that it has sufficient assets in Ontario to pay costs? c) If not, what is the appropriate quantum of security for costs to be ordered?

IV. ANALYSIS

(a) Should leave under CLA s. 67(2) be granted for these motions?

13Interlocutory motions not expressly provided for by the CLA, such as motions for security for costs, must obtain “consent” of the court in order to proceed. This is by virtue of CLA section 67(2). Under that subsection, such “consent” should only be granted “upon proof that the steps are necessary or would expedite the resolution of the issues in dispute.”

14The Defendants rely on Rule 56.01(1)(d) for their motions, namely the ground that allows security for costs to be ordered where the plaintiff is a corporation and “there is good reason to believe that the plaintiff . . . has insufficient assets in Ontario to pay the costs of the defendants.” I have held in Norseman Construction & Development Ltd. v. Evedmon, 2013 CarswellOnt 19065 at paragraph 13 that the threshold for the determination of what is “necessary” for the purpose of CLA section 67(2) in such motions is similar to the threshold for the determination of whether “there is good reason to believe” that the plaintiff corporation does not have sufficient assets in Ontario to pay the defendant’s cost. My reason for drawing this parallel was the necessity to achieve procedural fairness in lien cases where the lien claimant corporation has the security of the land and, in some cases, the further security of posted security for costs should the claim for lien be vacated, while the defendant has no security for the costs of defending the claim. This imbalance becomes acute when there is evidence that the plaintiff corporation does not have sufficient assets to pay the defendant’s costs, and where the defendant has posted security (including security for costs) for the plaintiff’s claim. I drew my inspiration for this conclusion from the leading decision in this areas of Master Sandler in Biotechnik Inc. v. O’Shanter Development Co., [2003] O. J. No. 1633 (Ont. Master). I will apply the same logic here.

15Therefore, the initial question is whether the Defendants have established proof for such a “good reason to believe” that Yulanda has insufficient assets in Ontario to pay their costs. As to the test for this hurdle of “good reason to believe,” there is the important decision of Justice Lang of the Court of Appeal in City Commercial Realty (Canada) Ltd. v. Bakich, [2005] O. J. No. 6443 (Ont. C.A.). Her Honour held that, while the defendant did not have to establish that the plaintiff corporation in fact had insufficient assets to pay costs, the defendant did have to establish a “belief of insufficiency that goes beyond mere conjecture, hunch, or speculation.” She went on to state that the moving party had to show “indicia of insolvency” or “instability,” such as a failure to make corporate filings, unpaid judgments or liabilities, a temporary dissolution, a significant disposition of assets, or the plaintiff as a single purpose entity, namely a shell company. Her concern was that, with a lesser test, there would be no meaningful hurdle and the courts would become inundated with motions for security for costs against plaintiff corporations. I share that concern, and I will apply the test she articulated.

16The Defendants argued that I should consider lower court decisions that did not apply an “instability and insolvency” test at this stage, such as the decision in Cigar500.com Inc. v. Ashton Distributors Inc., 2009 CarswellOnt 5241, where Justice Code found that the test was met by evidence that the plaintiff corporation had suspended business, was not generating significant cash flow and had liabilities that exceeded its assets. I do not agree. Not only is the decision of Justice Lang of higher authority and more binding on me, it is also persuasive. Defendants should have to cross a real hurdle at this stage in order to avoid overburdening the courts with such motions. Furthermore, while not determinative, I note that business in the construction sector is notoriously uneven. There should, therefore, be such a narrower test in construction lien actions in light of the requirement to establish “necessity” under CLA section 67(2).

17The Defendants argued that there are two reasons they have met this initial hurdle:

a) Fluidity of the bank accounts: The Defendants do not argue that the Yuanda bank accounts in Vancouver are immune from Ontario execution. What they argue is that the bank statements for the accounts produced by Yuanda show a trend of transferring funds to and from various accounts and entities. For instance, on June 23, 2016, Yuanda transferred US $700,000 to Yuanda US, leaving a minimal balance of only US $10,000. Then, after Yuanda was served with these motions, Yuanda US transferred US $400,000 into the USD account. Four days later, US $200,000 of this amount was transferred to an unknown party. Some of the debits and credits in the Canadian dollar account came from subcontractors of Yuanda on these projects named Trillium Glazing Inc. and Trillium Industries Canada Inc. The argument is, as stated in the Defenants’ factum at page 13, that these accounts “appear to be nothing more than pass through accounts with the funds primarily provided by Yuanda USA Corportion.” As a result of this fluidity, the bank accounts do not qualify as assets capable of paying the Defendants’ costs.

b) No ongoing business operations: Yuanda has no head office in Ontario. It has and pays four employees who work out of their residences. It admits that it is not now active on construction projects, although it has submitted two bids, one for a project in Waterloo in the amount of $5 million that was rejected and one for a project in Toronto in the amount of $25 million that is still outstanding. The bank accounts show that Yuanda last paid WSIB premiums on March 21, 2016, a year ago. The statements show no income from accounts receivable. They show only payments to law firms and accountants or transfers to and from various bank accounts and entities. In short, so the argument went, the evidence is that Yuanda is not carrying on an active business.

