Court File and Parties

COURT FILE NO.: CV-15-538581 / CV-15-538931 DATE: 2022/02/01

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ST. JOSEPH’S HEALTH CENTRE, Plaintiff AND: PROBUILT PROFESSIONAL LIGHTING, LLC. et al., Defendants

And

CARILLION CONSTRUCTION INC., Plaintiff AND: ACKLANDS-GRAINGER INC. et al., Defendants

BEFORE: ASSOCIATE JUSTICE R. M. BROTT

COUNSEL: R. Barnable, for the Plaintiff St. Joseph’s Health Centre Email – rory@barnablelaw.ca

D. Fiorita, for the Plaintiff Carillion Canada Email – Dfiorita@cozen.com

J. Teal, for the Defendant ProBuilt Profession Lighting Email – JTeal@lloydburns.ca

K. Di Tomaso, for the Defendant Carillion Canada Email – KDiTomaso@sblegal.ca

ENDORSEMENT

[1] These two actions arise out of a fire that occurred on October 24, 2013 at St. Joseph’s Health Centre. It is alleged that the fire originated at or within a temporary lighting lamp know as a “wobblelight”. The wobblelight was at the construction site at the hospital.

[2] The pleadings in the Carillion action were closed in December 2016 and the pleadings in the St. Joseph’s action were closed in June 2017. Examinations for discovery were held in July 2018.

[3] Immediately prior to the examination for discovery of the representative of the defendant ProBuilt Professional Lighting LLC (“ProBuilt”), its counsel advised all of the other parties that ProBuilt was not the manufacturer of the wobblelight despite its pleading stating otherwise. He advised that the manufacturer of the wobblelight was Wise Plastics Technologies Inc. (“Wise Plastics”).

[4] ProBuilt brought a motion in 2021 pursuant to Rule 26.01 to amend numerous paragraphs in its Statements of Defence in both actions. It argued that if the court found that the proposed amendments were found to be a withdrawal of admission, then ProBuilt sought under Rule 51.05 to withdraw the admission. The plaintiffs in both actions, St. Joseph’s and Carillion, and the co-defendant Carillion in the St. Joseph’s action, opposed ProBuilt’s motions.

[5] This court found that the effect of the amendment sought did amount to a withdrawal of admission. The court did permit ProBuilt to withdraw its admission, allowing ProBuilt to amend its Statement of Defence in both actions.

[6] While the parties exchanged costs outlines at the hearing and were urged to agree on costs, they were unable to do so. Oral submissions on costs were made at two separate court appearances.

[7] The moving party ProBuilt seeks costs on a partial indemnity basis in the amount of $20,028.03. It asserts that costs should follow the event and even if the court orders some costs to the responding parties, those compensatory costs should be set off against ProBuilt’s costs, given its success on the motion.

[8] The defendant Carillion Construction Inc. o/a Vanbots and/or Vanbots, a Division of Carillion Construction Inc. (“Carillion”) seeks substantial indemnity costs of $29,342.99 for costs of the motion and $76,236.86, on a substantial indemnity basis, for ‘reset’ costs. Its costs outline notes partial indemnity costs at $21,496.57 and $55,854.67 respectively. Carillion notes that it successfully opposed the amendment motion under Rule 26.01. Regarding the Rule 51.05 motion to withdraw the admission, Carillion submits that costs are payable on a solicitor client basis, even though they were unsuccessful on that issue.

[9] The plaintiff St. Joseph’s Health Centre (“St. Joseph’s”) seeks costs of the motion in the amount of $16,244.27 and reset costs of $37,659.23 on a partial indemnity basis and $22,138.06 and $58,822.32 on a substantial indemnity basis.

[10] The plaintiff Carillion seeks costs of $21,687.86 on a partial indemnity basis and $29,574.36 on a substantial indemnity basis for the motion. It also seeks ‘other anticipated costs’ in the amount of $7500 – $17, 500. It further notes that the cost of the delay of this action is immeasurable.

COSTS OF THE MOTION

[11] Rule 57.01(1) sets out the factors to be considered in assessing costs.

[12] Amount Claimed - The St. Joseph’s action is a claim for $350,000 but for both actions, ProBuilt faces a combined damages claim of $1.6 million.

[13] Importance of the issues - The issue of whether ProBuilt was the manufacturer of the wobblelight is critical to the issue of liability in these proceedings.

[14] Conduct of any party that tended to shorten or lengthen unnecessarily the duration of the motion - The moving party’s motion record addressed primarily the amendment issue. After the voluminous responding materials were served and filed, the moving party delivered supplementary materials.

[15] The law is clear that where the effect of an amendment to a pleading is to withdraw an admission, Rule 51.05 supercedes Rule 26.01 because it is more specific. (Antipas et al. v Coroneos et al., 1988 CanLII 10348 (ON SC), [1988] O.J. No. 137 (Ont. H.C.J.) at para. 12) Arguing both issues contributed unnecessarily to the length and complexity of the motion. The moving party could have simply argued the motion as a Rule 51.05 withdrawal of admission and this would have served to reduce the costs of all of the parties on the motion.

