CITATION: Skyway Canada Limited v. Dependable Mechanical Systems Inc., 2017 ONSC 7228

COURT FILE NO.: CV-17-570939

DATE: December 4, 2017

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Skyway Canada Limited v. Dependable Mechanical Systems Inc. and Rajesh Ahuja;

BEFORE: MASTER C. WIEBE

COUNSEL: Harold Murphy for Dependable Mechanical Systems Inc. (“Dependable”) and Rajesh Ahuja; Peter A. Downard for Skyway Canada Limited (“Skyway”) and Kenneth P. Eccleston (“Eccleston”).

HEARD: November 17, 2017.

REASONS FOR DECISION

[1] Dependable brought this motion on September 30, 2017 for an order setting aside the noting of the defendants in default (done on April 6, 2017), setting aside a default judgment (issued on June 2, 2017), setting aside a Writ of Seizure and Sale (issued June 30, 2017) in relation to that same default judgment, and granting leave to the defendants to file their Statement of Defence (delivered on April 21, 2017). By September 30, 2017 these issues had been resolved. I ordered on consent at the telephone conference call of June 30, 2017 that scheduled this motion that the noting in default be set aside. In July, 2017, Mr. Eccleston delivered to Mr. Murphy a consent to an order setting aside the default judgment. On July 24, 2017, Skyway withdrew its Writ of Seizure and Sale. Granting leave to file the statement of defence is a formality, and I grant that order.

[2] The only issue that required the attendance on a long motion appointment was the question of costs. As Mr. Murphy made clear at the telephone conference call on June 30, 2017, Dependable wants costs of the motion not only against Skyway, but against its lawyer of record, Mr. Eccleston. Mr. Murphy stated at the time that the claim for costs is based on Mr. Eccleston’s alleged “concoction” of evidence about a court filing and his alleged dishonesty to the court. At the argument on November 17, 2017, Mr. Murphy filed a Bill of Costs showing a substantial indemnity amount of $9,754.57 which he stated he wanted paid by Skyway and Mr. Eccleston.

[3] Because of the allegations against himself personally, Mr. Eccleston retained a lawyer, Mr. Downard, to act on this matter for Skyway and Mr. Eccleston. Mr. Downard strenuously opposed the defendants’ costs submissions arguing that there was not only no evidence of such “concoction” and dishonesty, but that Mr. Murphy was guilty of discreditable conduct by making and persisting in his groundless allegations against a lawyer of Mr. Eccleston’s experience and reputation. Mr. Downard filed two costs outlines, one showing a substantial indemnity costs amount of $14,592 for his own work, and the other showing a substantial indemnity costs amount of $27,981.28 for Mr. Eccleston’s work in preparing for this motion. The two amounts total $42,573.28. Mr. Downard wants a costs order on this motion in that amount as against the defendants and in favour of Skyway and Mr. Eccleston.

[4] In the motion, Skyway and Mr. Eccleston served and filed affidavits sworn by Mr. Eccleston, his law clerk, Kelly Duffy, his process server, Jenifer MacCallum, and a representative of Skyway, Douglas Herrington. The defendants served and filed affidavits from Cathy Mastrogiacomo, one page, and Robert Malcolm, the chief financial officer of Dependable. Mr. Murphy also served and filed a brief of written costs submissions that he signed and to which he attached several documents.

Facts

[5] Having reviewed the motion material and heard submissions, I herewith provide a chronology of the facts I have found for the purpose of this motion:

i. On April 22, 2016, Skyway entered into a fixed price contract with Dependable to supply, install and remove scaffolding equipment on a project for a fixed price of $19,450.

ii. Skyway supplied, installed and removed scaffolding. On January 24, 2017, it sent Dependable a list of equipment that had not been returned and a statement of 5 time and material invoices for work rendered throughout 2016. It alleges that its contract changed to a time and material one. On February 16, 2017 Skyway rendered an invoice for the unreturned equipment, in accordance with the contract. The total of these two items is $41,290.29.

iii. On March 6, 2017 Skyway had the Statement of Claim in this action issued. It claimed contract damages of $41,290.29 and breach of trust. This pleading, which was without great particularity, was served on Mr. Murphy, in-house counsel at Dependable, on March 10, 2017.

iv. Mr. Murphy did not serve a Notice of Intent to Defend or a Demand For Particulars. He did not correspond with Mr. Eccleston before the expiration of the time period for the delivery of a Statement of Defence under the Rules, namely March 31, 2017. Therefore, Mr. Eccleston received instructions to note the defendants in default.