18In response, Yuanda argues that these are not indicia of “insolvency” and “instability” per se. Concerning the factors outlined in the City Commercial Realty case, Mr. Li’s evidence was that Yuanda was up to date with its filings, has no unpaid judgments or liabilities, has never been temporarily dissolved, has not made any significant dispositions of assets, is not a single purpose entity or shell company, and has no current PPSA or similar security interest registrations against it, let alone any secured creditor seeking to enforce its security. This evidence was unchallenged. As a result, there was no evidence in the motion that Yuanda is insolvent and unstable. I agree with this point. I make the further point that the Defendants apparently made no effort to obtain recent financial statements or tax returns for Yuanda, documents that would no doubt have given a clearer picture of the company’s long-term health.

19Furthermore, Yuanda argued that the points raised by the Defendants can be viewed from a different perspective, namely as showing that Yuanda in fact is stable and active and has assets sufficient to pay costs. The following facts indicate that Yuanda carries on business: the four employees provide ongoing services; the on-going payments to accountants and lawyers indicate company activity; Yuanda continues to bid on projects, one of which remains outstanding. The Yuanda bids in 2016 may have been with the letterhead of the Chinese parent, but Mr. Li in cross-examination pointed out that this was done because the parent company provided cost estimating, and that the remainder of the subject bids were prepared by Yuanda, and that this was Yuanda’s modus operandi. There was no issue that successful bids were and would be performed by Yuanda, and that Yuanda would be the one paid on those contracts.

20There is another perspective to the bank accounts. Ms. Brazil pointed out that the average bank balances for Yuanda’s bank accounts from April to October, 2016 was CDN $254,499.15 and US $66,956.29, and that the bank balances on October 31, 2016 were CDN $266,949.60 and US $209,778.29. While there was much activity in the accounts, these averages and balances show a consistent record of not insignificant cash on hand. Furthermore, liquidity is only one consideration when determining the quality of an asset; see Dion v. CIBC World Markets Inc., 2002 CarswellOnt 5878 (SCJ) at paragraph 3. Ms. Brazil made the further point that the transfers between Yuanda, Yuanda US and the Trillium companies were not out of the ordinary course of business. Yuanda admits that it is related to Yuanda US. Its transfers to and from Yuanda US were what would be expected between related companies, and should not per se raise concerns about corporate instability. I note that in MGM v. BMO, 2008 CarswellOnt 1191 (Ont. Master) there was evidence of similar transfers between the United States and Canada, and that Master Brott nevertheless found in paragraphs 4 and 8 that the moving party bank had failed to meet its initial onus. As to Trillium, it is undisputed that these companies did business with Yuanda on the subject projects. Therefore, there would have been regular transfers of money between them.

21One of the most telling arguments by Yuanda, however, concerned its holdback entitlement on the Pier 27 Project. Mr. Genier argued that this is an asset of Yuanda that in itself should defeat the motions. He pointed out that the monthly payment certification was done on the Pier 27 Project by “the Owner’s site superintendent or project manager” in accordance with the governing contract. That proposition was not disputed. In his affidavit, Mr. Li produced the Yuanda payment certificates on the Pier 27 Project, and a schedule showing the payments that were made on that project. This evidence indicates that the Pier 27 Defendants certified Yuanda progress certificates 3 to 19 and paid progress certificates 1 to 19, holding back basic holdback as required by the CLA. The total of the holdback on the certified and paid payment certificates is $1,161,349.67 plus HST, or $1,312,235.13, namely an amount that exceeds the total security for costs being claimed by the Defendants in these motions. The proposition that this basic holdback of $1,312,235.13 was certified by the Pier 27 Defendants as “payment certifier” under the CLA was also not disputed. Furthermore, Ms. Raphael advised in argument there was one other claim for lien on the Pier 27 Project, namely one from the Yuanda sub-trade, Trillium, but that this other claim for lien was vacated with no separate security. This leads to the inference that the only claim against the basic holdback (other than the set-off of the owner) is that of Yuanda.

