Court File and Parties

COURT FILE NO.: CV-18-498-000 DATE: 2019-07-30

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

NICHOLAS TEMPLE and SUSAN TEMPLE Plaintiffs (Responding Party)

Mr. M. Maher, solicitors for the Plaintiffs (Responding Party)

- and -

RICHARD MOOREY and CHARLEEN MOOREY Defendants (Moving Party)

Ms. T. Rhaintre, agent for Cheadles LLP for the Defendants (Moving Party)

HEARD: July 24, 2019, at Thunder Bay, Ontario

Madam Justice H. M Pierce

Reasons on Costs of Motion to Set Aside Partial Summary Judgment

Introduction

[1] The plaintiffs were granted partial summary judgment when the defendants’ former counsel did not appear through inadvertence. The defendants moved to set aside the partial summary judgment but were not successful. The plaintiffs now claim enhanced costs for resisting the defendants’ motion.

[2] The plaintiffs were awarded full indemnity costs of $7,162.14 on the uncontested motion for partial summary judgment. The costs claimed by the plaintiffs on that motion were reduced as discussed in my reasons for summary judgment.

[3] My reasons for dismissing the defendants’ motion specify that costs submissions should not exceed five pages. Nevertheless, Mr. Maher filed seven unnumbered pages. It is never wise to ignore the directions of the court.

[4] The plaintiffs now claim full indemnity costs of $15,011.88 for the defendants’ motion. The motion was adjourned at the first return because the defendants were not ready to proceed and once because the motion was not reached on the list.

[5] The plaintiffs submit that they are entitled to full indemnity costs because the terms of the general security agreement executed by the defendants specified that the plaintiffs could recover their expenses.

[6] The defendants argue that there is no reprehensible conduct that warrants full indemnity costs. They submit that costs should be fixed at $5,000.00.

[7] The defendants also contend that a significant costs award would bar them from proceeding with the counterclaim as the defendants are in a precarious financial situation. However, there is no evidence that the defendants are impecunious.

[8] The defendants ask that any costs award be in the cause so that it awaits the results of the counterclaim. The record suggests that they did not pay a previous costs award within the time frame ordered by the court. Their default became an issue in the litigation.

[9] It is speculative, at this point, as to whether the defendants will proceed with their counterclaim. I have already ruled that the counterclaim does not afford a defence to the plaintiffs’ claim. Therefore, it is reasonable that any costs awarded not be contingent on the outcome of a counterclaim that may or may not proceed.

[10] I will now consider the quantum of costs.

[11] The general security agreement states:

CHARGES AND EXPENSES The Secured Party may charge on its own behalf and pay to others reasonable sums for expenses incurred and for services rendered (expressly including legal advice and services) in or in connection with realizing, disposing of, retaining or collecting the Collateral or any part thereof, and such sums shall be a first charge on the proceeds of realization, disposition or collection.

[12] Costs are in the discretion of the presiding judge. Rule 57.01(1) of the Rules of Civil Procedure sets out the factors for the court to consider. The bedrock principle that applies to costs awards is that they must be reasonable: Boucher et al. v. Public Accountants Council (Ontario), 71 O.R. (3d) 291, 48 C.P.C. (5th) 56, para. 26. The court must also be mindful that costs are an indemnity and not a cudgel. In short, cost awards must not be so prohibitive as to bar a party’s access to justice.

[13] In fixing costs, the court may consider any evidence of the reasonable expectations of the unsuccessful party with respect to costs. In this case, the defendants have filed their own bill of costs claiming partial indemnity costs of $4,952.95 plus disbursements.

[14] Rule 1.04(1.1) of the Rules of Civil Procedure also instructs the court that the application of the Rules of Civil Procedure must be proportionate to the importance and complexity of the issues and to the amount involved in the proceeding.

[15] The plaintiffs were awarded partial summary judgment in the amount of $65,673.80 which includes costs of $7,162.14.

[16] The terms of the general security agreement specify reasonable sums. In my view, this should not be understood as substantial or complete indemnity costs or the agreement would have so stated. In this case, the bulk of the plaintiffs’ legal work was done in presenting the motion for partial summary judgment, for which costs were awarded accordingly. In defending the judgment, the onus was on the defendants to persuade the court to set it aside. It was a narrow issue.

[17] The plaintiffs have also claimed costs for the case not being reached on the motions list. While unfortunate, the blame does not lie at the defendants’ feet.

[18] In my view, the plaintiffs’ claim for $15,000.00 in costs is not proportionate to the nature of the motion, or to the amount previously recovered, including costs. There are no grounds for awarding what are in effect punitive costs in these circumstances. Based on the defendants’ bill of costs, I conclude that they could not have anticipated the quantum of costs claimed by the plaintiffs who have already been awarded ample costs for two previous motions.

[19] A reasonable sum in these circumstances, pursuant to the parties’ contractual obligation, would be partial indemnity costs, which I fix at $5,000.00 inclusive of fees, disbursements, and HST. The defendants shall pay these costs to the plaintiffs within 60 days.

“original signed by”

The Hon. Madam Justice H.M. Pierce

Released: July 30, 2019