772067 Ontario Limited v. Victoria Strong Manufacturing, 2017 ONSC 5191

CITATION: 772067 Ontario Limited v. Victoria Strong Manufacturing, 2017 ONSC 5191

COURT FILE NO.: CV-14-516437

DATE: 2017-10-03

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 772067 Ontario Limited, Plaintiff

AND:

Victoria Strong Manufacturing Corporation and Paul Terlecki, Defendants

BEFORE: Mr. Justice Stephen Firestone

COUNSEL: Paul H. Starkman, for the Plaintiff (Defendant by Counterclaim)

Barry Rubinoff for the Defendants (Plaintiffs by Counterclaim)

HEARD: In Writing

COSTS ENDORSEMENT

[1] Both the plaintiff (defendant by counterclaim), 772067 Ontario Limited (“the plaintiff”) and the defendant (plaintiff by counterclaim), Victoria Strong Manufacturing Corporation (“the defendant”) brought summary judgment motions for the determination of all issues in both the main action and counterclaim. The action against the co-defendant Paul Terlecki was dismissed on consent.

[2] The plaintiff’s motion for summary judgment came before me on December 10, 2015. In order to have all issues before the Court the matter was adjourned so that the defendant could bring its motion in the counterclaim to be heard at the same time as the motion in the main action. This was done in order to avoid the risk of “duplicative or inconsistent findings at trial” regarding the common issues in both the main action and counterclaim: See Hamilton (City) v. Thier + Curran Architects Inc., 2015 ONCA 64, at para. 22; Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922, at para. 4.

[3] The parties agreed to have all issues in dispute in the main action and counterclaim determined by way of summary judgment. The parties further confirmed at the return date before me on March 9, 2017, that based on the complete evidentiary record which was now before the court, the summary judgment process would provide a fair and just adjudication of all issues in dispute.

[4] By way of written reasons dated May 2, 2017, I granted judgment in favor of the plaintiff in the main action and the defendant in the counterclaim. In the main action I granted judgment in favor of the plaintiff in the amount of $5,367.20 plus applicable HST and interest. In the counterclaim I granted judgment in the amount of $47,077.48 plus applicable HST and interest.

[5] In my reasons for decision I encouraged the parties to agree on costs. I indicated that if the parties could not agree that I could be contacted in order to set a timetable for delivery of cost submissions. A timetable was subsequently fixed and the parties’ cost submissions have been received.

[6] The parties subsequently agreed to the HST and interest calculations as well as the form of judgment. It was agreed that the plaintiff is to have judgment in the total amount of $6,132.96 and the defendant in the total amount of $51,801.05. It was further agreed that the amount of $6,132.96 owing by the defendant is to be set-off against the amount of $51,801.05 owing by the plaintiff.

Position of the Plaintiff

[7] The plaintiff seeks costs of the action and summary judgment on a partial indemnity basis in the amount of $106,063.41.

[8] The plaintiff highlights that initially the defendant did not bring its own motion for summary judgment in the counterclaim. In addition it submits that the plaintiff was successful on the issue of the defendant’s default of the lease. It argues that a considerable amount of time was spent addressing the intricate accounting and interpretive arguments made by the defendant in support of its position and their attempts to demonstrate that the defendant is not in default, which was ultimately rejected by the court.

[9] Regarding the counterclaim the plaintiff states that the Court found that there was an agreement to reinstate the lease. Ultimately the court found the plaintiff in breach of the agreement to reinstate and reduced damages accordingly. The plaintiff submits that the parties were required to file additional evidence to address the counterclaim which was now before the court. It argues that the counterclaim was greatly inflated and largely unproved and necessitated the additional expense including the retaining of an expert to address the issues in the defendant’s counterclaim which were largely rejected by the court.

[10] As set forth in its bill of costs, the plaintiff seeks fees and disbursements to the original return date as well as additional amounts incurred in defending the counterclaim.

[11] In the alternative, the plaintiff submits that if the Court is of the view that the results are divided, there should be no costs awarded to either party.

Position of the Defendant

[12] The defendant submits that the plaintiff, on its motion for summary judgment, sought the amount of $189,838.59. It highlights that on the original return date of the motion, the court adjourned the proceeding and required the defendant to bring forward the issues in its counterclaim so that all matters were before the court.

[13] The Court found that the plaintiff was entitled to only re-entry costs in the sum of $6,132.96 inclusive of interest and HST, an amount within the monetary jurisdiction of the Small Claims Court. The Court further found that the defendant was entitled to damages in the amount of $51,801.05 inclusive of interest and HST. The defendant points out that after the agreed to set-off the plaintiff’s net recovery is zero.

[14] The defendant submits that there is no reason to depart from the usual order that the unsuccessful party, in this case the plaintiff, pay to the successful party its costs of the action on a partial indemnity basis. The defendant seeks its costs on a partial indemnity basis in the amount of $76,730.39 inclusive of disbursements and HST. It submits that its requested costs are reasonable and highlights that they are approximately $30,000.00 or 28% less than the costs being put forward by the plaintiff. As a result they are therefore reflective of the reasonable expectation of the parties and of the principle of proportionality.

[15] The defendant submits that the unsuccessful plaintiff is not entitled to costs except under exceptional circumstances which do not exist here. In any event it argues that the plaintiff’s claims for costs of responding to the counterclaim is overstated.

Analysis

[16] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides as follows:

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.

[17] Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, identifies the factors the court may consider in exercising its discretion to award costs. Rule 49.10 has no application as neither party delivered a qualifying offer to settle.

[18] I have considered the submissions of counsel as well as the relevant legal principles and their application to the factual matrix of this case. Success on these motions is divided. The plaintiff recovered the amount $6,132.96 and the defendant the amount of $51,801.05. In addition the parties agreed to a separate set-off provision regarding the amounts recovered by each of the parties. The amounts recovered are within the jurisdiction of the Small Claims Court and Simplified Procedure respectively.

[19] Based on the procedural history of this case and the results achieved, I order that both parties bear their own costs.

Firestone J.

Date: October 3, 2017