Court File and Parties

COURT FILE NO.: CV-17-583582 DATE: 2019-10-21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MACQUARIE EQUIPMENT FINANCE (CANADA) LTD., Plaintiff AND: 2326695 ONTARIO LTD. operating as DURHAM DRUG STORE, Defendant AND: MEDVIEWMD INC., LEASECORP CAPITAL INC., and DANIEL NEAD, Third Parties

BEFORE: Sossin J.

COUNSEL: Ron Aisenberg, Counsel for the Plaintiff Amer Mushtaq, Counsel for the Defendant Stephen Gaudreau, Counsel for Third Party, Leasecorp Capital Inc.

HEARD: July 16, 2019

ENDORSEMENT ON RECONSIDERATION & COSTS

OVERVIEW

[1] On July 16, 2019, I heard a motion brought by MacQuarie Equipment Finance (Canada) Limited ("MacQuarie"), for summary judgment against 2326695 Ontario Ltd., operating as Durham Drug Store ("Durham Drug Store"). The third party defendant, Leasecorp Capital Inc. ("Leasecorp"), also brought a summary judgment motion to dismiss the claim against it by the defendant, Durham Drug Store.

[2] The issues in dispute concerned the validity of a lease between MacQuarie and Durham Drug Store, which Leasecorp had brokered.

[3] On August 28, 2019, I released my decision, MacQuarie Equipment Finance (Canada) Ltd. v. 2326695 Ontario Ltd. et al., 2019 ONSC 5019 (the "August 28th judgment"). In that decision, I found that the lease between Macquarie and Durham Drug Store was valid and that Macquarie was entitled to damages. I also dismissed a cross-claim by Durham Drug Store, and dismissed Durham Drug Store's third party claim against Leasecorp.

[4] At the end of that decision, I stated (at para. 67):

The motions for summary judgment by MacQuarie is granted and MacQuarie is entitled to judgment in the amount of $90,057.13, together with pre-judgment interest, though in the circumstances, I find it more appropriate to calculate this interest at the rate prescribed in the Courts of Justice Act rather than the rate prescribed in the lease itself.

[5] I did not address the question of post-judgment interest.

[6] Subsequent submissions from the parties address the issue of a possible reconsideration of the question of pre and post-judgment interest and the question of costs. I address both these questions in this endorsement.

RECONSIDERATION

[7] On September 4, 2019, MacQuarie requested the opportunity to make additional written submissions on two issues arising from the August 28th judgment.

[8] First, MacQuarie wished to address the issue of pre-judgment interest, on the basis that the contractual rate of interest was not raised at the hearing or in my decision.

[9] Second, MacQuarie wished to address the applicable post-judgment interest rate on the same grounds, as it asked for the contractual rate to apply in its factum but the issue was not addressed in my decision.

[10] MacQuarie's position is that they were denied procedural fairness by not having these important issues addressed. MacQuarie relies on Labatt Brewing Company Limited v. NHL Enterprises Canada, L.P., 2011 ONCA 511, at para. 21:

[21] In summary, the NHL and Molson were not given an opportunity to address the ultimate conclusion reached by the application judge, the formation of a binding agreement between the NHL and Labatt on November 12, 2010. In a real sense, this constituted for the NHL a "finding [of] liability on a theory never pleaded and with respect to which battle was never joined" (Rodaro, at para. 63). As Cronk J.A. said in Grass, at para. 53, "at the end of the day, the issues between the parties are defined by and confined to those pleaded". That did not happen in this case, with the result that the NHL and Molson were denied procedural fairness.

[11] On September 5, 2019, Durham Drug Store provided submissions in response to MacQuarie's request, opposing the reconsideration of these two issues.

[12] Durham Drug Store relies on Justice Perell's decision in Apotex Inc. v. Kalinka, 2016 CanLII 81983 (ON SC), at paras. 9, 11:

...[T]he circumstances in which a court may vary an order are limited. Generally speaking, a court may only vary an order where: (a) there are new facts arising or discovered after the order was made that might probably have altered the judgment and could not with reasonable diligence have been discovered sooner; or (b) there has been an error in expressing the intention of the court.

A motion for reconsideration is not the venue for new arguments or new evidence that could have been made and/or led at the initial hearing; Mujagic v. Kamps, supra at para. 13; Sykes v. Sykes, [1995] B.C.J. No. 821 (B.C.C.A.) at paras. 6, 12.

[13] Durham Drug Store submits that both the issues of pre- and post-judgment were addressed in MacQuarie's oral submissions, and a document outlining the underlying calculations of interest under the lease was provided at the hearing as well.

