Court File and Parties

COURT FILE NO.: CV-14-515247 DATE: 20170727 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: AACR Inc. o/a Winmar Toronto/Brampton, Plaintiff AND: Lixo Investments Limited and Bolliger Holdings Corporation and Intact Insurance Company Intact Compagnie D’Assurance and Granite Claims Solutions LP Intact, Defendants

BEFORE: Pollak J.

COUNSEL: Renata Kis, for the Plaintiff Stefania Sdao, for the Defendant Intact Insurance Company R. Lee Akazaki, for the Defendant Granite Claims Solutions LP Charles Wagman, for the Defendant Lixo Investments Limited

HEARD: June 6, 2016, July 25, 2016 and February 8, 2017

Endorsement

[1] The parties seek costs in relation to a set of three motions for summary judgment that were heard together. The Plaintiff, AACR Inc. o/a Winmar Toronto/Brampton (“Winmar”), sought summary judgment against all of the Defendants. The Defendants Granite Claims Solutions LP (“Granite”) and Intact Insurance Company Intact Compagnie D’Assurance (“Intact”) brought motions for summary judgment to dismiss Winmar’s claim against them.

[2] This Court granted the summary judgment motions brought by Granite and Intact, dismissing Winmar’s claim against these Defendants. This Court dismissed Winmar’s motion for summary judgment, finding that Winmar had been unable to prove that any of the defendants were liable to pay it for the amounts claimed. However, the Court did not dismiss the action against the Defendant Lixo Investments Limited (“Lixo”) because there were genuine issues requiring a trial.

[3] I have read and considered the submissions of the parties, and I have taken into account the factors set out in Rule 49 and Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. I am required to award costs that are reasonable and fair. See Boucher v. Public Accountants Council for the Province of Ontario et al., [2005] 71 O.R. (3d) 291 (C.A.).

[4] Granite and Lixo both request costs on a substantial indemnity basis.

[5] Intact has settled the issue of costs with the Plaintiff.

[6] The Plaintiff, Winmar, submits that costs to Lixo should be payable in the cause. Additionally, the costs claimed by Granite are unjustifiably high, and payment should be deferred until after the trial. The Plaintiff also requests leave to seek a Bullock Order in order to allow it to recover costs payable to the successful Defendants from any unsuccessful Defendant after trial.

The Parties’ Submissions

[7] Lixo and Granite both submit that costs on a substantial indemnity basis are appropriate based on Rule 20.06, which allows the Court to order such costs if a party acted unreasonably in making a motion for summary judgment.

[8] Granite further submits that this Court has jurisdiction to award costs on a substantial indemnity basis under s. 86(1) of the Construction Lien Act, R.S.O. 1990, c. C.30 (the “Act”). Granite also relies on s. 86(2) of the Act which limits costs to the “least expensive course” to arrive at a result. Granite submits that the Act favours making a successful party whole. Furthermore, Granite submits that the Act favours rewarding Granite and Intact for having brought a motion that simplified the remainder of the action.

[9] Lixo and Granite both submit that the Plaintiff acted unreasonably by bringing its motion for summary judgment and that costs on a substantial indemnity basis should therefore be awarded.

[10] Specifically, Lixo refers to Winmar’s position in the litigation “that someone ought to pay it for the good and necessary work it completed…” and submits that this language shows that the Plaintiff did not know who should pay for the completed work. Rather, the Plaintiff wanted the Court to determine who was responsible for payment. Lixo submits that summary judgment is clearly not appropriate in such circumstances.

[11] Lixo also relies on this Court’s finding that Winmar adduced no evidence to prove its damages at its summary judgment motion.

[12] Granite further submits that, in contrast to Winmar’s motion, its own motion for summary judgment was brought out of necessity to protect Granite from having to participate in a construction lien trial where the work performed was going to be a complicated issue. It submits that Winmar’s response to Granite’s motion for summary judgment was also unreasonable.

[13] Granite relies on correspondence and emails it sent to Winmar urging Winmar to discontinue the claim against Intact and Granite. Granite also served the following offers to settle:

(a) February 2, 2015: Offer by Granite for dismissal without costs, open for acceptance until February 10, 2015. (b) April 27, 2016: Offer by Granite under rule 49.10 to settle the motion and the action on the basis of a dismissal of the action against it, with payment of Granite’s costs of $30,000 plus HST.

[14] Lixo claims costs of $46,432.47 and submits that its costs claimed are reasonable in light of the complexity and length of the appearances in court and cross-examinations.

[15] Granite claims costs of $85,360.78. It acknowledges that these costs are approximately double those of Intact, but submits that this is because Granite was accountable to Intact and “took the lead” in this case.

[16] I agree with Lixo and Granite that Winmar acted unreasonably in bringing its motion for summary judgment. I also agree with Granite’s position that its own motion for summary judgment was necessary.

