Court File and Parties
COURT FILE NO.: 15-4060-SR DATE: 2018-03-13 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: COMMERCIAL ROOFING & SHEET METAL INC., Plaintiff AND: CONSILIUM GROUP A DIVISION OF 979410 ONTARIO INC, Defendant
BEFORE: The Honourable Mr. Justice D.J. Gordon
COUNSEL: Rade Sajic, Counsel for the Plaintiff Santiago Costa, Counsel for the Defendant
HEARD: February 8, 2018
ENDORSEMENT
[1] Three motions were initially presented in this case:
(i) plaintiff’s motion regarding defendant’s undertakings from examination for discovery;
(ii) defendant’s motion regarding plaintiff’s undertakings from examination for discovery; and
(iii) defendant’s motion for security for costs.
[2] These motions came before Braid J. on November 16 and 17, 2017. The motion for security for costs was argued. Oral reasons were subsequently delivered, dismissing that motion. Both undertaking motions were adjourned. The issue of costs on the security for costs motion was reserved to the judge hearing the undertakings motion.
[3] These matters came before me on February 8, 2017. On this occasion, plaintiff’s counsel reported the defendant having delivered the required documents pertaining to his motion and, hence, that motion was no longer required. He did not seek a cost award for having to bring the motion to obtain answers to undertakings.
[4] Submissions were presented by both counsel on the remaining motion of the defendant as well as with respect to costs of the previously dismissed motion. As counsel could not agree on the oral reasons of Braid J., I indicated a transcript would be requested. The transcript was received a month later.
A. Undertakings
[5] Mr. Costa reported three outstanding undertakings of the plaintiff requiring determination:
(i) to produce a copy of the time sheets for all of the jobs that are at issue in this action;
(ii) to produce a ledger that shows the amounts invoiced and payments received for each of the four projects listed in the statement of claim; and
(iii) to produce Commercial’s bank records for the account Consilium deposited funds to, for the period of January 1, 2014 to December 31, 2015.
(i) Time Sheets
[6] Mr. Costa acknowledges receiving some time sheets but says there must be more. Mr. Sajic says the plaintiff has produced all of the time sheets it has.
[7] Ruling – It would appear time sheets were not routinely completed by the plaintiff. However, it cannot be directed to produce something that does not exist. The plaintiff is bound by the submission of Mr. Sajic. The lack of time sheets may well present problems for the plaintiff on a time and material claim. This component of the motion is dismissed.
(ii) Ledger
[8] Mr. Costa continues to seek a detailed ledger with dates and invoice numbers for each project. Mr. Sajic reports delivering to opposing counsel the document provided by the plaintiff, showing invoices.
[9] Ruling – The plaintiff corporation is required to maintain an ongoing ledger. This is not a difficult undertaking and the plaintiff cannot just say it is a simple business operation. The term “ledger” has a specific meaning. The plaintiff has not answered the undertaking but, in my view, can easily do so either by the principal of the plaintiff or its accountant. The plaintiff is directed to provide a detailed ledger, as it undertook to do, within 30 days of the release of this decision.
(ii) Bank Records
[10] Mr. Costa reports receiving the bank records of the plaintiff to November 30, 2014. He seeks the remaining bank records in accordance with the undertaking. Mr. Sajic submits the plaintiff opened the bank account in March 2014 and has produced those records only to November 30, 214, as such was the last date of payment from the defendant. Mr. Costa does not disagree, but says it is too late for the plaintiff to argue relevance.
[11] Ruling – Undertakings have become an unnecessary problem in civil litigation, mainly as litigants and counsel are not fully prepared. Here, the undertaking was too wide in terms of date, but was specific in terms of purpose, namely depositing funds by the defendant. Relevancy remains the standard. The plaintiff has answered the purpose of the undertaking. This component of the motion is dismissed.
B. Costs re: Security for Costs Motion
[12] I have reviewed the transcript regarding the oral reasons of Braid J. in dismissing the defendant’s motion. As I am only dealing with the issue of costs, I am obliged to accept the validity of her ruling. The highlights of the oral reasons can be summarized as follows:
the plaintiff has insufficient assets in Ontario to pay the defendant’s costs;
the plaintiff is not impecunious;
the plaintiff delivered invoices for work completed and these invoices were not paid by the defendant;
the defendant provided no evidence as to the purported deficiencies or quantification of those deficiencies and Mr. Costa declined the court’s invitation to adjourn the motion to provide further evidence in this regard;
the plaintiff has established that this case has a good chance of success;
there was delay by the defendant in bringing this motion, some two and a half years since the action had commenced and despite reference in its statement of defence of its intention to bring such a motion for security for costs;
an order for security for costs would not be just.
[13] Given the insufficient assets of the plaintiff, there may well have been a logical basis for the defendant’s motion for security for costs. However, as appears from the reasons of Braid J., there are two significant impediments: the failure to provide evidence on deficiencies and quantification of same, and significant delay in bringing the motion. The defendant says, in its statement of defence, that the damages payable by the plaintiff exceed the amount owing to the plaintiff. In this regard, the matters referred to above, particularly delay, are of significant concern when dealing with costs. I am not suggesting improper litigation strategy by the defendant, despite the allegation of the principal of the plaintiff, John Longpre, in paragraph 10 of his affidavit, sworn November 12, 2017, where he says “I believe Consilium wishes to take advantage of its superior economic position to pressure Commercial into compromising or giving up its claim”.
[14] The plaintiff had to defend the motion for security for costs; otherwise, the action would have to be abandoned. I am satisfied it is entitled to a cost award and reject the submission of Mr. Costa that such an award would reward the plaintiff for its impecuniosity.
[15] Mr. Sajic seeks full indemnity costs of $11,782.23 for both motions. The time claimed is excessive, despite the serious nature of the motion. The appropriate award is substantial indemnity.
Summary on Costs
[16] The plaintiff was successful on the security for costs motion. There was mixed success on the undertaking motion. I am of the view the plaintiff is entitled to substantial indemnity costs, fixed in the amount of $5,000, inclusive of HST and disbursements and so order.
D.J. Gordon J.
Released: March 13, 2018