22Mr. Grenier argued that this amount is not an ordinary account receivable. It is a special trust fund created by CLA section 7(2) for the benefit of Yuanda by virtue of and at the time of payment certification. This proposition was not challenged by the Defendants. CLA section 7(2) states that, “where amounts become payable under a contract to a contractor by the owner on a certificate of a payment certifier, an amount that is equal to an amount so certified that is in the owner’s hands or received by the owner at any time thereafter constitutes a trust fund for the benefit of the contractor.” It is not disputed that Yuanda applied on or about January 22, 2015 in accordance with the governing contract for payment of the basic holdback, including the above noted certified basic holdback. It is also not disputed that Yuanda eventually registered a claim for lien on March 18, 2015 in the amount of $3,118,616.18, which amount includes the certified basic holdback.

23The Defendants primary response was that this basic holdback should not be counted as a Yuanda asset for the purpose of these motions as it is subject to the set-off and counterclaim of the Pier 27 Defendants, which set-off and counterclaim considerably exceeds the Yuanda basic holdback. The Defendants point to provisions of the governing contract which state that any certified draw, including holdback, is subject to a final accounting. There is no doubt that the governing contract on the Pier 27 Project contains clauses which allow for such a final accounting. Clause 4.1.2 states that any payment on account is not an admission of final liability for payment and is “subject to a final re-adjustment.” Clause 4.1.3 states that the “Owner may at any time adjust the account for all irregularities and thereafter pay the corrected balance to the Contractor, or may elect to defer a full review until such time as it pays the holdback.”

24I do not, however, accept this response. First, any contract term is subject to the overriding provisions of the CLA. That is made clear by CLA section 5(1) which deems all contracts to be amended to conform with the CLA. Second, a trustee’s right of set-off is determined by CLA section 12. Section 12 states that a trustee may “retain” from trust funds an amount that, “as between the trustee and the person the trustee is liable to pay under a contract or subcontract related to the improvement, is equal to the balance in the trustee’s favour of all outstanding debts, claims or damages, whether or not related to the improvement.” There is authority for the proposition that the trustee’s right of set-off in section 12 is contingent on the trustee proving that it actually “retained” (and did not spend) the trust funds that are subject to the alleged set-off; see Aborform Countertops Inc. v. Stellato, 1996 CarswellOnt 1287 (Gen. Div.) at paragraph 42 and Datasphere Sales Ltd. v. Universal Light & Power Corp., 1993 CarswellOnt 804 at paragraph 14. There was no evidence in either motion that the Pier 27 Defendants have in fact retained the certified basic holdback. Therefore, it is an open question at this point as to whether the Pier 27 Defendants can assert their contractual set-off right against the certified basic holdback.

25Section 12 was not raised expressly in argument before me. I, therefore, considered recalling the parties for submissions on this point. I decided not to do so, as the legal point, as articulated above, does not appear to be contentious in the case law, and there was clearly no evidence in the motion of retention of the certified basic holdback. Furthermore, I do not view this discussion as being unfair to the Defendants. I note that Mr. Grenier argued the trust point in detail. In paragraphs 55 and 57 of his factum he dealt with the Defendants’ argument of contractual set-off by stating that such a right cannot negate any part of the CLA section 7(2) trust, as the set-off right must conform to the CLA and has not been at this point crystallized in a judgment. This, in my view, implies the section 12 point. Finally, there are enough other grounds for my decision and, therefore, another attendance to argue the section 12 point would not necessarily determine the outcome.

26Because of the payment certification by the Pier 27 Defendants (not by a third party professional) and the absence of evidence of retention of the certified basic holdback by the Pier 27 Defendants, I draw a close parallel between this case and those cases where security for costs was denied because the defendant admitted owing the plaintiff money. In Cortes v. Lipton Bldg. Ltd., 1963 CarswellOnt 279 (Ont. Master), the plaintiff sued on a mortgage debt owed by the defendant company. The court dismissed the defendant’s motion for security for costs in light of its admitted debt to the plaintiff. In Engebretson Grupe Company v. Grossman, 1937 CarswellOnt (HCJ), the defendant admitted to obtaining oranges from the plaintiff and not paying for them, with the explanation for the non-payment being a claimed set-off for losses allegedly suffered because of defective oranges. The set-off did not eliminate the entire debt, and the court dismissed the defendant’s motion for security for costs as a result. In Clark v. Tiger Brand Knitting Co., 1986 CarswellOnt 385 (HCJ), the court made the following statement in dismissing a motion for security for costs: “Because the defendant is admittedly indebted to the plaintiff in an amount greater than its anticipated costs in the defending the action, it cannot be in need of protection for its costs of defence.”

27I make the same statement in relation to the Defendants in these motions. The Defendants have failed to show that they are in need of protection as they have failed to show for the purpose of these motions that the Pier 27 Defendants do not owe Yuanda the basic holdback they have certified and not paid, with the said holdback being in an amount that exceeds the claimed security for costs.

