Court File and Parties
COURT FILE NO.: 17-74785 DATE: 20181120 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1179 Hunt Club Road Inc., Applicant AND Ottawa Medical Square Inc. and Abrar Mobarak, Respondents
BEFORE: Justice R. Ryan Bell
COUNSEL: Elliot Birnboim, for the Applicant Anne Tardif, for the Respondents
HEARD: In writing
Costs Endorsement
[1] The respondents were successful on all issues raised on the application. I found that Ottawa Medical Square (“OMS”) did not anticipatorily repudiate the agreement of purchase and sale. I found that the agreement of purchase and sale came to an end on November 28, 2017 when both parties were unable to close the transaction and that, as a result, OMS was entitled to the return of the $250,000 deposit. I found that Ms. Mobarak was not personally liable under the agreement of purchase and sale.
[2] The respondents seek their costs of the application in the amount of $35,606.34, on a partial indemnity basis, inclusive of disbursements and HST.
[3] 1179 Hunt Club Inc. concedes that in the usual course, the respondents would be entitled to their costs. However, Hunt Club asserts that neither party is an “innocent” party (as neither was ready, willing and able to close on the scheduled closing date) and that OMS’ conduct leading up to the closing date is not the type of conduct that should be rewarded by an order of costs.
[4] I do not agree with Hunt Club’s position. The fact that neither party was ready, willing and able to close the transaction on the scheduled closing date is not a reason to withhold costs to the respondents, the successful parties on the application. Hunt Club’s reliance on OMS’ conduct in relation to costs echoes its anticipatory breach argument on the application. As I stated in my reasons for decision, the OMS was seeking alternative financing in order to complete the transaction. I found that the complaints about a lack of response by counsel were satisfactorily addressed when Mr. Presseau called to introduce himself as OMS’ new solicitor.
[5] The court’s broad discretion in matters of costs may extend to a consideration of the conduct of a party prior to and leading up to litigation; however, in this case, there was no conduct amounting to misconduct so as to warrant costs being withheld from the successful parties (Bardoscia v. The Regional Municipality of Niagara Police Services Board, 2005 ON SC 25952, at para. 15).
[6] I would distinguish Re Lamb and Costain Ltd., 1985 ON SC 2254 where the court denied costs to the purchaser of a property who succeeded in voiding the agreement of purchase and sale. In Re Lamb, the court found that the purchaser signed the agreement, promising to make an additional payment, but hoping that the court would relieve her of her obligation to do so. The facts before me are very different.
[7] I agree with the respondents that the application was of moderate complexity. It involved the doctrine of anticipatory breach, the law as it relates to “time is of the essence” clauses and the law of personal guarantees. The record was sizeable. Both sides conducted cross-examinations.
[8] The issues were important to both parties. Hunt Club sought to retain the deposit in the amount of $250,000. It also sought a declaration that OMS was liable for failing to complete the transaction and that Ms. Mobarak was personally liable. Had I made such findings, the respondents would have been liable for any shortfall on the sale of the building which OMS had contracted to purchase for $5,600,000.
[9] I find that the hourly rates of the respondents’ counsel are within the range for counsel of their experience.
[10] I reject Hunt Club’s argument that the quantum of partial indemnity costs should be reduced on the basis that the reply submissions were not a matter within the reasonable expectation of either party. In order to avoid a second hearing day, I permitted Hunt Club to make its reply submissions. I then permitted the respondents to make brief sur-reply submissions, also in writing.
[11] A costs outline is an important tool in assessing the amount that an unsuccessful party could reasonably expect to pay (2016637 Ontario Inc. o/a Balkan Construction v. Catan Canada Inc. et al., 2013 ONSC 5448, at para. 7). Hunt Club has not provided its own costs outline. However, but for the proposed reduction in costs as a result of the reply submissions, Hunt Club does not take issue with the reasonableness of the time and fees spent by the respondents’ counsel in relation to the application.
[12] Having regard to the factors listed in Rule 57.01 of the Rules of Civil Procedure and, in particular, the amount of costs that Hunt Club, as the unsuccessful party, could reasonably expect to pay in relation to the application, I fix the respondents’ costs of the application at $35,000.00, inclusive of disbursements and HST. The costs are to be paid by Hunt Club within 30 days.