Court File and Parties

COURT FILE NO.: CV-19-1939 DATE: 2022 04 22 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Elegant Façade Inc., Plaintiff AND: Broccolini Construction (Toronto) Inc., Defendant

BEFORE: Chozik J.

COUNSEL: Alex Flesias, Counsel for the Plaintiff Allison Speigel, counsel for the Defendant

Costs Endorsement

[1] The defendant, Broccolini Construction (Toronto) Inc. (“Broccolini”), brought a motion to reduce the security posted to vacate the lien registered by the plaintiff, Elegant Façade Inc. (“Elegant”). It also brought a motion for security for costs. In a Ruling dated December 17, 2021, I allowed Broccolini’s motions. I ordered that the lien be reduced from $1,751,669 to $797,636.23, then further reduced to $233,289.86 after accounting for money held in trust. I also ordered Elegant to post $120,000 as security for costs. As part of those motions, Broccolini was granted leave to file an additional affidavit under rule 39.02(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Collectively, these three motions are referred to by Broccolini as the “Omnibus motion”.

[2] Costs of an earlier motion, a refusals motion heard by Justice Gibson on November 18, 2020, had been reserved to the hearing of the motions before me.

[3] In my Endorsement, I indicated that I would receive written submissions with respect to costs. I have received and reviewed the written submissions and Bill of Costs submitted by Broccolini. I have also received and considered the written submissions submitted by Elegant, including the legal authorities relied on.

[4] Broccolini seeks total costs of $119,453.85 inclusive of disbursements and HST. Broccolini argues that substantial indemnity costs of $108,206.85 on the Omnibus motion are appropriate. It seeks partial indemnity costs of $11,247 on the refusals motion heard by Justice Gibson.

[5] Elegant argues that costs should be reserved to the trial. Elegant argues that these motions were akin to injunctive relief and that reserving costs ‘to the cause’ is justified: Fernicola (In Trust) v. Creview Development Inc. (2009), R.P.R. (4th) 175, at paras. 3-4. Elegant argues that reserving costs to the trial is more just because the litigation was not terminated by these motions and a trial will be required to allow the parties to fully litigate the issues. Thus, Elegant argues, I should exercise the discretion available to me to make an alternative order reserving costs to the trial.

[6] I am not persuaded that costs should be reserved to the trial.

[7] Rule 57.03(1) of the Rules of Civil Procedure requires the court to fix the costs and order them to be paid within 30 days “unless the court is satisfied that a different order would be more just”. Most motions are ‘interlocutory’ in the sense that they come between the time an action is started and the trial – they are interim or temporary; not constituting a final resolution of the whole controversy: Bryan A. Garner, ed., Black’s Law Dictionary, 11th ed. (Thomson Reuters, 2019) sub verbo “interlocutory”. However, it is not a prerequisite under rule 57.03(1) that a motion effectively terminate the litigation before costs will be ordered. Elegant’s suggestions to the contrary have no foundation in the law or in principle and Elegant does not persuasively cite any legal authority to justify its position.

[8] While a final resolution of the litigation is not required, these motions did bring about the final resolution of sub-issues in this matter, specifically the amount of the lien and the need for security of costs. The resolution of these sub-issues makes it appropriate to award costs at this time, as those determinations, within the context of the entire proceeding, are final. Further, the refusals motion, though an interlocutory step, bears no resemblance whatsoever to an interlocutory injunction. Despite Elegant’s claims, there is nothing in particular about these motions that warrants reserving the decision on costs to the cause.

[9] Rule 57.01 of the Rules of Civil Procedure lists the various factors to be considered in fixing and awarding costs. The court is directed to consider, amongst other things:

• 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,
• the amount claimed and the amount recovered in the proceeding,
• the complexity of the proceeding,
• the general importance of the issues,
• the conduct of the parties, and
• whether any step in the proceeding was improper, vexatious, or unnecessary, or taken through negligence, mistake, or excessive caution.

[10] The court has a broad discretion in fixing costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. In Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), at paras. 24-26 and 38, the Court of Appeal held that costs must be fair and reasonable and within the expectation of the parties. Proportionality is a governing principle and must be considered by the judge fixing costs.

[11] In fixing costs, my objective is to consider the factors set out in rule 57.01 and identify an amount that is fair and reasonable. Specifically, I must identify an amount that is fair and reasonable for an unsuccessful party to pay in these particular circumstances, rather than an amount fixed by the actual costs incurred by Broccolini.

[12] With respect to quantum, in its written submissions, Elegant did not take issue with the costs sought. Elegant did not file a costs outline, so there is nothing to suggest that Broccolini’s costs are either unreasonable or disproportionate.

[13] The issues on these motions were legally and factually complicated, with a significant amount at stake. A reduction in the lien of almost $1.5 million was ordered. Elegant was ordered to pay $120,000 as security for costs. These motions were significant steps in complex, high-stakes litigation.

[14] I must also consider any unreasonable conduct of the parties, including failure to accept a reasonable offer. I find that Elegant, by its litigation conduct, caused Broccolini to incur tremendous costs. Elegant also failed to accept a reasonable offer from Broccolini. The offer Elegant made was substantially different from the result Broccolini ultimately obtained. I find that Elegant acted unreasonably at times by attempting to delay or de-rail Broccolini’s Omnibus motion. It failed to abide by agreed-upon timetables and court orders. The production of documents it claimed to contain the particulars of the “forced scopes” was, as I found, a “document dump”. Sorting through those materials was an enormous effort at an increased cost.

[15] As a result of Elegant’s conduct, Broccolini had to request multiple case conferences and incur the resulting expense. Broccolini was ultimately successful on the refusals motion before Justice Gibson, which was also necessitated by Elegant’s conduct. In short, Elegant made this litigation far more onerous, time consuming, and costly than it had to be.

[16] I accept that Broccolini is entitled to substantial indemnity costs after May 10, 2021, because its success on these motions beat its offer of that date. I also find that this is an appropriate case in which to award substantial indemnity costs given my finding that the lien claim was exaggerated. I agree with the statement of Master (Associate Justice) Todd Robinson in GTA Restoration Group Inc. v. Baillie, 2020 ONSC 6327, at para. 12, that the lien remedy is an extraordinary one and that adverse costs awards are one means by which the court can deter lien claimants from pursuing willfully exaggerated liens. In this case, I found that the lien amount claimed by Elegant was exaggerated.

[17] In my view, having regard to the factors above, including the complexity of the proceeding, importance of the issues, and circumstances of the case, costs of $119,453.85 inclusive of disbursements and HST are fair, reasonable, and proportionate. Elegant shall pay these costs to Broccolini within 30 days.

Chozik J. Date: April 22, 2022