Court File and Parties

Court File No.: CV-20-652215 Date: 2021-04-06 Superior Court of Justice - Ontario

Re: Sandbanks Summer Village Resort Management Inc., Cottage Advisors of Canada Inc., Sandbanks Village Developers Inc., and Sandbanks Telecommunications Inc., Applicants And: Prince Edward Vacant Land Condominium Corporation No. 10, Respondents

Before: Paul B. Schabas J.

Counsel: John De Vellis and Jonathan Miller for the Applicants Christy Allen and Victoria Craine for the Respondents

Heard: February 3, 2021

Costs Endorsement

[1] On February 8, 2021 I released Reasons dismissing the Applicants’ motion for an injunction: Sandbanks Summer Village Resort Management Inc. v. Prince Edward Vacant Land Condominium Corporation No. 10, 2021 ONSC 989. I invited written submissions on costs which have now been received.

[2] The Respondent was entirely successful and seeks costs on a substantial indemnity basis in the amount of $68,451.33, which includes HST and disbursements and “reflects a discount of $9,691.07.” In support of its position the Respondent argues that the injunction motion had no merit, and that it was brought for “improper and ulterior motives” as it is the latest in a series of lawsuits brought by Howard Johnstone Hall (“Hall”), the principal of the Applicant corporations, in his ongoing battles with the Respondent and its individual unit holders.

[3] The Respondent also argues that the Applicants unnecessarily complicated the motion, including filing excessive materials, splitting their case by filing most of their evidence in reply, filing two factums, and attempting at the last minute to have the court consider all issues on the application and not just the injunction motion.

[4] In the alternative, the Respondent seeks costs on a partial indemnity basis of $46,898.07, inclusive of HST and disbursements.

[5] In response, the Applicants argue that the costs should be deferred to the judge hearing the balance of the application or, alternatively, that costs should not be awarded on a substantial indemnity basis, disputing each of the Respondent’s arguments.

[6] First, in my view costs should not be deferred to the judge hearing the application. This Court has adopted a practice of making costs awards as matters proceed. In this case, there is a serious issue as to whether the matter should even go forward by way of application rather than action, as I noted in my Reasons at para. 2. Further, while some of the evidence may also be used on the application, should it be pursued, the costs award in this matter can be taken into account, as appropriate, by the judge hearing the application. It is not appropriate to defer costs indefinitely, especially when the proceeding may have an uncertain future.

[7] Under the Courts of Justice Act, s. 131(1), there is broad discretion in determining costs. Rule 57.01(1) lists factors to be considered. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances: Boucher v. Public Accountants Counsel for Ontario, 2004 14579 (Ont. C.A.). The Court should also have regard to the principle of proportionality (R. 1.01(1.1)) and seek to balance the indemnity principle with the objective of facilitating access to justice.

[8] I am not satisfied that the Applicants’ conduct in bringing the motion warrants an award on a substantial indemnity basis. Although I dismissed the motion, there is a serious issue to be tried in this case. I do not have a sufficient basis to conclude that Hall is simply using litigation as a weapon to retain some control over the Respondent, and cannot conclude that the Applicants’ conduct was reprehensible in bringing the motion for an injunction.

[9] I am concerned, however, by the Applicants’ conduct in the way in which it conducted the application, and in particular the manner in which it attempted to split its case and sought to have the entire application heard before me, which was not what was contemplated when the application was brought. In my view this was improper. It unnecessarily complicated matters and caused the Respondent to incur additional costs above those claimed on a partial indemnity basis.

[10] Overall, an award of costs should be in an amount that the unsuccessful party should reasonably have expected to pay. The Applicants’ own Bill of Costs showed that they incurred legal fees of over $100,000 on this motion and would have sought costs on a partial indemnity basis of $71,734.41, which is more than the Respondent seeks on a substantial indemnity basis.

[11] Accordingly, having regard to the factors discussed in this Endorsement, and the improper conduct in the course of the motion that I have identified, I conclude that costs should be awarded to the Respondent in the amount of $60,000.00 inclusive of HST and disbursements.

Paul B. Schabas J.

Date: April 6, 2021