[17] However, Winmar submits that costs should be payable in the cause because the action by Winmar against Lixo will continue to trial and the adjudication on the merits of the action will proceed. It is therefore possible that Winmar may prove the full amount owing to it by Lixo. It should be noted that Lixo did not move for a dismissal of the action.

[18] Winmar also submits that Lixo is not entitled to seek costs for the motions as the Court sought only submissions on costs from Intact, Granite, and Winmar. I do not accept this argument as the omission of a reference to Lixo with respect to cost submissions was clearly a typographical error in the Court’s endorsement.

[19] Winmar also disputes the appropriateness of Granite’s high substantial indemnity costs for the action and summary judgment motion. Winmar submits that Granite’s costs of over $85,000.00 are excessive, not within the reasonable expectations of the parties and disproportionate in relation to the action. For example, Winmar submits that Granite’s costs are nearly double what Intact sought to recover on this motion.

[20] Winmar therefore submits that Granite’s costs should be reduced to the costs that Intact and Winmar have agreed on for costs payable to Intact on a substantial indemnity basis of $36,000 (inclusive of HST and disbursements) on a substantial indemnity basis.

[21] Winmar also argues that its costs are a fraction of what Granite seeks on a substantial indemnity basis. It submits that its expectation of a potential cost award on these motions is a relevant factor in determining the reasonableness of a costs award. I agree that the “reasonable expectation” of the parties is a relevant factor. However, I have found that Winmar acted unreasonably on these motions and I find that its expectations about cost awards are also unreasonable. It was entirely unsuccessful on the motions. The lower costs Winmar has incurred (and it submits it was expecting) have produced an extremely undesirable result and a finding by this Court that it has acted unreasonably.

[22] Finally, Winmar seeks to defer the payment of costs to Granite until the hearing of the trial against Lixo is concluded. It submits that the summary judgment motions by Granite and Intact were the result of Lixo’s denial that it had a direct contract with Winmar in its Statement of Defence. Winmar argues that it had to add Granite and Intact as parties.

[23] Winmar further submits that it ought to be entitled to recover the costs payable to Granite or other Defendants from Lixo if the Court finds after trial that Lixo breached a contract between Winmar and Lixo. It therefore requests leave to seek a Bullock Order. This, however, is also within the discretion of the trial judge. This request was not addressed on the motions before the Court. The threshold test for such an order is whether it was reasonable to join the defendants and keep them in the action until judgment, given the nature of the allegations (Moore (Litigation Guardian of) v. Wienecke, 2008 ONCA 162, 90 O.R. (3d) 463 at paras. 38 and 41; Wicken (Litigation Guardian of) v. Harssar (2002), 24 C.P.C. (5th) 164 at para. 28; Gardner (Litigation guardian of) v. Hann, 2012 ONSC 2006, at para. 16). The request for a Bullock Order is a discretionary decision that should be made by the trial judge. I therefore decline to permit Winmar’s request for leave and will not defer the payment of costs to Granite. Winmar also requests that any costs order by this Court be without prejudice to Winmar recovering those costs from Lixo after the trial. This is, as well, an issue for the trial judge.

[24] As well, I do not accept Winmar’s arguments with respect to the costs requested by Lixo. The jurisprudence is clear that on a motion for summary judgment, each party must put “its best foot forward” and cannot rely on what might happen at trial. To award “costs in the cause” would, in my view, be unfair in this case particularly given that Winmar’s summary judgment motion was, in the Court’s view brought unreasonably.

[25] I also agree with Granite’s position that its motion for summary judgment was necessary and that Winmar acted unreasonably in responding to Granite’s motion for summary judgment.

[26] I agree with the Defendants that there must be consequences for parties who act unreasonably on a motion for summary judgment. As mentioned, it is well established that Winmar had the obligation to put its best foot forward on these motions for summary judgment.

[27] When I consider all of the factors I have referred to above, I award costs on a substantial indemnity basis to Lixo in the amount of $46,432.47 to be paid by Winmar. I find that such costs were reasonably incurred in light of the complexity of these motions. As I have found, I am of the opinion that Winmar acted unreasonably in bringing its motion for summary judgment against Lixo.

[28] On the basis of the Rule 49 offer made by Granite to Lixo and on the basis of my finding that Lixo acted unreasonably in its response to Granite’s motion for summary judgment, I award costs in favour of Granite on a substantial indemnity basis of $85,000 to be paid by Winmar. These costs are high but Granite was required to defend itself and the legal arguments were unusually complex. Other than the submission that these costs are excessive, Winmar has not made any submissions disputing specific costs incurred by Granite.

[29] Finally, at the hearing, all parties agreed that if the motions by Intact and Granite were allowed, all cross-claims should also be dismissed on a without costs basis. I therefore make such order and dismiss all cross-claims.

Pollak J. Date: July 27, 2017