Court File and Parties

COURT FILE NO.: CV-22-00676658-00CL

DATE: 20221201

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: HK UNITED CONSTRUCTION LTD., HK UNITED TRUCKING LTD., KARNAIL SINGH, JARNAIL SINGH and TARLOCHAN SINGH, Plaintiffs

AND:

JOHN MALANCA also known as JUAN CARLO MALANCA, ALFREDO, MALANCA also known as ALFREDO ITALO MALANCA also known as ALFREDO PALMERI also known as ALFREDO PALMERI MALANCA, KATARZYNA PIKULA also known as KASIA PIKULA, RCG GROUP LTD., 1719456 ONTARIO LTD., AKM HOLDINGS CORP., 197 MCKAY BARRIE CORP., RUGGIERO SPENCER MILBURN LLP and DAVIDE JOSEPH DI IULIO 1000032025 ONTARIO INC., 2735440 ONTARIO INC., SCHNEIDER RUGGIERO SPENCER MILBURN LLP and DAVIDE JOSEPH DI IULIO, Defendants

AND:

KATARZYNA PIKULA also known as KASIA PIKULA & 197 MCKAY BARRIE CORP., Plaintiffs by Counterclaim

AND:

HK UNITED CONSTRUCTION LTD., HK UNITED TRUCKING LTD., KARNAIL SINGH, JARNAIL SINGH and TARLOCHAN SINGH, Defendants by Counterclaim

AND:

JOHN MALANCA, ALFREDO MALANCA, R.C.G. GROUP LTD., 1719456 ONTARIO LTD, and 1291529 ONTARIO LTD., Plaintiffs by Counterclaim

AND:

HK UNITED CONSTRUCTION LTD., HK UNITED TRUCKING LTD., KARNAIL SINGH, JARNAIL SINGH, TARLOCHAN SINGH, and 2198689 ONTARIO INC., Defendants by Counterclaim

BEFORE: Cavanagh J.

COUNSEL: John Polyzogopoulos and Varoujan Arman for Plaintiffs HK United Construction Ltd., Karnail Singh, Jarnail Singh, and Tarlochan Singh (Moving Parties)

Bevan Brooksbank and Adrian Pel for Defendants Kasia Pikula, AKM Holdings Corp., 197 McKay Barrie Corp. and 1000032025 Ontario Inc. (Responding Parties)

HEARD: In writing

COSTS ENDORSEMENT

[1] The plaintiffs HK United Construction Ltd., Karnail Singh, Jarnail Singh, and Tarlochan Singh brought a motion for an order granting them leave to issue a certificate of pending litigation for registration against title to a property in Barrie (the “Property”).

[2] The moving parties’ motion was dismissed, conditional upon 197 McKay Barrie Corp. (“197 Corp.”), the owner of the Property, giving the undertaking to the Court that the responding parties had offered (to be included in the form of Order to be issued for the motion) in terms described at para. 63 of my endorsement.

[3] The undertaking to the Court was offered by 197 Corp. in the affidavit of Ms. Pikula sworn June 10, 2022, at para. 104. This affidavit was served on June 15, 2022.

[4] Both the moving parties and the responding parties seek costs of the motion.

[5] The moving parties submit that they were the more successful parties on the motion and are entitled to costs.

[6] The moving parties submit that substantial protection was offered through the undertaking and that the undertaking was not communicated until service of Ms. Pikula’s affidavit on June 15, 2022, which was after they had delivered their motion record for this motion.

[7] The moving parties submit that in all the circumstances, it was reasonable for them to proceed with the motion.

[8] The moving parties submit that they were successful on the key substantial disputes that underpinned the motion including that they had demonstrated a triable issue as to their claim to an interest in the Property.

[9] The moving parties seek costs on a partial indemnity scale in the amount of $65,000, a reduction of the partial indemnity costs set out in their costs outline ($88,152.80), in recognition of the fact that they were not fully successful.

[10] After the responding parties’ offered undertaking to the Court was communicated on June 15, 2022, it was open to the moving parties to accept the offered undertaking in settlement of the substantive relief sought on the motion. They did not do so and, instead, chose to proceed with their motion.

[11] The fact that the moving parties had already served their motion record when the undertaking was offered may have affected the parties’ positions with respect to costs of the motion had the offer been accepted in settlement of the substantive relief sought on the motion. However, when the moving parties chose to proceed with their motion after the undertaking was offered, they took the risk that if they were to be unsuccessful on their motion, they would be exposed to an order as to costs.

[12] I do not agree that costs should be awarded based on success or failure on particular issues on the motion. The moving parties were not successful on their motion. They are not entitled to costs.

[13] The responding parties were successful on the motion. They are entitled to costs.

[14] The responding parties seek costs on a substantial indemnity scale in the amount of $127,460.61 or, in the alternative, on a partial indemnity scale in the amount of $86,739.59.

[15] The responding parties submit that substantial indemnity costs are appropriate here because, they contend, (i) the moving parties forced the responding parties and the Court to endure a costly and unnecessary motion in the face of the moving parties’ reasonable attempts at resolution, (ii) the motion was tactical because the moving party sought to put 197 Corp. in default of mortgages and exerted undue pressure by seeking to obtain a CPL, and (iii) the moving parties engaged in case-splitting and led reply evidence in an allegedly improper attempt to smear the responding parties.

[16] I do not agree that the moving parties engaged in conduct that qualifies as reprehensible conduct justifying an award of costs on an elevated scale. Costs should be on a partial indemnity scale.

[17] The costs of the responding parties (based on actual rates) is $140,550.64. The costs of the moving parties (based on actual rates) is $141,756.16. The responding parties seek costs on a partial indemnity scale based on hourly rates equal to 60% of the actual hourly rates charged by their counsel.

[18] I have considered the factors in rule 57.01. The motion was factually complex and raised important issues for the parties. The moving parties submit that their partial indemnity costs claimed ($88,152.80) are reasonable. It follows from this submission that they do not challenge the reasonableness of the responding parties’ claim for partial indemnity costs ($86,739.59). I am satisfied that the amount claimed by the responding parties for costs is within a range of costs that the moving parties could reasonably expect to pay if they were not successful on their motion.

[19] I fix the responding parties’ costs of this motion on a partial indemnity scale in the amount of $86,739.59 to be paid by the moving parties to the responding parties within 30 days.

Cavanagh J.

Date: December 1, 2022