v. On April 4, 2017 Ms. MacCallum attended at the court office to file a requisition to note the defendants in default. She was advised by a court official that a Notice of Intent to Defend had been filed in this action. She could not note the defendants in default as a result. She told Ms. Duffy and was instructed to return on April 11, 2017, the end of the additional ten days, to then note the defendants in default.

vi. On April 6, 2017, at the initiative of her employer (the process serving company), Ms. MacCallum had the physical file for this action pulled, and discovered that the filed Notice of Intent to Defend was in relation to another action with a court file number that was the same as the one for this action with exception of one digit. Ms. MacCallum got a court clerk to correct the misfiling. She then had the defendants noted in default.

vii. On April 7, 2017, a Friday, Mr. Murphy corresponded for the first time with Mr. Eccleston by email. He stated that he would serve the statement of defence “next week.”

viii. On April 11, 2017, the process server was informed not to attempt to note the defendants in default because of Mr. Murphy’s email. The process server responded that the defendants had already been noted in default.

ix. On April 13, 2017 Mr. Eccleston, believing that there was a filed and valid Notice of Intent to Defend and that the default was a mistake, wrote a letter to Mr. Murphy informing him that Dependable had been noted in default and that, because a Notice of Intent to Defend had been filed and despite not having been served with that document, he would “agree to provide our consent to the setting aside of the noting in default.” Mr. Murphy did not respond to this letter.

x. The process server rendered its invoice to Mr. Eccleston enclosing a copy of the erroneously filed Notice of Intent to Defend. On reviewing this material for the first time on April 18, 2017, Mr. Eccleston wrote another letter to Mr. Murphy that day stating that, after reviewing the court file, it was clear that Dependable had not in fact served a Notice of Intent to Defend, that his offer of April 13, 2017 was withdrawn, and that Dependable needed to move in 10 days to set the default aside, “failing which we will proceed to obtain default and summary judgment.” Mr. Eccleston wanted to see the particulars of the Dependable defence.

xi. On April 21, 2017, Mr. Murphy emailed a Statement of Defence to Mr. Eccleston. In their pleading the defendants make general allegations of deficiencies in the scaffolding and of overbilling, all without particularity. There is reference to an invoice for the alleged unreturned equipment that they say was delivered only on April 19, 2017. Mr. Murphy could not file the pleading due to the default.

xii. On April 21, 2017, Mr. Murphy offered to Mr. Eccleston by separate email to meet to try and settle the case.

xiii. On May 2, 2017 the two lawyers talked and agreed to discuss settlement on terms whereby Skyway would not take default proceedings during the discussions and whereby Dependable would move to set aside the default “as soon as practicable” should the discussions fail to produce a settlement. Mr. Eccleston confirmed these terms in an email to Mr. Murphy on May 3, 2017.

xiv. On May 4, 2017 Mr. Murphy sent a letter to Mr. Eccleston containing an offer to settle, purporting to explain the delay in the defendants’ pleading and expressing disappointment that Skyway was considering default proceedings in light of its “professional courtesy” of April 13, 2017. There was no mention of the letter of April 18, 2017.

xv. On May 10, 2017, Mr. Eccleston responded explaining Skyway’s claim in detail, and the history of the default. He explained that his April 13, 2017 proposal had been based on a court filing error and was withdrawn when that error was discovered. He reminded Mr. Murphy that it was his failure to correspond with counsel in a timely way or serve a Notice of Intent to Defend that led to the default.

xvi. On May 12, 2017, Mr. Murphy emailed Mr. Eccleston a letter discussing the issues in the case. At the end of the letter, he demanded that Mr. Eccleston honour his “enforceable” promise in his April 13, 2017 letter to set the default aside.

xvii. On May 17, 2017, Mr. Murphy emailed Mr. Eccleston threatening to “report” him concerning an “ethical issue.” Mr. Eccleston responded that same day reiterating that his April 13, 2017 proposal to set aside the noting in default was based on “an error on the court’s part,” and that Dependable in the end had been properly noted in default. He stated that “your client is required to bring a motion to set aside the noting in default.” Settlement discussions were obviously over.

xviii. On May 18, 2017 Mr. Murphy wrote to the Registrar of the Superior Court asking for an investigation of the misfiling. He added the following statement: “. . . if it were not for the fact that Mr. Eccleston is a lawyer and bound by a duty of honesty, I would have trouble believing him.”

