Court File and Parties

Court File No.: CV-18-0245-00 Date: 2019-10-09 Superior Court of Justice – Ontario

Re: JGB Collateral, LLC., a Delaware Limited Liability Company, Plaintiff And: Donna Jean Hewitt Rochon and John Rochon, Defendants

Before: Mr. Justice Graeme Mew

Counsel: Melanie Ouanounou and Kirby Cohen, for the Plaintiff Jonathan P. Collings, for the Defendant, Donna Jean Hewitt Rochon Jonathan P. Collings, for the Defendant John Rochon for the purpose of making submissions on costs

Heard: In Writing

Endorsement on Costs

[1] The defendants seek their costs of this action, including a summary judgment motion brought by the plaintiff which resulted in me ordering the dismissal of the plaintiff’s claim: see reasons for decision reported at 2019 ONSC 4920.

[2] In its summary judgment motion, the plaintiff sought to enforce a mortgage which is registered against the title of a property owned by the defendant Donna Rochon. I determined that the mortgage was unenforceable and, hence, that summary judgment should instead go dismissing the action and discharging the mortgage.

[3] It is to be noted that the defendants did not seek summary judgment. Rather, they opposed the plaintiff’s motion for summary judgment. However, as a consequence of my findings, I determined that, consistent with the approach taken in King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 2015 at para 14 and Whalen v. Hillier (2001), 2001 CanLII 24070 (ON CA), 53 O.R. (3d) 550 (C.A.), it was open to me to grant summary judgment to the successful defendants.

[4] The other observation I would make at the outset is that although both defendants were successful on the motion, the role played by John Rochon was essentially passive. The mortgage in question was registered against the property of Donna Hewitt, who like her husband, John Rochon, was a guarantor of a loan made by the plaintiff to a company called JRjr33. Mr. Rochon is currently acting for himself in this litigation, although he did retain counsel, Mr. Simmonds, for the purposes of appearing at the summary judgment motion.

[5] The defendants seek substantial indemnity costs in the amount of $106,202.04 or, in the alternative, partial indemnity costs of $77,881.49.

[6] The defendants submit that substantial indemnity costs are appropriate where, on a motion for summary judgment, a party has acted unreasonably by making or responding to the motion; or the party has acted in bad faith or for the purposes of delay: Rule 20.06.

[7] The defendants argue that given the lack of evidence that Donna Rochon had received legal advice which, as a sophisticated lender, the plaintiff ought to have reasonably known would be required in order to hold an enforceable Ontario mortgage over property owned by her, it was unreasonable for the plaintiff to have persisted in bringing its summary judgment motion.

[8] The plaintiff responds that substantial indemnity costs in the context of a summary judgment motion should be applied with “considerable caution” and that “in determining whether a party acted unreasonably in bringing a motion for summary judgment, the “omniscience of hindsight” should play no role in the analysis”: Himidan v. 2546579 Ontario Inc., 2018 ONSC 6037, para’s 8, 10 and 11.

[9] In my view, it was reasonable for the plaintiff to bring its summary judgment motion. While ultimately unsuccessful, there was nothing exceptional about the claim that should have led the plaintiff to believe that it was unlikely to succeed. To the contrary, although the principles of undue influence in circumstances similar to those pertaining in this case are now relatively well established in law, the instances of undue influence being successfully established are few and far between.

[10] In my view, this is not a case which calls for an award of substantial indemnity costs.

[11] The plaintiff has provided a bill of costs in relation to the motion which, inclusive of taxes and disbursements amounts to approximately $56,500 on a substantial indemnity basis. This total does not appear to include costs of the action unrelated to the motion for summary judgment. As an indication of the reasonable expectations of the plaintiff, however, it is of assistance.

[12] Having regard to the factors set out in Rule 57.01, but in particular, the reasonable expectations of the parties and the principle of proportionality in a case seeking to enforce a mortgage alleged to be security for a claim of over $7,000,000, I fix the costs payable by the plaintiff to Donna Rochon on a partial indemnity basis, inclusive of taxes and disbursements, at $49,000 and the costs payable to John Rochon in the all inclusive amount of $1,000.

Mew J.

Date: 09 October 2019