[16] Whether any step in the proceeding was improper, vexatious or unnecessary – The delay in bringing this motion and the finding made on the motion will unquestionably serve to prolong this litigation.

[17] The general rule is that costs follow the event. Master Hawkins at para 13 in Yeoman v Meyer, 2015 ONSC 716, 2015 CarswellOnt 1292 relying on King’s Gate Developments Inc. v Drake (1994), 1994 CanLII 416 (ON CA), 17 O.R. (3d) 841 (C.A.) and Tikhanova v Covelli, 2004 CarswellOnt 1967 (Ont. Master) makes clear that “on a motion to amend a pleading, a compensatory award of costs to the responding party will frequently be appropriate, even if the responding party was not successful in opposing the motion to amend.”

[18] While in the case at bar, the responding parties were successful in opposing the motion to amend, the court granted an indulgence to the defendant ProBuilt by permitting the withdrawal of the admission. There was accordingly partial success to all parties on the motion.

[19] The responding parties seek their costs on a substantial indemnity basis. They emphasized the importance of formal admissions in the civil justice system. There is no question that admissions play a significant role in our litigation process but where the withdrawal is due to inadvertence and conduct of that party in regard to the circumstances leading to the request to withdraw the admission is not called into question, the thrust of the submission by the responding parties that withdrawals of admissions should necessarily result in costs to a responding party on a substantial indemnity scale is too far-reaching.

[20] Rule 2.01(1) states:

A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity and the court,

(a) may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of real matters in dispute;

[21] While substantial indemnity costs are awarded where the conduct of a party warrants a payment of costs above the partial indemnity scale, our Rules provide for mechanisms to correct mistakes. To significantly penalize litigants for errors which are not egregious would run contrary to the general principles of our Rules of Civil Procedure.

[22] It is the objective of Rule 57.01 that costs be fixed in an amount that is fair and reasonable for the unsuccessful party. This is so over and above the consideration of the individual factors outlined in the Rule including the fact that ProBuilt delayed in bringing the motion and brought it under both Rules 26.01 and 51.05. ProBuilt’s success tempered with the indulgence granted and divided success on its motion have been considered in connection with what ProBuilt could expect the costs to be.

RESET COSTS

[23] In the Reasons permitting the withdrawal of the admission, I stated at para [41]:

While the responding parties may suffer prejudice, particularly due to the ‘reset’, it is prejudice which can be compensated for in costs.

[24] Reset costs are to be considered as part of the compensatory costs on a motion to amend. They constitute the cost to reset the litigation as a result of the amendment. The moving party submits that the only costs for reset would relate to the issuance of the claim against Wise Plastics. ProBuilt submits further that should there be any costs arising from the amendment as the litigation progresses, it is premature at this stage to fix those costs. It is the submission of ProBuilt that those costs are currently hypothetical and accordingly should be left to the trial judge.

[25] The responding parties assert that because the amendment was permitted, they must now respond to the amended pleading and then proceed to the discovery stage. Other reset costs include but are not limited to the cost of drafting a claim against Wise Plastics, further examinations for discovery, costs thrown away for past examinations, further motions (for example on a possible limitation issue and/or 30.10 motion), and reconsideration of strategy of the case. They rely on the Alberta decision in Dwyer v Fox 1996 CarswellAlta 295, 1996 ABCA 95, [1996] A.W.L.D. 399, [1996] A.J. No.268, which held that because of the importance of admissions in our judicial system, parties must be penalized if those positions change. This is, in that court’s view, a way to balance the unfairness to the responding parties who relied on the admission.

[26] The responding parties knew of the existence of Wise Plastics back in 2018. Wise Plastics would have been involved in these proceedings regardless of whether or not ProBuilt was successful on this motion. The responding parties accordingly would have had to incur all costs in that regard. The responding parties’ costs outlines claim for more than 100 hours of lawyers’ time to address the limitations issue and a possible motion for summary judgment, which amount is excessive.

[27] Other reset costs being sought by the responding parties include locating ProBuilt employees and a possible motion for disclosure of manufacturing documentation under Rule 30.10. These possible costs bear little or no relationship to the amendment. Further the responding parties offered no evidence of why they would have to take such steps as a result of the amendment.

[28] Under Rule 51.03 it is my view that the responding parties are entitled to reasonable reset costs – to amend their pleadings and to conduct further discovery, both of which I find are payable on a partial indemnity basis.

[29] Taking into account the mixed result on the motion, the Rule 57.01 factors, the quantum of costs that the unsuccessful party could reasonably expect to pay in relation to the permission to amend at this stage (which is still only at the discovery phase), the reset and what is fair and reasonable, it is ordered that the defendant ProBuilt shall pay within sixty days (60) to each of St. Joseph’s, Carillion as plaintiff, and Carillion as defendant, costs fixed on a partial indemnity basis in the amount of $20,000.00.

ASSOCIATE JUSTICE RONNA M. BROTT

Date: February 1, 2022