Court File and Parties

COURT FILE NO.: 10024/08 DATE: 2022/03/24

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 1238915 Ontario Limited, Creditor -and- Connie Nothdurft, Debtor (Garnishment No. 45800CV21A015075-28) -and- Andrew Adam Ferri, Debtor (Garnishment No. 45800CV21A01547) -and- Renaud Law, Garnishee

COUNSEL: Cameron Neil, for the Creditor Simon Croft Sigler, for Connie Nothdurft Julian Renaud, for Renaud Law

THE HONOURABLE JUSTICE D.L. EDWARDS

DECISION ON COSTS

[1] On January 24, 2022 I released my reasons for decision with respect to a motion brought by the Judgment Creditor, 1238915 Ontario Limited, with respect to two notices of garnishment that had been served upon Renaud Law with respect to Andrew Ferri and Connie Nothdurft (“Debtors”).

[2] Subject to certain matters referred to in the decision, I ordered that Renaud Law, which was holding funds in trust, pay the amount set forth in the notice of garnishment.

[3] In the event that the parties could not agree upon costs, I set a timetable for cost submissions, which I have received and reviewed. This is my cost decision.

The Position of the Parties

[4] The Judgment Creditor seeks costs on a substantial indemnity basis in the amount of $24,753.17 for fees and $561.10 for disbursements. Alternatively, it seeks costs on a partial indemnity basis of $16,738.16.

[5] Ms. Nothdurft submits that I should reserve the issue of costs to the judge hearing the motion to set aside the default judgment, because there are live issues regarding the ownership of the Judgment Creditor and an outstanding motion to set aside the default judgment that gave rise to the garnishment proceedings.

[6] I note that Ms. Nothdurft’s submissions were filed one day after the extension that the parties agreed to.

[7] Mr. Ferri did not file any cost submissions.

[8] Renaud Law did not file any submissions within the scheduled timelines.

The Law

[9] Rule 57.01 of the Rules of Civil Procedure sets out the factors that I should consider in fixing costs in exercising my discretion under Section 131 of the Courts of Justice Act.

[10] Rule 57.01 states:

57 .01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs. R.R.O. 1990, Reg. 194, r. 57.01 (1) ; O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1.

[11] My overall task is to fix an amount that is fair and reasonable for the unsuccessful party to pay in this proceeding, and not an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario, at para. 24.

Analysis

[12] I am satisfied that this motion was necessary as Renaud Law was not prepared to honour the garnishment notices without a court order.

[13] I also find that the Judgment Creditor was successful and is entitled to a cost order. I granted the relief that it sought, but then gave the Debtor an opportunity, in the proper forum, to litigate their issues prior to the release of the funds.

[14] One factor in determining the reasonableness of a Bill of Costs is what a losing party could expect to pay, which can be reflected in that party’s counsel’s Bill of Costs.

[15] Unfortunately, Ms. Nothdurft’s counsel did not provide a cost outline with his submission.

[16] I find that, although this appears to be a relatively simple matter, in fact, because of the issues raised by the Debtors, it was complex and the amount of money at stake is significant.

[17] In reviewing the Bill of Costs of the Judgment Debtor’s counsel and considering the substance of the motion, I am satisfied that the hours docketed are reasonable and the hourly rate of counsel is appropriate.

[18] Ms. Nothdurft’s counsel submits that I should defer any cost award until the motion to set aside the default judgment is heard.

[19] In the circumstances, I find that would not be an appropriate decision.

[20] The default judgment was obtained in 2018. Neither Debtor took any meaningful steps to have that judgment set aside until faced with the garnishment notices. It would be unfair to the Judgment Creditor to not award it with costs for the step which he was required to take because of the positions taken by the Debtors and Renaud Law.

[21] I do have concern that on the motion Renaud Law acted more as an interested party than a neutral stakeholder. Taking such a position requires that I consider whether costs should be awarded against it.

[22] I find that although Renaud Law did argue in support of the Debtor’s position, it did not cross the line which would attract a cost order.

[23] The Judgment Creditor urges that I order costs on substantial indemnity basis because of fraud by the Debtors. I did not find fraud, but rather I found that the Debtors had organized their affairs in such a way that an order piercing the corporate veil was appropriate.

[24] In all of the circumstances, I am satisfied that the Judgment Creditor is entitled to a cost award on a partial indemnity basis in the amount of $16,738.16 fixed, inclusive of HST, payable within 30 days.

[25] I order that the Debtors pay to the Judgment Creditor the sum of $16,738.16 fixed inclusive of HST within 30 days.

D.L. Edwards J. Released: March 24, 2022