Court File and Parties

COURT FILE NO.: CV-21-00657638

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ELLIOTT, plaintiff AND: MMC MARKETING & PROMOTION INC et al, defendants

BEFORE: Associate Justice R. Frank

COUNSEL: S. Pulver for the defendants / moving parties D. Camenzuli for the plaintiff /responding party

HEARD: March 31, 2023

Endorsement

[1] The defendants brought a motion for security for costs. While the motion was pending, the plaintiff made a with prejudice offer to settle (the “Offer”) which the defendants did not accept. After receiving the plaintiff’s responding motion materials, the defendants advised they would not be proceeding with the motion. The parties were unable to agree on costs of the defendants’ abandoned motion, which is the only issue before me.

[2] The plaintiff seeks costs in the total amount of $14,892.97. One portion of the cost claim by the plaintiff is calculated on a partial indemnity basis. The balance of the cost claim, which relates to costs that post-date the Offer, is calculated on a substantial indemnity basis.

[3] The defendant takes the position that the costs claimed by the plaintiff are excessive and unreasonable in the circumstances. The defendants’ position is that the costs claimed are inflated because: (1) the hours claimed are excessive; and (2) the plaintiff is seeking to recover costs for items that are not properly claimed or recoverable because they relate to activity by the plaintiff’s counsel with respect to issues other than the motion for security for costs.

[4] The defendants submit that the amount of work done should have been limited to approximately 4 to 5 hours. They argue that this would have been a reasonable and sufficient amount of time to: (1) prepare a responding record for the security for costs motion; and (2) deal with all of the relevant tasks and issues up to the time the defendants advised the plaintiff they would be abandoning their security for cost motion.

[5] The defendants acknowledge that the plaintiff made the Offer and that any work following the Offer should be at a higher scale of cost. Nevertheless, they take the position that, even applying the higher scale to a portion of the work undertaken by the plaintiff, the total costs should not exceed $2,500 to $3,000. The defendants also submit that any costs awarded to the plaintiff should not be payable until there is a disposition of the plaintiff’s summary judgement motion, which is currently scheduled for November 2023.

[6] The plaintiff’s submissions include the following:

a. The security for costs motion was not brought in good faith. Specifically, the defendants acted in a careless manner and did not do the necessary (or any) due diligence in support of their allegation that the plaintiff lacked the financial resources to pay an adverse costs order. b. The defendants’ motion materials contained numerous bald allegations, some of which were irrelevant to the motion. The plaintiff was required to respond to the allegations as part of the opposition to the motion. c. The defendants took more than two months to serve their motion materials following the scheduling of the motion. This resulted in a very condensed timeline for the preparation of responding materials, which increased costs unnecessarily. d. There was no good faith basis for the defendants to assert that the plaintiff’s pending summary judgement motion is frivolous or vexatious. The defendants’ faulty assertion is belied by the fact that the summary judgment motion was considered by Justice Sugunasiri in Civil Practice Court before it was scheduled to proceed later this year. e. The defendants’ motion was improperly based on the allegation that the plaintiff's summary judgment motion is frivolous and vexatious. In addition to the fact that the defendants did not have a good faith basis to make this assertion (as noted above), a Rule 56.01 motion is only available where the defendant has reason to believe that the action (rather than a particular step in the action) is frivolous or vexatious.

[7] The plaintiff also asserts that it made the with prejudice Offer to settle the security for costs motion prior to preparing its responding materials. When the Offer was presented to the defendants, the plaintiff included with it a real estate appraisal demonstrating that the plaintiff had equity in the hundreds of thousands of dollars with respect to a property he owns. The plaintiff submits that, based on that real estate appraisal alone, it was clear that the plaintiff had sufficient financial means to satisfy an adverse costs order, particularly given that the security for costs sought by the defendants was only in the amount of $20,000.

[8] The plaintiff acknowledges, that a small portion of the time included in the cost claim includes time spent on legal research in anticipation of the factum and argument that would be required. Plaintiff’s counsel submits that this was entirely reasonable given the condensed timeframe for responding to the motion that was created by the defendants’ delay in serving their motion materials.

[9] While the defendants complain about some of the entries in the plaintiff’s cost outline, plaintiff’s counsel explained that the amounts claimed relate only to matters that were relevant to the security for cost motion. For example, claims for time spent at certain case conferences are only with respect to time at such case conferences that relates to the defendants’ security for costs motion (as opposed to the plaintiff’s summary judgment motion).

[10] Finally, the plaintiff acknowledges that the amount claimed with regard to the case conference before Associate Justice La Horey should deducted from the costs claimed, given the order that no costs were be payable with respect to that case conference. The plaintiff quantifies the appropriate deduction at approximately $300.

[11] Having reviewed the defendants’ motion materials, including the affidavit filed in support of the security for cost motion, and the plaintiff’s cost outline, and having considered the submissions of the parties, I find that the quantum claimed by the plaintiff is reasonable. I base that finding on the following:

a. The assertions made in the affidavit filed by the defendants in support of the security for costs motion include numerous bald allegations, and do not demonstrate the necessary due diligence to support a good faith claim for security for costs. It was entirely appropriate for the plaintiff to respond to and rebut those allegations. b. The defendants’ security for costs motion was based on the assertion that the plaintiff’s summary judgement motion is frivolous and vexatious. That assertion is not supportable given that the plaintiff was required to have the motion vetted by a judge in order to schedule it. Further, and in any event, I accept the plaintiff’s submission that the defendants incorrectly focussed on the summary judgment motion (a particular step in the action as opposed to the action as a whole) as allegedly being frivolous or vexations. c. Once the plaintiff had served its Offer, which included sufficient information about the plaintiff’s assets, it was unreasonable for the defendants to require the plaintiff to prepare responding materials. In doing so they caused the plaintiff to incur further and unnecessary costs. d. The defendants did not file a cost outline of their own. “[An] attack on costs claimed based on excessive time spent is no more than an ‘attack in the air’ where that party has not delivered its own costs outline”; Halton (Regional Municipality) v. Ohashi, 2021 ONSC 8399 at para 16, citing Risorto v. State Farm Mutual Automobile Insurance Co..

[12] Further, in view of the Offer, I find that the plaintiff’s costs incurred following the Offer should be fixed on a substantial indemnity basis. Finally, I do not accept the defendants’ argument that any costs awarded should be deferred to a later date, namely, following the disposition of the plaintiff’s summary judgement motion. Rather, costs should be payable in the ordinary course, and in this circumstance, within 30 days.

Disposition

[13] For the reasons outlined above, I order the defendants to pay to the plaintiff costs of the motion fixed in the amount of $14,500.00, inclusive of disbursements and taxes, within 30 days.

R. Frank Associate J. Date: April 5, 2023