Court File and Parties

COURT FILE NO.: CV-21-00672174

DATE: 20220121

ONTARIO SUPERIOR COURT OF JUSTICE

RE: GALT MACHINE & PLATING INC., Applicant

AND:

MLS GROUP LTD., Respondent

BEFORE: Justice Mohan D. Sharma

COUNSEL: Dylan Baker, for the Applicant

Josh Suttner, for the Respondent

HEARD: January 21, 2022

COSTS ENDORSEMENT

[1] This is my costs decision following my judgment on an urgent application brought by a commercial tenant to recover possession of leased property under s. 20 of the Commercial Tenancies Act and sections 98 and 101 of the Courts of Justice Act. That decision is reported at: Galt Machine and Plating Inc. v MLS Group Ltd., 2021 ONSC 8156. In my judgment, I granted the applicant Tenant a declaration that the respondent Landlord’s termination of the lease was unlawful and ordered the Landlord to give exclusive possession of and access to the property, in accordance with the Lease.

[2] The applicant Tenant seeks costs in the amount of $24,637.91 on a substantial indemnity basis, or $16,600.22 on a partial indemnity basis. It notes that it made offers to pay rent for three months, plus an already overdue security deposit, following the property being seized by the Landlord, which offers were not accepted.

[3] The respondent Landlord argues that the Tenant was delayed in commencing this application in November, following the termination of the lease on August 26, 2021. It argues that costs would have decreased had the Tenant acted promptly. It further argues that the Tenant made several arguments that were unsuccessful. It also notes, pursuant to my Judgment, that the Tenant’s conduct and history of breaches were significant factors that would have disentitled the Tenant from equitable relief. The Landlord also notes that the Tenant had been given an opportunity to re-instate the Lease, provided an indemnity from the Tenant’s principal was given. With respect to the Tenant’s offers, the Landlord says they did not constitute a compromise.

[4] In its reply, the Tenant says that its offer was a compromise because it was offering to pay rent for September and October, months during which it had been locked out of the property.

[5] Pursuant to s. 131(1) of the Courts of Justice Act, the Court has a broad discretion when determining the issue of costs. Rule 57.01(1) sets out the factors to be considered by the Court when fixing costs.

[6] The overall objective of fixing costs is to determine an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v Public Accountants Counsel for Ontario, 2004 CanLII 14579 (ON CA), [2004] OJ. No. 2634 (C.A.). In determining costs, I must consider the factors set out in rule 57.01(1), as well as the principle of proportionality set out in rule 1.04(1.1). I keep in mind the Court should seek to balance the indemnity principle with the fundamental objective of access to justice.

[7] After carefully reviewing the parties’ cost submissions, in my view, this is not an appropriate case for rule 49 cost consequences to flow. In my Judgment, the law and evidence favoured the Tenant with respect to only one of several arguments it advanced. I have also considered the offer to settle made by the Landlord, which was not unreasonable in the circumstances, particularly given the many prior breaches by the Tenant of the Lease and the accommodations made by the Landlord to accommodate the Tenant. I am entitled to consider any offer to settle made in writing, pursuant to r. 49.13. In my view, the equities and the conduct of the parties in this litigation do not support the quantum of costs the Tenant seeks.

[8] Having considered the above factors, I order the respondent Landlord to pay costs fixed in the amount of $5,000, including disbursements and HST, to the applicant Tenant, within 30 days.

Justice Mohan D. Sharma

Date: January 21, 2022