Court File and Parties

COURT FILE NO.: 704/17

DATE: 20180508

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ADAM SAX, Plaintiff/Respondent

AND:

RICK AURORA, 2349336 ONTARIO LTD. O/A THE CONDO MALL, ROYAL LEPAGE WEST REALTY GROUP LTD., JESSICA LENOUVEL (LEUNG), JASWINDER AURORA, AND PRITINA BHAVSAR Defendants/Apellant

BEFORE: Cavanagh J.

COUNSEL: Danny Kastner and Gregory Ko, for the Plaintiff(s)/Applicant(s)

Katrina Marciniak, for the Defendant, Royal LePage West Realty Group

HEARD: By Written Submissions

COSTS ENDORSEMENT

[1] The Defendant (Appellant) Royal LePage West Realty Group Ltd. (“Royal LePage”) seeks an order as to costs from the Plaintiff (Respondent) Adam Sax in relation to the Plaintiff’s unsuccessful motion to quash the appeal that was commenced by Royal LePage from the order of Ferguson J. by which she granted leave to the Plaintiff, on a nunc pro tunc basis, to commence and prosecute a derivative action on behalf of the Defendant 2349336 Ontario Ltd. against Royal LePage.

[2] Royal LePage submits that:

a. It was wholly successful in opposing the Plaintiff’s motion.

b. The motion was of significant importance to Royal LePage because, if the motion had been successful, the effect would have been to bar Royal LePage from disputing that the derivative claim ought to be allowed.

c. Although the issues were not novel in a legal sense, the motion involved arguments that had not been directly addressed in other cases.

d. The arguments required a substantial investment of time and research and were of moderate complexity.

e. The costs sought by Royal LePage are not unreasonable or outside of the reasonable expectations of the parties.

f. Royal LePage seeks costs on a partial indemnity scale in the amount of $8,633.03 inclusive of fees, disbursements and HST.

[3] The Plaintiff submits that the circumstances in relation to this motion are such that there should be no order as to costs. The Plaintiff submits:

a. The Plaintiff had good reason to bring the motion and he acted in good faith. The central question on the motion was a novel one on which there was no clear judicial guidance, and it was in the interests of the parties to have the question of jurisdiction resolved before the hearing of a full appeal.

b. The motion was appropriate to bring and it was in the interests of all parties to have the jurisdictional question raised on this motion decided in advance of a full appeal.

c. Royal LePage, in its Notice of Motion, expressed that s. 255 of the OBCA provides a right of appeal to the Divisional Court without the necessity of obtaining leave to appeal, and this incorrect statement (insofar as it applies to an interlocutory order) caused or contributed to jurisdictional confusion which the motion was required to resolve.

d. A costs award, at this stage of the action, would impair the Plaintiff’s ability to continue the litigation.

[4] I do not question that the Plaintiff acted in good faith in bringing his motion.

[5] The decision in Salewski v. Lalonde, 2017 ONCA 515 upon which the Plaintiff relies as one where the court treated an identical type of order as interlocutory did not involve the question of whether an order granting leave to commence a derivative action is interlocutory or final. For this reason, I do not accept the Plaintiff’s submission that Salewski involved an identical type of order. The decision of the Divisional Court in Swinkels v. American Home Assurance Co., 2012 ONSC 4345 did involve an appeal from an order granting leave to add a derivative claim, and leave to appeal had been obtained. However, as I noted at paragraph 26 of my decision, the order that was appealed in Swinkels was not made on a nunc pro tunc basis, and did not involve the question of whether a motion for leave to commence a derivative action should be barred because it was brought after the expiry of the applicable limitation period.

[6] Although there was no clear guidance from the jurisprudence that addressed whether an order granting leave to commence a derivative action, nunc pro tunc, in the circumstances of this case, was a final order or an interlocutory order, the general principles that apply to determine whether an order is interlocutory or final are the subject of much jurisprudence. I do not regard the motion as one that raised a question that was sufficiently novel as to justify departure from the usual rule that costs of an interlocutory motion should be fixed and made payable within 30 days.

[7] I agree that the Plaintiff’s motion raised a jurisdictional question and that, had the motion not been brought, this question could have arisen at the hearing of the appeal in the same way that the question of jurisdiction arose at the hearing of the appeal in Salewski. However, the Plaintiff chose to move to quash the appeal in advance of the hearing of the appeal. I do not consider the fact that the question on the motion was a jurisdictional one to be sufficient to warrant depriving the successful party of costs.

[8] The submissions made on behalf of the parties on this motion did not involve the question of whether s. 255 of the OBCA provides a right of appeal of an interlocutory order to the Divisional Court without leave. The question on the motion was whether the order of Ferguson J. was final or interlocutory. I do not agree that Royal LePage’s Notice of Appeal contributed to such “jurisdictional confusion” that would justify a departure from the usual rule with respect to costs.

[9] When a party brings a motion, the party knows that there is an exposure to costs if the motion is not successful. I do not agree that if holding the Plaintiff liable for payment of an order as to costs may affect his ability to continue the action, this is a sufficient reason for me to exercise my jurisdiction to decline to follow the usual approach that costs follow the event.

[10] Royal LePage is entitled to costs of the motion on a partial indemnity scale.

[11] I have reviewed the Costs Outline submitted on behalf of Royal LePage. Royal LePage seeks fees on a partial indemnity scale calculated at an amount that represents 60% of the actual fees that were charged. In my view, the amount of time that is claimed and the partial indemnity rate that is used are both reasonable and proportionate to the issues raised on this motion.

[12] I fix costs of this motion in the amount of $8,166.51 inclusive of fees, disbursements and HST, to be paid by the Plaintiff to Royal LePage within 30 days.

Cavanagh J.

Date: May 8, 2018