Court File and Parties

COURT FILE NO.: CV-00002443 DATE: 20230427 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

STRONACH CONSULTING CORP. Plaintiff – and – YORK REGION VACANT LAND CONDOMINIUM CORPORATION NO. 1010, RICK IRONS, JUDSON WHITESIDE, CYNTHIA MITCHELL, RICHARD MANGAT, NINO CAMPOLI and JOHN OR JANE DOE DIRECTORS OF YORK REGION VACANT LAND CONDOMINIUM CORPORATION NO. 1010 Defendants

Counsel: J. Suttner for Plaintiff, Responding Party A. Sahai for the Defendants

HEARD: In writing

costs endorsement

McCarthy J.

Endorsement

[1] The Defendants seek costs of the motion which saw the court strike the pleadings against the individually named directors of the defendant condo corporation referred to as Adena Meadows. The reasons on motion are dated February 22, 2023.

[2] The Defendants seek costs on a substantial indemnity scale in the amount $55,786.90; in the alternative, they seek costs on a partial indemnity scale in the amount of $37,407.17. The Defendants assert that in naming the directors individually, the Plaintiff made tactical and unfounded allegations against them when it should have acknowledged that the within action is a simple contract claim between corporate entities.

[3] The Plaintiff suggest that the Defendants’ proposed costs are absurd and inflated and greatly exceed the amount which the Plaintiff would have claimed if it had been successful as evidenced by its own costs outline provided to the opposite side before the hearing. Costs on a substantial indemnity scale should be reserved for cases of outrageous or reprehensible conduct by a party. The inability to craft a pleading does not meet the standard of egregious misconduct warranting substantial indemnity costs. The Defendants’ suggested range is inflated when compared to cost awards by this court in other motions to strike. The Plaintiff suggests that costs on a partial indemnity scale of $10,000 are appropriate.

[4] In arriving at a fair award for costs the court should rely on the factors set out at rule 57.01 of the Rules of Civil Procedure and be mindful of the oft-cited principle of proportionality. Ultimately, costs at any stage of a proceeding are in the discretion of the court: see s. 131 of the Courts of Justice Act.

[5] The Defendants were successful in their motion. All the allegations against the directors were struck. This was of considerable importance for those individuals who faced not only the potential exposure to a judgment of some significance but also the inconvenience and possible expense of defending a civil action.

[6] The legal issues involved were of some complexity: corporate law, trust law, unjust enrichment, the law of pleadings, inducing breach of contract.

[7] The amount claimed in the action is $1.5 million, an amount that the court must categorize as beyond the means of the average person to pay. Proportionality to the amount claimed would partially justify a handsome award of costs.

[8] As found by the court, the action boils down to one of simple contract between two corporate entities. The court detects a tactical motivation behind the Plaintiff’s dogged determination (the pleading in question was the third version of essentially the same allegations) to involve the directors in the dispute. Whether the motive was expanded discovery or intimidation designed to encourage early and favourable resolution as suggested by the Defendants, the court is persuaded that the step of naming the directors personally in the context of this action was ill-advised, unreasonable and unnecessary.

[9] Still, I am not persuaded that any step or position taken was egregious. The merits of the matter between the two corporate entities have not been adjudicated. The individual Defendants were represented by counsel for Adena Meadows and I have no evidence before me that they incurred individual or collective expense beyond that incurred by Adena Meadows to fend off this pleading. Certainly, the court did not receive multiple bills of costs from these person as might be expected if they were seeking individual indemnification. The pleadings against the directors were boiler-plate, non-descript and misplaced, but hardly outrageous.

[10] In my view, costs of this motion should follow the result but on a partial indemnity scale and for a reasonable and proportional amount.

[11] Having considered all of the applicable principles, I would fix costs of the motion at $25,000 inclusive of fees, HST and disbursements. Those costs are payable to the Defendants by the Plaintiff forthwith.

McCarthy J. Released: April 27, 2023