Court File and Parties

Court File No.: CV-16-547619 Date: 2022-08-26 Ontario Superior Court of Justice

Re: Duninger Corporation, c.b.a. Active Engineering, Plaintiff And: Rami Mohamad Reda, a.k.a. Rami Reda, a.k.a. Mohamad Reda, Big Bee Corporation, Jerry Montour and John Doe, Defendants

Before: Robert Centa J.

Counsel: Nathanial Read-Ellis, for the plaintiff Antonios T. Antoniou and Ian Sinke, for the defendant Jerry Montour

Heard: August 23, 2022, in writing

Costs Endorsement

[1] In an endorsement released August 9, 2022, I granted the defendant Jerry Montour’s motion for leave to withdraw five deemed admissions arising from the plaintiff’s request to admit: Duninger Corporation v. Montour, 2022 ONSC 4605. I have now received the parties’ submissions on costs.

[2] Mr. Montour seeks the costs of the motion on a partial indemnity scale, fixed in the amount of $14,151.98, all inclusive. Mr. Montour submits that he was entirely successful and is presumptively entitled to his partial indemnity costs. Mr. Montour acknowledges that he was seeking an indulgence of the court. He submits, however, that the plaintiff acted unreasonably in attempting to rely on the deemed admissions on the eve of trial and then refused to do the right thing by not consenting to the withdrawal of the deemed admissions. Mr. Montour also notes that he offered to pay $10,000 in costs to the plaintiff in exchange to the plaintiff consenting to the relief he sought on the motion. That offer was not accepted.

[3] The plaintiff submits that no costs should be ordered in connection with the motion. The plaintiff points to prior decisions of the court that declined to make a costs order in favour of the party that unsuccessfully brought a motion to withdraw deemed admissions: National Utility Service (Canada) Ltd. v. Kenroc Tools Inc. (1995), 34 C.P.C. (3d) 362 (Ont. Gen. Div.); Silani Sweet Cheese Limited v. Aviva Insurance Company Canada, 2018 ONSC 6214, at para. 14; Epstein Equestrian Enterprises Inc. v. Cyro Canada Inc., 2012 CanLII 44947 at paras. 20 and 22 (S.C.J.); De Naray v. Gainers Inc., 1997 CarswellOnt 4412 at paras. 22-25 (Gen. Div.). The plaintiff submits that Mr. Montour’s offer to settle (which was delivered at 11:05 the business day before the hearing) should not change the result. The plaintiff does not challenge the amount of costs sought by Mr. Montour.

[4] Fixing costs is a discretionary decision under section 131 of the Courts of Justice Act, R.S.O. 1990, c C.43. In exercising my discretion, I may consider the result in the proceeding, any offer to settle or to contribute made in writing, and the factors listed in Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg 194. I find that a number of the listed factors are relevant to the exercise of my discretion in this case.

[5] First, I consider Mr. Montour to have been entirely successful on this motion, which supports a cost order in his favour: rule 57.01(1). Second, the issues raised on this motion were extremely important to Mr. Montour: r. 57.01(1)(d). As the plaintiff submitted in its motion for judgment, “The Deemed Admissions are sufficient to establish Mr. Montour's liability to Active Engineering in the requested amount” of $437,211 USD, plus interest since 2015. Mr. Montour had no choice but to bring this motion. This factor supports a costs order in his favour. Third, Mr. Montour’s offer to settle (albeit late in the day) was a meaningful compromise and he has achieved a result more favourable than his offer to the plaintiff: rule 57.01. This third factor also supports a costs order in his favour.

[6] I do not accept the plaintiff’s submissions that Mr. Montour should be denied his costs because he sought an indulgence. There are certainly some cases where the party obtaining an indulgence from the court will not receive a costs order in their favour: rule 57.01(2). Here, however, that would not be an appropriate result.

[7] The plaintiff accepted that counsel made an inadvertent error when he failed to respond to five of the 57 requests. The plaintiff knew that permitting Mr. Montour to withdraw the deemed admissions would cause it no prejudice that could not be compensated for in costs. The plaintiff’s position that Mr. Montour could not raise a triable issue in respect to the truth of the admission was meritless. The time for the plaintiff’s style of “gotcha litigation” has long passed: Smith v. Sun Life Assurance Company of Canada, 2021 ONSC 7109; Sirhindi v. Qayyum, 2020 ONSC 5590; Alguire v The Manufacturers Life Insurance Company, 2016 ONSC 5295.

[8] As I stated in the endorsement on the merits, the Rules of Civil Procedure should not reward taking advantage of, or acting upon, slips, mistakes, or inadvertence by counsel. Similarly, I would not exercise my discretion to make a costs award that could incentivize such conduct. Parties who take unreasonable positions should expect to face costs consequences for their folly: Strathmillan Financial Limited v. Teti, 2021 ONSC 7603 at paras. 46–53; Mollicone v. Town of Caledon, 2011 ONSC 883.

[9] Mr. Montour seeks the costs of the motion on a partial indemnity scale, fixed in the amount of $14,151.98, all inclusive. That amount is very similar to the amount contained in the plaintiff’s bill of costs. It is a fair and reasonable amount for a motion of this type.

[10] For these reasons, I fix the costs of the motion at $14,151.98, inclusive of disbursements and Harmonized Sales Tax, and order the plaintiff to pay that amount to the defendant within 30 days of the date of this order.

Robert Centa J.

Date: August 26, 2022