COURT FILE NO.: CV-20-00642177-0000
DATE: 20220526
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ON DECK CAPITAL CANADA, ULC
Plaintiff
- and –
NORTHERN PROTOCOL INC. and AARON WESTON
Defendants
Jessica Hewlett for the Plaintiff
Siddharth Joshi for the Defendants
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] In this action, on an appeal of an interlocutory Order of an Associate Judge, I set aside the Order. The Associate Judge had set aside the Defendants, Northern Protocol Inc. and Mr. Weston, having been noted in default. I set aside that Order, and I held that the Plaintiff, On Deck Capital Canada, ULC, is at liberty to move for a default judgment.
[2] I ordered that if the parties could not agree about the matter of costs, they may make submissions in writing.[^1]
[3] On Deck Capital now seeks costs on a partial indemnity basis of $4,030.30, all inclusive, for the motion before the Associate Judge, and it seeks costs on a substantial indemnity basis of $7,826.03, all inclusive, for the appeal, for a total claim of $11,856.33.
[4] As background facts to this costs assessment, the following should be noted:
a. At the motion heard by the Associate Judge, the Defendants requested costs of $6,233.78 on a partial indemnity basis.
b. The Associate Judge awarded the Defendants costs of $4,500, all inclusive, for their successful motion to have the noting in default set aside.
c. Before the argument of the appeal, on July 22, 2021, counsel for the Defendants served a Rule 49 Offer to Settle the Notice of Appeal, along with a cover letter that included the following:
We strongly believe that your client’s Appeal of Master La Horey’s decision is baseless and without merit. Your client is acting in a vexatious manner and counsel is aiding its client’s attempts to misuse the court process out of vengeance. If the Notice of Appeal is not withdrawn before the scheduled CPC date, we will use this letter and offer to support our requests for costs on a full indemnity scale, as well as potential costs against counsel personally pursuant to r. 57.05 of the Rules of Civil Procedure.
d. In response, counsel for On Deck Capital wrote to counsel for the Defendants advising that the Appeal would be proceeding.
e. On July 29, 2021, counsel for the Defendants sent a with prejudice communication, stating:
Further to our previous email sent on July 26, 2021 enclosing the word version of the draft Order for you to review and revise, and further to your email of July 23, 2021, we respond to same as follows:
- Please accept this email as formal notice from the Defendants that they intend to seek costs against the firm personally at the appeal hearing for all communications and work done post-motion for setting aside noting in default and all work done to respond to your Notice of Appeal which the Defendants believe is being pursued without merit or possibility of success. […]
f. On Deck Capital submits that the correspondence of July 29, 2021 justifies awarding it costs on a substantial indemnity basis for the appeal.
[5] Northern Protocol and Mr. Weston submit that there should be no order as to costs for the original motion and for the appeal because when on February 24, 2021, On Deck Capital refused their request to set aside the noting in default on consent, they had no choice but to bring their motion and to contest the appeal while On Deck Capital had the more efficient choice of reopening the pleadings and moving for a summary judgment.
[6] In the alternative, Northern Protocol and Mr. Weston submit that the appropriate award of costs should be on a partial indemnity scale for the motion and the appeal. They submit that the costs of the motion should be set at $2,418.18, all inclusive. They submit that the costs of the appeal should be set at $4,695.62, all inclusive, for a total award of $7,113.80.
[7] There is no merit to the Defendants’ chutzpah-submission that there should be no order as to costs. Costs followed the event when the Defendants were successful, and costs shall follow the event when the Plaintiffs are successful on the appeal.
[8] Having sought $2,000 more than the Plaintiffs now seek for the motion before the Associate Judge, it is again audacious for the Defendants to submit that $2,418.18 is the appropriate costs award for the motion. On Deck Capital’s request for costs of $4,030, all inclusive, on a partial indemnity basis is fair and reasonable and is the appropriate award.
[9] On Deck Capital’s request for costs on a substantial indemnity basis for the appeal is also appropriate in the circumstances of this case. In Davies v. Clarington (Municipality),[^2] the Court of Appeal held that the substantial indemnity scale of costs should be employed only when there was a clear finding of reprehensible conduct on the part of the party against which the cost award is being made.
[10] The matter of the Defendants’ aggressive threat against On Deck Capital’s lawyers is just part and parcel of the history of procedural misconduct that I describe in my Reasons for Decision on the appeal. The Defendants’ conduct in this litigation justifies a punitive costs award.
[11] I, therefore, grant On Deck Capital’s request for costs on a partial indemnity basis of $4,030.30, all inclusive, for the motion before the Associate Judge and costs on a substantial indemnity basis of $7,826.03, all inclusive, for the appeal for a total claim of $11,856.33.
[12] Order accordingly.
Perell, J.
Released: May 26, 2022
COURT FILE NO.: CV-20-00642177-0000
DATE: 20220526
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ON DECK CAPITAL CANADA, ULC
Plaintiff
- and –
NORTHERN PROTOCOL INC. and AARON WESTON
Defendants
REASONS FOR DECISION - COSTS
PERELL J.
Released: May 26, 2022
[^1]: On Deck Capital Canada, ULC v. Northern Protocol Inc., 2022 ONSC 2335 [^2]: (2009), 2009 ONCA 722, 100 O.R. (3d) 66 at paras. 28–40 (C.A.).