COURT FILE NO.: 164/16
DATE: 2019 03 18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SCO-TERRA CONSULTINIG GROUPS LIMITED
Plaintiff
R. Haas, Counsel for the Plaintiff
- and -
THE CORPORATION OF THE TOWN OF MONO
Defendant
C. Raphael, Counsel for the Defendants
-and between-
SCO-TERRA CONSULTING GROUP LIMITED
Plaintiff
R. Hass, Counsel for the Plaintiff
-and-
ARAGON (HOCKLEY) DEVELOPMENT (ONTARIO) CORPORATION cob as THE ARAGON GROUP
Defendant
C. Raphael, Counsel for the Defendants
HEARD: June 4th, 2018
REASONS FOR DECISION
LEMAY J.
[1] This was a motion brought by the Defendants for the discharge of two construction liens as well as the dismissal of the underlying actions pursuant to the Limitations Act. The Defendants were successful in having the construction liens removed from the property, while the Limitations Act issues were left to trial. The reasons for my decision are reported at 2019 ONSC 669. It is now time to fix the costs for this action.
[2] In fixing the costs for this action, I note that the Defendants, the Town of Mono and Aragon were represented by the same counsel, as Aragon has an indemnity agreement in place with Mono. As a result, I will simply refer to the Defendants in my reasons.
The Positions of the Parties
[3] The Defendants seek their costs on a partial indemnity basis in the amount of $21,253.24. The Defendants argue that they were successful on the bulk of the motion and the costs sought by the Defendants are reasonable and fair.
[4] The Plaintiff also seeks its costs on a partial indemnity basis in the amount of $20,000.00. The Plaintiff argues that it succeeded on the substantive claims in this case and that it had the greater success on the procedural issues. Further, the Plaintiff asserts that the Limitations Act issues took up much more time than the construction lien issues that the Defendants had some success on.
Law and Analysis
[5] The Defendants did make an offer to settle in this case. However, that offer involved the entire action, and not just the construction liens. As a result, the offer does not trigger Rule 49.
[6] Therefore, the relevant legal principles that apply in this case are set out in Rule 57.01. I am of the view that the most relevant principles are as follows:
a) Who was the successful party?
b) Whether any party engaged in conduct that would tend to shorten or lengthen the litigation?
c) The complexity of the issues.
d) The reasonable expectation of the parties.
[7] I will address each issue in turn.
Who Was the Successful Party?
[8] Each party asserts that they were the more successful party in this case. That cannot be correct. As noted in Scipione v. Scipione 2015 ONSC 5982, the question of who was the successful party focuses on the very simple question of who got what they asked for.
[9] Although Scipione was decided in the family law context, Pazaratz J.’s opening comments are worth keeping in mind in the civil context as well. He observes:
Why do written costs submissions frequently try to lead us into some sort of parallel universe where losers are actually winners?
If you lost, don’t re-write the facts to argue that you won. It only makes the judge go back – repeatedly – to see if we’re talking about the same case.
And if the best you got was a mixed result on one of the issues, don’t claim you were right to relentlessly pursue all of the issues. Especially when you ignored repeated opportunities to pursue only the claims which might have had some merit.
Rules 18 and 24 of the Family Law Rules set out many important and complex considerations in dealing with costs. In making submissions, counsel would be remiss if they didn’t vigorously advance every potential argument on behalf of their client. Because in determining costs, fairness to both the winner and the loser is paramount.
But the starting point – determination of success – shouldn’t be so muddy.
Who got what they asked for?
That question shouldn’t be so complicated.
[10] In this case, I have gone back over my notes, the factums and the recording of the argument from the motion. First, it is clear that, contrary to the assertions in the Plaintiff’s costs submissions, the bulk of the submissions on this motion dealt with the construction lien issues. Second, it is clear that the Defendants were successful on both those issues and the procedural matters. The only place where the Defendants were not successful was on the Limitations Act argument, which was clearly a secondary part of both the motion and the materials.
[11] In particular, on the procedural issues, the Plaintiff took the position that the actions should be consolidated rather than merely heard together. I found against the Plaintiff on this issue (see paragraphs 81 and 82 of my reasons). Given the amount of correspondence on this issue, it is difficult to see how this issue was “of little importance” to the Plaintiff as counsel for the Plaintiff now asserts. Further, the Plaintiff’s concession that it was prepared to leave this issue to the trial judge only came when the parties could not agree on the proper Order. The Plaintiff was clearly unsuccessful on this issue.
[12] As a result, there is no basis to award the Plaintiff any costs on this motion, other than for the Limitations Act issues. The Defendants were successful on the bulk of the issues that consumed the bulk of the court time. However, given that there is a live limitations issue, and given that the Defendants’ motion on the limitations issues was not unreasonable, the costs relating to the Limitations Act issues should be fixed by my decision and payable in the cause.
[13] The amount sought by the Defendants on this portion of the motion is $2,361.50 on a partial indemnity basis. I am of the view that this is a not unreasonable amount, but that it understates the time spent on the Limitations Act issues. The amount for this portion of the motion should be $3,000.00 inclusive of HST and disbursements. It is to be awarded in the cause.
Conduct that Tended to Lengthen the Litigation
[14] Counsel for the Plaintiff argues that by bringing this motion the Defendants unnecessarily lengthened the proceedings. He advances this position in two ways. First, he argues that the Defendants should simply have posted bonds for the lien amounts and continued on with the merits of the action. Second, he argues that the Defendants should not have brought the Limitations Act motion in light of the principles in Hryniak v. Mauldin (2014 SCC 7). I reject both arguments.
