Court File and Parties

COURT FILE NOS.: CV-17-585966 & CV-18-591520 DATE: 2020 02 25

SUPERIOR COURT OF JUSTICE - ONTARIO

IN THE MATTER OF the Construction Lien Act, RSO 1990, c. C.30, as amended

RE: BROOK RESTORATION LTD., Plaintiff - and - YORK CONDOMINIUM CORPORATION NO. 129, Defendant

AND RE: BROOK RESTORATION LTD., Plaintiff - and - YORK CONDOMINIUM CORPORATION NO. 129, Defendant

BEFORE: Master Todd Robinson

COUNSEL: D. Fulton, counsel for the defendant / moving party B. Kuchar, counsel for the plaintiff

DATE: In writing

COSTS ENDORSEMENT

[1] On January 22, 2020, I heard and granted the in-writing motions of the defendant, York Condominium Corporation No. 129 (the “Owner”), in both CV-17-585966 and CV-18-591520, seeking leave to amend the Owner’s statement of defence and counterclaim in each action. The motions were unopposed by the plaintiff, Brook Restoration Ltd. (“Brook”), as confirmed by Brook’s counsel at the hearing for directions on January 7, 2020. During that hearing, the Owner confirmed its intention to seek costs of both motions against Brook, notwithstanding that Brook did not oppose. In Trial Directions #3 issued January 10, 2020 in respect of that hearing, I directed that the parties make written submissions as to costs if they were unable to reach agreement. I have now received and considered each party’s costs submissions.

[2] The Owner seeks costs on a partial indemnity basis in the amount of $2,065.86, including disbursements and HST. The Owner submits that it is entitled to its partial indemnity costs of the motions for several reasons, including the following:

(a) Brook failed to provide its position on amendment by the deadline ordered in Trial Directions #2 and Brook did not confirm that it would not oppose the pleading amendments until after preparation of the motion materials;

(b) Since the Owner did not know the motions would be unopposed until the last minute, costs ought to be awarded in favour of the Owner: Simpkin v. Ability Machine and Manufacturing Inc., 2010 ONSC 3207 at para. 10;

(c) Brook’s decision not to oppose the motion is, by analogy to subsection 58(1.3) of the Construction Act, deemed consent to the motions; and

(d) Brook ought to have formally consented to the amendment and, in the absence of doing so, costs of the motion ought to be awarded since Brook’s conduct in failing to consent necessitated unnecessary costs of preparing motion materials: Nicholson v. Sun Life Assurance Company of Canada at paras. 5-6.

[3] Brooks opposes any costs award in favour of the Owner, and seeks its own costs of preparing responding cost submissions in the amount of $847.50 on a partial indemnity basis or, in the alternative, that no costs be awarded. Brook provides several submissions in response to the Owner’s position, including the following:

(a) The Owner was not entitled to Brook’s consent as of right;

(b) Despite requests, the Owner failed to provide Brook with the basis for the proposed amendments until December 9, 2019. Brook submits that it had no knowledge of the basis for the alleged soil deficiency issue when the amendments were proposed and accordingly sought information about the soil deficiency both prior to and following the second hearing for directions. Brook submits that the information was not provided until December 9, 2019 (after the deadline set for Brook to provide its position on the amendments);

(c) Brook offered to consent on terms (namely that the Owner would not oppose Brook’s request for leave to issue a third party claim for contribution and indemnity relating to the soil deficiency issues), but the Owner rejected the offer and proceeded to prepare motion materials;

(d) The Owner prepared and served full motion materials when it was not required to do so, and without having obtained a motion date. Doing so is argued to have been contrary to a request by Brook’s counsel to discuss the matter before the ordered deadline for service of the Owners’ notice of motion;

(e) A pleading amendment should not be met with costs unless it is unnecessarily opposed: Khan v. Metroland Printing, Publishing & Distributing Ltd. at para. 6 and Kular v. Ecular Solar Technologies Inc., 2012 ONSC 2674 at para. 5;

(f) Courts have construed pleading amendments as a benefit or indulgence to the moving party to correct a flaw or defect in that party’s pleading: Ravenda Homes Ltd. v. 1372708 Ontario Inc., 2010 ONSC 5784 at para. 8; and

(g) Since Brook did not oppose the motions, and instead only required the Owner to meet “the bare minimum threshold for receiving the court’s indulgence”, there is no basis for a costs award in favour of the Owner.

