2017 ONSC 6854
COURT FILE NO.: CV-15-534257
DATE: November 16, 2017
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Limen Structures Ltd. and 1033803 Ontario Inc. o/a Forma-Con Construction, as a joint venture v Brookfield Multiplex Construction Canada Limited
BEFORE: Master C. Albert
COUNSEL: B. Bowles and J. Nathwani, for the moving party (defendant) Fax: 416-368-3467
J. Armel and D. Resnick, for the responding party (plaintiff) Fax: 416-204-2826
COSTS OF SUMMARY JUDGMENT MOTION
MASTER C. ALBERT
ENDORSEMENT
Brookfield Multiplex Construction Canada Limited (“Multiplex”) brought a motion for summary judgment to dismiss all or part of the delay claim of Limen Structures Ltd. and 1033803 Ontario Inc. o/a Forma-Con Construction, as a joint venture (“Limen JV”). For reasons released on August 25, 2017, I dismissed the motion, having determined that the issues raised on the summary judgment motion are genuine issues that require a trial.
I invited counsel to file written costs submissions, which they did on September 5, 2017 (Limen JV), September 12, 2017 (Multiplex), and October 27, 2017 (Limen JV).
Limen JV asks for partial indemnity costs fixed at $172,138.70 for the main motion and the two ancillary motions, being Multiplex’s motion for leave pursuant to section 67 of the Construction Lien Act, R.S.O. 1990, c.C.30, and Limen JV’s motion to compel production of the Revay report.
Multiplex proposes three alternatives: (i) defer costs of the summary motion and the ancillary leave and production motions to trial, (ii) alternatively, award costs to Multiplex for the leave motion and the production motion as well as for the main summary judgment motion, on the basis that it was reasonable for Multiplex to bring the summary judgment motion (which required a leave motion) and Multiplex was successful on the production motion, and (iii) in the further alternative, award no costs to Limen JV.
As to the first alternative, it is the practice of the court to render costs dispositions on a “pay as you go” basis. While the court will make findings of fact at trial regarding the truth of the facts asserted by Limen JV’s deponent Mr. Brannigan, it does not change the fact that Limen JV was put to the expense of defending a complex summary judgment motion brought by Multiplex regarding Limen JV’s delay claim. I disagree with Multiplex’s assertion that it was reasonable to bring the motion. This is a complex, multi-million dollar case where trial and expert evidence on the issue of delay is inevitable. The motion for summary judgment was a bold and risky tactical strategy and the unsuccessful moving party ought to compensate the successful responding party. The presumption in the rules of civil procedure that costs be fixed and payable following disposition of the motion is appropriate in this case.
For the reasons that follow, costs of the main summary judgment motion and the leave motion, combined, are fixed at $148,878.62 payable by Multiplex to Limen JV. From this amount Multiplex may deduct costs of the production motion fixed at $3,000.00.
General Principles
- As a general principle costs in a proceeding under the Construction Lien Act, as in an ordinary action, are in the absolute discretion of the court[^1]. In fixing costs the court must consider the facts and circumstances of the particular case, including the expectation of the parties[^2].
Relevant Factors
Rules 57.01(1), 49 and 1.04 describe factors for the court to consider when fixing costs. The list is non-exhaustive and includes many factors. The factors particularly relevant to the present case are indemnification, reasonable expectation of the payor, outcome, complexity, importance of the issues, conduct of the parties and proportionality[^3].
I have considered each of these factors in determining a reasonable, fair and appropriate award of costs of the three motions: the motion for leave, the motion to compel production of the Revay report and the main summary judgment motion.
Liability for costs and conduct of the parties
Generally the successful party, in this case Limen JV, is entitled to costs. Multiplex argues that it would be appropriate to depart from this practice in this case based on the court’s comments regarding the suspicious lack of corroboration of Mr. Brannigan’s evidence of notices and the court’s expression of concern regarding the reliability of his evidence. Multiplex argues that costs should be denied where the court finds that the successful party has been found guilty of dishonest conduct (see reasons for decision, paragraphs 43 to 51)[^4].
In my reasons I did not make a finding that Mr. Brannigan’s conduct or evidence was dishonest. Rather, I found his evidence self-serving and lacking corroboration, elements that contributed to the court’s decision that a trial is required for the court to make findings of fact on the issue of notice.
Multiplex’s motion was a bold attempt to strike a delay claim of $11,131,466.82 by way of summary judgment, without a trial, in circumstances where a lengthy and complex trial on multiple issues including the issue of delay is inevitable.
It was the court’s ultimate determination that the summary judgment motion should not have been brought. As I wrote at paragraph 81 of my reasons, in reference to the case of Hryniuk v Mauldin[^5] relied on to a large degree by Multiplex:
“… in the present case, the issues raised on this motion are factually and legally complex. Credibility is a significant factor. The monetary value of Limen JV’s claim at risk on this motion is over $11 million. This is not a case where proportionality calls for a summary process. In answer to the question posed by Karakatsanis, J., I find that the added expense and delay of fact finding at trial is necessary in this case to achieve a fair and just adjudication.”
Multiplex’s reliance on applying the Supreme Court of Canada’s reasoning from Hryniuk v Mauldin to the multimillion dollar Limen JV claim was risky. As noted in my reasons on the motion, the Supreme Court of Canada in Hryniuk was specifically addressing a situation where a trial could be avoided by applying enhanced summary judgment fact finding methods. Multiplex’s attempt to apply that reasoning to an eleven million dollar claim failed and Limen JV should be compensated in costs for the expense of resisting the motion and the risk of having its claim dismissed if it did not vigorously oppose the motion.
