CITATION: Relax Muskoka Cottages Inc. v. 2052219 Ontario Inc., 2017 ONSC 5964

COURT FILE NO.: CV-14-1385

DATE: 20171005

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RELAX MUSKOKA COTTAGES INC.

Plaintiff

– and –

2052219 ONTARIO INC.

Defendant

Sabrina A. Lucenti, for the Plaintiff

Mauro Marchioni, for the Defendant

HEARD: By Written Submissions

RULING ON COSTS

DiTOMASO J.

OVERVIEW

[1] The parties are two adjoining land owners in downtown Orillia who were engaged in a dispute regarding the existence and use of a right of way over a laneway located between their two properties.

[2] The proceedings were commenced by way of two competing Applications. The Applications were converted to trial of certain issues. A four day trial was conducted with written submissions that followed.

[3] My lengthy Reasons for Judgment were delivered on August 29, 2017.

[4] The parties agreed that costs would be determined by way of written submissions.

[5] All written submissions by the parties were received on September 20, 2017.

[6] The following are my reasons on costs.

POSITION OF THE PLAINTIFF RELAX MUSKOKA COTTAGES INC.

[7] The Plaintiff Relax submits that it is the successful party to these proceedings. The Plaintiff Relax claims that it was largely more successful than the Defendant 205 and therefore requests its costs on a partial indemnity basis throughout in the amount of $87,580.84 all inclusive.

POSITION OF THE DEFENDANT 2052219 ONTARIO INC.

[8] The Defendant 205 submits that it was substantially successful in this action and, as such, the costs follow the event. The Defendant 205 seeks its partial indemnity costs in the amount of $86,386.49 all inclusive.

ANALYSIS

Entitlement

[9] Pursuant to s. 131(1) of the Courts of Justice Act, costs are in the discretion of the court.

[10] Rule 57.01 sets out a number of factors which may be considered by the court in the exercise of its discretion with respect to costs. Such factors include any offers to settle made in writing, the complexity of the proceeding, the importance of the issues, and any other matters relevant to the question of costs.

[11] Both sides submit that they were substantially successful at trial.

[12] There were a number of issues relating to the existence and use of the right of way over the laneway which were dealt with at trial. Those issues were recited and dealt with at length in my Reasons for Judgment.

[13] The Plaintiff Relax sought the rectification of title to show that the laneway was “subject to” a right of way in favour of the Plaintiff Relax. Title to the laneway was rectified in favour of the Plaintiff Relax. However, the partial register for the laneway was rectified with restriction to the right of way to pedestrian access only. The Land Registrar was directed to rectify the partial register for the laneway accordingly. Regarding rectification of title, the Plaintiff Relax was successful.

[14] However, at the heart of this action, was the issue of vehicular access over the laneway. The Plaintiff Relax sought vehicular access over the laneway in order to access its back parking lot. The Plaintiff Relax’s property had a mixed use – residential and a pub. The Defendant 205 opposed vehicular traffic over the laneway primarily on the grounds that it was inherently unsafe and any right of way over the laneway in favour of the Plaintiff Relax would be for pedestrian access only.

[15] This critical issue was found in favour of the Defendant 205. For reasons set out in my Reasons for Judgment, a declaration was granted to the Defendant 205 that the purpose and scope of the right of way was for pedestrian access only by the Plaintiff Relax, its tenants and invitees for all reasonable purposes ancillary to the commercial/residential use of the Relax lands.

[16] Further, the Defendant 205 was ordered to remove a boulder forthwith situated at the front entrance of the laneway at 205’s own expense. I understand that this was immediately done after my judgment was released.

[17] There were further orders dismissing the Plaintiff Relax’s claim for damages in its entirety, prohibiting Relax, its agents, servants, tenants, employees, officers and directors from trespassing across the Defendant 205’s property and a declaration that 205 has good and valid title to the land described as the laneway, subject to the rectification of title.

[18] I should also add that the Defendant 205 was not successful in obtaining a declaration that it was entitled to an easement or right of way over a strip of land on the rear northerly ten feet of property owned by the Plaintiff Relax for the purposes of access and wintertime piling of snow. I was not satisfied that the Defendant 205 was entitled to any such easement or right of way. It was left to the parties to make the necessary and appropriate snow removal arrangements as between them.

