Court File and Parties

Court File No.: CV-12-443718 Date: 2019-05-08

Superior Court of Justice - Ontario

Re: CRIAG HURST, Plaintiff - and - JAMES HANCOCK, DARWIN PRODUCTIONS INC. and TRADEPOINT 360 INC., Defendants

Before: Master Todd Robinson

Counsel: K. Marciniak, for the moving defendants, James Hancock and Darwin Productions Inc. M. Singh, for the plaintiff

Heard: March 28, 2019

Reasons for Decision

[1] The defendants, James Hancock and Darwin Productions Inc. (together, the “Hancock Defendants”), move for an order requiring that the plaintiff pay the costs ordered payable following their successful summary judgment motion, which is currently the subject matter of a pending appeal in the Court of Appeal, within 30 days, failing which the plaintiff’s defence to the Hancock Defendants’ counterclaim be struck. The Hancock Defendants also seek an order staying a pending motion by the plaintiff for summary judgment dismissing their counterclaim.

Preliminary Matter - Lack of Jurisdiction

[2] As I confirmed to counsel at the hearing, I lack jurisdiction to stay the plaintiff’s motion for summary judgment or to interfere with the timetable order for that motion. The plaintiff’s summary judgment motion is the subject of a timetable order of Justice Diamond dated December 21, 2018. That order outlines a timetable for steps leading up to a hearing for the summary judgment motion and directed that the motion itself would be scheduled at a future attendance in Civil Practice Court. Pursuant to Rule 37.02(2)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), I lack jurisdiction to set aside, vary or amend an order of a judge.

[3] I accordingly cannot override Justice Diamond’s order, which contemplates that the plaintiff’s motion for summary judgment will be proceeding. As a result of my comments at the hearing, I understand that the parties intended to separately address the plaintiff’s summary judgment motion at the next Civil Practice Court attendance. To the extent required, the motion regarding relief in respect of the plaintiff’s motion for summary judgment is dismissed.

[4] The balance of these reasons deal with the remainder of the motion, namely whether or not the plaintiff is obliged to make payment of the costs award granted by Justice Cavanagh by costs endorsement dated December 13, 2018 while appeal of the merits judgment remains pending.

Background to Motion

[5] The Hancock Defendants’ motion arises out of the costs awarded following their successful summary judgment motion. The remaining defendant, Tradepoint 360 Inc., was previously noted in default after its defence was struck. The summary judgment motion was heard on July 25, 2018 before Justice Cavanagh, who reserved and ultimately granted summary judgment on October 5, 2018 dismissing the action in its entirety. Following written submissions as to costs, Justice Cavanagh ordered on December 13, 2018 that the plaintiff pay to the Hancock Defendants their costs fixed in the amount of $40,000, inclusive of fees, disbursements, and HST (the “Costs Award”).

[6] The plaintiff’s former lawyers, Graham Partners LLP, Graham Wilson & Green and HGR Graham Partners LLP (collectively, the “Intervenors”), were permitted to intervene and supported the plaintiff in his opposition of the motion for summary judgment. No costs were sought or ordered against the Intervenors.

[7] By notice of appeal dated November 2, 2018 (prior to the Costs Award), the Intervenors commenced an appeal from Justice Cavanagh’s summary judgment decision. The plaintiff did not commence his own appeal. The Intervenors’ notice of appeal seeks to set aside the judgment and seeks an order that the summary judgment motion be instead dismissed. The pertinent relief is framed in the notice of appeal as follows:

THE APPELLANTS ASK that the judgment of the Court below be set aside and that in its place, an order be granted dismissing the defendants’ motion for summary judgment, with costs.

[8] The plaintiff has admittedly not paid the Costs Award, but on the basis that it is stayed by virtue of the appeal. The Hancock Defendants disagree, taking the position that the costs are not stayed because neither the Intervenors nor the plaintiff have appealed costs. The limited evidence on this motion suggests that the debate between counsel as to enforceability of the Costs Award was ongoing until this motion was ultimately brought seeking an order compelling that the plaintiff make payment of the Costs Award, failing which his defence to counterclaim be struck.

