COURT FILE NO.: CV-15-527301

DATE: 2019-12-06

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: John Maxwell and Jonathan Warren, Plaintiffs

AND:

8580162 Canada Corp. cob as Fresh Home Innovations, 8580192 Canada Corp. cob as Regal Design+ Build, Mahdi Ramezanostovan and Ramin Afnani, Defendants

BEFORE: Carole J. Brown, J.

COUNSEL: Goode J., Pantel A. for the Plaintiffs

Green D., Linden J. for the Defendants

HEARD: September 12, 2018

Costs ENDORSEMENT

[1] This matter was heard September 12, 2018 and my endorsement released September 21, 2018. The plaintiff subsequently sought leave to appeal a portion of my endorsement, but leave was denied on January 17, 2019.

[2] The defendants were wholly successful in their motion to set aside default judgment and to have the funds seized and frozen from their accounts returned. They now seek their costs on a substantial indemnity basis in the total amount of $35,670.20, inclusive of disbursements and HST. In the alternative, they seek partial indemnity costs in the amount of $24,280.65, also inclusive of disbursements and HST.

[3] Costs are generally intended to award a successful party in whole or in part for its costs incurred in the proceeding.

[4] The circumstances leading to the default judgment are as follows. The lawyer they had retained as regards this action did not properly represent them, had been suspended by the Law Society of Upper Canada (as it then was) without their knowledge, did not disclose his suspension to the defendants, did not keep them informed of proceedings in the action, but rather simply advised that he had followed up with plaintiffs’ counsel, did not satisfy various court orders, did not examine the plaintiffs for discovery and did not appear at motions on the defendants’ behalf, but rather agreed to orders and costs without obtaining his clients’ instructions, and did not inform them of these orders and costs awards against them. Without their knowledge, they were noted in default and default judgment was ordered against them.

[5] While the defendants requested the plaintiffs to set aside the default judgment, given all of the circumstances, the plaintiffs would not do so and, hence, this motion was brought. The defendants argue that the plaintiff should have consented to setting aside default judgment upon learning of the circumstances and should not have taken steps to obtain judgment when they knew that there was an issue with respect to opposing counsel due to voicemail left by the suspended lawyer for plaintiffs’ counsel advising that he was suspended.

[6] It is the position of the plaintiffs that in all of the circumstances of this case they should be awarded their costs thrown away in obtaining the default judgment and their costs of the defendants’ motion to set aside default judgment and argue that this is an appropriate case in which to award costs to the unsuccessful party. The plaintiffs take the position that they expended significant costs to obtain the default judgment and did so strictly in accordance with the rules.

[7] They seek reimbursement for their costs for obtaining the default judgment and their costs thrown away on a partial indemnity basis in the amount of $31,752.79 or on a substantial indemnity basis in the amount of $45,206.74.

[8] I have considered the case law relied upon by the parties as well as the written submissions of both parties. I am not persuaded by the arguments of the plaintiffs that they are entitled to their costs of obtaining the default judgment and their costs thrown away. I am of the view that this motion could and should have been avoided and that cooperation among counsel would have been the proper course of action.

[9] I am satisfied that the defendants are entitled to the costs of their motion and award them their cost on a partial indemnity basis in the amount of $24,288.65 all-inclusive.

BROWN, CAROLE J., J.

Date: December 6, 2019