Court File and Parties

COURT FILE NO.: CV-16-129230-00

DATE: 20190926

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CORPORATION OF THE TOWN OF RICHMOND HILL, Applicant/Respondent

AND:

2285473 ONTARIO INC., 2285364 ONTARIO INC., JEFF REID and KATHY REID, Respondents/Appellants

BEFORE: The Honourable J. Dawe

COUNSEL: Charles A. Painter, Counsel, for the Applicant/Respondent Neil G. Wilson, Counsel, for the Respondents/Appellants

HEARD: In Writing

ENDORSEMENT re costs

[1] On May 7, 2019 I released my endorsement setting out my reasons for declining the Corporation of the Town of Richmond Hill’s request for an interlocutory injunction barring the Respondents/Appellants from using certain properties in a manner that contravenes a town zoning bylaw. I invited the parties to provide written submissions on the issue of costs.

1) Positions of the parties

[2] The Respondents/Appellants (“the Respondents”), as the successful parties on the motion for an interim injunction, seek their costs on a partial indemnity basis, which they quantify at $3,851.04.

[3] In response, the Corporation of the Town of Richmond Hill (“Richmond Hill”) urges me to reserve the issue of costs to the judge who eventually hears its Building Code Act, 1992 application for a compliance order, which has been consolidated with a number of Building Code Act, 1992 appeals that have been brought by the Respondents. In the alternative, Richmond Hill argues that costs should be fixed in a lower amount than the Respondents request, and should be made payable in the cause.

[4] Richmond Hill’s arguments for denying the Respondents their usual entitlement as the successful parties to partial indemnity costs payable forthwith builds on the submissions it made at considerable length in the motion to justify its request for an interlocutory injunction. Richmond Hill reiterates its reasons for believing that the Respondents always intended to use the two buildings at issue here as multi-unit rental apartments, contrary to the applicable zoning bylaw, as well as its belief – which I found had not been substantiated – that the Respondents are still using the buildings in a non-compliant manner. However, Richmond Hill argues that even if the Respondents are now complying with the zoning bylaw:

… the Town has clearly succeeded in part through its motion in forcing some sort of compliance with the applicable law by the Respondents, if one accepts their story as discussed in the latest affidavits … [Underlining in original]

[5] In the alternative, Richmond Hill argues that the Respondents should not be entitled to bill a 9.5 hour fee for their counsel’s attendance on the motion, since he would have had to attend in any event to address scheduling issues. According to Richmond Hill the fee for preparation and attendance on the day of the hearing should be no more than four hours, which on its calculations would reduce the Respondents’ costs from the $3,851.04 claimed to $2,305.20.

[6] Richmond Hill also argues that any costs award should be made payable “in the cause”, arguing that the Respondents “ought not to be rewarded for having forced the Town to take action, unless and until such action is found by the court not to have been justified or warranted in all of the circumstances”.

[7] For their part, the Respondents dispute that granting them their costs of the motion would be a “reward”, arguing that it would simply amount to “partial reimbursement for the legal costs [they] would not have had to incur if the Town had not brought its motion” for an interim injunction. They point out that Richmond Hill “had in its possession all of the [Respondents] affidavits when it decided to proceed with the motion”.

[8] With respect to the quantum of costs, the Respondents note that the scheduling and timetabling issues that were addressed on the motion appearance were all uncontested. The Respondents also argue that Richmond Hill’s challenge to their costs claim is undermined by its failure to supply its own bill of costs for comparison purposes.

2) Analysis

[9] I did not grant the interim injunction sought by Richmond Hill because I was not satisfied on the evidence before me that the Respondents, whatever they might have done in the past, were currently “flouting” Richmond Hill’s zoning bylaws by using their two buildings as multi-unit apartments. As I noted in my earlier endorsement, the Respondents had been charged with various bylaw infractions in 2016 but these charges had been withdrawn by the York Region prosecutor’s office in 2018. At para. 16 of my endorsement I explained:

The difficulty Richmond Hill faces in this case is that the present evidential record does not unambiguously establish that the Respondents are “persistent offender[s] who will not be stopped by the penalties provided by statute”.[^1] To the contrary, while Richmond Hill has presented a strong case that the Respondents may have always intended to convert the buildings into rental apartments and that they actually did so in breach of the bylaw in 2016, the evidence also suggests that the experience of being prosecuted for the 2016 breach may have had at least some deterrent effect.

[10] In my view, the evidential record also does not support Richmond Hill’s present claim that the Respondent’s apparent present compliance with the bylaw was forced “in part through its motion” for an interim injunction. Rather, the Respondents appear to have taken steps to make their buildings less suitable for ongoing use as rental apartments – e.g., removing door locks and kitchen stoves – at some point before December 2018, which was several months before Richmond Hill’s motion for an interim injunction was heard. Although Richmond Hill emphasized that it would be very easy for the Respondents to reverse the changes they have made and convert the buildings back into separate apartment units, Richmond Hill presented no evidence that the Respondents have actually done this. It would in my view be pure speculation to attribute this to Richmond Hill’s decision to press ahead with its motion for an interim injunction. Correlation does not imply causation.

