CITATION: Levac v. Pychel, 2017 ONSC 5210
COURT FILE NO.: 10758/15
DATE: 2017/09/06
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jacques Levac and Claudette Levac
S. Draper for the Plaintiffs
Plaintiffs
- and -
Michael James Pychel, and The Corporation of the City of Welland
A. Scott for the Defendants
Defendants
- and -
Maximum Concrete Foundations Inc., 1671233 Ontario Limited and Gabmar Construction Ltd.
L. Thompson for the Third Party Maximum Concrete Foundations Inc.
L. DeLisio for the Third Party 1671233 Ontario Limited
Third Parties
- and -
Salvatore De Donato
G. Phelan for the Fourth Party
Fourth Party
The Honourable Mr. Justice J.R. Henderson
ENDORSEMENT ON COSTS AND OTHER MATTERS
[1] I gave my decision on three motions in this proceeding by way of my written decision dated July 28, 2017.
[2] The plaintiffs, Jacques Levac and Claudette Levac, and the defendants, Michael James Pychel (“Pychel”) and the Corporation of the City of Welland (“Welland”), hereinafter collectively called the “moving parties”, were successful on the main motion before the court. In particular, at the request of the moving parties I declared the settlement agreement to be valid and ordered the third party, 1671233 Ontario Limited (“167”), to execute the full and final release (“the Release”).
[3] The other two motions related to the fourth party claim. 167 brought an unsuccessful motion for an order granting leave to issue the fourth party claim, and the fourth party, Salvatore De Donato (“De Donato”), brought a successful motion for a stay of the fourth party claim.
[4] I have now received written submissions from counsel for all parties regarding issues arising out of my decision. Those issues are as follows:
What costs, if any, are payable by 167 to the plaintiffs, Pychel, Welland, and to Maximum Concrete Foundations Inc. (“Maximum”) in the main motion?
Are the plaintiffs entitled to recover interest from 167 in addition to the settlement funds that are currently being held in trust?
Should there be an order permitting counsel for the plaintiffs to release the settlement funds to the plaintiffs?
What is the appropriate wording for the order and the Release in the main motion?
What is the appropriate wording for the order regarding the fourth party claim?
What costs, if any, are payable by 167 to De Donato regarding the fourth party motions?
COSTS OF THE MAIN MOTION
[5] I accept that the moving parties were successful on the main motion, and therefore the moving parties are entitled to costs.
[6] In my view there was no conduct by 167 that would justify substantial indemnity costs. 167 took a position that was not endorsed by this court, but 167’s conduct was not so egregious that it would justify substantial indemnity costs. Therefore, the scale of costs will be on a partial indemnity basis.
[7] I accept that the issues on the main motion were important to all parties, and that the complexity of the issues was modest. Further, I accept that counsel for the plaintiffs, Pychel, and Welland worked together to avoid unnecessary duplication of legal services. In addition, Pychel and Welland jointly used one counsel for the main motion. In my view this was an efficient use of counsels’ time.
[8] I note that counsel for Maximum filed material and attended the motions hearing, but did not participate at the hearing. Again, this was an efficient use of legal services.
[9] Regarding the quantum of costs claimed, I find that the partial indemnity bill of costs from the plaintiffs is close to what the parties should reasonably have expected. I also find that there are some excessive charges for consultations and research in the bill of costs submitted by counsel acting jointly for Pychel and Welland.
[10] Considering all of these factors I order costs in the main motion on a partial indemnity basis payable by 167 within 30 days in the following all inclusive amounts:
to the plaintiffs - $5,000
to Pychel and Welland jointly - $5,000
to Maximum - $1,000
INTEREST ON THE SETTLEMENT FUNDS
[11] The parties reached a settlement in the amount of $80,000. This was an all-inclusive figure that would have included principal, interest, and costs. Shortly after the settlement had been reached by the parties, the settlement funds were paid to counsel for the plaintiffs to be held in trust pending completion of the documentation. That documentation has yet to be completed and the settlement funds remain in trust.
[12] In written submissions, counsel for the plaintiffs requests that I order that 167 pay a further amount to the plaintiffs in order to compensate the plaintiffs for interest on the plaintiffs’ line of credit. It is submitted that the plaintiffs used a line of credit to do repairs to the property while awaiting the release of the settlement funds. By delaying the release of the settlement funds to the plaintiffs, counsel submits that 167 caused the plaintiffs to incur this interest expense.
[13] In my view this request is not appropriate on the evidence before me. Given that the settlement funds were in the control of plaintiffs’ counsel, those funds could have been held in an interest bearing account so that the plaintiffs would have received accrued interest on the funds when the funds were eventually released to them. I have no evidence to suggest that the settlement funds did not earn interest, or could not have earned interest, pending the release of the settlement funds to the plaintiffs. Further, I have no strong evidence as to the need for the plaintiffs to borrow money for repairs to the property before the plaintiffs received the settlement funds.
