Court File and Parties

Court File No.: CV-22-686696 Date: April 25, 2023

Superior Court of Justice - Ontario

Re: Mappro Realty Inc. v. Mizrahi Developments Inc. and City of Toronto;

Before: ASSOCIATE JUSTICE C. WIEBE

Counsel: Susanne Balpataky for Mappro Realty Inc.; Fraser Mackinnon Blair for Mizrahi Developments Inc.; Nicholas Rolfe for the City of Toronto.

Heard: April 25, 2023.

Endorsement

[1] This was a motion brought by the plaintiff, Mappro Realty Inc. (“Mappro”), seeking an order pursuant to Rule 5.04(2) of the Rules of Civil Procedure correcting the name, “Mizrahi Developments Inc.” (“MDI”), to the proper name of the registered owner of 1 Bloor Street West, Toronto, Mizrahi Development Group (The One) Inc. (“MDG”).

[2] Mappro has property next to 1 Bloor Street West. The underlying action concerns allegations of interference with Mappro’s property rights by the high-rise development underway on 1 Bloor Street West named “The One.”

[3] By the time of the argument of the motion, the only issue was the costs of the motion. The parties had agreed that the requested substantive order should be granted. Concerning costs, there were two issues: whether Mappro or MDI should pay the other costs; and what the proper quantum of the award of costs should be. No one was seeking costs from the City of Toronto, who attended only to observe.

[4] On the first issue, I determined, after reading the motion material and hearing oral argument, that MDI should pay Mappro costs. I gave that ruling orally and added that I would issue written reasons to support that ruling. The following are my reasons:

a) The test of misnomer is whether it is clear that the plaintiff intended to sue the rightful defendant, that a party properly informed would have known from a reading of the statement of claim that the rightful defendant was being sued, and that the order is otherwise just; see Stekel v. Toyota Canada Inc., 2011 ONSC 6507, at paragraph 24 and Clarhar-Hebert v. Dan, 2022 ONSC 5720, at paragraph 23.

b) It is clear that this test was met in this case. The statement of claim issued on September 7, 2022 made it clear that Mappro was suing the owner of 1 Bloor Street West. Furthermore, MDI knew MDG was the proper party to the action when it received and reviewed the statement of claim, and that there was a mistake. That was evident from the email the lawyer for MDI, Barbara Grossman, sent to the lawyer for Mappro on December 22, 2022 shortly after MDI was served with the statement of claim. In this email, Ms. Grossman identified that MDI was wrongly named as it had no interest in 1 Bloor Street West. She called this “an inadvertent misapprehension about the corporate entity on title and on the permit . . .” She demanded that MDI be removed.

c) On December 23, 2022, the day after the Grossman email, Mappro served the Notice of Motion for this motion with the return date yet to be determined. MDI should have consented to this motion, or at least indicated that it was not opposing. There was some discussion about whether a party could consent to a motion under Rule 5.04(2). I saw no reason why that could not have been done. In any event, there was nothing stopping MDI from indicating that it was not opposing. After securing the inevitable City lack of opposition, Mappro could then have brought this as a motion in writing. The action could have proceeded accordingly while the parties awaited the in writing order.

d) That was not done. Instead, MDG embarked on a course of conduct that purported to preserve rights to a limitation defence. On December 29, 2022 Ms. Grossman emailed the lawyer for Mappro, Allison Speigel, proposing a consent order pursuant to Rule 26.02(b) of the Rules of Civil Procedure that added MDG and deleted MDI and that expressly deferred the argument of the misnomer point. She justified this position on limitation grounds without explaining what those were. She later send a consent document embodying her position. Mr. Blair in argument explained that the pleaded cause of action was of a continuing tort and that the limitation period would, therefore, bear on the issue of damages. That was not explained by Ms. Grossman. In any event, where, as here, the misnomer is clear, due diligence is immaterial to the motion as the rightful party will be viewed as having been a party from the inception of the action; see Lloyd v. Clark, 2008 ONCA 343, at paragraph 4 and Clahar-Hebert, op. cit., at paragraph 28. Mappro was entitled to the misnomer order it sought, not some other order.