xix. On May 19, 2017 Mr. Murphy emailed Mr. Eccleston a letter accusing him of wanting “to embarrass me” by forcing Dependable to bring a motion to set aside the default. Mr. Murphy presented his rendition of facts under a title, “Facts re: LSUC complaint.” He stated that he did not believe Mr. Eccleston’s misfiling explanation. He discouraged Mr. Eccleston from providing the Registrar with “false evidence,” and threatened to bring contempt proceedings if he did so.

xx. On May 23, 2017, Mr. Eccleston sent Mr. Murphy two faxes. The first enclosed a copy of the misfiled Notice of Intent to Defend that had been provided by the process server. The second was a letter with a detailed review of the facts concerning the misfiling and the April 13, 2017 letter, facts that accord with the facts I have found on this motion. Mr. Eccleston recommended that Mr. Murphy put his own insurer on notice given the default.

xxi. On May 25, 2017, Mr. Murphy sent Mr. Eccleston an email letter accusing Mr. Eccleston of not having a reasonable and honest belief that Dependable had delivered a Notice of Intent to Defend when he wrote the April 13, 2017 letter. Mr. Murphy suggested that Mr. Eccleston had made a promise in that letter he should stand by.

xxii. On May 31, 2017, Mr. Murphy wrote another letter to the Registrar, copying Mr. Eccleston, enclosing the misfiled Notice of Intent to Defend. He stated that he had discussed this matter with counsel and the process server in the action with the misfiled Notice, all of whom had no knowledge of the misfiling. He concluded with this statement: “Regretfully, I believe that I have fallen into a trap, the false premise of which is a non-existent Court error.” He stated that he wanted to meet with the Registrar and Mr. Eccleston to discussion the situation.

xxiii. On June 2, 2017, Mr. Eccleston obtained a default judgment against the defendants.

xxiv. On June 8, 2017, Mr. Eccleston emailed Mr. Murphy advising him to take steps “to protect your employer.” He stated that Skyway’s patience was “exhausted.” He advised of the default judgment and his instructions to execute on it. He stated that he would be getting further instructions “once I have your draft materials.”

xxv. The Dependable motion to set aside the default was referred to me for hearing, and I scheduled a scheduling telephone conference call for June 23, 2017. On June 22, 2017, Mr. Eccleston emailed Mr. Murphy with particulars of the two pillars of the Skyway claim, namely the time and material invoices and the unreturned equipment. After a discussion on June 23, 2017, I adjourned the call to June 30, 2017.

xxvi. On June 26, 2017 Mr. Murphy emailed one Erick Barniske at the Registrar’s office asking him to verify the misfiling. He added that he doubted that an error had been made. The next day, June 27, 2017, Mr. Barniske emailed back stating that “after reviewing both actions, it would appear that the Notice of intent to defend was filed in the appropriate action and that no error was made with respect to the filing of the document.”

xxvii. On June 29, 2017 Mr. Eccleston emailed Mr. Murphy with a proposal to set aside the default judgment by having Dependable pay $6,325.74 of the Skyway claim and $1,000 in costs thrown away. There was no response.

xxviii. On June 30, 2017, at the adjourned telephone conference and after a discussion, I ordered on consent that the noting of Dependable in default be set aside. The issue of the default judgment did not come up. I set a schedule for the determination of the issue of costs and the status of the apparently undisputed portion of the Skyway claim. The parties have now agreed that I not determine the latter issue.

xxix. In July, 2017, Mr. Eccleston served Mr. Murphy with a consent to an order setting the default judgment aside. On July 24, 2017, he had a Writ of Seizure and Sale (obtained on June 30, 2017 concerning the default judgment) set aside.

xxx. On July 17, 2017 Mr. Eccleston wrote to Christopher DiGregorio, the supervisor of Court Operations with the Registrar and Mr. Barniske’s superior, inquiring as to court filing procedure and whether the alleged misfiling could have happened without of a record of same. On July 28, 2017 Mr. DiGregorio emailed back stating that the misfiling could have happened in the physical file without it being reflected on the computer record. He explained Mr. Barniske’s email of June 27, 2018 as being the result of a quick computer check, which would not have shown the misfiling in the physical file.

xxxi. On September 27 and 28, 2017 Mr. Murphy left two voicemail messages for Mr. Eccleston demanding that he “purge [his] contempt.” Mr. Murphy said that Mr. Eccleston was not going to like what Mr. Murphy was going to file. He said, “how you could have done this is simply beyond me.” Mr. Murphy served his motion material on September 30, 2017.

