Court File and Parties
COURT FILE NO.: 3978/16/ CV-15-410-00 DATE: 2017 11 20
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Superior Fine Papers Inc., Reliance Holdings Limited and Reliance Developments Corporation, Plaintiffs
AND:
Newalta Corporation and Todd Smith, Defendants
AND BETWEEN -
Revolution Environmental Solutions LP c.o.b. as Terrapure Environmental and Revolution Environmental Solutions Acquisition GP Inc., Plaintiffs
AND:
Superior Fine Papers Inc., Reliance Holdings Limited and Reliance Developments Corporation, Defendants
BEFORE: LEMAY J
COUNSEL: A. McLennan, Counsel for the Plaintiffs herein and for the same parties as the Defendants in Court File No. CV-15-1410-00 R . Agarwal, Counsel for the Defendant, Newalta Corporation T. McGurrin, Counsel for the Defendant, Todd Smith and for the Plaintiffs in Court File No. CV-15-1410-00
COSTS ENDORSEMENT
[1] This was a motion to transfer file CV-15-0410 (“the Thunder Bay action”) from Thunder Bay to Milton, a motion to have the matter heard together with Milton file No. 3978/16 (“the Milton action”), and a cross-motion to have the Milton action stayed on the basis of a jurisdiction clause.
[2] I dismissed both motions, and directed the parties to contact R.S.J. Warkentin in Thunder Bay to discuss whether the Milton action should be transferred to Thunder Bay. My reasons are set out at 2017 ONSC 6589. It is now time to fix the costs for both motions. I will set out the relevant principles, and then deal with the costs of each motion separately.
[3] The deadline for submissions was set out in my original decision. All three parties provided submissions, but I only received reply submissions from counsel for Newalta and the Property Owners within the time limits. I will consider the submissions I have received in my reasons. I will also refer to the various parties using the same nomenclature that I used in my original reasons.
The Relevant Law
[4] The principles that the Court is to consider in assessing costs are set out in Rule 57.01 of the Rules of Civil Procedure. The primary principle is that costs normally follow the event. In addition, costs are normally awarded on a partial indemnity rate, usually at about 65% of the lawyer’s actual costs (see Eastern Power v. Ontario Electricity Financial Corporation 2012 ONCA 366 at paragraph 26). There are no exceptional circumstances in this case that would justify an award of substantial indemnity costs to any party.
[5] In addition, the following principles from Rule 57.01 are relevant to my consideration of the costs in this case:
a) The amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed. b) The complexity of the proceeding. c) The conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding. d) Whether any step in the proceeding was improper, vexatious or unnecessary.
[6] Finally, it is worth noting that the modern costs rules are designed to foster three fundamental purposes. First, to indemnify successful litigants for the costs of litigation. Second, to encourage settlements. Third, to discourage and sanction inappropriate behavior.
The Procedural History
[7] Before addressing the costs of each of the motions, it is worth setting out the procedural history of these two actions in some further detail, as this history informs my decision on the costs, particularly with respect to the costs of the stay motion in the Milton action.
[8] The Thunder Bay action was started in September of 2015, the pleadings were amended in mid-2016, and on March 22nd, 2017, B. Fitzpatrick J. set the matter down for trial by setting a pre-trial date on May 18th, 2017. This date was adjourned on consent to August 10th, 2017 as a result of Mr. McLennan’s schedule.
[9] A pre-trial was held before Warkentin R.S.J. on August 10th, 2017. At that time, the Property Owners, represented by Mr. McLennan, took the position that the pre-trial was premature because they were bringing a motion to have the matter transferred to Milton so it could be heard together with the Milton action. This argument was rejected, and a timetable was set.
[10] In the meantime, the Milton action had been commenced on December 23rd, 2016. However, it was not served on Newalta until May 12th, 2017. Newalta advised counsel for the Property Owners that it would be bringing a motion to have the Milton action stayed as against it based on the exclusive jurisdiction clause in the agreement between Newalta and the Property Owners. This motion was scheduled for August 15th, 2017.
[11] On August 5th, 2017, the Plaintiffs served a notice of motion to have the Thunder Bay action transferred to Milton.
[12] The parties appeared before D. Fitzpatrick J. on August 15th, 2017. In accordance with the provincial practice direction and Central West Region’s protocol, he advised the parties that he could not deal with the transfer motions, as I am the R.S.J.’s designate for transfer motions for Central West. He was also of the view that the stay motion needed to be heard after the transfer motion.
[13] There was then a further appearance before me on September 21st, 2017. At that time, I determined that both the stay and the transfer motion should be heard before me, and a further hearing date of November 1st, 2017 was fixed.
The Motion to Stay
[14] Mr. McLennan, on behalf of the Property Owners, seeks costs in the sum of $5,945.50, inclusive of HST and disbursements. In seeking these costs, Mr. McLennan argues as follows:
- The Stay Motion was an avoidable and unnecessary cost to the Plaintiffs herein with spill over effect in regard to the Construction Lien Action between the Terrapure Group as plaintiffs therein and the Plaintiffs herein as defendants therein, resulting in an adverse affect on the timing of the scheduling of the Construction Lien Action which has been set down for a trial, thereby making it more difficult for both actions to be tried together without any delay however small of the Construction Lien Action, objected to by counsel for the Terrapure Group in the Construction Lien Action. Regardless of the forum location in Ontario for both actions, trying them together has merit.
[15] In essence, Mr. McLennan is claiming that it is Newalta’s fault that the discovery plan in the construction lien (the Thunder Bay) action is not being followed because Newalta brought an unnecessary motion to stay. In addition, Mr. McLennan argues that the Court should award the Property Owners their costs of this motion because costs normally follow the event.
