COURT FILE NO.: CV-16-0275-00
DATE: 2021-09-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
RUMBLE ENERGY INCORPORATED
Plaintiff
- and -
1401366 ONTARIO LIMITED OPERATING AS PLYMOUTH LANDING, JIM PETERSON, DERVLA O’REILLY, SHAWN O’REILLY and 002244438 ONTARIO LIMITED OPERATING AS SHOREX
Defendants
Mr. Jeff Van Bakel, for the Plaintiff
Mr. Jordan Lester, for the Defendants
HEARD: By Zoom, June 8, 2021, at Thunder Bay, Ontario
Madam Justice T. J. Nieckarz
Decision On Costs
OVERVIEW:
[1] The issue before me for determination is whether either party is entitled to their costs associated with a Status Hearing that was resolved on consent, or whether the appropriate disposition is no costs.
[2] For reasons that follow, I find that the Defendants are entitled to costs in the amount of $2,500.
BACKGROUND:
[3] In April 2015, the Defendant, 1401366 Ontario Limited (“Plymouth”) commenced proceedings in the Small Claims Court in Thunder Bay against the Plaintiff, Rumble Energy Incorporated (“Rumble”). The claim was for breach of contract.
[4] Rumble defended the Small Claims Court action and brought its own claim, seeking $200,000 in damages. Additional parties were added, including Jim Peterson (“Peterson”), who is an officer of Plymouth.
[5] As Rumble’s claim exceeded the jurisdiction of the Small Claims Court, it sought to have the action transferred to the Superior Court. The Small Claims Court proceeding was adjourned to allow for proceedings to be commenced in the Superior Court.
[6] In November 2015, Rumble commenced its action in the Superior Court in Toronto. Plymouth and Peterson defended the action and advanced a counterclaim. It took some time for requests for particulars to be addressed, and for pleadings to close. Motions were brought with respect to a transfer of the proceedings to Thunder Bay (Plymouth) and a request for consolidation of the Plymouth/Rumble action with other actions (Rumble).
[7] Affidavits of documents were exchanged, and discoveries completed in June 2019. Undertakings were satisfied by the Plymouth defendants in October 2020. Rumble’s undertakings were not satisfied. All claims with the other Defendants to this action were resolved in June 2019.
[8] The 5-year anniversary of the filing of the Statement of Claim expired on November 26, 2020. Pursuant to Rule 48.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the registrar of the court shall dismiss an action upon the 5-year anniversary of its commencement unless a court orders otherwise, the action has been set down for trial, a timetable has been agreed upon by all parties to permit the action to proceed, or a status hearing has been set.
[9] Prior to November 26, 2020, Rumble had not proposed a timetable, set the matter down for trial or requested a status hearing. Similarly, the Plymouth defendants had not taken any such steps with respect to their counterclaim. No notice of administrative dismissal was issued by the court. Counsel for the Plymouth defendants communicated with court staff and were advised that if they wished the matter to be dismissed for delay, a motion would need to be brought.
[10] Plymouth and Peterson’s counsel scheduled a case conference with a judge for February 1, 2021. Counsel for Rumble was advised prior to setting the date that a case conference was being requested, although the purpose was not communicated in the email. There was no response to the request to set a mutually agreeable date, so Plymouth’s counsel set the date unilaterally. Rumble’s counsel was advised of the date. Counsel for Rumble did not respond and did not appear, despite having been served with a conference brief indicating that the Plymouth defendants were seeking to have Rumble’s action dismissed. Justice H. Pierce ordered a Status Hearing be set. The Status Hearing was scheduled for May 21, 2021.
[11] On April 26, 2021, Rumble served a Status Hearing Record. Counsel for Rumble, Mr. Kroeker, swore an affidavit citing various reasons for the delay in the litigation. These reasons related to Plaintiff’s counsel’s schedule and obligations, and significant personal health concerns. Mr. Kroeker’s affidavit explains that it was inadvertence on his part for not setting the action down for trial within 5 years as required Rule 48.14.
[12] Within the record were responses to some of the Plaintiff’s undertakings given in 2019. The Plymouth defendants allege that there remain undertakings outstanding. The principal of the Plaintiff, and Mr. Kroeker, each attested that the Plaintiff was ready to set the matter down for trial.
[13] The Plymouth defendants do not fully accept the Plaintiff’s explanation for delay and believe the delay to have been intentional and strategic. They argue that the delay has been designed to defeat Plymouth’s claim that was first advanced in April 2015, by delaying the advancement of the case and making the litigation too cost prohibitive to pursue.
[14] Rumble has similarly made allegations against the Plymouth defendants and their counsel, questioning their motives for certain steps and actions taken in this proceeding. Suffice it to say that the litigation is bitter.
[15] Despite each party’s suspicion as to motives of the other, they were able to reach an agreement to permit the action to continue with an agreed upon timetable. The Status Hearing was resolved on consent, subject to the issue of costs.
