BARRIE COURT FILE NO.: CV-15-1511-00 DATE: 20190417 CORRECTED DATE: 20190910 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Wayne Douglas Mason and Diane Lillian Mason, Plaintiffs AND: Robina Khan McCracken, Tariq Hameed, Jozef Zubrzycki, and Bluechip Services Inc., Defendants

BEFORE: THE HON. MADAM JUSTICE A.A. CASULLO

COUNSEL: J. L. Turner, for the Plaintiffs Y. D. Payne, for the Defendant, Robina Khan McCracken S. K. Raina, for the Defendant Bluechip Services Inc. B. Opalinski, for the Defendant Jozef Zubrzycki

HEARD: April 1, 2019

Corrected Endorsement: The text of the original Endorsement was Corrected on September 10, 2019 and the description of the correction is appended.

COSTS ENDORSEMENT

Background

[1] This action arises out of a 2006 transfer of property from the plaintiffs, Wayne and Diane Mason, to the defendant Tariq Hameed (“Hameed”). [1] During his ownership Hameed placed two mortgages on title, the first to Jozef Zubrzycki (“Zubrzycki”) and the second to Bluechip Services Inc. (“Bluechip”). In 2010, Hameed transferred the property to Robina Khan McCracken (“McCracken”), who subsequently placed three additional mortgages on title, one to Bluechip and two to Zubrzycki.

[2] The fly in ointment is that the Masons were not paid the full purchase price of $750,000 in 2006. They received $410,000 to satisfy outstanding debts, with the balance of $340,000 to be paid at a later date. How and when they were to receive the $340,000 was never confirmed in writing, and versions differed at trial. The Masons did not receive their money, and thus commenced this action in 2015.

[3] The property was ultimately sold pursuant to court order, and the Accountant for the Superior Court has been holding $1,170,246.92 since March 2017.

[4] The trial centered on the following issues:

• Are the Masons owed money for the unpaid purchase price of the Property?
• Is McCracken liable to the Masons for the unpaid purchase price?
• Are the Masons entitled to a vendor’s lien against the Property for the unpaid purchase price?
• Is the Masons’ claim barred by the doctrine of laches?
• If the Masons are entitled to a vendor’s lien, does it take priority over all, or any, of the mortgages registered on title to the Property?
• Are the Masons liable to McCracken for occupation rent; if so, what is the quantum?
• Is McCracken liable for punitive damages to the Masons?
• Who is entitled to the funds paid into court, and in what amounts?

[5] The Masons were successful on all fronts but punitive damages. However, the evidence regarding punitive damages was instructive in establishing that the Masons were the unpaid sellers of the property, and that McCracken knew they were unpaid sellers and she assumed responsibility for that debt when she acquired title to the property.

[6] The evidence regarding punitive damages was also required to establish the Masons’ legal entitlement to the vendor’s lien, the issue of laches, and McCracken’s claim for occupation rent.

[7] Bluechip’s argument that the doctrine of latches operated to prevent the Masons from any recovery was not successful.

Efforts at Resolution

[8] The following offers to were made:

Date	Made By	Breakdown	Accepted/By Whom
November 3, 2017	Masons	$350,000 to Masons $50,000 to McCracken $330,000 to Bluechip $440,250 to Zubrzycki	No Party
November 17, 2017	Zubrzycki	$330,000 to Masons $30,000 to McCracken $310,000 to Bluechip $500,250 to Zubrzycki	No Party
March 1, 2018	Masons	$350,000 to Masons $35,250 to McCracken $325,000 to Bluechip $460,000 to Zubrzycki	Bluechip
October 23, 2018	Bluechip	$325,000 to Masons	No

[9] In reviewing the offers to settle, it is important to understand the context within which they were made. When the individual figures are added together, each offer (with the exception of Bluechip’s) totals $1,170,250 – in essence the funds that were paid into court, rounded up slightly. Clearly, the parties were operating under the premise that this was all the money there was to work with. I note that the offers were all-inclusive, with no consideration for interest. Each party also bore their own costs.

[10] Bluechip submits that it offered to settle with the Masons because they were the only party challenging Bluechip’s mortgages. The Masons submit, and I agree, that with the crossclaims still live issues at that time, it was not possible for them to accept Bluechip’s offer.

[11] I was advised there was a mediation which did not result in a resolution.

Parties’ Positions

[12] As one might expect given the protracted nature of this litigation, there was finger pointing across all lines during costs submissions. Arguments were made as to who should get costs, who should not get costs, who should pay costs, etc. I will not address each submission, and will instead highlight the salient arguments.

