COURT FILE NO.: CV-16-553674

DATE: 20200127

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: STYLE CONSTRUCTION MANAGEMENT LTD., Plaintiff

AND:

1875790 ONTARIO LTD. o/a CAN-LAKESHORE ACADEMY INC. and 1957298 ONTARIO LTD. and BECKY YIN and HENG XIAN LIU and 2467502 ONTARIO INC., Defendants

BEFORE: B. Davies J.

COUNSEL: Harry Sarros, for the Plaintiff Dennis Ovsyannikov, the Defendant

HEARD: January 15, 2020

ENDORSEMENT

[1] The defendants carry on business as a private school in Richmond Hill, Ontario. The plaintiff, Style Construction Management Ltd. (“Style Construction”), is a renovation company.

[2] Style Construction claims that it prepared architectural, mechanical and electrical drawings, and applied for building permits in anticipation of a renovation of the defendants’ school. Style Construction claims that the defendants have not paid the invoices it submitted for the work done.

[3] The defendants take the position that they did not retain Style Construction to do any work for them. The defendants deny there was any contract between them and Style Construction for any professional services.

[4] Style Construction initially sought over $150,000 in damages, including $100,000 for “deceit, conspiracy to injure, aggravated damages, and/or punitive damages.” At a civil practice court appearance in July 2019, Style Construction withdrew the fraud claim and indicated its intention to pursue the breach of contract claim, which is alleged to be worth $50,059. As a result, this matter is now proceeding under the simplified procedure set out in Rule 76.

[5] Style Construction brought and then abandoned a motion for summary judgment. The defendants filed its responding materials on the summary judgment motion before Style Construction decided to abandon it.

[6] The defendants now argue they are entitled to costs in relation to the abandoned summary judgment motion. There are two issues to be decided:

(a) Should costs be ordered now or deferred to trial?

and,

(b) If costs are ordered now, should costs be ordered on a partial indemnity basis or substantial indemnity basis?

[7] For the reasons that follow, I order Style Construction to pay costs forthwith on a partial indemnity basis in the amount of $5,713.50.

A. Should costs be ordered now or deferred to trial?

[8] Rule 37.09(3) says that when a motion is abandoned the responding party is entitled to the costs of the motion forthwith, unless the court orders otherwise.

[9] Style Construction argues that no costs should be ordered now because the work done by the defendants in response to the summary judgment motion will be useful to them at a later stage of these proceedings. In other words, Style Construction argues that there are little if any “costs thrown away” as a result of its abandoned summary judgment motion. Style Construction argues that the cost of the summary judgment should therefore be deferred to trial.

[10] It is difficult to predict how this matter will unfold. The parties have not responded to undertakings given during discovery. No mediation has taken place. No pre‑trial has been held. This matter may settle and there may not be a trial. In my view, it would be unfair to the defendants to defer the issue of costs to a trial, which is still some time away and may not occur. The defendants incurred legal expenses responding to the now abandoned summary judgment motion and are, in my view, entitled to recover those costs now.

[11] To be clear, the defendants are not entitled to double recovery of any of their costs. If the work done by the defendants in responding to the summary judgment motion assists them in the ongoing proceeding, the costs they have recovered now should be taken into account when assessing the costs, if any, they are entitled to recover after trial: Ledore Investments Ltd v. Murray, 2002 CanLII 49422 (ON SC), [2002] O.J. No. 1073 (S.C.) at paras 19 – 20, per Stinson J.

[12] Style Construction also argued that the defendants’ conduct on the summary judgment motion frustrated their efforts to address the abandoned motion expeditiously and get the matter back on track for trial. Counsel for Style Construction advised the defendants that he was not going to pursue the summary judgment motion by letter on December 9, 2019. In that letter, counsel took the position that the matter should proceed by way of a summary trial and that the costs of the abandoned summary judgment be deferred to trial. Having not received any response to his letter, counsel for Style Construction sent an email to counsel for the defendants at 11:20 p.m. on December 17, 2019 advising of his intention to book a civil practice court appearance for December 20, 2019. Counsel for the defendants responded on December 19, 2019 and advised that he did not agree with the proposal to proceed by summary trial or to defer the costs to the trial. The defendants took the position that the matter should proceed under the procedure set out in Rule 76. Counsel appeared in civil practice court on December 20, 2019 and Dow J. ordered that the costs issue would be addressed on the date originally set for the summary judgment motion.

[13] Style Construction also complains that counsel for the defendants did not respond in a timely way to other correspondence in relation to the summary judgment motion. There is evidence that counsel for the defendants was very slow in responding to correspondence from opposing counsel. In fact, counsel for Style Construction had to repeatedly follow up to get a response.

[14] While I do not condone the fact that counsel for the defendants did not attend promptly to correspondence from opposing counsel, his conduct did not delay the proceedings and does not justify denying the defendants the costs they are entitled to on the abandoned motion. Style Construction chose to bring a motion for summary judgment, which is a serious step in any civil proceeding that must be carefully considered. After the defendants filed their responding materials, Style Construction clearly concluded that they would not be successful on the summary judgment motion and abandoned their motion. A delay in communication about how to get the matter back on track is not a basis to deny the defendants costs for the work that was done by their counsel to respond to the summary judgment motion, work that convinced Style Construction to withdraw its motion.

[15] I, therefore, find that the defendants are entitled to their costs on the abandoned summary judgment motion to be paid forthwith.

B. Should costs be awarded on a partial indemnity basis or substantial indemnity basis?

[16] The defendants initially asked for costs on a substantial indemnity basis. Rule 20.06 gives the court discretion to grant costs on a summary judgment motion on a substantial indemnity basis if the moving party acted unreasonably by bringing the summary judgment motion or acted in bad faith to delay the proceedings.

[17] The defendants did not file any materials other than a costs outline in their relation to their request for costs. There is, therefore, no evidentiary basis to support a finding that Style Construction acted unreasonably in bringing the summary judgment motion or acted in bad faith to delay the proceedings. As a result, costs of the abandoned motion will be awarded on a partial indemnity basis.

[18] Counsel for the defendants spent 25.5 hours responding to the summary judgment motion. They are asking for a total of $5,713.50, inclusive of HST, for costs on a partial indemnity basis. Having regard to the factors set out in Rule 57.01, I am satisfied that the hours spent and the amount claimed is reasonable in all the circumstances.

[19] I, therefore, order Style Construction to pay costs in the amount of $5,713.50, which includes HST, forthwith to the defendants.

C. Timetable Order

[20] It is apparent from the correspondence filed with the court that counsel are having difficulties agreeing on even routine procedural matters. As a result, I asked counsel to discuss a timetable for the completion of the next steps in this proceeding. With the consent of all parties and with a view to ensuring the orderly progress of this matter, I also order the parties to comply with the following timetable:

(a) Answers to undertakings given during discovery shall be provided by all parties no later than April 30, 2020;

(b) Any motion arising from the answers given to the undertakings must be brought no later than May 30, 2020;

(c) A mediation is to be conducted by August 31, 2020; and

(d) The plaintiff is to serve and file a notice of readiness for pre-trial conference and set the matter down for trial no later than October 31, 2020.

B. Davies J.

Date: January 27, 2020.