[16] Normally, I would agree that costs follow the event. Normally, I would also find that $3000.00 in costs (inclusive of HST and disbursements) are appropriate for the stay motion. However, in this case, I have determined that the Property Owners are not entitled to recover any costs of this motion for the following reasons:
a) The motion to transfer the Thunder Bay action to Milton and the motion to stay the Milton action are clearly related. Indeed, the reason for dismissing the motion to stay the Milton action is the existence of the Thunder Bay action. b) From the moment the Property Owners commenced the Milton action against Newalta, they should have been aware that they were planning to ask that the Thunder Bay action should be transferred to Milton. c) The Property Owners were aware, from June 15th, 2017, that Newalta was bringing a stay motion in this case. d) The Property Owners did nothing about their transfer motion until the very last moment, being August 5th, 2017. There is no good explanation in the materials before me for this delay. The motion to transfer the Thunder Bay action to Milton should have been brought, at the latest, very early in 2017.
[17] As a result, I reject Mr. McLennan’s assertion that the delays in the Thunder Bay action are Newalta’s responsibility. In my view, those delays are the result of the Property Owners’ approach to these motions. Those delays have also resulted in significant additional costs for Newalta, being the wasted appearance before D. Fitzpatrick J. on August 15, 2017, and the appearance before me on September 21st, 2017. Those wasted appearances should result in the elimination of any costs recovery on the part of Newalta. In addition, the conduct of the Property Owners in failing to move promptly to have their motion to transfer heard is also conduct that should be sanctioned by the Court as there was no good explanation for it. In this case, the appropriate sanction is to deny the Property Owners recovery of the costs that they are seeking.
The Motion to Transfer
[18] Terrapure argues that it should be entitled to its costs for this motion on the basis that Terrapure was the successful party, the Property Owners did not seek leave (as they could have done) to commence a third party claim against Newalta in the Thunder Bay action, and the Property Owners made strategic choices in an attempt to delay the action.
[19] On behalf of the Property Owners, Mr. McLennan argues that no costs should be awarded to Terrapure for the following reasons:
- The Motion to change the Venue was reasonable especially given the seemingly willingness of the lawyer for the plaintiffs in the Construction Lien Action to consider same, but with the new added caveat that, notwithstanding his tactics in delaying responding to the motion and in pleading for Todd Smith herein, he does not want any ‘delay’ in the trial of the Construction Lien Action which he has unduly accelerated while dragging his feet in the within action deliberately in an attempt to avoid having both actions tried together whether in Thunder Bay.
- The Plaintiff’s Motion, while unsuccessful was reasonable and laudable in the quest to avoid multiplicity of actions and for judicial economy and in the interests of justice.
- The Plaintiffs note that in the Construction Lien Action the Terrapure Group attacked mortgages on the property of SFP and, although known to the plaintiffs therein and pleaded in the Statement of Defence therein and raised at the first trial conference, the Terrapure Group has not responded to the defence that the alleged work was done on water lots owned by Her Majesty the Queen in Right of Canada, not the named Defendants. Nor did the defendant Todd Smith herein take a position on the Plaintiffs’ motion.
[20] I start by noting that there is no evidence that counsel for Terrapure was willing to consider the transfer motion. Indeed, the materials I have before me suggest otherwise. I also note that the positions of the parties on the role of Her Majesty the Queen in Right of Canada are not relevant to the transfer motion.
[21] I am also of the view that there are no reasons in this case to depart from the general principle that costs should follow the event. In particular, I do not see any efforts to delay either matter on the part of Terrapure.
[22] In my reasons on the motion, I expressed a concern that it appeared to me that “at least part of the reason for, and timing of, the transfer motion is to delay this matter.” (at paragraph 80) This is a concern about the conduct of the Property Owners that justifies a higher award of costs in favour of the Terrapure parties.
[23] In addition, it is clear from the chronology that I have set out above that the Property Owners did not move in an expeditious way to resolve the motions in this case. Indeed, by delaying their transfer motion to August of 2017 and not discussing their plans for this motion with the other parties, the Property Owners caused two extra court appearances. This is conduct of a party that tended to lengthen the proceedings, and it should be taken into account in assessing the costs.
[24] However, I do not see any basis for awarding Terrapure substantial indemnity costs of this motion. Those costs are only awarded in rare circumstances, such as where there is fraud or deceit, or the action is improperly defended (see Matttachhione v. Mattachione 2011 ONSC 1427 and Hunt v. T.D. Securities Ltd. (2003), 66 O.R. (3d) 481 (C.A.) In addition, Terrapure has not set out any strong arguments for an award of substantial indemnity costs. As a result, partial indemnity costs are appropriate in this case.
[25] This brings me to the question of what costs the losing party could reasonably expect to pay in this case. Evidence of what those costs should be can be gleaned, in part, from what the losing party would have claimed if they had won. In this case, the Property Owners would have claimed $5,992.50 inclusive of HST and disbursements.
[26] Terrapure is claiming nearly $8,500.00 in costs for this motion. I am of the view that this amount is somewhat excessive, particularly given that the legal tests on a motion to transfer are well known and relatively simple to apply. However, some additional costs must be factored in as a result of the requirement for Terrapure to attend three times on a motion to transfer.
[27] In the circumstances, partial indemnity costs of $7,000.00 inclusive of HST and disbursements is a reasonable amount, and I order the Property Owners to pay that amount within fourteen (14) days of the release of these reasons.
Disposition
[28] There are to be no costs of the motion to stay in Milton Court File No. 3978/16.
[29] The Property Owners are to pay Terrapure’s costs for the motion to transfer Thunder Bay Court File No 15-0410 in the sum of $7,000.00 within fourteen (14) days of the release of these reasons.
LeMay J.
Date: November 20, 2017