Court File and Parties

Court File No.: CV-21-00663825-00CL Date: 2022-11-29 Superior Court of Justice - Ontario

Re: Tridelta Investment Counsel Inc., Tridelta Fixed Income Fund, Tridelta High Income Balanced Fund, 2830063 Ontario Inc., 2830064 Ontario Inc., 2830068 Ontario Inc., GTA Mixed-Use Developments L.P., Mixed-Use Developments (Ontario) L.P. and Wasaga Developments and Infrastructure 2021 L.P., Plaintiffs

And: GTA Mixed-Use Developments GP Inc., Mixed-Use Developments (Ontario) GP Inc., Wasaga Developments and Infrastructure GP Inc. and U Developments Inc., Defendants (Plaintiffs by Counterclaim)

And: Tridelta Investment Counsel Inc., Tridelta Fixed Income Fund, Tridelta High Income Balance Fund, 2830063 Ontario Inc., 2830064 Ontario Inc. and 2830068 Ontario Inc., Defendants by Counterclaim

Before: Justice Cavanagh

Counsel: Christopher P. Naudie and Lauren Tomasich, for the Plaintiffs (Moving Parties) Simon Bieber, Jordan Goldblatt and Cameron Rempel, for the Defendants (Responding Parties) Gavin H. Finlayson and Matthew G. Smith for 320 Bronte Road Inc., 27 Harwood Avenue Inc., and 253 Queen Street Inc. (Responding Parties)

Heard: In Writing

Costs Endorsement

[1] The Plaintiffs ("TriDelta") brought a motion for (i) interlocutory injunctive relief restraining the defendants and non-parties (the "Project Companies") from dealing with unsold properties owned by the Project Companies; (ii) leave to issue a certificate of pending litigation for registration against title to the unsold properties, and (iii) leave to amend their statement of claim in the form proposed.

[2] The defendants and the Project Companies opposed the motion and were separately represented.

[3] For reasons given in an endorsement released on October 28, 2022, TriDelta's motion was dismissed.

[4] The defendants and the Project Companies seek costs of the motion from TriDelta.

[5] TriDelta opposes an award of costs. TriDelta submits that there should be no order as to costs because:

a. TriDelta brought the motion out of necessity given its investments in the Partnerships and the Project Companies and the evidence upon which it relied on its motion, including the lack of available trial dates before April 2023;

b. The responding parties created the circumstances that give rise to this motion by their failure to observe basic standards of financial reporting and corporate governance, as evidenced by Mr. Tajbakhsh's many refusals on his cross-examination.

c. TriDelta was partially successful in obtaining interim relief during attendances before judges of the Commercial List on August 24, 2022 and September 12, 2022; and

d. the Respondents are controlled by one person (Mr. Tajbakhsh) and their claims for costs are duplicative. TriDelta submits that the conduct of the responding parties needlessly increased the costs of all parties on the motion.

[6] In the alternative, TriDelta submits that the costs claimed by the responding parties are excessive.

[7] In the further alternative, TriDelta submits that cost should be awarded in the cause or, alternatively, should be determined by the trial judge.

[8] I disagree that the responding parties should be denied costs because TriDelta considered its motion to be brought out of necessity or because of the conduct of the responding parties. I do not question TriDelta's motive for bringing its motion. However, when it brought its motion, TriDelta took that risk that if it were to be unsuccessful, it would be exposed to an award of costs. There were no findings made in the decision on the motion in relation to the conduct of the responding parties that would justify an order denying them costs.

[9] Costs of interlocutory motions should be fixed unless the justice of the case suggests otherwise. On this motion, TriDelta was unsuccessful. I do not agree that the costs of this motion should be determined by the trial judge, who did not hear the motion, by considering the necessity and reasonableness of TriDelta's motion in the context of the trial. The justice of the case does not support an order for costs in the cause or deferring costs to the trial judge.

[10] I do not agree that the endorsements made by other judges on the Commercial List ordering interim terms before TriDelta's motion could be heard is a factor that justifies an order that there be no costs of the motion. Neither judge addressed the merits of the submissions by TriDelta in support of its motion for interim interlocutory relief. Interim terms were ordered through the exercise of judicial discretion where the matter was before the court.

[11] TriDelta submits that the amounts claimed for costs by the defendants and by the Project Companies on the motion are unreasonable and grossly excessive.

[12] In support of this submission, TriDelta relies on a costs decision made by Penny J. on a prior set of motions for consolidation of proceedings and in respect of production issues in respect of which TriDelta was successful and was awarded costs of $20,000. TriDelta submits that those motions were far more complex than this motion with more pages of materials placed before the court.

[13] TriDelta submits that if costs are awarded against it, the defendants should be entitled to $20,000 consistent with Justice Penny's prior costs award, while the non-party responding parties should be entitled to $5,000 for essentially duplicative submissions.

[14] I do not agree that I should decide the amount of costs to be awarded on this motion by limiting costs to the amount of costs awarded by another judge on another set of motions in this proceeding. Without a close understanding of the other motions, including the issues raised, the importance of those issues, the materials filed, and time spent by counsel for the parties, it is difficult to make a comparison with this motion that will provide a useful guide in determining the appropriate amount of costs.

[15] At the conclusion of the hearing of this motion, I asked whether the parties had exchanged costs outlines and were ready to make submissions as to costs. I was advised that they had not done so. As a result, in my endorsement, I invited written submissions if the parties were unable to resolve costs.

[16] The defendants and the non-party responding parties have provided costs outlines in support of their submissions as to costs. TriDelta has not provided a costs outline as part of its submissions as to costs.