[9] In the midst of the debate, the plaintiff scheduled its own motion for summary judgment seeking to dismiss the Hancock Defendants’ counterclaim, which became the subject of Justice Diamond’s timetable order dated December 21, 2018.

[10] Subsequent to the Hancock Defendants bringing this motion and the plaintiff serving responding materials, the plaintiff served a notice of motion in the Court of Appeal to stay enforcement of the Costs Award and seeking leave to appeal it, as well as other relief regarding the determination of costs of the summary judgment motion. A supplementary responding motion record was thereafter served in this motion including that evidence.

[11] I have since been advised by letter of plaintiff’s counsel dated April 29, 2019, written with apparent consent of counsel for the Hancock Defendants, that the Court of Appeal is permitting the plaintiff’s motion to be heard concurrently with appeal argument on May 16, 2019. I do not find this fact to be material in deciding the motion.

Analysis

[12] Rule 63.01(1) of the Rules provides as follows:

63.01 (1) The delivery of a notice of appeal from an interlocutory or final order stays, until the disposition of the appeal, any provision of the order for the payment of money, except a provision that awards support or enforces a support order.

[13] Whether or not the automatic stay in Rule 63.01(1) captures a costs decision related to a motion decision under appeal is the crux of the Hancock Defendants’ motion. Put another way, is a separately released costs award, which is not itself specifically appealed, a provision of the order under appeal for the payment of money?

[14] The plaintiff argues that the Intervenors’ appeal is for an order substituting the judgment with an order dismissing the summary judgment motion “with costs”, so costs are thereby appealed given the relief sought for a new costs order in favour of the plaintiff. It is the plaintiff’s position that it is illogical to allow the costs decision that flowed from the judgment to stand even though the judgment itself may be overturned. The plaintiff further argues that the Costs Award is a “provision of the order for the payment of money” given the invitation by Justice Cavanagh to make cost submissions at paragraph 54 of his reasons for judgment and the determination in the costs endorsement that costs should be payable by the plaintiff because the Hancock Defendants succeeded in their motion. The plaintiff submits that the position is reinforced by the reality that if the Court of Appeal overturns Justice Cavanagh’s decision, then the Costs Award will be automatically reversed as well since paragraph 54 of the decision, which invited cost submissions and which links the Costs Award to the judgment, would be overturned.

[15] In both the plaintiff’s factum and in argument by plaintiff’s counsel, I was pointed to the recent decision of the Court of Appeal in Bondfield Construction Company Limited v. The Globe and Mail Inc. et al., 2019 ONCA 166. At para. 29 of that decision, the Court of Appeal held as follows [emphasis added]:

[29] Both sides sought leave to appeal the costs order made by the motion judge. As I would allow the main appeal, the costs order made by the motion judge falls. There is no need to address the applications for leave to appeal costs.

[16] I am also pointed to the decision of the Court of Appeal in Tricontinental Investments Co. v. Guarantee Co. of North America, [1989] OJ No 1663 (CA). In that motion, dealing with security for costs of an appeal, the Court of Appeal held at para. 14 as follows [emphasis added]:

Typically, such an order for costs is made by a trial judge to follow the event of the disposition of the action at trial in a judgment which is the very subject-matter of the pending appeal and, if the judgment is reversed on appeal, the order for costs will, typically, be reversed as well.

[17] I am further pointed to the decision of the Court of Appeal in City Commercial Realty (Canada) Ltd. v. Bakich, [2005] OJ No 6443 (CA), in which the Court of Appeal held at para. 4 as follows:

By rule 63.01, the trial judgment, insofar as it awards costs to the moving parties, is automatically stayed pending outcome of the appeal. This automatic stay of a trial costs award operates in favour of both a corporate and individual litigant. As a result of the automatic stay, the existence of a trial costs order cannot be said, pending appeal, to be an unsatisfied order for costs: [citation omitted].