[14] According to Durham Drug Store, if MacQuarie had wished to make further or additional submissions on these issues, its opportunity to do so was at the hearing, and not now. Durham Drug Store concludes its submissions by stating, "It is understandable that the plaintiff is disappointed in your decision on the issue of pre and post-judgment interest. But the plaintiff's disappointment pales in comparison to my client's disappointment in your decision, who firmly believes that there has been a miscarriage of justice by your decision. But the proper course of action for the plaintiff or my client would be to appeal your decision, if they choose to do so; their disappointments do not warrant a reconsideration by you."

[15] On September 19, 2019, I wrote to the parties with respect to MacQuarie's request for a reconsideration of the pre and post-judgment interest issues:

With respect to the plaintiff's request for additional submissions on two issues, I do not see a basis for additional submissions with respect to the issue of pre-judgment interest, as the distinction between the contractual rate of interest under the lease and the CJA rate of interest formed part of the submissions on the motion and has been addressed in the reasons for judgment. As a result, the request to make additional submissions on the first issue is denied. I do see a basis for additional submissions on post-judgment interest, as this issue is not specifically addressed in the reasons for judgment, and so this request is granted.

[16] No further submissions on the issue of post-judgment interest, however, were received.

[17] While it may be inferred from that finding in the August 28th judgment that the Courts of Justice Act ("CJA") interest rate would similarly apply to post-judgment interest, I will take this opportunity to clarify that aspect of the judgment. The same circumstances which led me to conclude the CJA was the more appropriate pre-judgment interest rate, also lead to the conclusion that the CJA rate is the appropriate post-judgment interest rate.

COSTS

[18] In the August 28th judgment, I invited the parties to provide costs submissions, and provided a timetable for doing so.

[19] On September 9, 2019, I received the costs submissions of MacQuarie. MacQuarie seeks costs of the action, including the summary judgment motion, on a full indemnity basis, citing a clause in the lease which states that the "Lessee must pay Lessor's costs of collection, re-possession of the Equipment and enforcement rights, including legal costs." On this basis, MacQuarie seeks costs in the amount of $30,724.89, all inclusive.

[20] On September 27, 2019, Leasecorp provided its costs submissions. Leasecorp was successful on its motion for summary judgment with respect to Durham Drug Store's third party claim. Leasecorp seeks its costs for the action, including the motion, on a substantial indemnity basis. Leasecorp's submission is that Durham Drug Store made "serious and baseless" allegations that Leasecorp was a knowing participant in a fraud, and unnecessarily lengthened and increased the complexity of the action, including the motion, by its conduct of the litigation against Leasecorp. Leasecorp relies on the decision of this Court in Expoed Inc. Anaca Technologies Ltd., 2017 ONSC 6513 ("Expoed") at paras. 6 and 18.

[21] On this basis, Leasecorp seeks costs of $24,031.46 (plus 689.63 in disbursements). In the alternative, Leasecorp seeks costs on a partial indemnity basis of $15,861.80 (plus 689.63 in disbursements).

[22] On September 30, 2019, Durham Drug Store provided its costs submissions. Durham Drug Store argues that full indemnity costs are not specifically mentioned in the provision of the lease on which MacQuarie relies.

[23] Durham Drug Store further argues that Expoed may be distinguished. In that case, no fraud was found while in this case, there has been a default judgment for fraud against the third party defendants MedView and Nead, and the question in the third party claim against Leasecorp was how far the fraud extended. Durham Drug Store submits the costs it should owe MacQuarie are $15,000, all inclusive, while the costs it should owe Leasecorp are $11,500.

[24] On October 2, 2019, MacQuarie provided its reply to Durham Drug Store's costs submissions. MacQuarie relies on Nadarajalingam v. Zhao, 2018 ONSC 1618 where Justice Dunphy found contractual wording in relation to indemnity for costs did not need to spell out "full indemnity" for that to be the scale of costs found.

[25] MacQuarie also relies on Expoed for its alternative claim for costs on a substantial indemnity basis.

[26] Costs are discretionary and informed by the factors set out in Rule 57.01 of the Rules of Civil Procedure. The breadth of this discretion has been confirmed by the Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, (2004), 71. O.R. (3d) 291 (C.A.).

[27] The Court of Appeal has made it clear that the overriding principle when fixing costs is that the amount of costs awarded be reasonable in the circumstances: see Davies v. Corporation of the Municipality of Clarington, 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52.

[28] I find in the circumstances of this case, and in light of the submissions of the parties and applying the factors set out in Rule 57.01, it is reasonable that Durham Drug Store pay costs to MacQuarie in the amount of $20,000, all inclusive, and to Leasecorp in the amount of $15,000, all inclusive, within 30 days of this endorsement.

Sossin J.

Date: October 21, 2019