Court File and Parties

2017 ONSC 4010 COURT FILE NO.: CV-13-19056 DATE: 20170629

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

2283624 Ontario Limited, Plaintiff – and – Performance Painting & Floor Coating Ltd. and The Corporation of the City of Windsor, Defendants

Counsel: Sheri-Lynn Medaglia, for the Plaintiff Robert J. Reynolds, for the Defendant, Performance Painting & Floor Coating Ltd.

HEARD: Written submissions

Reasons on Costs

CAREY J.:

[1] On April 25, 2017, I ruled on behalf of the defendants after a four day construction lien trial. The amount at issue was $58,760. The parties submitted written submissions as to costs.

[2] The successful defendant, Performance, seeks substantial indemnity costs in the amount of $44,881.45, alternatively partial indemnity costs until November 21, 2016 and, thereafter, substantial indemnity costs in the amount of $42,066.70 or costs on a partial indemnity basis in the amount of $37,169.20.

Position of the Parties

[3] The defendant relies on my findings in relation to the strength of the plaintiff’s case and likely tactical motivations. The claim for substantial indemnity costs relies on s. 86 of the Construction Lien Act, R.S.O. 1990, c. C.30, as well as Rule 49 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The Rule 49 offer was dated November 21, 2016, and offered to pay $10,000 to the plaintiff on an all-inclusive basis. That offer remained open until one minute after the commencement of the trial (November 29, 2016) and was not accepted.

[4] The defendant urges this court to use the costs award to strongly discourage unnecessary actions brought for tactical advantage. It relies on the decision of DiTomaso J. in JDM Developments Inc. v. J. Stollar Construction Limited, 2006 CarswellOnt 817, [2006] O.J. No. 558, 51 C.L.R. (3d) 293.

[5] The unsuccessful plaintiff submits that the amount of costs are excessively disproportionate to the amount at dispute and thus far beyond what a reasonable party would anticipate as the risk of its liability for costs if unsuccessful in his action. It relies on *Boucher v. Public Accountants Council for the Province of Ontario*. It says the issues were discreet and narrow in scope and not complex. An award in the amount sought by the defendant would foreclose access to this court to all except those prepared to accept the risk of a prohibitive cost order. The defendant’s offer to settle date, November 21, 2016, should not be considered says the plaintiff. Relying on Yepremian v. Weisz, 1993 CarswellOnt 462, the plaintiff submits the wording of Defendants Offer to Settle put the plaintiff in a position of not knowing what had been offered and thus Rule 49 is not engaged.

[6] Finally, the plaintiff submits that this court erred in failing to consider equitable remedies as this was a positive remedy that ought to have been properly pleaded in the statement of defence. The failure of the defendant to do so deprived the plaintiff of the opportunity to make a fully informed decision when considering the conduct of the action and thus the offer to settle ought to be disregarded in determining the scale and quantum of costs. The plaintiff suggests costs in the range of $15,000 to $20,000 would be reasonable.

Analysis

[7] The costs claimed in the detailed cost outline of the successful defendant are, in my view, reasonable. In my view, the defence offer to pay the plaintiff $10,000 to settle was a valid Rule 49 offer. My reasons for judgment included conclusions regarding both the lack of any contract and the plaintiff’s tactical misuse of the Construction Lien Act mechanism.

[8] The plaintiff’s valuation of the rental value of the paint pots in question lacked any connection to the reality of the state of the equipment. Thousands of dollars were expended by the defendant to get the equipment into a usable state. They were not used very long on the Lou Romano site, the property where the lien was registered. On the evidence before me, I would not have found that there was any unjust enrichment on the part of the defendant. In fact, the plaintiff now has in its possession a considerable amount of refurbished paint blasting equipment thanks to the defendant. There was no claim by the defendant before me.

[9] The plaintiff’s submission that it respectfully disagreed with the decision of the court in terms of its jurisdiction regarding equitable remedies in a construction lien case is puzzling for two reasons. First of all, it seems to be a gratuitous criticism of the decision outside of an appeal. Secondly, it ignores the facts found by the court which should make it clear that there was no factual or evidentiary basis to find the plaintiff was owed any money by the defendant. The evidence before me supported a conclusion in direct opposition to that proposition. I was not asked to decide how much the plaintiff owed the defendant.

[10] As to the reasonableness and proportionality of the claim for costs as compared to the amount at issue, that issue is one entirely due to the decisions of the plaintiff. Rather than sue in Small Claims Court or using the Simplified Rules of the Court for claims under $100,000 in contract, the plaintiff chose the construction lien process. In doing so, the defendant was required to pay into court $73,450 in April of 2013 and has been denied the use of that money for over four years since that payment.

[11] The extraordinary advantage to the plaintiff in contrast to the difficulty that the lien registration visited on the defendant is strong, persuasive evidence of its use for purely strategic reasons.

[12] In my view, this is exactly the type of case contemplated for substantial indemnity costs by both s. 86 of the Construction Lien Act and Rule 49.

[13] Accordingly, there will be substantial indemnity costs to the defendant in the total amount of $44,881.45, including fees, disbursements and HST.

Original signed by Justice Thomas J. Carey Thomas J. Carey Justice

Released: June 29, 2017

2017 ONSC 4010 COURT FILE NO.: CV-13-19056 DATE: 20170629 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: 2283624 Ontario Limited Plaintiff – and – Performance Painting & Floor Coating Ltd. and The Corporation of the City of Windsor Defendants REASONS on costs Carey J.

Released: June 29, 2017