Court File and Parties
COURT FILE NO.: 18-75220
DATE: 2019/11/29
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: EXEL CONTRACTING INC., Plaintiff
AND
JEAN DAOUST CONTRUCTION INC. and OTTAWA HOUSING CORPORATION/ LA SOCIETE DE LOGEMENT OTTAWA, Defendants
BEFORE: Justice A. Doyle
COUNSEL: Jonathan Collings, Counsel, for the Applicant
Marie-Pier Dupont, Counsel, for the Defendant
HEARD: In writing
COSTS ENDORSEMENT
[1] On October 22, 2019, the Court dismissed the Plaintiff’s (“Exel”) motion for summary judgment as the Court found, among other things, that it was not appropriate to grant a summary judgment given the context of the litigation as a whole and it would result in a partial summary judgment. Exel v. Daoust, 2019 ONSC 5903.
[2] The parties were unable to agree on costs and they have provided their submissions.
[3] The Defendant, Ottawa Housing Corporation, did not participate in the motion.
[4] After considering the parties’ submissions, various attachments and the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”), the Court awards the Defendant, Jean Daoust Construction Inc. (“Daoust”), costs in the amount of $15,000 payable by Exel at the time of the finalization of this matter (at trial or settlement).
Daoust’s Position
[5] Daoust submits that as the successful party, it is presumptively entitled to costs. It is seeking costs on a substantial indemnity basis in the amount of $40,985.14
[6] It is relying on r. 20.06 of the Rules by submitting that the Plaintiff acted unreasonably by making this motion without regard to the case law from the Ontario Court of Appeal which strongly discourages against motions for summary judgment brought where the Court is being asked to render a partial summary judgment.
[7] Daoust states that after Exel launched its motion, it had provided the Plaintiff with one of the leading Court of Appeal cases in this area, but Exel refused to abandon its motion.
[8] Daoust argues that it should have been clear to Exel that there was a genuine issue for trial with respect to Exel’s responsibility regarding the termination of the main contract between Daoust and the other Defendant. Instead of proceeding with a doomed motion, Exel could have advanced the action.
[9] Pursuant to r. 49 of the Rules, an offer to settle served on December 6, 2018, proposed the abandonment of the motion and offered to pay $1,000.00 to Exel. Another offer dated April 18, 2019 offered the same but a cost of $500.00 payable to Exel. These offers were not accepted.
Exel’s Position
[10] The Plaintiff submits that the costs should be ordered “in the cause” and the Court should quantify the costs on a partial indemnity basis.
[11] It relies on r.20.06 of the Rules and Himidan v. 2546579 Ontario Inc., 2018 ONSC 6037, where the Court cautioned against imposing substantial indemnity costs in determining whether a party acted unreasonably and that “omniscience of hindsight should play no role in the analysis”. In that case Justice Schreck stated that Rule 20.06 should be employed only in “exceptional circumstances” where a party has behaved improperly. Exel brought the motion in good faith in an attempt to avoid a long trial.
[12] Exel argues that the complexity of the matter made summary judgment inappropriate. The existence of a contrary authority does not create bad faith.
[13] Exel is requesting that they receive costs be “thrown away” due to the last-minute adjournment request by Daoust on January 15, 2019. Their costs on a partial indemnity basis claimed for the adjournment is $2782.50.
[14] Exel also submits that costs should be in the cause to “sustain the value of the party’s investment until the final outcome”. See Mak (Estate) v. Mak, 2019 ONSC 2710.
[15] Regarding quantum, Exel states their costs on a substantial indemnity basis was $33,123.30 which is less than Daoust’s claim for costs.
Legal Principles
[16] The costs of a proceeding are in the discretion of the Court (Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 131 (1)). That discretion must be exercised on a principled basis (Davies v. Clarington Municipality, 2009 ONCA 722, 100 O.R. (3d) 66, at para. 40). Fixing costs is not merely a mechanical exercise; the amount awarded should, considering all the circumstances, be fair and reasonable (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)). In a proper case, costs may be awarded against a successful party (r. 57.01 (2) of the Rules).
[17] Rule 20.06 of the Rules, deals with costs in summary judgment motions:
The Court’s power to fix and order costs on a substantial indemnity basis for a motion of summary judgment may be exercised in two limited circumstances:
a) Where the party acted unreasonably by making or responding to the motion; or
b) Where the party acted in bad faith for the purposes of delay.
[18] The factors which may be considered when awarding costs, in addition to success and any offers to settle, are listed in r. 57.01 of the Rules.
Analysis
[19] Successful parties are entitled to costs. Daoust has obtained a decision that is more favourable than their offers to settle and meets the criteria set out in r.49.03 of the Rules.
[20] I am guided by various cases that have dealt with this issue of whether a successful party is entitled to costs on a substantial basis due to the other party acting unreasonably.
[21] In Ferndale Enterprises Inc. v. Expertus Technologies Inc., [2019] O.J. No 1248, Justice P. Cavanagh concluded that the successful party was entitled to costs only on a partial indemnity basis as it was not obvious that the motion had no chance of success based on the evidentiary record.
[22] In Himidan v. 2546579 Ontario Inc., 2018 ONSC 6037, Justice Schreck stated that the “omniscience of hindsight” should play no role in the analysis. She states that Rule 20.06 requires some improper conduct and should only be employed in “exceptional circumstances” where a party has behaved improperly. She refers to 1095909 Ontario Inc. v. Westmount-Keele Ltd., 2016 ONSC 3507.