[4] Costs of a motion are generally awarded incidental to the motion. It was nevertheless open to the Owner to seek costs of these motions in the cause (which is when costs of preparing the statements of defence and counterclaim in the first instance will be considered) or to seek to have costs determined at the conclusion of litigation. However, since the Owner seeks a determination on costs of the motions, it is appropriate that I address the Owner’s claim for costs now.

[5] In determining costs, the court has broad discretion to fashion a costs award that the court deems fit and just in the circumstances: section 86 of the Construction Lien Act, RSO 1990, c C.30 (the provisions of which remain applicable to these proceedings by operation of section 87.3 of the current Construction Act) and Rule 57.01 of the Rules of Civil Procedure, RRO 1990, Reg 194 (the “Rules”) (which applies by operation of subsection 67(3) of the Construction Lien Act). The general principles applicable when determining costs are well settled. Costs are discretionary. Rule 57.01 sets out factors to be considered by the court in exercising that discretion, which are in addition to considering any written offers to settle. The court must also consider the overall objective of fixing an amount that is fair and reasonable in the particular proceeding, having regard to the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 OR (3d) 291 (CA) at paras. 26 and 38.

[6] I have considered all relevant factors in exercising of my discretion regarding costs, although have not gone through every factor in detail in this costs endorsement.

[7] I do not accept the Owner’s argument that Brook’s position should be viewed as deemed consent. Consenting to a motion and not opposing it are distinct. Notably, the Rules themselves distinguish between opposed motions, unopposed motions and consent motions: see, for example, Rule 37.12.1, which expressly discusses the different procedures for motions in writing brought on consent, on an unopposed basis, or on an opposed basis. In my view, the Owner has erroneously equated lack of opposition with consent. The Owner provides no authority to support its argument that a party’s decision not to oppose is properly deemed a consent, other than by arguing analogy to subsection 58(1.3) of the Construction Act (which is the same provision in the former Construction Lien Act, the provisions of which remain applicable in these proceedings). That subsection provides as follows:

(1.3) A person given notice under subsection (1.1) who does not oppose the motion or does not appear at the hearing of the motion shall be deemed to consent to the reference under clause (1) (b).

[8] While subsection 58(1.3) does deem consent, that deeming provision operates specifically in the context of a motion for a judgment of reference under subsection 58(1)(b), which is a motion for reference of a construction lien action, in whole or in part, to a person agreed by the parties. No case law has been provided by the Owner supporting an interpretation of that narrow deeming provision to apply to other motions brought in construction lien actions. In my view, the Owner’s argument that Brook’s decision not to oppose is deemed consent by analogy to subsection 58(1.3) is not a reasonable analogy in the framework of either the current Construction Act or the former Construction Lien Act.

[9] I do not accept the Owner’s submission that Brook’s failure to consent to the motions put the Owner to unnecessary legal costs of preparing motion materials for both actions. No authority has been provided by the Owner supporting that a responding party has any obligation to consent to a motion or circumstances in which a failure to consent has given rise to costs against a responding party. Neither Nicholson nor Simpkin support the Owner’s position. Nicholson involved an opposed motion to set aside a dismissal order at a status hearing. The comments relied upon by the Owner were made in the context of explaining why the unsuccessful responding party was still entitled to its costs of the motion, given that the set aside relief granted to the plaintiff was an indulgence and the plaintiff’s motion was necessitated solely by the plaintiff’s own dilatory conduct. Simpkin involved an unopposed summary judgement motion where the responding party had filed a responding motion record, but in the end did not oppose. That fact was key in the determination that costs should be awarded because “it was not known that th[e] motion would be unopposed until the very last minute.”

[10] In my view, Brook had no obligation to consent and the Owner had no basis in law to expect that Brook would consent. In the absence of such consent, a motion was required, although I accept that whether the motion proceeded on an unopposed or opposed basis would reasonably change the level of detail required in the motion materials.

[11] Brook correctly points out that there was no order requiring the Owner to serve a complete motion record, only that a notice of motion be served by December 13, 2019. My order specifically provided that, “If a motion is brought, the date for such motion should be agreed by the parties with available short motion dates obtained from my Assistant Trial Coordinator.” The Owner suggests that dates were sought from the court, but no response was provided. I am unaware of any requests for motion dates and the Owner has not included any information on when emails were sent or telephone calls were placed to obtain dates. Regardless, I am not satisfied that it was necessary for the Owner to prepare and serve complete motion records by reason of any conduct of Brook. The timeline placed before me in the email correspondence provided is significant:

(a) On October 22, 2019, Brook’s counsel requested information regarding the alleged soil deficiency, apparently without response;

(b) On November 12, 2019, the second hearing for directions in this reference occurred, during which the Owner’s counsel advised the Owner’s intention to amend its statements of defence and counterclaim to add a claim for damages arising from the alleged soil deficiency. The court was advised that a soil contamination report had been obtained by the Owner. A timetable was set for the Owner to provide the draft amended pleadings, for Brook to provide its position, and for the Owner to either take out consent amendments or serve its notices of motion to amend.