[17] In Odede v. Tartaro, 2021 ONSC 2547, Price J. summarized the general principles governing costs in his endorsement deciding costs of a summary judgment motion. The defendant's summary judgment motion was granted and the action was dismissed. In his endorsement, Price J., at paras. 37-38, explained the effect of the failure of the plaintiffs (unsuccessful parties on the motion) to submit a Bill of Costs:

[37] The plaintiffs did not submit a Bill of Costs for their lawyers' time, or any evidence of the amount of time the lawyers spent. I therefore have no basis upon which to determine whether the defendants' lawyers' time was reasonable by comparison. This court has held, on more than one occasion, that when one party attacks another's costs as excessive, but does not put its own dockets before the court, the attack "is no more than an attack in the air." In Risorto v. State Farm Mutual Automobile Insurance co., (2003) [2003 43566], Winkler J., then a motion judge, stated:

The attack on the quantum of costs, insofar as the allegations of excess are concerned, in the present circumstances is no more than an attack in the air. I note that State Farm has not put the dockets of its counsel before the court in support of its submission. Although such information is not required under Rule 57 in its present form, and the rule enumerates certain factors which would have to be considered in exercising the discretion with respect to the fixing of costs in any event, it might still provide some useful context for the process if the court had before it the bills of all counsel when allegations of excess and "unwarranted over-lawyering" are made. In that regard, the court is also entitled to consider "any other matter relevant to the question of costs". (See Rule 57.01(1)(i)). In my view, the relative expenditures, at least in terms of time, by adversaries on opposite sides of a motion, while not conclusive as to the appropriate award of costs, is still, nonetheless, a relevant consideration where there is an allegation of excess in respect of a particular matter.

[38] The same reasoning applies when the Court receives submissions from only one party. In the absence of a Bill of Costs from the plaintiffs, there is nothing with which to compare the costs claimed by the defendants.

[18] The defendants' costs outline shows how fees claimed are calculated by describing categories of services and showing the time spent by legal professionals in each category. The partial indemnity hourly rates are 60% of actual rates. The fees claimed by the defendants on this basis are $62,808. Total fees plus HST are $70,973.04. The defendants claim partial indemnity costs of $65,000 all-inclusive.

[19] TriDelta does not address the time claimed in the defendants' costs outline, other than by reference to the costs awarded by Penny J. on another set of motions. In the absence of a costs outline from TriDelta showing the amount of time expended by its counsel for this motion, its challenge to the time spent by the defendants' lawyers is no more than "an attack in the air".

[20] I have reviewed the defendants' costs outline. TriDelta has not shown that the amount of time spent is unreasonable for the activities described. I am satisfied that amount claimed for partial indemnity costs is within a range of costs that TriDelta could reasonably have expected to pay if it were to be unsuccessful on the motion. I am reinforced in this conclusion by the fact that TriDelta did not provide a costs outline showing the time spent by TriDelta's lawyers on this motion.

[21] I fix costs to be paid by TriDelta to the defendants on a partial indemnity scale in the amount of $65,000.

[22] The Project Companies claim costs on a substantial indemnity scale in the amount of $59,000 calculated based on actual legal expenses of $66,419.14. The Project Companies claim, in the alternative, costs on a partial indemnity scale in the amount of $39,000.

[23] The Project Companies submit that costs on a substantial indemnity scale are justified where the Project Companies were forced to incur significant legal costs to defend against the potential threat of a sweeping injunction and a certificate of pending litigation.

[24] The Project Companies rely on Molinari v. Aloe, 2018 ONSC 7516 where the Court awarded costs to a non-party to the proceeding on a substantial indemnity scale on the basis that non-parties are on a different footing than parties for the purposes of costs recovery and "[w]here non-parties are forced to incur significant legal costs to successfully defend exposing their private financial affairs to a host of individuals in an action, it is appropriate in some cases to award substantial indemnity costs." The Project Companies accept that substantial indemnity costs are reserved for cases where there has been reprehensible, scandalous or outrageous conduct.

[25] TriDelta has not engaged in reprehensible conduct that justifies an award of costs in favour of the Project Companies on an elevated scale. Costs should be paid on a partial indemnity scale.

[26] TriDelta submits that the costs of the Project Companies should be reduced because their submissions were duplicative of those of the defendants and because, it contends, the participation of the Project Companies was limited to filing an Aide Memoire.

[27] I do not agree that the Project Companies unreasonably increased costs by retaining separate counsel and making separate submissions. The Project Companies were a target of the motion and they were entitled to retain separate counsel to represent them. While there was some overlap in the submissions of their counsel with the submissions of counsel for the defendants, the submissions of counsel were made in different ways and, overall, were complementary and not unnecessarily duplicative.

[28] In an endorsement dated September 12, 2022, Kimmel J. made an endorsement that the Project Companies have leave to appear on the motion and to file a brief Aide Memoire setting out their position.

[29] The costs outline of the Project Companies includes time claimed for services provided from the date of the motion before Conway J. and including reviewing the moving parties' record, reviewing and providing input on the responding affidavit and providing input during preparations for cross-examinations, as well as preparation of the Aide Memoire and preparation for and attendance at the hearing of the motion.

[30] Given that the Project Companies were targets of the relief claimed on the motion, I am satisfied that the time claimed is not unreasonable, having regard to the importance of the motion to the Project Companies and the other factors in rule 57.01 of the Rules of Civil Procedure.

[31] I fix costs to be paid by TriDelta to the Project Companies on a partial indemnity scale in the amount of $39,000.

Cavanagh J.

Date: November 29, 2022