COURT FILE NO.: CV-18-00605531-00CP
DATE: 2020/08/07
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LUCIE ANNE MARIE RITCHIE, (formerly Brunet), RAHUL JOSHI and ERIN LESLIE
Plaintiffs
- and -
CASTLEPOINT GREYBROOK STERLING INC.
Defendant
Geoffrey D.E. Adair, Q.C. for the Plaintiffs
Brian Chung for the Defendant
Proceeding under the Class Proceedings Act, 1992
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] The Defendant, Castlepoint Greybrook Sterling Inc., is a land developer, and in 2014-2016, it planned to develop a 10-storey residential condominium in the City of Toronto. Between 2015 and 2016, Castlepoint pre-sold 179 units. The Plaintiffs, Lucie Anne Marie Ritchie (formerly Brunet), Rahul Joshi, and Erin Leslie, respectively entered into pre-construction Agreements of Purchase and Sale. Castlepoint never began construction, and in late 2016, relying on an early termination provision in the agreements (Clauses 6 (f) and 28), Castlepoint terminated the agreements and returned the purchasers’ deposits with interest.
[2] On September 20, 2018, pursuant to the Class Proceedings Act, 1992 [^1], Ms. Richie, Mr. Joshi, and Ms. Leslie sued Castlepoint for breach of contract. The theory of their action was that Castlepoint failed to meet its obligations under the Agreements of Purchase and Sale to take all commercially reasonable steps to satisfy the financing condition in the agreements, including the obtaining of municipal approvals. The Plaintiffs submitted that Castlepoint breached Clauses 1 (a) and 6 (f) of the Tarion Delayed Occupancy Warranty, which is a part of the Agreements of Purchase and Sale.
[3] In June 2020, I heard three motions. First, the Plaintiffs brought a motion to deliver an amended Statement of Claim with respect to the breach of contract claim. Castlepoint opposed leave being granted, and it submitted that a new cause of action was being pleaded after the limitation period. Second, based on the original or the amended Statement of Claim, the Plaintiffs sought to have their action certified as a class action. Third, in response to the motion for certification, Castlepoint brought a cross-motion to have the Plaintiffs’ action dismissed. Castlepoint contended that it did not breach the Agreements of Purchase and Sale, but, in any event, it submitted that it is entitled to rely on Clause 28, the termination without damages clause.
[4] The outcome of the three motions was that:[^2] (a) the Plaintiffs were granted leave to amend the Statement of Claim; (b) Castlepoint’s summary judgment motion was granted; (c) the Plaintiffs action was dismissed; and (d) because the Plaintiffs’ action was dismissed, their certification motion was dismissed as moot.
[5] Castlepoint seeks costs of $68,369.13, all inclusive, on a partial indemnity basis. This sum is comprised of costs of $58,883.64, all inclusive, for the motions, and $9,485.49 for the action. Castlepoint submits that there should be no costs awarded to the Plaintiffs for the pleadings motion because it was brought on the eve of the hearing and the Plaintiffs did not file any supporting motion material.
[6] The Plaintiffs do not oppose Castlepoint’s request for costs of the action. However, the Plaintiffs submit that there ought to be no costs of both Castlepoint’s motion for summary judgment and the Plaintiffs’ motion for leave to amend the Statement of Claim. In the alternative, the Plaintiffs submit that an award of $30,000.00 for partial indemnity fees, plus HST and disbursements of $654.07; i.e. $30,654.07 is the appropriate award for the summary judgment motion.
[7] The Plaintiffs submit that there should be no costs for the motion for summary judgment because it raised a novel point of law of importance to the public, condominium developers, and persons purchasing pre-construction condominiums in Ontario. The interpretation of Clause 28 of the Agreement of Purchase and Sale turned in large part on the interpretation of Ontario Regulation 165/08, made pursuant to the Ontario New Home Warranty Act. Castlepoint recognized in its Costs Submissions that Clause 28 was in widespread use by condominium developers in Ontario.
[8] The Plaintiffs note that the motion did not decide whether Castlepoint’s termination was “righteous” in the sense of whether Castlepoint acted in good faith in terminating the Agreements of Purchase and Sale. Thus, the Plaintiffs submit that a “no costs “ order avoids the risk that a party who may have failed to act in good faith in respect of their contract performance obtains the benefit of a costs award. The Plaintiffs argue that while it has been found that Castlepoint was entitled to rely upon an exculpatory clause; nevertheless, it is fair and just to give some consideration when it comes to costs to the fact that their success was based upon what might fairly be described as a “hard” or “onerous” provision that it inserted into the contract at the expense of ordinary consumers. The Plaintiffs submit that it should be appreciated that it is common knowledge that the events unfolded during a rising market to the detriment of those consumers.
[9] In any event, the Plaintiffs submit that Castlepoint has claimed partial indemnity fees and HST in the amount of $3,282.54 for items related to its opposition of the Plaintiffs’ motion for leave to amend the Statement of Claim, and the Plaintiffs submit this amount should deducted from Castlepoint’s claim for costs.
[10] With respect to the alternative of a reduced award, the Plaintiffs submit that $30,000.00 for fees represents a fair and reasonable award based on all the circumstances. The Plaintiffs submit that weighing all relevant factors, including the straight-forward nature of the issue, the simplicity of the motion records, and the lack of any contentious facts, makes an award of $30,000 plus HST and disbursements fair and reasonable.
[11] I do not agree with the Plaintiffs’ submission that Castlepoint’s claim for costs should be reduced by reason of the undetermined issue of whether Castlepoint acted in good faith in terminating the Agreements of Purchase and Sale. The parties entered into a contract, and the summary judgment motion determined that Castlepoint was entitled to enforce an exculpatory term of that contract.
[12] I do, however, agree that Castlepoint’s partial indemnity claim for costs should be reduced. There is some merit to the submission that the case raised novel and important issues. There is some merit to the Plaintiffs’ argument that having regard to all the factors relevant to the exercise of the court’s discretion, $68,369.13, all inclusive is excessive on a partial indemnity basis and that the award should be reduced. There is also the fact that some consideration should be given to the circumstance that Castlepoint arguably should have consented to the amendment of the Statement of Claim, which made no difference to its reliance on the exculpatory provision that was the critical issue on the summary judgment motion. In all events, it was or should have been in the reasonable expectations of Castlepoint that its claim on a partial indemnity basis might be reduced. In my opinion, in all these circumstances, the appropriate award is $52,500.00, all inclusive, payable within 30 days. Order accordingly.
[13] In the circumstances of the Covid-19 emergency, these Reasons for Decision are deemed to be an Order of the court that is operative and enforceable without any need for a signed or entered, formal, typed order.
[14] The parties may submit formal orders for signing and entry once the court re-opens; however, these Reasons for Decision are an effective and binding Order from the time of release.
Perell, J.
Released: August 7, 2020
COURT FILE NO.: CV-18-00605531-00CP
DATE: 2020/08/07
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LUCIE ANNE MARIE RITCHIE, (formerly Brunet), RAHUL JOSHI and ERIN LESLIE
Plaintiffs
- and -
CASTLEPOINT GREYBROOK STERLING INC.
Defendant
REASONS FOR DECISION
PERELL J.
Released: August 7, 2020
[^1]: S.O. 1992, c. 6. [^2]: Ritchie v. Castlepoint Greybrook Sterling Inc., 2020 ONSC 3840