[13] I find that the Masons were most amenable to resolution. The two offers they served would have seen funds going to each party, an eminently reasonable position to take. The Masons seek $74,413.41 in costs and disbursements, plus $2,288.25 for the costs hearing.

[14] Bluechip was also interested in resolution. It was prepared to accept the Masons’ second offer, but that was contingent on all parties agreeing to the resolution. It also served an offer on the Masons. Bluechip seeks costs of $34,907.93.

[15] I find the true barriers to resolution were the positions taken by Zubrzycki and McCracken. I say this despite the fact that Zubrzycki served an offer to settle which, like the Masons’ offer, would have seen funds going to each party. Ill-advisedly, Zubrzycki’s insistence that he was owed over $500,000 in principle made resolution impossible. Zubrzycki seeks $66,865.80 in costs and disbursements, including trial attendance fee of $5,000 per day as a self-represented party (Mr. Zubrzycki was represented by counsel at the costs hearing). Zubrzycki did not provide a bill of costs.

[16] McCracken did not accept any of the three offers, all of which would have seen her recover some funds. While her counsel submitted that she was open to resolution, there was no evidence before the court to substantiate this. McCracken asks to be paid the balance of the funds paid into court after each party is paid pursuant to paragraph 89 of my decision ($42,246.90), plus all the interest that has accrued since November 2017. This despite the fact that the judgment clearly indicates interest, costs, and disbursements were yet to be calculated. McCracken did not provide a bill of costs.

Analysis

[17] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[18] Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, identifies the factors a court may consider when exercising its discretion to award costs. While these factors provide guidance when a court is assessing and fixing costs, as Boswell J. held in Nesbitt v. Jeffery, 2018 ONSC 7285:

Regardless of the particular factors considered relevant by the court on any given assessment, it is now well-settled that the overarching principles to be observed in the exercise of the court’s discretion to fix costs are fairness, proportionality and reasonableness: see Beaver v. Hill, 2018 ONCA 840; Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.); and Moon v. Sher (2004), 246 D.L.R. (4th) 440 (C.A.).

Conclusion

[19] I find on balance that no party was 100% successful at trial, and no party truly beat their offer. It is accurate to suggest that when interest, costs, and disbursements are factored in, the figures might belie this observation. However, recall that success must be viewed from the perspective of how the offers to settle were structured, and the finite figure available for allocation. Additionally, a party’s position on the distribution hierarchy also has a bearing on whether they beat their offer to settle.

[20] In an effort to reach the fairest, most proportional, and reasonable resolution of costs, I make the following awards.

[21] The Masons are awarded their costs as sought. There were submissions that the Masons should not receive costs of the 2017 motion before Justice DiTomaso. I disagree. As Ms. Turner, counsel for the Masons advised, there were four separate motions before the court that day – each party sought relief of one form or another. His Honour did not grant the vendor’s lien at the motion, but he did find it was a triable issue.

[22] Bluechip shall recover costs on a partial indemnity basis, given its failed position on laches. The Masons argued that Bluechip should only receive costs on the second mortgage, not the first. I do not find favour with this argument.

[23] McCracken will not recover any costs in light of both her failure to accept any offer, and her complete lack of success at trial.

[24] Zubrzycki will not recover any costs, as I find his insistence on receiving virtually 100% of the principal owed to him forced this matter to trial.

[25] The funds paid into court shall be distributed as set out below:

Party	Trial Award	Interest (to July 7, 2017)	Costs and Disbursements	Total
Zubrzycki	$200,000	$42,290.41	0	$242,290.41
Bluechip	$165,000	$18,226.85	$34,907.93	$218,134.78
Masons	$340,000	0	$76,701.66	$416,701.66
Bluechip	$153,000	$17,488.11	0	$170,488.11
Zubrzycki	$170,000	$29,603.29	0	$199,603.29
Zubrzycki	$100,000	$22,389.04	0	$122,389.04

[26] Counsel for McCracken suggested that when viewed with an eye to proportionality, the costs sought by the Masons were inordinately high. I disagree. My overall impression is that Ms. Turner did much of the heavy lifting in this litigation. In addition, she provided material to the court, including a chronology, and written submissions, both of which were valuable aides-memoire. I note that Mr. Raina also assisted the court by providing detailed interest calculations.

[27] With the release of this decision, it is hoped that the parties can put this lengthy saga to rest.

CASULLO J.

Date: September 10, 2019

September 10, 2019 – Correction:

The citation in the third and fourth lines of para. 18 has been corrected to read: Nesbitt v. Jeffery, 2018 ONSC 7285.

[1] The plaintiffs were never able to find Hameed to serve him, so he did not participate in the litigation.