[19] Notwithstanding the success of the Plaintiff Relax in respect of the rectification of title, I find that the Defendant 205 was substantially successful at trial.

[20] I find that the primary issues in which the Defendant 205 was successful were as follows:

(1) Whether the right of way over the laneway provided for vehicular access;

(2) Whether the Quit claim over the laneway ought to be set aside and title thereto reverted to a community easement;

(3) Whether Relax was entitled to damages in the amount of $61,234.78.

[21] At trial, it was found that the right of way over the laneway did not provide for vehicular access. Rather, I held that access was restricted to pedestrian access only. Further, the Defendant 205 was successful in respect of the Quit claim issue and it was completely successful in denying damages claimed in the amount of $61,234.78. The Plaintiff Relax’s claim for damages was dismissed in its entirety.

[22] There were competing submissions by the parties in respect of the effect of offers that each of them had made. I find that the offers were made in good faith. However, the parties were diametrically opposed in respect of the relief that they sought and resolution of their issues. The Plaintiff Relax sought vehicular access over the laneway to its rear property which was without vehicular access for reasons set out in my judgment. I found that the Plaintiff Relax had been trespassing over the Defendant 205’s property in order to access its rear parking lot. The Plaintiff Relax sought a court determination that the laneway provided vehicular access to Relax’s property. Such vehicular access over the laneway was Relax’s only remedy and it failed in this regard.

[23] The settlement discussions between the parties went nowhere. Those discussions and any Offers to Settle were unsuccessful because the question of the use of the laneway for vehicular access required a judicial determination at trial. Neither side was unreasonable in trying to resolve this essential issue short of a trial. Because of the positions and interests of each party, such resolution, predictably, was impossible.

[24] Notwithstanding the Plaintiff Relax’s success in respect of the rectification issue and the Defendant 205’s claim for an easement for snow removal, I find that the Defendant 205 was substantially successful at trial in this matter. Neither party acted unreasonably. There is no basis that the Defendant 205 ought to be deprived of its costs.

[25] Costs are a discretionary matter to be exercised judicially with regard to s. 131(1) of the Courts of Justice Act and Rule 57.01 of the Rules of Civil Procedure.

[26] I have considered all of the circumstances of this case and I exercise my discretion in favour of the Defendant 205. I find that the Defendant 205 is entitled to its costs on a partial indemnity basis. Having so found, I have also determined that the Plaintiff Relax is not entitled to costs.

Quantum

[27] The Defendant 205 seeks its costs in the amount of $86,386.49 all inclusive. It seeks its costs against the Plaintiff Relax and Relax’s insurer on a joint and several basis.

[28] I find that there is no basis to award costs against Relax’s insurer on a joint and several basis. Relax’s insurer is not a party to these proceedings and it has not been established who Relax’s insurer is and why such costs should be awarded against that insurer on a joint and several basis. There is absolutely no merit for this claim. The costs that are the subject of this order are between the Plaintiff Relax and the Defendant 205 only.

[29] The Defendant 205 seeks costs in the amount of $86,386.49 all inclusive. The Plaintiff Relax seeks costs in the amount of $87,580.84 all inclusive. There is a difference of approximately $1200.00 between the two Bills of Costs.

[30] No issue is taken by either side in respect of excessiveness of the costs claimed either by way of hourly rate or time spent.

[31] I have reviewed the Bill of Costs presented by the Defendant 205 in respect of this matter. I find the costs claimed by the Defendant 205 are fair, reasonable and proportionate. I also find that there is a reasonable expectation (given Relax’s own Bill of Costs), that the Plaintiff Relax as the unsuccessful party would be exposed to an amount now claimed by the Defendant 205.

[32] I have considered the Plaintiff Relax’s success on certain issues which were important and consumed not insignificant time at trial and in these proceedings. Acknowledging this success, I have discounted the Defendant 205’s partial indemnity costs to the amount of $70,000 all inclusive.

[33] Accordingly, I find that the Defendant 205 is entitled to costs in the amount of $70,000 all inclusive against the Plaintiff Relax payable within the next thirty days.

CONCLUSION

[34] For these reasons, Relax Muskoka Cottages Inc. is hereby ordered to pay 2052219 Ontario Inc. costs fixed in the amount of $70,000 all inclusive of disbursements and HST within thirty days from the date of the release of these reasons.

G.P. DiTomaso J.

Released: October 5, 2017