xxxii. On October 11, 2017 Mr. Murphy called Chris Beaven, Mr. Eccleston’s process server and accused him and Mr. Eccleston of “planting” the Notice of Intent to Defend, and threatened legal action.

xxxiii. On October 13, 2017 Mr. Murphy called Mr. Eccleston’s old partner, Ken Movat, advising of the “professional issues” concerning Mr. Eccleston and urging him, Mr. Movat, to urge Mr. Eccleston to accept an offer Dependable had made earlier that week, an offer that, according to Mr. Murphy, would “protect [Mr. Eccleston’s] reputation and accept responsibility on behalf of his client without admitting anything personally.”

Analysis

[6] As to the issue of whether Mr. Eccleston fabricated the misfiling of the Notice of Intent to Defend, as alleged by Mr. Murphy, the overwhelming evidence on the motion is that he did not do so. The affidavit of Ms. McMallum, the process server, showed that she could not on April 4, 2017 requisition the noting of Dependable in default due to a filed Notice of Intent to Defend. She also clearly stated that she, on her employers’ own initiative, on April 6, 2017 had the subject file pulled and had a court clerk correct the misfiled Notice and note Dependable in default. That the misfiled Notice was not that of Dependable is undisputed, as Dependable never delivered a Notice of Intent to Defence. Therefore, there was a misfiling, and there was no evidence fabrication by Mr. Eccleston.

[7] Mr. Murphy tried mightily, even at the argument of the motion with all of the evidence presented, to argue that Mr. Eccleston had fabricated the misfiling. He argued that the chances of such a misfiling are remote. I accept that point, but it proves nothing, certainly not that the misfiling did not happen. He stated that Mr. Eccleston and his process server could have “planted” the Notice. That could have happened I suppose, but there is simply no evidence to corroborate this accusation of gross professional misconduct.

[8] Mr. Murphy argued that the motive Mr. Eccleston had to fabricate the misfiling was to justify his retraction in his April 18, 2017 letter of his April 13, 2017 promise to consent to the setting of the default aside. He called this a “trap,” designed to force Dependable to incur the cost and inconvenience of moving to set aside the default. But, as I pointed out repeatedly to Mr. Murphy, this makes absolutely no sense as it does not address the obvious question as to why Mr. Eccleston, a seasoned lawyer, would manufacture a misfiling that thwarted his client’s instruction to note Dependable in default. The only reasonable explanation is that Mr. Eccleston had the honest, mistaken belief that the filed Notice was valid, that the default was a mistake, that his promise of April 13, 2017 was necessary as a result, and that this promise could be and was retracted when he discovered the truth about the misfiling on April 18, 2017. Mr. Murphy had no response to this point. Furthermore, there was no “trap,” as Mr. Eccleston gave ample notice to Mr. Murphy on several occasions, starting with the April 18, 2017 letter, to bring a motion to set aside the default.

[9] The only evidence from Dependable on this point of evidence fabrication that did not amount to supposition and speculation was the email from Mr. Barniske, the Registrar official, to Mr. Murphy on June 27, 2017 stating that the Notice had been filed in the appropriate file and that there had been no misfiling. Mr. Murphy argued that this was proof positive of the misfiling, as, according to him, the court keeps perfect track of any misfilings. Mr. Eccleston’s affidavit, on the other hand, contains the information from Mr. Barniske’s superior, Mr. DiGregorio, that the court does not keep perfect track of misfilings in physical court files. Mr. DiGregorio explained the Barniske email as being the result of a quick computer search that would not have shown the misfiling. Mr. Murphy had no further evidence on this point. I accept the explanation given in Mr. Eccleston’s affidavit.

[10] Mr. Murphy gave other arguments for his requested costs award. He argued that Skyway and Mr. Eccleston acted unreasonably in requiring that Dependable bring a motion to set aside the default in any event, regardless of the misfiling issue. I do not fault Skyway for this. The Dependable Statement of Defence was without particularity. Mr. Harrington’s affidavit shows that Skyway had given Dependable sufficient particularity of its real claim as early as January and February, 2017. Skyway was, therefore, justified in requiring to see real evidence of the Dependable defence before giving up the rights flowing from the default, particularly in a case of this modest amount. Mr. Murphy also argued that Mr. Eccleston should be faulted for not mentioning the default judgment in the telephone conference that scheduled this motion. Mr. Eccleston should have advised me of the default judgment, but in the end the existence of the default judgment was no consequence when I set aside the default on consent on June 30, 2017. Mr. Eccleston shortly thereafter delivered a consent to Mr. Murphy to have the default judgment set aside. In any event, Mr. Eccleston advised Mr. Murphy about the default judgment on June 8, 2017, and, therefore, Mr. Murphy knew of its existence at the time of the telephone conference call.