Multiplex argues that alternatively it should be allowed its costs of the leave motion for two reasons:
(i) Had Limen JV not opposed the motion for leave it would not have incurred costs; and
(ii) Multiplex was successful on the leave motion.
As to (i), it is for the court to determine whether the test for leave in section 67 of the Construction Lien Act, R.S.O. 1990, c.C.30 for leave is met. Consent of the parties is only one factor for the court to consider. Consent does not usurp the court’s responsibility to apply the leave test and determine the issue of leave on its merits.
As to (ii), the fact that Multiplex was successful in obtaining leave to proceed with the main motion, I note that the leave motion is part and parcel of the summary judgment motion. If Limen JV is entitled to costs of the main motion then it is also entitled to its costs of the leave motion. The arguments presented by Limen JV in opposition to granting leave were ultimately the reasons the court found applicable to refuse to grant summary judgment on the main motion: the issues were too complex to be decided without a trial, and the issue of delay would nevertheless remain a trial issue because Multiplex counterclaimed for delay damages. While Limen JV lost the leave motion, it was inextricably intertwined with the main motion and had Multiplex not brought the main motion Limen JV would not have incurred the expense of opposing the leave motion.
Regarding the motion brought unsuccessfully by Limen JV for production of the Revay report, the court is of the view that the motion should not have been brought. The report was clearly prepared in contemplation of litigation and settlement discussions. It is a privileged document and the parties ought to have been able to resolve the issue without the court’s intervention. Multiplex is entitled to costs of that motion, such costs to be fixed and set-off against costs payable by Multiplex to Limen JV for the main motion.
For these reasons I find that it is appropriate for costs to follow the event and for Limen JV to recover its costs of the summary judgment motion, including the leave motion, on a partial indemnity scale and for Multiplex to set-off against that sum the costs fixed by the court for the production motion.
Quantification
On the issue of quantification of the main summary judgment motion, Multiplex accepts Limen JV’s quantification of partial indemnity costs of $123,878.62 inclusive of disbursements and HST as reasonable. This amount is less than the costs reflected in Multiplex’s costs outline and was or ought to have been within the reasonable expectation of Multiplex. I accept $123,878.62 as a reasonable and appropriate quantification of costs of the main summary judgment motion.
Regarding the motion for leave, the amount claimed according to the costs outlines of both parties is similar: Limen JV’s costs outline reflects partial indemnity costs of $45,232.55 inclusive of disbursements and HST for the leave motion. Multiplex’s costs outline reflects partial indemnity costs of $43,405.12 inclusive of disbursements and HST for the leave motion
While the motion was a significant one, in my view the time claimed as spent is excessive. Notwithstanding my finding that the leave motion was necessary only because of Multiplex’s summary judgment motion and on that basis Limen JV is entitled to costs of the leave motion, the quantum of costs claimed should be reduced to reflect that Limen JV was unsuccessful on that ancillary motion. I find that a reasonable and appropriate costs award for the leave motion on a partial indemnity scale is $25,000.00 payable by Multiplex to Limen JV.
Regarding quantification of the production motion, Limen JV’s costs outline shows partial indemnity costs of $3,027.53 inclusive of disbursements and HST. Multiplex’s costs outline shows costs of $9,591.35 inclusive of disbursements and HST. In my view the quantum of costs claimed by Multiplex is excessive taking into account the nature of the motion: resisting production of an expert report prepared in contemplation of litigation. The quantum claimed by Multiplex is in excess of Limen JV’s reasonable expectation. A more reasonable and appropriate quantification of costs of the production motion is $3,000.00, inclusive of disbursements and HST.
CONCLUSION
In all the circumstances it is my view that costs of the leave motion and the main motion ought to be fixed at $123,878.62 and $25,000.00 respectively, inclusive of disbursements and HST, for a total of $148,878.62 payable by Multiplex to Limen JV. From this amount Multiplex is entitled to set off costs of the production motion fixed at $3,000.00 inclusive of disbursements and HST. I regard these amounts as fair and reasonable in the circumstances.
Accordingly, this court orders that Multiplex pay costs of the motions to Limen JV fixed at $145,878.62, payable within 30 days of release of these reasons.
Master C. Albert.
Released: November 16, 2017
2017 ONSC 6854
COURT FILE NO.: CV-15-534257
DATE: November 16, 2017
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Limen Structures Ltd. and 1033803 Ontario Inc. o/a Forma-Con Construction, as a joint venture
Plaintiff (Responding party)
- and -
Brookfield Multiplex Construction Canada Limited
Defendant (Moving party)
COSTS: SUMMARY JUDGMENT MOTION
Master C. Albert
Released: November 16, 2017
[^1]: Courts of Justice Act, R.S.O. 1990, c.C.43, s.131; Construction Lien Act, R.S.O. 1990, c.C.30, s.86
[^2]: Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), 71 O.R. (3d) 291; [2004] O.J. No. 2634; 2004 14579 (Ontario Court of Appeal) per Armstrong, J.A. at paras. 24 and 26, cited by D.G.Price, J. in Blankers.v.Stewart 2010 ONSC 3978 per at paras 39 and 40
[^3]: Rule 1.04
[^4]: 2017 ONSC 5071
[^5]: 2014 SCC 7