BARRIE COURT FILE NO.: CV-14-0402

DATE: 20190820

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Balmoral Developments Hilda Inc., Plaintiff

AND:

The Corporation of the City of Orillia, Ian Sugden and Kelly Smith, Defendants

BEFORE: The Hon. Mr. Justice G.M. Mulligan

COUNSEL: C.D. Salazar, Counsel for the Plaintiff M. Nguyen, Counsel for the Defendants

HEARD: By written submissions

COSTS ENDORSEMENT

[1] The plaintiff, Balmoral Developments Hilda Inc. (Balmoral) commenced an action against the City of Orillia and two of its employees, Ian Sugden and Kelly Smith (hereinafter the City of Orillia). On February 12, 2019, the City of Orillia brought a motion for summary judgment against Balmoral. Balmoral brought cross-motions seeking relief with respect to the same issues.

[2] Reasons for my decision were released on May 29, 2019.

[3] The issue of costs was reserved. As noted in my decision at paras. 61 and 62:

At the conclusion of this motion, both parties made costs submissions, in the event that they were successful. However, in this case, success has been mixed and the issue of damages is yet to be determined.

I therefore give the parties an opportunity to make further submissions on costs…

[4] Both parties have made submissions seeking costs.

[5] There is an extensive history of litigation between the parties, which was reviewed briefly in my Reasons for Decision.

The Summary Judgment Motion

[6] The summary judgment motion brought by the City of Orillia concerned two discreet issues. Balmoral summarized the two issues in its costs submissions at para. 2:

(a) Was By-Law 2014-75, enacted by the City on or about July 24, 2014, lawfully enacted? (“Issue One”)

(b) Were the “barrier-free” accessibility requirements imposed upon Balmoral by the City purportedly pursuant to the Building Code, O.Reg. 350/06 lawfully imposed? (“Issue Two”)

[7] The City of Orillia was successful with respect to Issue Two, the barrier-free accessibility requirements. In the result, a portion of Balmoral’s claim in its action against the City of Orillia was dismissed.

[8] With respect to Issue One, By-Law 2014-75, the City’s summary judgment motion was not successful. For reasons given, it was determined that the City had no power to impose conditions with respect to an Exemption Certificate under s. 9(6) of the Condominium Act. This leaves to be determined an assessment of damages. As noted in para. 58 of my decision: “The issue of damages was not addressed and is therefore subject to a trial of that issue or other disposition of the court.”

Position of the Parties

[9] Both parties are seeking costs with respect to this matter.

City of Orillia’s Costs Submissions

[10] As set out in their costs submissions at para. 5, the City submits:

The defendants (the City of Orillia) seek its partial indemnity costs at a reduction of 50% to reflect the divided success on the motion – the defendants’ reduced costs are $9,668.02 and $10,859.51 for advancing its motion and the costs of defending the action respectively. The defendants also seek an additional $850.33…for costs submissions. The total sought is $21,377.86.

[11] The City submits it was wholly successful on Issue Two, the barrier-free accessibility requirements. The amount sought by the City includes partial indemnity costs for pleadings and initial investigations ($12,320.66), work toward examinations for discovery ($4,087.30) and file management ($2,812.40). As noted, the amount sought by the City reflects fifty percent of what they would otherwise have sought had they been successful on both issues on this summary judgment motion.

[12] Balmoral seeks costs of $9,489.50. As set out in para. 1 of its costs submissions:

The plaintiff/responding Party, Balmoral Developments Hilda Inc. (“Responding Party”), seeks it partial indemnity costs, reduced by 20% to reflect divided success, in the amount of $9,489.50, inclusive of HST and disbursements. This amount includes $969.50 being 80% of the partial indemnity rate of 4 hours to complete these written costs submissions.

[13] In its submissions with respect to divided success, Balmoral notes at paras. 21 and 22:

In instances of divide success, the Court is entitled to consider which party is “more successful”.

While success was divided, it is respectfully submitted that the Responding Party was “more” successful given the success on issue one, the more crucial issue to be determined, and the specific findings of bad faith.

[14] In their submissions, both parties acknowledged that the issues were complex. Further, the issue with respect to conditions in an Exemption Certificate under the Condominium Act were novel issues. Both parties made submissions which reflected reductions in costs sought, based on divided success. The City of Orillia sought costs reduced by fifty percent. Those costs claims were considerably higher than Balmoral’s claim. Balmoral sought costs less twenty percent, based on divided success.

Applicable Principles

[15] The principles in r. 57.01 and principles in various decisions from the Court of Appeal are well known. The court has discretion under s. 131 of the Courts of Justice Act to award costs. The court can consider the amount of costs that an unsuccessful party could reasonable expect to pay, the amount claimed, and the amount recovered in the proceeding, among other factors. As Armstrong J.A. stated for the Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 at para. 24:

Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in a particular proceeding, rather than a fixed amount by the actual costs incurred by the successful litigant.

[16] As Epstein J.A. stated further in Clarington (Municipality) v. Blue Circle Canada Inc., [2009] O.J. No. 2436 at para. 52:

As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party, rather than the exact measure of the actual cost of the successful litigant.

Conclusion

[17] In my view, Balmoral was the more successful party with respect to this summary judgment motion. It resisted the City of Orillia’s claims to dismiss this action in its entirety. Although its claim against the City of Orillia with respect to the barrier-free requirements (Issue Two) was dismissed, its claim for damages with respect to the City of Orillia’ imposition of conditions as part of the Exemption Certificate under the Condominium Act was not dismissed. The action continues with respect to an assessment of damages, if any. In connection with that issue, the City of Orillia was found to have acted in bad faith. In my view, this warrants an assessment of costs against the City of Orillia with respect to that part of Balmoral’s claim.

[18] However, a costs award with respect to a summary judgment motion ought to avoid double recovery. Much of the work done by Balmoral may well form part of its costs submissions if it is successful at trial. I note in particular, its claim for trial management and preparations for examination for discovery.

[19] I have considered the submissions of the parties, the principle of reasonableness and the ongoing nature of this litigation. Damages have not yet been adjudicated. I am satisfied that an award of $10,000 all inclusive to Balmoral strikes the right balance with respect to this matter.

[20] Costs are therefore payable by the City of Orillia to Balmoral Developments Hilda Inc. within 30 days of the release of this endorsement.

MULLIGAN J.

Date: August 20, 2019