COURT FILE NO.: CV-18-0294; CV-18-0548
DATE: 2019-01-29
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JIM MIGLIAZZA (SUPERIOR HOME HEALTH CARE)
M. Cupello, for the Plaintiff
Plaintiff
- and -
SANDPAUL INVESTMENTS LIMITED
J. Lester, for the Defendant
Defendant
HEARD: January 15, 2019, at Thunder Bay, Ontario
Mr. Justice D.C. Shaw
Decision On Costs
[1] On January 15, 2019, I received submissions on the costs of two motions heard on December 13, 2018.
Background
[2] The plaintiff, Jim Migliazza, is the sole officer, director and shareholder of Able Access Health Care Incorporated. In 2018, Able Access entered into a contract with the defendant, Sandpaul Investments Limited, pursuant to which Able Access supplied and installed a wheelchair lift at a property owned by the defendant at 106 Cumberland Street North, Thunder Bay.
[3] The defendant failed to pay for the lift.
[4] On May 9, 2018, a lien was registered against title to the property for the unpaid monies. In error, the lien was registered in the name of Mr. Migliazza, rather than in the name of Able Access. Further, even if the lien had been correctly registered in the name of Able Access, it was out of time.
[5] On June 21, 2018, a statement of claim was filed with respect to the lien. It named Mr. Migliazza as the plaintiff.
[6] No certificate of action was filed. There was no other action under which the lien could shelter.
[7] The defendant brought a motion to discharge the lien.
[8] In turn, the plaintiff brought a motion to add Able Access as a plaintiff. The plaintiff also requested the court to declare that title to the wheelchair lift remained with Able Access under the terms of its contract with the defendant. The plaintiff’s motion also asked for summary judgment for the unpaid cost of the wheelchair lift.
[9] During submissions on the hearing of the motions, the defendant acknowledged that it owed the unpaid cost of the wheelchair lift. The plaintiff acknowledged that the lien had not been perfected.
[10] The parties consented to an order at the hearing of the motions that Mr. Migliazza have judgment for $36,537.50 and that the lien be discharged.
[11] That left to be determined the plaintiff’s claim for a declaration of title to the wheelchair lift. The defendant submitted that the court had no jurisdiction to make such a declaration because of the provisions of the Personal Property Security Act (the “PPSA”). The defendant submitted that if Able Access wanted to protect its title to the wheelchair lift, the proper procedure was to register a security interest under the PPSA.
[12] During the lunch hour, before the continuation of the hearing of the motions in the afternoon, Able Access, having reconsidered its position in light of the defendant’s submissions, registered a security interest in the wheelchair lift under the PPSA. When court reconvened to continue the hearing of the motions, the plaintiff abandoned his claim to have the court make a “declaration of title”. The plaintiff also did not proceed with his claim to add Able Access as a party.
[13] The defendant now seeks costs of its motion to discharge the lien. It requests substantial indemnity costs of $12,341.11, inclusive of disbursements and HST. In the alternative, it asks for partial indemnity costs of $8,503.12, inclusive of disbursements and HST.
[14] The plaintiff responds that there should be no award of costs of the motions.
[15] The defendant refers to s. 86(1) of the Construction Lien Act (now the Construction Act). Section 86(1) provides that an order for costs under the Act is in the discretion of the court and may be made on a substantial indemnity basis.
[16] The defendant relies on the fact that the lien was registered out of time, that it was not perfected and that the lien claimant was improperly named. The defendant submits that even though the plaintiff was made aware that the lien was invalid, the plaintiff failed to discharge the lien until after the defendant brought its motion.
[17] The defendant also submits that the plaintiff brought the motion for summary judgment without leave and on short notice and reneged on what the defendant says was an accepted offer to settle.
[18] The plaintiff acknowledges that, in hindsight, the proper procedure to have followed was to have registered a security interest under the PPSA rather than registering the lien. Counsel for the plaintiff refers to this as “a learning curve”.