(c) On December 2, 2019, Brook’s counsel made a written request for release of the soil contamination report discussed at the hearing for directions;

(d) On December 9, 2019, the Owner’s counsel provided the requested soil contamination reports to Brook’s counsel;

(e) On December 12, 2019, Brook offered to consent to the order, subject to the condition noted above that the Owner would not oppose Brook’s request for leave to issue a third party claim. The Owner’s counsel immediately rejected that offer. Brook’s counsel shortly thereafter proposed a discussion before the Owner invested time in a notice of motion. No such discussion appears to have occurred;

(f) On December 13, 2019, the Owner appears to have served its notices of motion in compliance with the ordered deadline; and

(g) On December 20, 2019, prior to service of the Owner’s motion materials, Brook’s counsel confirmed that Brook would not oppose the Owner’s motions, provided that no costs were sought against Brook. The Owner’s counsel confirmed he would not get those instructions, and would recommend $750 in costs. The Owner thereafter served its full motion materials.

[12] I agree with the Owner that Brook appears to have failed to provide a position on the proposed amendments by the ordered deadline of December 6, 2019. Brook argues that it had no information on the alleged soil contamination, and reasonably required that information to provide its position. The alleged soil contamination was discussed at the hearing for directions on November 12, 2019 and particulars of Brook’s alleged use of contaminated soil were included in the draft amended statements of defence and counterclaim. The subsequent request on December 2, 2019 was for copies of the soil contamination report, i.e., the evidence supporting the claim. I do not accept that Brook lacked sufficient knowledge of the basis of the claim to provide a position on pleading amendment by December 6, 2019.

[13] Prior to the deadline for the Owner to take out consent orders or serve its notices of motion, Brook did make an offer to consent on terms. That offer was rejected. Based on what is before me, following the email exchange on December 12, 2019, it appears that the Owner decided not to engage in further discussions with Brook on terms of consent. Instead, the Owner served the notice of motion and began preparing motion materials.

[14] Did Brook’s conduct necessitate a notice of motion and full materials? In my view, as outlined above, Brook had no obligation to consent, but Brook was nevertheless agreeable to consenting on terms. However, it appears the Owner was not willing to discuss terms. I separately stipulated a deadline to take out a consent amendment since Rule 26.02(b) provides that such a consent amendment may be effected without formal order. In the absence of the Owner’s willingness to negotiate terms of consent, a notice of motion was required. Brook appears to have confirmed that it would not be opposing the motions before any motion materials were served. There is nothing before me to support that any conduct by Brook between its offer of consent on terms on December 12, 2019 and its confirmation that it did not oppose the motions on December 20, 2019 warranted preparation of a complete motion record materials. No motion date had been confirmed or booked when those motions materials were being prepared. I do not agree that Brook’s conduct necessitated their preparation.

[15] I agree with Brook’s submission, supported by the decisions in Khan and Kular, that a pleading amendment motion should not be met with costs unless it is unnecessarily opposed. That is not the case here. The Owner had no indication of any intention by Brook to oppose. Brook offered to consent on terms, then discuss the motion before costs were incurred, then confirmed it would not oppose. The Owner elected to prepare the motion materials on the mistaken belief that Brook was obliged to consent and that the Owner would be able to recover costs if Brook failed to do so. The Owner has provided no explanation for why it was unwilling to discuss terms of consent or non-opposition by Brook prior to incurring the cost of preparing a supporting affidavit and motion record.

[16] For the foregoing reasons, I find no basis to award costs of either motion to the Owner.

[17] Brook seeks its costs of preparing responding costs submissions. However, Brook failed to comply with the timetable order requiring that it provide its position on the amendments. I have not accepted the explanation for that breach of the order. In my view, Brook’s non-compliance is sufficient basis to deny Brook’s request for its costs of the responding costs submissions.

[18] Having weighed the factors in Rule 57.01, I accordingly find that it is fair and reasonable in the circumstances that each party bear its own costs of the Owner’s motions.

MASTER TODD ROBINSON DATE: February 25, 2020