[11] The more important issue is whether Mr. Murphy conducted himself in this matter in a way that merited an award of costs against Dependable despite the fact that it succeeded on its motion; see Rule 57.01(2). The issue is also whether Mr. Murphy has conducted himself in a way that is “reprehensible” and thereby deserving of the sanction of a substantial indemnity costs award as against Dependable; see Davies v. Clarington (Municipality), 2009 ONCA 722, at paragraph 40. In my view, he has done so.

[12] Mr. Murphy did not correspond with Mr. Eccleston until April 7, 2017, namely a week after the deadline for delivering a Statement of Defence. Such communication is normally done by counsel before the deadline to get more time to defend. He did not serve a Notice of Intent to Defend. This is the way in which the Rules give you more time to defend. Therefore, he became embarrassed when he learned from the Eccleston letter of April 13, 2017 that Dependable had been noted in default. Mr. Murphy admitted to this embarrassment in argument. No doubt the Eccleston promise in that same letter to set aside the default on consent came as a relief to Mr. Murphy. But he knew that the Eccleston promise was based on a falsehood and a misapprehension because Mr. Murphy had not served a Notice of Intent to Defend, a state of affairs that rendered the April 13, 2017 promise unenforceable. Mr. Murphy did not deny this knowledge. I note that he made no effort at the time to correct Mr. Eccleston’s misapprehension.

[13] When Mr. Eccleston then retracted the April 13, 2017 promise and demanded that Dependable move to set aside the default in his letter of April 18, 2017, Mr. Murphy was suddenly faced with the consequences of his embarrassment. Instead of taking responsibility and bringing the motion after settlement discussion broke down in mid-May, 2017, as he should have done, Mr. Murphy chose to not believe Mr. Eccleston’s reasonable explanation for his April 13, 2017 promise, and tried to force Mr. Eccleston to reinstate the April 13, 2017 promise. He did so by deliberately painting Mr. Eccleston personally in the worst possible light. He propagated the story that Mr. Eccleston fabricated the filing of the Notice of Intent to Defend to give his April 13, 2017 promise the pretext of being capable of being and indeed having to be retracted in order to “force” Dependable to move to set aside the default, namely the “trap” theory. Such conduct, if found to be true, could have led to Mr. Eccleston’s disbarment. This strategy, had it worked, would no doubt have had the effect of sparing Mr. Murphy the inconvenience and embarrassment of having to bring the motion. I have found this story to be unfounded and totally unreasonable, as described above.

[14] What is most egregious, though, is that Mr. Murphy continued with this story and with greater intensity even as Mr. Eccleston provided Mr. Murphy with further and detailed evidence in support of Mr. Eccleston’s version of events. This was particularly the case with the two letters Mr. Eccleston sent Mr. Murphy on May 23, 2017. By this point, settlement discussions had ended, and Mr. Murphy had openly questioned Mr. Eccleston’s honesty and was threatening to report him to the Law Society. In his two May 23, 2017 letters, Mr. Eccleston gave a detailed description of what had happened with his process server and the noting in default. These stated facts accorded with the events. In addition, and most importantly, Mr. Eccleston provided Mr. Murphy with a copy of the misfiled Notice of Intent to Defend that had been provided by the process server. This should have ended the matter.

[15] What did Mr. Murphy do? He only intensified his attack on Mr. Eccleston. He emailed Mr. Eccleston on May 25, 2017 asserting that Mr. Eccleston did not have an honest belief in the existence of the Notice when he wrote the April 13, 2017 letter. Mr. Murphy emailed the Registrar on May 31, 2017 alleging that there was a “non-existent Court error,” and threatened contempt proceedings against Mr. Eccleston. He later in October, 2017 went so far as to accuse Mr. Eccleston and his process server of “planting” the misfiled Notice. He demanded that Mr. Eccleston “purge his contempt.” He even called Mr. Eccleston’s former partner, Kenneth Movat, to try to get him to influence Mr. Eccleston in order to “protect [Mr. Eccleston’s] reputation.”