[19] Counsel for the plaintiff emphasizes that after the defendant brought its motion, he attempted to work with counsel for the defendant with a view to discharging the lien to allow a sale of 106 Cumberland Street North and the sale of another property owned by the defendant, provided that the plaintiff’s title to the wheelchair lift was protected. Counsel for the plaintiff takes exception to the defendant’s submission that the plaintiff reneged on an accepted offer to settle.
[20] The plaintiff submits that the defendant incorrectly stated on the motion that time was of the essence for the lien to be discharged because the sale of 106 Cumberland Street North was scheduled to close the next day. In fact, the sale had not closed as of the costs submissions because of claims totaling $1,251,857.00 against the defendant, which exceeded the sale proceeds of the property by $321,150.57.
Discussion
[21] Where a party is wholly successful in an action, and there is no misconduct on its part, the party is, as a general rule, entitled to costs.
[22] The defendant was successful on its motion to discharge the plaintiff’s lien.
[23] The lien was filed in the name of an individual officer of the company rather than in the name of the company which had entered into the contract. The lien was not registered in time. No certificate of action was registered. There was no action under which the lien could properly shelter. The plaintiff should have been aware that the lien and the lien action were fatally flawed. It is understandable that the plaintiff wanted to protect its interest in the wheelchair lift, but the appropriate remedy was registration under the PPSA. This only happened after it became apparent on the argument of the motions that there was a real question of the jurisdiction of the court to make a “declaration of title” in the face of the provisions of the PPSA.
[24] However, the plaintiff was partially successful on its motion. Although, after the security interest was registered under the PPSA, the plaintiff abandoned his claim for a declaration of title and did not pursue his claim for the addition of the corporate entity as a party, the plaintiff was successful in obtaining, on consent, judgment for the unpaid balance of the purchase price of the wheelchair lift.
[25] I have reviewed the e-mails between the solicitors for the parties during settlement discussions, held before the hearing of the motions. The defendant was of the view that the plaintiff had agreed to a draft order that was silent as to title to the wheelchair lift. The plaintiff was of the view that any order had to deal with title. It appears to me that there was a misunderstanding between the parties. It is unclear to me from my review of the e-mails how the misunderstanding came about. However, I do not find that the solicitor for the plaintiff acted improperly.
[26] The defendant should be indemnified for costs incurred to deal with the improper registration of the lien. An award of costs, however, should be mitigated by the fact that the defendant had not paid for the wheelchair lift, which was the focus of the lien and the action and, although the defendant agreed to a judgment for the outstanding debt, it did so only after the plaintiff brought its motion.
[27] Section 86 of the Construction Lien Act permits an award of costs on a substantial indemnity basis. In my view, this is not a case where the extraordinary remedy of substantial indemnity costs is appropriate. In Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3 (S.C.C.), McLachlin J. (as she then was) described the circumstances when elevated costs are warranted as:
… only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.
[28] In Bond v. Brookfield Asset Management Inc., [2011] O.J. No. 2760 (S.C.J.), at para. 6, Perell J. held:
… it would not be a proper exercise of the court’s discretion to order costs on a substantial indemnity basis simply because a party has a weak case or even a very weak case.
[29] The plaintiff’s conduct was not reprehensible, scandalous or outrageous. The lien claim was ill conceived, but monies were owed by the defendant.
[30] The issue is costs of the motions. However, the defendant’s Bill of Costs sets out work done from the inception of the action, prior to the motions. Time spent unrelated to the motions is not subject to indemnification at this step of the proceeding.
[31] In my view, it would be fair and reasonable to award the defendant partial indemnity costs of the motions in the sum of $4,500.00, inclusive of disbursements and HST. In light of the fact that $36,537.50 is owed by the defendant to the plaintiff under the consent judgment, it is appropriate that the award of costs of $4,500.00 be payable by the plaintiff only upon payment of the judgment, and it is so ordered.
“original signed by”
The Honourable Justice D. C. Shaw
Released: January 29, 2019
COURT FILE NO.: CV-18-0294; CV-18-0548
DATE: 2019-01-29
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JIM MIGLIAZZA (SUPERIOR HOME HEALTH CARE)
Plaintiff
- and -
SANDPAUL INVESTMENTS LIMITED
Defendant
DECISION ON COSTS
Shaw J.
Released: January 29, 2019
/sab