POSITIONS OF THE PARTIES:
Rumble:
[16] Rumble takes the position that the Plymouth defendants’ consent to the timetable and resiling from their position that the action should be dismissed, is tantamount to success for the Plaintiff on the status hearing. Had the Plymouth defendants proposed a timetable in the first place, instead of convening a conference and then status hearing, costs could have been avoided. By forcing a status hearing, the Plymouth defendants caused significant expense, with Mr. Kroeker having to involve LawPro, and the Plaintiff having to file an almost 1000 page record detailing the history of the matter before the Plymouth defendants would agree to a timetable.
[17] Rumble further argues that the Plymouth defendant’s position in pursuing a dismissal of Rumble’s claim was somewhat disingenuous given that they too had not fulfilled their reciprocal obligation to pursue and set down their counterclaim. The Plymouth defendants were vigorously pursuing a dismissal of Rumble’s action when they too were in default of their obligations under Rule 48.14. Had they made overtures towards establishing a litigation timetable, then significant costs could have been avoided.
[18] Rumble argues that an appropriate disposition in the circumstances is no costs to either party, but if anyone should be entitled to costs, it is Rumble. Costs are sought on a partial indemnity basis of $8,193.97 inclusive of HST.
Plymouth and Peterson:
[19] The Plymouth defendants seek their costs from the scheduling of the case conference through to, and including the argument of the costs issue, in the amount of $5,139.00 inclusive of H.S.T. and disbursements.
[20] The Plymouth defendants argue that all the costs incurred from the case conference onwards were caused by Rumble and were entirely unnecessary. Had Rumble’s counsel attended the case conference and advised of its intention to advance the action, produce its undertakings, and explain the delay, the costs associated with the Status Hearing and subsequent costs hearing would have been entirely unnecessary. When Rumble subsequently in their Status Hearing Record, offered explanations for the delay, satisfied most of its undertakings, and committed to moving this case towards trial, the Plymouth defendants acted reasonably and consented to a timetable to avoid further costs.
[21] The Plymouth defendants further argue that it was not them who compelled the Plaintiff to show cause why the action should not be dismissed while they too had not set down their counterclaim. They argue that this step was ordered by Justice H. Pierce at the case conference that Rumble failed to attend. In any event, it is entirely reasonable for the Plymouth defendants to take the steps they took given the non-responsiveness of counsel for Rumble throughout this matter that cause them to “drag” Rumble through each stage of the litigation.
ANALYSIS:
Who Is Entitled to Costs?
[22] I disagree with Rumble’s position that either it should have its costs of the Status Hearing matters or alternatively, there should be no costs. On the facts of this case, I cannot find that Rumble was the “successful party” for costs purposes. Once Rumble addressed the issues by delivering their Status Hearing materials fully explaining the reasons for delay, complying with outstanding undertakings and committing to setting the matter down for trial, the Plymouth defendants acted reasonably by consenting to a timetable and avoiding the necessity of a contested Status Hearing. In circumstances in which Rumble’s inaction necessitated having to file materials for the Status Hearing in the first place, I cannot find them to be successful simply because Plymouth waited for the explanation for delay, undertakings and commitment to proceed to trial before agreeing to a timetable. I also have no materials before me that shed light on what steps Rumble took after having missed the case conference to ascertain whether Plymouth would consent to a timetable.
[23] This is not a situation similar to the case of Hakim Optical Laboratory Limited v. Phillips, 2009 420 (ON SC) relied upon by the Plaintiff. The Hakim case is somewhat unusual in that it was the Defendant (Phillips) seeking to set aside an administrative dismissal of the Plaintiff’s case and the Plaintiff resisting that request. In that case, the court awarded costs to Phillips as the successful party in being granted the indulgence sought. The facts are distinguishable. The court found that Hakim had vigorously contested the setting aside of an administrative dismissal for delay. Hakim did not consent once materials were provided explaining the delay, as is the case here. In paras. 155 and 156 of Hakim, Master Glustein found that it was not unreasonable to have expected Phillips to incur some costs associated with the motion, but once the motion material was delivered it would have been reasonable for Hakim to have proceeded on consent. The fact that Hakim continued to resist the relief sought entitled Phillips to costs. In the case at hand, the Plymouth defendants appropriately consented once Rumble turned its attention to the litigation.
[24] I agree with the Plymouth defendants that all of the costs of Rumble associated with having to prepare the voluminous 1000-page Status Hearing Record and to deal with the question of costs would have been unnecessary, but for Rumble’s non-responsiveness to Plymouth’s attempt to set a case conference and Rumble’s non-attendance at that conference. Rumble had been put on notice in the conference brief that Plymouth was seeking to have the action dismissed for delay and still did not attend, endeavour to comply with Rule 48.14, or otherwise communicate with counsel for the Plymouth defendants to try to establish a timetable for the litigation. Had Rumble simply attended the conference, a timetable could have been established and further costs avoided.
