COURT FILE NO.: CV-14-516943

MOTION HEARD: 2020-09-15

REASONS RELEASED: 2020-11-04

WRITTEN COSTS SUBMISSIONS FILED: 2021-04-19

COSTS ENDORSEMENT RELEASED: 2021-08-09

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

SUPER A HOTELS INVESTMENT AND MANAGEMENT GROUP (CANADA) INC.

Plaintiff

• and -

1205723 ONTARIO INC.

Defendant

BEFORE: MASTER M.P. McGRAW

COUNSEL: P. Neufeld Email: pneufeld@wagnersidlofsky.com

• Counsel for the Plaintiff, Super A Hotels Investment and Management Group (Canada) Inc.

J. Klein Email: jklein@ksalaw.com

• Counsel for the Defendant, 1205723 Ontario Inc.

COSTS ENDORSEMENT RELEASED: August 9, 2021

Costs Endorsement

I. Introduction

[1] The Plaintiff brought a Rule 48.14(5) motion for a status hearing (the “Extension Motion”). By Reasons For Endorsement dated November 4, 2020 (Super A Hotels Investment and Management Group (Canada) Inc. v. 1205723 Ontario Inc., 2020 ONSC 6785)(the “Reasons”), I granted an extension to the set down date. Both parties seek costs of the Extension Motion. The Plaintiff also requests costs of the Defendant’s motion for dismissal for delay (the “Dismissal Motion”) which did not proceed.

II. The Law and Analysis

[2] Subject to the provisions of an Act or the Rules, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid (s. 131(1), Courts of Justice Act (Ontario)). In exercising its discretion, in addition to the result and any offer to settle made in writing, the court may consider the factors set out in Rule 57.01(1).

[3] The overriding principles in determining costs are fairness and reasonableness (Boucher v. Public Accountants Council for the Province of Ontario, (2004) 2004 ONCA, 71 O.R. (3d) 291 (C.A.)). The general rule is that costs on a partial indemnity scale should follow the event except for very good reasons such as misconduct of the party, miscarriage in procedure or oppressive or vexatious conduct (1318706 Ontario Ltd. v. Niagara (Regional Municipality) (2005), 2005 ONCA, 75 O.R. (3d) 405 (C.A.); 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 at paras. 10, 12-14).

[4] The Plaintiff seeks $15,360.26 which includes $9,590.70 on a partial indemnity scale for the Extension Motion, $2,126.25 on a substantial indemnity scale for the Dismissal Motion plus HST and disbursements of $1,498.61. The Defendant submits that it is entitled to costs of the Extension Motion in the amount of $8,500 on a partial indemnity scale or alternatively, that no costs should be ordered. The Defendant also asserts that no costs should be awarded for the Dismissal Motion.

[5] In my view, there is no reason to depart from the general rule that the Plaintiff is entitled to costs of the Extension Motion on a partial indemnity scale reflective of its success. While I agree with the Defendant that the court granted the Plaintiff an indulgence by extending the set down date, this does not entitle the Defendant to costs or disentitle the Plaintiff in the present circumstances.

[6] Given the impending dismissal of its action, the Extension Motion was vitally important to the Plaintiff (Rule 57.01(1)(d)). Further, as I held in the Reasons, the Defendant’s conduct materially contributed to the Plaintiff’s delay in moving this action forward thereby necessitating the Extension Motion (Rules 57.01(1)(e) and (f)). Specifically, the Defendant transferred (the “Transfer”) the property at issue in this action (the “Property”) to a company controlled by friends and associates of the Defendant’s principals during the proceedings and after the Plaintiff brought a motion to compel the Defendant to pay deposits and fees into court (the “Preservation Motion”). The Defendant’s principal then failed to disclose the Transfer during his cross-examination on the Preservation Motion and misled the Plaintiff into believing that the Property was the only material asset available for execution if the Plaintiff was successful. The Plaintiff only learned about the Transfer after seeing an open house sign at the Property and making its own inquiries. The Defendant then caused further delay by not providing particulars of the Transfer or its availability for a contempt motion in response to requests by the Plaintiff. The Plaintiff did not take further steps until a mutual acquaintance of the parties advised that the purchaser was not arm’s length.

[7] The Plaintiff could have done more to move the action forward and must bear some responsibility for having to bring the Extension Motion. However, the Defendant did not disclose any particulars of the Transfer and often did not respond at all to the Plaintiff’s inquiries. Accordingly, it was not unreasonable for the Plaintiff to believe that the Defendant had no assets to pursue and explains some of the delay. Consistent with my conclusions in the Reasons, awarding costs to the Defendant or denying them to the Plaintiff would effectively condone the Defendant’s conduct and ignore the costs it caused the Plaintiff to incur.

[8] In the circumstances, I am satisfied that it is fair, reasonable, proportionate and within the reasonable expectations of the parties for the Defendant to pay costs of the Extension Motion to the Plaintiff fixed in the amount of $8,000 (including HST and disbursements) on a partial indemnity scale within 30 days.

[9] With respect to the Dismissal Motion, I conclude that no costs should be awarded. While there may have been some initial confusion, it is apparent from the record that the Defendant was responding to the Extension Motion and not pursuing its Dismissal Motion. Further, the Plaintiff initially filed a factum on its own Extension Motion which made submissions for a Rule 24 dismissal motion. The Defendant did not deliver a factum in support of its Dismissal Motion, only making submissions on the Extension Motion.

Costs Endorsement Released: August 9, 2021

Master M.P. McGraw