COURT FILE NO.: CV-15-00524487

MOTION HEARD: 20190930

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Amos Tayts, Plaintiff

AND:

Gordon Fox, Harvey Shapiro, Maxim Zavet, Levy Zavet Professional Corporation, Emblem Cannabis Corporation, Emblem Corp., Kindcann.com, Inc., MZ Prime Holdings Ltd. and White Cedar Pharmacy Corporation, Defendants

AND:

Emblem Cannabis Corporation and Kindcann.com Inc., Plaintiffs by Counterclaim

AND:

Amos Tayts and Talya Lev-Mor, Defendants to the Counterclaim

BEFORE: Master B. McAfee

COUNSEL: R. Hine, Counsel, and P. Metani, Articling Student, for the Plaintiff and Defendants to the Counterclaim

B. McLeese, Counsel for the Defendants and Plaintiffs by Counterclaim

HEARD: September 30, 2019

ENDORSEMENT RE: COSTS

[1] All parties seek costs of the defendants’ abandoned motion for summary judgment.

[2] It is the position of the plaintiff/defendants to the counterclaim (the plaintiff) that they are entitled to costs of the motion for summary judgment on a partial indemnity basis in the all-inclusive amount of $46,997.68. It is the position of the defendants/plaintiffs by counterclaim (the defendants) that they are entitled to costs of the motion for summary judgment motion on a partial indemnity basis in the all-inclusive amount of $33,540.66.

[3] This action was commenced by statement of claim on March 20, 2015. On June 4, 2015, the statement of claim was amended to add declaratory relief relating to spoliation. In or about July 2015, statements of defence were delivered. In or about March 2016, the statement of defence of certain defendants was amended to assert a counterclaim.

[4] In or about April 2016, the plaintiffs’ productions were served. In or about November 2016, the defendants’ productions were served.

[5] In or about July 2017, the defendants advised that they intended to move for summary judgment.

[6] On August 4, 2017, the parties attended Civil Practice Court and obtained the date of February 8, 2018, for the defendants’ motion for summary judgment. A timetable was also ordered.

[7] On or about August 10, 2017, the defendants served a two volume motion record in accordance with the timetable.

[8] The plaintiff did not comply with the timetable. The timetable required the plaintiff to serve responding material by October 27, 2017.

[9] On January 11, 2018, plaintiff’s counsel wrote to defendants’ counsel advising that he was in the process of finishing the responding material and anticipated serving same before the end of the next week. Plaintiff’s counsel also indicated that he expected that the parties would need to attend Civil Practice Court to set a new timetable and motion date.

[10] On January 22, 2018, with no responding material having been served, defendants’ counsel wrote to plaintiff’s counsel confirming that no responding material had yet been served, asking when the responding material might be delivered, and if the plaintiff intended to seek an adjournment of the motion for summary judgment.

[11] On January 23, 2018, plaintiff’s counsel wrote to defendants’ counsel advising that he hoped to serve responding material in the next few days. In addition, plaintiff’s counsel advised: “We will also need to amend the pleadings to add Emblem (now that the KindCann companies have been amalgamated etc.). We will provide you with a notice of motion of amend as well.” The need to attend Civil Practice Court to reschedule the motion and amend the timetable was also noted.

[12] On February 2, 2018, the plaintiff served a responding affidavit, without exhibits. On February 6, 2018, the plaintiff served a two volume responding motion record.

[13] On February 20, 2018, the parties attended Civil Practice Court to obtain a new date for the motion for summary judgment. A new date was set for July 31, 2018, peremptory to the plaintiff. A further timetable was ordered.

[14] On February 28, 2018, the plaintiff provided the defendants with a copy of a draft fresh as amended statement of claim. On March 5, 2018, at the request of the defendants, the plaintiff provided a black line version of the draft fresh as amended statement of claim. The proposed amendments went beyond adding Emblem.

[15] On April 12, 2018, defendants’ counsel wrote to plaintiff’s counsel confirming the position of the defendants with respect to the proposed amendments. The defendants intended to oppose some of the proposed amendments.

[16] On May 3, 2018, plaintiff’s counsel wrote to defendants’ counsel asking if the defendants intended to abandon the motion for summary judgment in the event that the amendments were granted. Plaintiff’s counsel indicated that if so, a further appearance would be required to determine the quantum of costs payable by the defendants.

[17] On May 3, 2018, defendants’ counsel wrote to plaintiff’s counsel advising: “…I think we will need to decide what to do about our summary judgment motion once we see what the plaintiff’s pleadings look like following the motion. At the moment, the case we are trying to meet is a moving target. For now, as set out in our letter, we are asking that it be adjourned until the pleadings are finalized.”

[18] The parties agreed to adjourn the motion for summary judgment pending the outcome of the plaintiff’s motion for leave to amend the amended statement of claim.

[19] The plaintiffs’ motion for leave to amend the amended statement of claim was heard on October 26, 2018, and March 4, 2019. My reasons for decision were released on April 2, 2019 (2019 ONSC 1963). Leave to amend was granted.

[20] On May 3, 2019, at the Civil Practice Court appearance, the defendants advised the court that the only issue they intended to argue in relation to the motion for summary judgment was the issue of costs. In accordance with paragraph 28 of my reasons for decision dated April 2, 2019, the issue of costs of the motion for summary judgment was referred to me.

