Court File and Parties

Newmarket Court File No.: CV-20-218-00 Date: 2022-10-20 Ontario Superior Court of Justice

Between:

G5 Events Inc. Plaintiff/Defendant by Counterclaim

– and –

2748355 Canada Inc. Defendant/Plaintiff by Counterclaim

Counsel: Mauro Marchioni for the Plaintiff/Defendant by Counterclaim Brendan Jones for the Defendant/Plaintiff by Counterclaim

Heard: By written submissions

Costs Decision

HEALEY J.

[1] This is a decision on costs following a successful motion brought by the defendant/plaintiff by counterclaim, 2748355 Canada Inc. (the "Landlord"). The Landlord obtained an order declaring that the commercial lease between it and the plaintiff/defendant by counterclaim (the "Tenant") be terminated and granting the Landlord immediate possession of the premises.

[2] The Landlord was the successful party and is entitled to its costs. The Tenant has not filed any costs submissions. The Landlord's request for costs proceeds on an uncontested basis.

[3] Subsection 16.03 of the lease provides that if legal proceedings are brought for recovery of possession of the premises, or because of a default by the Tenant, "the Tenant will pay to the Landlord its expenses, including its legal fees on a solicitor and client or substantial indemnity basis as the case may be."

[4] The default of the Tenant that led to the Landlord taking action for recovery of the leased premises was a refusal to pay any rent after March, 2020, amassing arrears that were over $1M by the time of the hearing of the motion.

[5] As the decision explains, there was no legal basis for the Tenant withholding rent. Further, the Tenant refused all overtures by the Landlord to work cooperatively to remedy the arrears. The motion was necessitated entirely by the various and changing positions taken by the Tenant.

[6] Further, as explained in my reasons, the evidence of the Tenant's representative, Mr. Kacki, was contradictory and patently false on some of the most important issues on the motion. I determined that it was unreliable and not credible.

[7] The Tenant raised arguments that had very little chance of success, including asking for an abatement of rent to zero, submitting that the Landlord's actions amounted to constructive eviction and a request for relief from forfeiture. In the face of non-payment of rent for 2 ½ years while continuing to operate its business, this latter request for relief had zero merit. Pursuing these lines of argument prolonged the matter and added to its complexity.

[8] Following the release of my reasons, the Tenant's counsel refused to approve the draft order. This necessitated further correspondence and ultimately a telephone conference before me to settle its terms. The position taken by the Tenant's counsel was that first, he had no instructions to approve the draft order, and second, that there was no timeline in the endorsement with respect to giving up possession and that no formal order had been issued. The correspondence exchanged implies that he was taking the position that an endorsement was insufficient to govern his client's conduct.

[9] With respect to counsel, and as I expect he well knows, neither of those positions had any merit. Counsel does not need a client's instructions to approve an order, and the reasons at paras. 85 and 86 are very clear that possession was to be given to the Landlord immediately upon the lease's termination. The Tenant's unreasonable position increased costs unnecessarily.

[10] Even if the lease did not permit costs on an elevated scale, this is a case in which they are warranted, having met the criteria set out in Net Connect Installation Inc. v. Mobile Zone Inc. 2017 ONCA 766, at para. 8

[11] As it turns out, the exchange of correspondence between counsel following the release of this court's decision on September 22 indicates that the Tenant did not leave the premises. In correspondence sent by Mr. Jones dated September 29, he set out that the Tenant has remained in possession and has been observed removing property from the premises, all the while refusing entry to the bailiff and refusing to permit the locksmith to change the locks. These allegations do not form part of my considerations of costs of the motion and are left to the judge deciding the action. This costs decision deals with the costs of this motion up to and including the teleconference on September 28, 2022.

[12] I have reviewed the Landlord's Costs Outline. Fees on a substantial indemnity basis and disbursements totalling $50,348.74 are sought.

[13] The evidence filed for the motion was fairly substantial. The Landlord filed a record and a reply affidavit. The evidence included reference to examination for discovery transcripts and undertakings. Facta and briefs of authorities were filed. Because of the passage of time between the service of the original motion and its hearing, the Landlord also filed a supplementary affidavit. Some work was done by junior counsel.

[14] Even though there were extra steps involved in scheduling this motion for a hearing, likely due to the court's backlog exacerbated by the pandemic, this is not a case where the parties should equally bear those additional expenses. As previously stated, this motion was necessitated entirely by the Tenant's breach of the Lease and so it should be responsible for all associated costs of the motion.

[15] I have considered the facts, the legal principles applicable to costs summarized in Andersen v. St. Jude Medical Inc. (2006), 2006 CanLII 85158 (ON SCDC), 264 D.L.R. (4th) 557 (Div. Ct.) at para. 22; leave to appeal refused, 2006 CarswellOnt 7749 (Ont. C.A.), as well as the factors set out in r. 57.01. Now, "stepping back" to consider the appropriateness of the costs overall, I find that an amount that is fair and reasonable to award to the Landlord is $45,000 inclusive, payable forthwith. Order to issue accordingly.

HEALEY J.

Released: October 20, 2022