28I also note that Yuanda has other accounts receivable. There are the other Yuanda accounts receivable on the subject projects and on the Women’s College Hospital project. These accounts receivable exceed $6 million, but are all subject to set-offs that exceed this amount. Accounts receivable owed to the plaintiff by the defendant, even those potentially embroiled in litigation, have been considered as a grounds for dismissing motions for security for costs; see Sirron Systems Inc. v. North American Construction (1993) Ltd., 2010 CarswellOnt 2241 at page 1. Other decisions, on the other hand, have not given weight to accounts receivable embroiled in litigation; see 1049086 Ontario Ltd. v. Torbear Contracting Inc., 2005 CarswellOnt 7322 (SCJ) at paragraph 24. Suffice it to say here that the Yuanda accounts receivable, particularly those in relation to the Defendants, give me further confidence that my decision is just in the circumstances.

29I make one further comment. I note that Dominus, not the Defendants, posted the $50,000 of security for costs for the Yuanda claim for lien on the Pier 27 Project. It was Ferncastle, one of the Defendants, that posted the $50,000 of security for costs for the Yuanda claim for lien on the L Tower Project. Because of the Dominus security, there is not the same urgency to achieve procedural fairness in this case, namely to “level the playing field,” that there is in a case where the defendant has posted full security for costs for the plaintiff’s claims.

30For the reasons stated, I have concluded that the Defendants have failed to show that there is “good reason to believe” that Yuanda has insufficient assets in Ontario to pay the Defendants’ costs. Therefore, I do not grant the Defendants leave to bring these motions, and I dismiss them.

(b) If leave is granted, has Yuanda shown that it has sufficient assets in Ontario to pay costs?

31As I have refused leave for the motions, it is not necessary to go further. I will though say the following as obiter dictum.

32Had I granted leave, I would nevertheless have had difficulty granting the motion. The evidence on the motion strongly indicates that the “drivers” in both actions are the set-offs and counterclaims of the Defendants. Yuanda sues primarily on its unpaid draws. Mr. Grenier also showed that on the Pier 27 Project, the Pier 27 Defendants’ claim that Yuanda abandoned the contract has questionable credibility when placed against the fact that the Yuanda draws were certified by the Pier 27 Defendants up to 99% of completion. The Defendants, on the other hand, are asserting huge claims for damages for delay, cost overruns and deficiency correction costs, namely claims for damages of $5,000,000 on the Pier 27 Project and $25,000,000 on the L Tower Project.

33As I stated in my decisions in European Flooring Contract Services Ltd. v. Toddglen Iloft Ltd., 2013 ONSC 6445 at paragraph 33 and in Totalsiteworks Construction Corp. v. Mady Contract Division Ltd., 2014 ONSC 178 at paragraph 47, a plaintiff should not have to post security for costs to defend himself or herself. At least, there should be a discount in the awarded security in this regard. I would, therefore, have had difficulty awarding anywhere near the security for costs requested in these motions, if at all, even if I had granted leave.

34Ms. Raphael argued that the costs to be incurred to establish the Yuanda claims will be indistinguishable from the costs that will be incurred to establish the Defendants’ set-offs and counterclaims. I do not agree. I was not made aware of any sweeping delay or deficiency correction claims from Yuanda. These are the Defendants’ claims and they will have the onus to prove them. As Master McLeod stated in 1652472 Ontario Ltd. v. Black & McDonald Ltd., 2015 ONSC 4560 at paragraph 18, where the counterclaim is separate from the defence, the court should be careful not to award the defendant security for costs for the counterclaim.

(c) What is the appropriate quantum of security for costs to be awarded?

35As I have dismissed the motion, I do not have to deal with this issue, and I do not do so.

V. CONCLUSION

36For the reasons stated above, I dismiss the Defendants’ motions.

37Concerning the costs of this motion, counsel filed costs outlines. Concerning the Pier 27 Motion, the Pier 27 Defendants’ costs outline shows a partial indemnity amount of $13,856.85, while the Yuanda costs outline shows a partial indemnity amount of $23,706.04 and a substantial indemnity amount of $33,011.02. Concerning the L Tower Motion, the Ferncastle costs outline shows a partial indemnity amount of $13,856.85, while the Yuanda costs outline shows a partial indemnity amount of $18,377.11 and a substantial indemnity amount of $25,499.50.

38Costs usually follow the event, and in these motions Yuanda succeeded in defeating the motions in their entirety. If the parties cannot agree on costs, Yuanda has up to and including March 28, 2017 to serve and file written submissions on costs. In that event, the Defendants have up to and including April 10, 2017 to serve and file responding written submissions on costs. Yuanda has until April to serve and file reply written submissions on costs. Each set of submissions must not be longer than two pages.