[15] I start with the Plaintiff’s position that the Defendants should simply have posted bonds for the lien amounts instead of seeking to remove the liens from the property. I acknowledge that the Construction Lien Act is designed for efficient resolution of construction disputes. However, the problem with adopting the Plaintiff’s position is that it will encourage parties with weak, or non-existent, lien claims to impose a lien on property for the purpose of obtaining security for their claims at the outset of an action.
[16] It must be remembered that a construction lien encumbers the Defendants’ property. The lien limits the Defendants in what they can do with that property until they either post a bond or have the lien removed. From the Plaintiff’s perspective, the lien on the Defendants’ property provides security for the Plaintiff’s claim until the action is resolved. Adopting the Plaintiff’s position would permit individuals with weak or non-existent lien claims to impose liens on properties and extract security from Defendants even when they are not entitled to do so.
[17] If the Plaintiff is correct that “bonding off the liens” is the usual course in a case like this, then that would be of concern to the Court. In this case, the Plaintiff had no basis for asserting its lien claims, but used the lien provisions of the Construction Lien Act in order to obtain security that it was not entitled to have. If placing meritless liens on properties is a regular occurrence in the construction industry, then the Courts should strongly discourage those liens. One of the Court’s tools in that regard is costs.
[18] This brings me to the Plaintiff’s argument that the Defendants were playing hardball in challenging the lien claims. I also reject this argument. In my view, it was the Plaintiff that was playing “hardball” by seeking to enforce a lien that was without merit. The Plaintiff should not be entitled to avoid paying the costs that the Defendants incurred in order to respond to the Plaintiff’s tactics.
[19] In my view, a party is entitled to seek to remove a lien from their property on an interim motion. In this case, there was no merit to the Plaintiff’s lien claim, and the Defendants properly seek payment of the costs associated with removing the lien from the property.
[20] Then, the Plaintiff asserts that this case was not suitable for summary judgment under the principles of Hryniak. I disagree with that assertion. Given the value of the claim and the fact that Limitations Act issued are often amenable to resolution by way of a summary judgment motion, the Defendants’ decision to bring one was not at all unreasonable in my view. Indeed, there remains an open question as to which party will prevail on the limitations issue. As a result, as discussed above, I am ordering that the costs of the limitations issue are in the cause.
The Complexity of the Issues
[21] First, there is the question of whether this motion was complex. The parties agree that the matter was moderately complex and, having had to consider and decide the matter, I share their views on that point.
[22] Then, there is the question of who is responsible for the complexity of this motion. The Plaintiff asserts that the Defendants delivered massive volumes and compendiums of materials, and brought many complex facts into dispute. Again, a reading of the record makes it clear that it was the Plaintiff who advanced a number of complex arguments to support the validity of the liens in this case.
[23] This matter was made more complex by the Plaintiff advancing various reasons for the Court to uphold an unsustainable lien. Any complexity in the Defendants’ materials arose because of the need to anticipate and/or address the Plaintiff’s various arguments.
[24] Again, this is a factor that favours the Defendants’ position on costs.
Reasonable Expectations of the Parties
[25] Finally, there are the reasonable expectations of the parties. In this case, I had the parties file bills of cost prior to releasing my reasons on the motion. The total fees and disbursements (including HST) set out in the Plaintiff’s bill of costs is $42,461.69. The total fees and disbursements (including HST) set out in the Defendants’ bill of costs is $36,748.58. With these numbers in mind, it is clear that the partial indemnity amount claimed by the Defendants, of $21,253.34 inclusive of HST and disbursements is within the reasonable expectations of the parties.
[26] This brings me to the issue of proportionality, which I raised in my reasons and asked the parties to address. Although the costs must be proportionate to the amounts claimed in an action, I am of the view that the principle of proportionality cannot be relied upon by the Plaintiff in this case. When the issues are considered, it is not the value of the Plaintiff’s accounts that was in dispute in this proceeding. It is the ability of the Defendants to have unimpeded use of their land. The liens were not justified and the Plaintiff should be obligated to pay the costs for having them removed.
Conclusion
[27] For the foregoing reasons, I order as follows:
a) The Plaintiff shall pay the sum of $21,253.34, inclusive of HST and disbursements to the Defendant Aragon within fourteen (14) days of today’s date.
b) At trial, the successful party shall be entitled to costs in the sum of $3,000.00 on account of the Limitations Act motion.
[28] In addition, I note that there were steps that the parties were to complete as outlined in paragraphs 89 e and f of my reasons of January 25th, 2019. The parties are to update my judicial assistant on the status of this matter, and whether a discovery plan has been completed.
LEMAY J
Released: March 18, 2019
COURT FILE NO.: 164/16
DATE: 2019 03 18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SCO-TERRA CONSULTINIG GROUPS LIMITED
Plaintiff
- and -
THE CORPORATION OF THE TOWN OF MONO
Defendants
-and between-
SCO-TERRA CONSULTING GROUP LIMITED
Plaintiff
-and-
ARAGON (HOCKLEY) DEVELOPMENT (ONTARIO) CORPORATION cob as THE ARAGON GROUP
Defendant
REASONS FOR JUDGMENT
LEMAY J
Released: March 18, 2019