[25] In these circumstances, I also disagree with Rumble’s argument that Plymouth should have offered from the start to set a timetable and should not have set a case conference. Rumble did not respond to email communication, did not appear in court for a scheduled appearance and did not make any overtures itself towards establishing a timetable. If it does not behoove a party to respond to a request to dismiss their proceeding, then it is reasonable to infer that this non-responsiveness would have extended to a request for a timetable. I am satisfied that Plymouth acted reasonably in scheduling the conference and proceeding as it did.
[26] In argument there was some dispute as to whether it was the Defendants who necessitated the scheduling of a Status Hearing or whether it was Justice Pierce because she made the order. Ultimately, this is irrelevant to me. I do not accept the Plymouth defendants’ argument that it was not them, but Justice Pierce that required the Status Hearing. The Defendants had sought a dismissal from the registrar, but it was not granted. They had scheduled the conference to discuss proceeding with such a request. Justice Pierce’s endorsement was responsive to the issues raised by the Defendants. Regardless of whether the Defendants sought this relief at the conference or whether Justice Pierce ordered it on her own initiative, I must come back to my finding that each party’s costs associated with it could have been avoided if the Plaintiff had attended the conference.
[27] I find that, given the Plaintiff’s non-responsiveness initially to addressing the issue of delay, unnecessary costs were incurred by the Plymouth defendants that should be compensated for by an order of costs.
What Is The Appropriate Amount of Costs?
Legal Framework:
[28] An award of costs is in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43.
[29] The discretion of the court with respect to costs is to be exercised with consideration given to the result in the proceeding, offers to settle, and the factors provided for in Rule 57.01(1) of the Rules of Civil Procedure. These factors include, but are not limited to: the amount claimed and recovered; the complexity of the case; the importance of the issues; the conduct of the parties that tended to shorten or lengthen unnecessarily the duration of the proceeding; whether there were unnecessary steps; and a party’s denial of or refusal to admit anything that should be admitted.
[30] In exercising discretion in determining the amount of costs, a court must ensure that a costs award is fair and reasonable. It is not just a mechanical exercise of considering hours and rates. It should also reflect the reasonable expectations of the parties and seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at paras. 37-38; Andersen v. St. Jude Medical Inc., 2006 85158 (ONSC Div. Court) at para. 22.
Discussion:
[31] In exercising my discretion in determining the amount of costs, and in addition to factors already considered in this decision, I have taken into considering the following:
a. The parties agree that the issues on a Status Hearing are not overly complex, but are very fact specific, which required voluminous material. The Plymouth defendants did not file their affidavit until after the timetable was agreed upon. The Plaintiff argues that they should not be entitled to costs for this unnecessary step. While normally I would agree, in this case the affidavit was necessary for the costs hearing to provide the evidentiary basis for many of my findings.
b. The issues were of considerable importance to both parties as they determined whether or not Rumble’s action would be allowed to proceed.
c. The Plymouth defendants did have a reciprocal obligation with respect to proceeding with their counterclaim. However, once again all these issues could have been canvassed at the case conference.
d. The setting of a case conference appears to have been a necessary step to address how the claim and counterclaim were to proceed. Some of the costs would have been incurred for this step despite the non-responsiveness of the Plaintiff, particularly given Plymouth’s position that the action should be dismissed. However, much of the expense became wasted as a result of Rumble’s non-attendance.
e. The costs outline of the Plymouth defendants claims partial indemnity costs, disbursements and H.S.T. in the total amount of $5,139, as detailed in the bill of costs attached. The bill of costs details fees, disbursements and H.S.T. of $4,062.46. The costs outline has an additional $300 for appearance at the costs argument, but otherwise I am unable to reconcile the difference in the amounts claimed. Given that the amount claimed in the bill of costs accords with the attached itemization of fees and disbursements, I used the $4,062.46 (plus $300) as the starting point for determining costs.
f. I have no basis for assessing the $559.58 in photocopying fees and H.S.T., particularly given the electronic service and filing of all documents. I also have no basis for determining whether all of the fees charged as “clerk” fees are properly allowable on a partial indemnity basis, or whether some are more in the nature of administrative matters.
[32] Overall, I find that a fair and reasonable amount of costs for Rumble to pay to the Plymouth defendants is $2,500 inclusive of H.S.T. and disbursements.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz
Released: September 8, 2021
COURT FILE NO.: CV-16-0275-00
DATE: 2021-09-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
RUMBLE ENERGY INCORPORATED
Plaintiff
- and –
1401366 ONTARIO LIMITED OPERATING AS PLYMOUTH LANDING, JIM PETERSON, DERVLA O’REILLY, SHAWN O’REILLY and 002244438 ONTARIO LIMITED OPERATING AS SHOREX
Defendants
DECISION ON COSTS
Nieckarz J.
Released: September 8, 2021
/cjj