[18] The Hancock Defendants argue that the Costs Award is a separate and distinct order from the judgment under appeal, and rely on the Court of Appeal’s decision in Byers v. Pentex Print Master (2003), 62 OR (3d) 647 (CA). In that case, the Court of Appeal held that a costs judgment rendered after the 30-day appeal period following judgment on the merits is treated separately for appeal rights, requiring either a motion for leave to appeal the costs under Section 133(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43 and Rule 61.03.1(1) of the Rules, or amendment to a notice of appeal under Rule 61.08(1) of the Rules: see paras. 14-15 and 44.

[19] Byers is the cornerstone of the Hancock Defendants’ position that the Costs Award is a separately appealable order, is thereby not a provision of the judgment already under appeal, and is accordingly not captured by Rule 63.01(1). The Hancock Defendants submit that the time to seek leave to appeal had expired when the plaintiff’s motion in the Court of Appeal was brought, and that the plaintiff’s late motion was strategically brought solely in response to this motion.

[20] My difficulty with the Hancock Defendants’ position is that, for me to accept it, I must disassociate the Costs Award from the judgment granted by Justice Cavanagh. I cannot do so. In my view, the Costs Award is inextricably connected to the judgment under appeal and, accordingly, the disposition of the appeal. The interrelationship of the judgment and the Costs Award is clear from reading Justice Cavanagh’s costs endorsement, which evinces his own connection between the disposition of the motion in favour of the Hancock Defendants and his determination as to costs.

[21] During oral argument, I asked counsel for the Hancock Defendants whether or not the Costs Award would remain enforceable by her clients if the decision was overturned on appeal. In that circumstance, the Hancock Defendants’ position is that they would still be entitled to enforce the Costs Award and to keep any costs realized from the plaintiff, regardless of the appeal outcome, since the Costs Award was not itself appealed. I do not agree that is correct in law.

[22] Byers does not stand for the proposition that a subsequent cost award remains enforceable if not appealed, despite a successful appeal of the merits judgment. I do not agree that the other cases provided by the Hancock Defendants stand for such a proposition either. In Byers, the respondent moved to quash the appellant’s appeal as being brought out of time, and the Court of Appeal addressed the timing of appeal rights, namely whether appeal rights ran from the release of the merits judgment or the subsequent costs decision. The Court of Appeal held that, in circumstances similar to this case, the two would be separate for the purposes of appeal rights, but the decision does not go so far as to say that the costs decision, if not appealed, remains payable in the event the merits judgment is overturned. In decisions like Bondfield Construction, the Court of Appeal has articulated the principle that a costs order falls if the merits appeal is allowed: Bondfield Construction, supra at para. 29.

[23] Accordingly, given the inextricable connection between the judgment and the Costs Award in this case, I find that enforcement of the Costs Award is captured by the stay in Rule 63.01(1) of the Rules.

[24] If I am wrong in that, I would nevertheless find that enforcement of the Costs Award is now stayed by virtue of the plaintiff’s motion for leave to appeal costs. The plaintiff submits that filing of a notice of motion seeking leave to appeal the Costs Award is the equivalent of filing a notice of appeal, as was held in similar circumstances in Sammut v. Sammut, 2016 ONSC 7400 at para. 20. Whether or not the plaintiff’s motion in the Court of Appeal was brought in response to this motion is somewhat moot. It has been brought. Whether or not the motion for leave to appeal is timely or if the plaintiff is entitled to an extension in the time to appeal are matters for determination by the Court of Appeal. I see no principled basis or reason to distinguish Sammut from the circumstances of this case, and I am bound by that decision. Accordingly, until the plaintiff’s motion is determined and, if granted, the appeal as to costs is determined, enforcement of the Costs Award is stayed.

[25] For the foregoing reasons, the Hancock Defendants’ motion is dismissed, without prejudice to bringing it again should the appeal be unsuccessful.

[26] If the parties are unable to reach agreement as to costs of the motion, then they may provide brief written submissions not to exceed four (4) pages each, excluding costs outlines and any case law. The plaintiff shall deliver his costs submissions by May 16, 2019. The Hancock Defendants shall deliver their responding cost submissions by May 24, 2019. There shall be no reply submissions. All costs submissions shall be submitted electronically directly to my Assistant Trial Coordinator by email.

MASTER TODD ROBINSON DATE: May 8, 2019