SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 18-65526
DATE: 20220818
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
United Glass Services Inc.
Plaintiff
– and –
2138825 Ontario Inc. and
1826458 Ontario Inc.
Defendants
Raymond Di Gregorio, for the Plaintiff
Duncan M. MacFarlane Q.C., for the Defendant, 2138825 Ontario Inc.
Mitchell B. Rosenblatt, for the Defendant, 1826458 Ontario Inc.
HEARD: In Writing
COSTS DECISION
Justice l. sheard
Overview
[1] The plaintiff, United Glass Services Inc. (“United”), sued 2138825 Ontario Inc. (“213”) and 1826458 Ontario Inc. (“182”) for payment of $354,125.85 representing amounts due and owing under invoices submitted to 182 by United for labour and materials supplied to convert 90 Beach Rd., Hamilton, Ontario (“Beach Rd.”), a large industrial space, into a licenced cannabis-growing facility to be operated by Radicle Medical Marijuana Inc. (“Radicle”).
[2] Subject only to the determination of costs, United’s claim against 213, the owner of Beach Rd., was resolved prior to trial. 213 seeks its costs of the action from United in the total amount of $14,214.48.
[3] Following a five-day trial, and for reasons set out in the Reasons for Judgment dated June 21, 2022 (the “Reasons”), judgment was granted to United as against 182 in respect of the invoices submitted to 182, in the amount of $347,020.40, plus prejudgment interest on the balance owing under each invoice.
[4] As United was successful as against 182, it is presumptively entitled to costs from 182.
[5] The parties were unable to reach agreement on costs and were permitted to make written costs submissions. In making this costs decision, I have considered the parties’ written submissions, and the applicable law.
Positions of the Parties
[6] United seeks costs from 182 in the total amount of $58,035.21. That figure is comprised of fees and H.S.T. of $47,030.60, calculated on a partial indemnity basis, disbursements of $4,004.61 and a contribution of $7,000, representing approximately 50% of the costs claimed by 213 as against United.
United
[7] United submits that:
(a) the fees claimed are proportionate to the amount claimed and recovered;
(b) the importance of the issues to United, a small business which was required to sue for payment of its invoices, which related in large part to services rendered by subtrades retained by United on Beach Rd. and “substantially paid” by United, despite that United had not been paid by 182;
(c) 182 presented a defence at trial that had not been pleaded, referencing paragraphs 14, 15, 63, 83-87, of the Reasons;
(d) United was required to lien Beach Rd. and to commence an action against its owner, 213, in order to protect limitation deadlines and that, until examinations for discovery were completed, United was not in a position to withdraw its claim against 213;
(e) examinations for discovery of 182 required two attendances because 182’s principal required his examination to be cut short due to an unrelated commitment; and
(f) the $350.00 hourly rate charged by United’s lawyer is reasonable, given his 1997 year of Call;
182
[8] 182 submits that:
(a) there was minimal time spent at trial on the new defence raised by 182;
(b) pursuant to the provisions of s. 19(1) of the Construction Lien Act, R.S.O. 1990, c. C. 30, then in effect, United needlessly incurred costs such as registration of the lien, certification of the action, discharge of the lien, etc.; and
(c) except for the $7,000 claimed by United for contribution toward the costs claimed by 213 and the $2,279.85 in disbursements claimed by United that relate to United’s claim against 213, (a total of $7,279.85), 182 otherwise takes no issue with the partial indemnity costs claimed by United.
213
[9] The $14,214.48 in costs claimed by 213 are comprised of legal fees and H.S.T. of $13,285 and disbursements of $929.48. The legal fees relate to the pleadings, attending examinations for discovery on two occasions, attending a pre-trial conference, preparation for trial and correspondence and negotiations with counsel.
The Law
Costs Awards
[10] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, (the “CJA”) gives the court the discretion to determine by whom and to what extent costs are to be paid. Costs are discretionary and, in the exercise of that discretion, the court is to consider the factors set out in r. 57.01
[11] In civil litigation, costs usually follow the event. That rule should not be departed from except for very good reasons: see Gonawati v. Teitsson 2002 41469 (ONCA), [2002] CarswellOnt 1007 (Ont. C.A.)], 2002 41469 and Macfie v. Cater, 1920 401 (ON SC), [1920] O.J. No. 71 (H.C.J.) at para 28: Usanovic v. La Capital Life Ins., 2016 ONSC 5795, at para. 7.
[12] In 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.), Perell J. reformulated the purposes of the modern costs rules, at para. 10, as follows:
(1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements.
[13] Overall, the objective is to fix an amount that is fair and reasonable, having regard for, among other things, the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at paras. 26 and 38.
[14] A costs award should reflect what the court views as a fair and reasonable contribution by the unsuccessful party to the successful party rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), 2002 CarswellOnt 4020, 118 A.C.W.S. (3d) 341 (C.A.), at para. 4: Fehr et al. v. Sun Life Assurance Company of Canada, 2021 ONSC 8368, at para 83.
Analysis
[15] Except with respect to the costs relating to United’s claim against 213, I note that 182 takes no issue with the costs claimed by United. Even if 182 had not taken that position, I would have concluded that the costs claimed by United were fair and reasonable.
[16] I also note that neither United, nor 182, has voiced any objection to the costs claimed by 213, which, to this court, appear to be fair and reasonable.
[17] The only remaining issue to be decided by the court is whether to include in the costs awarded to United and payable by 182, the additional amount of $7,000, representing 182’s contribution toward the costs to be paid by United to 213 and the disbursements that 182 identifies as relating to United’s claim against 213. As noted above, those amount to $7,279.85 of the costs claimed by United as against 182.
[18] To determine that issue, I apply the principles referenced above, and the overriding principle that a costs award should reflect what the court views as a “fair and reasonable contribution by the unsuccessful party”. Even accepting 182’s submissions that United might not have needed to sue 213, that outcome was not guaranteed and, without more, it is not a foregone conclusion that 213 would have taken no part in the litigation or that no costs would have been incurred and claimed by 213. I find that United’s acted reasonably in taking action against 213.
[19] As set out in the Reasons, 182 offered no cogent evidence at trial to justify or explain why it did not pay United’s invoices. I conclude that the steps taken by United, including as against 213, were caused by 182’s unexplained and unjustified refusal to pay United’s invoices. As a result, I find that it is fair and reasonable for the costs awarded to United and payable by 182 to include the relatively modest amount of $7,279.85 claimed by United that relate to United’s action against 213.
Disposition
[20] Costs are awarded as follows:
Costs of the action payable by 182 to United are fixed, as claimed by United, in the total amount of $58,035.21, payable by 182;
Costs of the action payable by United to 213 are fixed, as claimed by 213, in the total amount of $14,214.48.
Justice L. Sheard
Released: August 18, 2022
COURT FILE NO. 18-65526
DATE:20220818
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
United Glass Services Inc.
Plaintiff
- and -
2138825 Ontario Inc. and 1826458 Ontario Inc.
Defendants
COSTS DECISION
L. Sheard
Released: August 18, 2022