[11] In any case, even if the Respondents’ conduct was influenced to some extent by the threat of Richmond Hill obtaining an interim injunction, this would not vindicate Richmond Hill’s decision to press forward with its motion even though it had no evidence that the Respondents were continuing to “flout” the zoning bylaw. Without any such evidence, Richmond Hill could not establish that an injunction designed to stiffen the existing statutory penalties for zoning bylaw breaches was either necessary or legally justified. Accordingly, I do not think it is accurate to characterize Richmond Hill as having achieved any partial success on its motion. Richmond Hill sought an interim injunction and came away empty-handed.

[12] As far as the quantum of costs is concerned, I am not persuaded that the Respondents’ bill of costs is excessive. The scheduling and timetabling issues that were addressed when the motion was heard on March 15, 2019 were all uncontested, and it is not apparent that both counsel would have had to attend before me had it not been for the fact that Richmond Hill was also seeking a contested interim injunction. In any event, obtaining a consent scheduling order would have taken only a matter of minutes, whereas the argument on the interim injunction motion took the better part of a day to complete.

[13] In my view, the Respondents’ counsel’s claimed costs of 4.2 hours for preparation prior to the day of the hearing and a further 9.5 hours for preparation and attendance on the hearing date are reasonable in the circumstances, having regard to the complexity of the disputed factual and legal issues and the size of the record adduced by both parties. I also see nothing excessive about counsel’s proposed partial indemnity hourly rate.

[14] Finally, I am not satisfied that it is appropriate in this case to order costs payable in the cause. The successful party on a motion is ordinarily entitled to his or her partial indemnity costs, payable forthwith. Making costs payable in the cause will sometimes be justified when the issues that will ultimately be decided in the cause overlap with the issue on the motion, such that the party who ultimately succeeds in the cause can be seen in hindsight as the one who also ought to have prevailed on the motion. As Nordheimer J. (as he then was) explained in e.g., Marini v. Muller, [2001] O.J. No. 259 at para. 5 (S.C.J.), in the context of a summary judgment motion:

[I]n a case such as this where the result of the summary judgment motion was what might fairly be referred to as a “close call”, the appropriate result is to leave the costs in the cause. There are two very distinct positions taken by the parties here. One or the other is going to be successful at trial. If the plaintiff's position is ultimately successful then there is some merit to the suggestion that it ought to have had its summary judgment in the first instance. If, on the other hand, the defendant is ultimately successful, then it clearly should have its costs of the summary judgment motion.

[15] In the case at bar, the issues that will have to be decided by the judge who hears Richmond Hill’s s. 38 Building Code Act, 1992 application and the Respondents’ related Building Code Act, 1992 appeals will in my view be legally and factually distinct from the question that was before me on the motion for an interim injunction. As noted above, I denied Richmond Hill’s request for interim injunctive relief because I was not satisfied that the evidence showed that the Respondents were currently “flouting” the zoning bylaw. The question of whether the Respondents are currently complying with the zoning bylaw will not be directly at issue in the main proceedings.[^2] While it may arise as a collateral matter – Richmond Hill’s position is that the building design changes at issue were meant to facilitate the Respondents’ scheme to breach the zoning bylaw – the judge who hears the case may find it unnecessary to decide the point. Although I stated in my earlier endorsement at para. 18 that the question of the Respondents’ current compliance with the zoning bylaw “will be a matter for the judge who conducts the … hearing [of the s. 38 application and the appeals] to resolve, with the benefit of a full evidential record”, I did not mean to suggest that the judge would necessarily have to decide this issue. Rather, I merely meant to indicate that I was making no definitive findings of fact that might be seen as binding.

[16] In summary, in the circumstances of this case Richmond Hill’s eventual success in the cause would not imply as a matter of law or logic that it ought to have been granted the interim injunction it requested. It may well turn out that Richmond Hill was justified in “tak[ing] action” against the Respondents by seeking a s. 38 Building Code Act, 1992 order against them, but that its decision to go further and seek an interim injunction was still unwarranted, as I found it to have been.

[17] In this regard, it is worth emphasizing that an injunction to stiffen the statutory penalties for a bylaw breach will not automatically be issued every time a breach is established. As I noted in my previous endorsement at para. 18:

Even if [the Respondents current] efforts [to comply with the zoning bylaw] are ultimately found to be inadequate, it cannot in my view be said that they are presently “flouting” the bylaw – that is, treating it with “contemptuous disregard”[^3] – or that the threat of a fine under the Planning Act would be inadequate to compel their compliance if the court determines that they are in breach.

[18] Accordingly, I am not satisfied that there is any compelling reason in this case to depart from the ordinary rule that the successful parties on a motion – here, the Respondents – are entitled to their reasonable costs on a partial indemnity basis, payable forthwith. Cost are ordered payable to the Respondents in the amount of $3,851.04, payable within 30 days.

DAWE J.

Date: September 26, 2019

[^1]: R.J. Sharpe, Injunctions and Specific Performance (loose-leaf) at ¶3.210. [^2]: As discussed in my earlier endorsement at para. 2, the main disputes in the main proceedings appear to be over whether certain design changes made to the Respondents’ buildings were actually already approved by Richmond Hill, and whether Richmond Hill acted improperly by refusing the Respondents’ applications for retroactive approval of some other design changes. [^3]: https://www.merriam-webster.com/dictionary/flouting.