[21] Rule 37.09(3) of the Rules of Civil Procedure provides as follows:

(3) Where a motion is abandoned or deemed to have been abandoned, a responding party on whom the notice of motion was served is entitled to costs of the motion forthwith, unless the court orders otherwise.

[22] There is no issue that any party acted unreasonably or in bad faith within the meaning of Rule 20.06 of the Rules of Civil Procedure.

[23] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c.C.43 provides that costs are in the discretion of the court.

[24] Rule 57.01(1) of the Rules of Civil Procedure sets out a non-exhaustive list of factors that the court may consider in exercising its discretion.

[25] In Inzola Group Limited v. The Corporation of the City of Brampton, 2017 ONSC 3822 (Ont. S.C.J.) Justice Daley determined the issue of costs of the defendant’s abandoned motion for summary judgement. Justice Daley states as follows:

16 A party that was required to respond to a subsequently abandoned motion is entitled to costs, in the absence of exceptional circumstances, and as such a party is presumptively entitled to such costs as a matter of right and to have those costs payable forthwith, unless ordered otherwise: Yang v. Mao, 1995 7052 (ON SC), [1995] O.J. No. 1323 (Ont. Gen. Div.).

17 This view has been accepted that a party responding to a summary judgment motion subsequently abandoned is entitled to costs and it is thus the moving party who must convince the court that there are sufficient grounds to depart from the provisions of Rule 37.09(3).

18 Thus, the defendant bears the onus of establishing that the court should deviate from the presumptive rule that the plaintiff is entitled to costs of the motion on a partial indemnity basis payable forthwith. Failing the presentation of such evidence, the plaintiff would be entitled to its costs on a partial indemnity basis.

23 The hallmarks of fairness and reasonableness, including the principle of proportionality must be present in any award of costs: Emmott v. Your Community Realty Inc., 2016 ONSC 7446 (Ont. S.C.J.). Further, the fixing of costs is not a simple mathematical exercise, and the exercise of this discretion should not begin or end with the calculation of hours multiplied by rates: Boucher v. Public Accountants Council (Ontario) [2004] CarswellOnt 2521 (Ont.C.A.), 2004 14579; Davies v. Clarington (Municipality), 2009 ONCA 722 (Ont. C.A.).

24 The fact that a summary judgment motion may have been reasonably brought and then abandoned does not disentitle the responding party to its costs: Augustine v. Inco Ltd., [2005] O.J. No. 1618 (Ont. S.C.J.).

[26] I am satisfied that this is an appropriate case to order otherwise within the meaning of Rule 37.09(3) of the Rules of Civil Procedure.

[27] With respect to the plaintiff’s request for his costs, the amendments were not a result of anything that transpired or came to light after the defendants advised of their intention to move for summary judgment. The plaintiff prepared responding material and then served a draft proposed amended pleading shortly thereafter. The plaintiff advised of the intention to amend the amended statement of claim to reflect a change in name, which was not the full extent of the amendments sought.

[28] The plaintiff could have avoided any costs that the plaintiff incurred in responding to the motion for summary judgment by advising of the intention to seek numerous amendments prior to incurring those costs. Had the plaintiff advised of his intention to seek substantial amendments earlier, the motion for summary judgment could have been put on hold earlier, prior to incurring the costs that the plaintiff now seeks. The plaintiff is not entitled to costs of the motion for summary judgment.

[29] With respect to the defendants’ request for their costs, had the plaintiff advised earlier of the intention to amend the amended statement of claim beyond seeking to add Emblem, the motion for summary judgment could have been put on hold earlier, before the defendants incurred those costs.

[30] Although I found that the impugned proposed amendments did not amount to a new cause of action, the amendments were extensive. Of the 128 paragraphs of the proposed fresh as amended statement of claim, approximately 100 paragraphs contained amendments.

[31] The defendants did not seek to abandon the motion for summary judgment after receipt of the responding material or after the plaintiff advised that they intended to seek an amendment to add Emblem. The amendment to add Emblem was not opposed.

[32] The position of the defendants on proceeding with the motion for summary judgment was contingent on the outcome of the motion for leave to amend. It was only after the determination of the motion for leave to amend that the defendants abandoned their motion for summary judgment.

[33] It was not unreasonable for the defendants to have reconsidered their position on the summary judgment motion in light of the outcome of the plaintiff’s motion for leave to amend.

[34] Having regard to the evidence before me, I am satisfied that the extensive amendments to the amended statement of claim pursued only after the motion for summary judgment was served and shortly after the responding motion material was served amount to exceptional circumstances. The defendants are entitled to costs of the summary judgment motion on a partial indemnity basis.

[35] I have reviewed and considered the costs outlines. The costs sought by the defendants are approximately $13,000.00 less than the costs sought by the plaintiff. As noted by Justice Daly in Inzola at para. 46, it is not unusual for a responding party to incur more costs on a summary judgment motion in light of the requirement that the responding party put its best case forward. However, having incurred $13,000.00 less in costs than the plaintiff, the defendants’ costs are an amount within the reasonable expectation of the plaintiff.

[36] Having regard to all of the circumstances of the motion for summary judgment I am satisfied that the amount sought by the defendants of $33,540.66 is for a fair and reasonable amount that the plaintiff could expect to pay for costs.

Summary of Order Granted

[37] Order to go as follows:

1. Costs of the defendants’ abandoned motion for summary judgment are fixed in the amount of $33,540.66 and payable by the plaintiff to the defendants within 30 days.

Master B. McAfee

Date: October 10, 2019