e) On February 23, 2023, with Ms. Speigel having obtained a motion date and threatening to bring this motion and seek costs, Ms. Grossman emailed stating that she would “recommend” not opposing this motion but on condition that the above noted consent be included in the motion material and that Mappro not seek costs against MDI. I agree with Ms. Balpataky that this was an unacceptable position. By this time, a “recommendation” would not suffice. MDI needed to state its position. Also, Mappro had incurred needless costs on this issue and deserved to get them paid. Furthermore, requiring the inclusion of the above noted consent in the motion material left the issue of misnomer open to question. Understandably, Mappro proceeded with this motion.

f) On March 10, 2023 MDI delivered its responding material. It stated that it was not opposing the motion, but it included its contentious consent in its materials. It was no sooner than the argument of this motion that MDI finally made it clear that it was unreservedly not opposing the substance of this motion.

g) I agree with Justice Lederer when he stated in his decision in Bertolli et al v. Toronto (City) et al, 2017 ONSC 7534, at paragraph 40 on the issue of costs in such a motion, that where a misnomer has been found, the order is not an indulgence. “It is an application of the law.” Therefore, costs should be determined in the usual way. As a result, I found that, as Mappro was the successful party and as the issue of misnomer was clear from the beginning, Mappro should get costs.

[5] As for the second issue, I note that the parties both filed costs outlines. The Mappro costs outline showed a partial indemnity amount of $13,525.16 and a substantial indemnity amount of $20,054.16. MDI’s costs outline showed a partial indemnity amount of $13,607.46 and $22,679.10 in substantial indemnity costs.

[6] Ms. Balpataky argued that Mappro should be awarded substantial indemnity costs of $20,054.16. Mr. Blair argued that the amount should be partial indemnity costs of only $8,000. I reserved on this issue of quantum.

[7] I have decided to award Mappro substantial indemnity costs of $18,000, and I do so for the following reasons:

a) MDI should pay substantial indemnity costs. In her December 22, 2022 email Ms. Grossman essentially conceded the misnomer point. She identified the mistake in the name and required that MDI be removed. By then embarking on a pointless exercise of trying to defend a groundless limitation defence, MDI caused this motion to be brought and the costs associated with it to be incurred.

b) Indeed, MDI’s conduct was tantamount to bullying. MDI wanted to keep the limitation defence, groundless as it was, hanging over Mappro during the pendency of this entire action. The only conclusion I can reach from this is that MDI wanted to gain an advantage from doing so. This needs to be sanctioned.

c) The costs outlines of MDI exceed those of Mappro, and Mappro’s material dealt with the substance of the motion, not just costs. MDI’s motion material was filed when it knew it was not contesting the substance of the motion. Therefore, I draw the conclusion that MDI should reasonably expect to pay substantial indemnity costs in the range claimed by Mappro.

d) Mr. Blair argued that I should discount the time spent by Ms. Speigel in this motion as she was acting in the motion as a witness not a lawyer. I do not accept this position. There was no cross-examination of Ms. Speigel. Therefore, her involvement was the swearing of her affidavit, an affidavit no doubt some other lawyer in the firm would have had to prepare if it was not her.

e) Mr. Blair made a complicated argument about costs. He parsed out certain periods of time and argued that Mappro should be disentitled to costs for the periods after February 23, 2023 and March 10, 2023. He argued that MDI made reasonable offers to settle the motion on February 23, 2023 and thereafter. I disagree. There was no offer made by MDI on February 23, 2023, much less a reasonable one, and the MDI position remained unclear after March 10, 2023.

f) I have discounted the Mappro substantial indemnity award by a small amount to recognize the fact that, due to its own lack of care in identifying the proper defendant, this motion was necessary and would have required a least a motion in writing, the costs of which Mappro would have had to absorb.

[8] I, therefore, reiterate that I award Mappro $18,000 in substantial indemnity costs as against MDI. MDI must pay this amount within 30 days from April 26, 2023.

DATE: April 25, 2023

ASSOCIATE JUSTICE C. WIEBE