[14] Therefore, the plaintiffs’ request for interest on the settlement funds is denied.
RELEASE OF THE SETTLEMENT FUNDS
[15] The settlement funds have not yet been released to the plaintiffs because 167 has not yet signed the Release. Further, there remain unresolved issues with respect to the wording of the Release.
[16] In my opinion, the settlement funds should be released to the plaintiffs forthwith as it is clear that the plaintiffs are entitled to this money. The issue of the wording of the Release is now before the court, and the wording will eventually be determined.
[17] Therefore, I order that the settlement funds currently held in trust by counsel for the plaintiffs shall forthwith be released to the plaintiffs, or to whom the plaintiffs shall direct.
WORDING OF THE ORDER IN THE MAIN MOTION
[18] The moving parties prepared a draft order that was approved by all parties, except 167. 167 refused to approve the draft order because, among other things, the Release that was attached to the draft order stated that 167 was voluntarily releasing the parties, and because the draft order included a term that 167’s former counsel, Ms. Huneault, would be permitted to sign the Release on behalf of 167 if 167 failed to do so.
[19] In my view the formal order should not include a term that would permit Ms. Huneault to sign the Release. This term was never requested in the motion material, the issue was never argued at the motions hearing, and this term does not form part of my decision. The fact that 167 is balking at signing a release, despite a court order to do so, does not permit counsel to add terms to an order without a proper motion. Therefore, I find that there should be no reference in the order to the possibility of Ms. Huneault signing a release.
[20] I agree that the Release should be attached as a schedule to the order, but I accept that there should be an amendment to the Release that confirms that 167 is signing the Release pursuant to a court order, not voluntarily.
[21] The other amendments to the Release requested by 167 in my view are not significant and should not be made. Further, the wording of the Release was approved by counsel for 167 as part of the settlement agreement that I have found to be valid. The wording of the Release cannot now be re-negotiated.
[22] Therefore, using the draft order attached as Schedule “C” to the submissions from Pychel and Welland as a starting point, I would re-phrase paragraph one to read, “This court declares that the Settlement Agreement formed on December 8, 2016, is binding.” I would eliminate entirely paragraphs three and five from the draft order. Paragraph four should be amended to show that counsel for the plaintiffs may forthwith release the settlement funds currently held in trust. Paragraph six should be amended to reflect the costs orders set out in this decision.
[23] Regarding the Release that is attached as Schedule “A” to the draft order, I require counsel to amend the Release to reflect my comments in this decision. If counsel still cannot agree on the wording of the order or the Release, counsel should make an appointment to appear before me in open court to settle the order.
WORDING OF THE ORDER IN THE FOURTH PARTY MOTIONS
[24] De Donato requests that I order that the fourth party claim is stayed with prejudice, as this was the request in De Donato’s notice of motion. 167 submits that the words “with prejudice” should not be in the order.
[25] Unfortunately, the issue of with or without prejudice was not argued at the hearing of the motion. In my written decision I ordered that “the fourth party claim is stayed”. Therefore, the formal order will remain silent as to whether the stay is with or without prejudice. The order will go in accordance with the precise words that I used in my written decision.
COSTS OF THE FOURTH PARTY MOTIONS
[26] De Donato was successful on both of the motions that related to the fourth party claim, and therefore De Donato is entitled to partial indemnity costs. Again, there is no reason to order substantial indemnity costs.
[27] I accept that the legal costs of De Donato were substantially reduced because the outcome of the fourth party motions depended heavily upon the outcome of the main motion. Thus, counsel for the fourth party was able to benefit from the material filed and the submissions made by the moving parties on the main motion.
[28] Considering all of these factors I order 167 to pay De Donato’s costs of the fourth party motions on a partial indemnity basis fixed at the amount, all inclusive, of $3,500, payable within 30 days.
SUMMARY AND CONCLUSION
[29] There will be an order in accordance with the terms of this decision.
J.R. Henderson J.
Released: September 6, 2017
CITATION: Levac v. Pychel, 2017 ONSC 4509
COURT FILE NO.: 10758/15
DATE: 2017/09/06
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jacques Levac and Claudette Levac
Plaintiffs
- and –
Michael James Pychel, and The Corporation of the City of Welland
Defendants
- and –
Maximum Concrete Foundations Inc., 1671233 Ontario Limited and Gabmar Construction Ltd.
Third Parties
- and –
Salvatore De Donato
Fourth Party
ENDORSEMENT ON COSTS
AND OTHER MATTERS
J. R. Henderson J.
Released: September 6, 2017