[16] Mr. Murphy argued that he was simply investigating the misfiling for the benefit of the court. The evidence does not support this position at all. He continued to correspond with the Registrar’s office, but with a view to uncovering the alleged fabrication. His email to Mr. Barniske of June 26, 2017 was prefaced by the statement that he doubted there had been an error. When he received Mr. Barniske’s response, he did not pursue his “investigation” further. Had he been investigating the matter in good faith for the benefit of the court, as he alleges, he would have corresponded with Mr. Barniske’s superior, as Mr. Eccleston subsequently did. Mr. Murphy argued that he wanted to meet with the Registrar and Mr. Eccleston. He did not need Mr. Eccleston’s presence, particularly given what had been delivered with the May 23, 2017 Eccleston letters. This all shows that Mr. Murphy was conducting an attack against Mr. Eccleston personally.

[17] This attack is now before the court in the form of a request to have me order costs against Mr. Eccleston personally. When I asked Mr. Murphy during the argument as to whether he maintained his allegation of evidence fabrication in face of all the filed evidence, he said “yes.”

[18] Such conduct requires a stiff sanction as it is reprehensible. In Unimac-United Management Corp. v. Cobra Power Inc., 2015 ONSC 3827 (Ont. Master) I stated that “making groundless allegations of misconduct against another lawyer and party is conduct of its own that must be discouraged strongly with stiff sanctions.” I reiterate that statement in relation to the costs on this motion. Mr. Murphy, Dependable’s in-house lawyer, conducted a groundless attack against Mr. Eccleston with groundless allegations of evidence fabrication, a very serious allegation. The purpose of this attack was to spare Mr. Murphy the embarrassment of having to bring a motion to set aside the noting in default. This conduct also delayed the motion, which I believe would have been resolved much earlier without the attendance had the attack not occurred. This all merits stiff sanctions.

[19] Therefore, I have decided to make the only costs award in this motion against Dependable. There was no claim of costs against Mr. Murphy personally, and I do not make such an order as a result. But there will be a costs order against Dependable and it will be on a substantial indemnity basis. The claim for costs as against Skyway and Mr. Eccleston is denied.

[20] Skyway presented two costs outlines. One showed a claim of substantial indemnity costs of $14,592 for Mr. Downard’s costs. This is about 80% of the actual cost, which is in line with the authorities on the quantum of substantial indemnity costs. Mr. Dowhard had to be hired by Mr. Eccleston because of the personal attack on Mr. Eccleston. Mr. Downard presented a detailed and persuasive factum and made a persuasive and successful argument. The total time shown, 25.8 hours, is not unreasonable given the gravity of the issues. While there might be an argument that this claim significantly exceeds the amount of the Dependable costs outline and thereby should be reduced due to the reasonable expectation of costs liability of the losing party, I am not prepared to do so, given the conduct of Mr. Murphy. The personal attack on Mr. Eccleston I have described should have made Mr. Murphy and his employer mindful of the risk of severe costs consequences should the attack fail. I grant the full $14,592 cost award as against Dependable to be paid to Skyway and Mr. Eccleston.

[21] Skyway’s second costs outline, was for Mr. Eccleston’s costs in preparing the affidavits and preparing the factum and argument. The claim is for substantial indemnity costs of $27,981.28 which is about 80% of the shown actual costs. I will make a discount on this claim as a result of the fact that Dependable actually succeeded on the underlying motion. I also believe that some of the time shown is excessive, given Mr. Downard’s involvement in the motion, such as the time shown for factum preparation. I have decided to award Skyway and Mr. Eccleston $16,000 on this claim.

[22] I note that Skyway delivered an offer to settle the costs issue on November 15, 2017, an offer whereby Dependable would pay Skyway the all-inclusive sum of $12,000. This was two days before the argument of the costs issue. While this is not a Rule 49.10 offer, I did take it into consideration. By this late date, November 15, 2017, with all of the evidence on the table and with the involvement of Mr. Downard, Dependable and Mr. Murphy should have considered this offer seriously, as the costs risk to Dependable by that point was clearly well beyond the offer. That they did not is a further indication of how misguided the Dependable perspective had become.

Conclusion

[23] For the reasons stated above, I, therefore, award Skyway and Mr. Eccleston substantial indemnity costs of $14,592 and $16,000 as against Dependable for a total of $30,592 to be paid in 30 days from the date of this order. The claim for costs as against Skyway and Mr. Eccleston is denied.

DATE: December 4, 2017

MASTER C. WIEBE