[23] In Ashim v. Zia, 2015 ONSC 564, at para. 9, Justice Emery sets out certain factors the Court can consider when determining if a moving party acted unreasonably:
What does it mean for a party to act unreasonably by bringing a motion for summary judgment in a post Hryniak environment? The court in Hryniak was clearly concerned about access to justice, particularly with respect to making litigation routes available to litigants that are proportionate to the case. It is my view a moving party would be seen to have acted unreasonably if:
the evidence on the motion was clearly insufficient to show facts on which the court could conclude that there was no genuine issue requiring a trial;
the legal basis for the motion was wrong or clearly insufficient for the court to conclude that there was no genuine issue requiring a trial;
the evidence and legal principles when applied to the issues on the motion did not engage the economies that Hryniak contemplated as a proportionate, timely and affordable procedure to justify bringing the motion having regard to the nature of the action or prevailing circumstances in the litigation; or
no meaningful order is made by the court under Rule 20.05 to assist with the trial management process for the action or that part of the action for which the motion for summary judgment was refused.
[24] In Mak Estate, Justice Edwards followed a line of cases that suggest that if a party’s motion for summary judgment fails but was brought in good faith, the appropriate disposition is “in the cause”. See Cuming v. Toronto, 2019 ONSC 2486, Gafny v. Vainshtein, 2016 ONSC 4030, Smith (Estate) v. National Money Mart Co. (2008), 2008 CanLII 45406 (ON SC), 92 O.R. (3d) 224, and Masales v. Cole, 2016 ONSC 1814. He stated at para. 23: “Fundamentally, the merits of this action remain to be determined. If the Defendant is ultimately vindicated he will have his costs of the action, which include the costs I have ordered. If, on the other hand, the court finds in favour of the Plaintiffs, it seems a little incongruous that the Defendant should get his costs from this failed summary judgment motion.”.
[25] Costs should follow the event and it is not necessary to burden the trial Judge with the issue of costs at this motion. This motion was not necessary.
[26] I have considered the following:
Exel was made aware of the Ontario Court of Appeal authorities that warned against partial summary judgment;
Based on the voluminous evidentiary record, it is abundantly clear that this is a complex matter, involving numerous parties, implicating different actions and that this Court would not render a summary judgment which would possibly bind the court in the main action;
Based on Exel’s own evidence, their own witnesses admitted the issues of delay and a possibility that Exel has some role in the delay; and
The time and effort used in the summary judgment motion could have been better spent towards advancing the action. The Hyrniak principles of proportionate, timely and affordable procedure were not respected in this motion and certainly did not take into account the economics contemplated in Hyrniak.
Quantum of Costs
[27] Daoust was put to significant expense to oppose the motion for summary judgment.
[28] However, much of the evidence used on the motion, specifically the transcripts of the cross-examination of the various deponents who provided Affidavits will be of assistance to counsel and to the trial Judge. It cannot be said that all the preparatory work involved in setting out the factual basis for the motion and exploring the events leading up to the termination of the contract by the Defendant, Ottawa Housing Corporation was completely wasted.
[29] It is my view that some of the work completed for the motion for summary judgement will be helpful in the main action. For example, the transcript of the examination of the various representatives of the parties delved into the issues that are part and parcel of the main action i.e. events leading up to termination of the contract and various issues that arose in that period of time. The transcripts also deal with the various players’ communication and actions and the timing. In my view, this will be of assistance to the parties as part of the discovery process in dealing with narrowing the issues and obtaining admissions.
[30] The Court has reviewed the bill of costs and notes the following:
i) The amount claimed by Daoust is more than Exel;
ii) It was a complex motion involving many facts and numerous related legal proceedings;
iii) It was an important issue for all parties involved and has an effect on the main action and the litigation as a whole and monetary amount claimed is significant;
iv) Five counsel members were involved and it is not clear whether there was duplication of work, however, the Court notes the majority of work was completed by junior counsel;
v) There are no details of time spent on various activities such as cross-examinations, preparation of documents.
[31] In my view, based on the above, the amount of time claimed is moderately excessive as to what would be fair and reasonable for Exel to pay.
[32] Also, any award of costs awarded should take into account that Exel had its costs “thrown away” at the adjournment of the motion.
[33] In my view, the Defendant is entitled to some costs related to the hearing of the summary judgment motion. Therefore, taking into consideration the bill of costs, Rules of Civil Procedure and the success of the motion, I award Daoust costs in the amount of $15,000.00 for the motion payable by Exel at the time of the finalization of this action.
Justice A. Doyle
Date: November 29, 2019
COURT FILE NO.: 18-75220
DATE: 2019/11/29
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: EXEL CONTRACTING INC., Plaintiff
AND
JEAN DAOUST CONTRUCTION INC. and OTTAWA HOUSING CORPORATION/ LA SOCIETE DE LOGEMENT OTTAWA , Defendants
BEFORE: Justice A. Doyle
COUNSEL: Jonathan Collings, Counsel, for the Applicant
Marie-Pier Dupont, Counsel, for the Defendant
COSTS ENDORSEMENT
Justice A. Doyle
Released: November 29, 2019.