Court File and Parties

2023 ONSC 2812 Court File No.: CV-19-82179 Date: 2023/05/11 Superior Court of Justice - Ontario

Re: OnPoint Group Ltd., Plaintiff (Responding party) And Conseil Des Écoles Catholiques du Centre Est, Defendant (Moving party) Ty Corp. Construction, Defendant And Multi-Service Restoration and Provision Construction Management Inc., (Intervening Parties)

Before: Justice A. Doyle

Counsel: Ronald Peterson, Counsel for the Plaintiff, OnPoint Group Ltd. Ronald Caza, Counsel for the Defendant, Conseil des Écoles Catholiques du Centre Est No one appearing for the Defendant, Ty Corp. Construction Keith MacLaren and Noémie Ducret, Counsel for the Intervening Parties

Heard: In writing

Costs Endorsement

Overview

[1] On March 20, 2023, the court granted summary judgment finding that the portable school classrooms (“portables”) built by OnPoint Group Ltd. (“OnPoint”) for the defendant Conseil des Écoles Catholiques du Centre Est (“CECCE”) are “improvements” within the meaning of the Construction Act, R.S.O. 1990, c. C.30, (the “Act”), and therefore engage the provisions of the Act.

[2] The intervening parties are involved in another action which shares similar facts as they relate to the portables built for CECCE.

[3] If the parties were unable to agree on the issue of costs, the parties were to provide costs submissions.

[4] Having now considered the costs submissions, bill of costs, offers to settle and the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, (the “Rules”), the court awards costs in the amount of $35,000 (inclusive of disbursements and HST) to OnPoint and costs in the amount of $9,500 (inclusive of disbursements and HST) to the intervenors.

OnPoint’s Position

[5] As the successful party on the motion, OnPoint is requesting costs on a full indemnity basis in the amount of $65,229.50.

[6] Counsel for the plaintiff has 40 years of experience, mostly in construction law, and charges an hourly rate of $475 per hour.

[7] The stakes in this motion were high as OnPoint is a small contractor and the loss of the motion would have significant financial implications to them as their claim was approximately $400,000.

[8] Costs were increased due to the CECCE’s refusal to admit facts, the need for interpreters as it was a bilingual hearing and the involvement of the intervenors requiring more time to be spent on reviewing their materials and lengthening the hearing of the motion.

Intervenors’ Position

[9] The intervenors are requesting costs in the amount of $11,950.53 based on a partial indemnity basis.

[10] Although as a general rule, intervenors are not entitled to costs, in this case, the nature and extent of the intervenor’s involvement permits the court to deviate from this general rule.

[11] The intervenors are involved in another civil action against the CECCE and there the CECCE was also seeking summary judgment on the ground that the Act did not apply to the construction and installation of classroom portables.

[12] They rely on the Alberta Court of Queen’s Bench decision in CJA, Local 1325 v. JV Driver Installations Ltd., where intervenors were involved as parties including cross-examining witnesses, leading evidence and making submissions. The court awarded costs to the intervenors.

[13] In this case, the intervenors, conducted cross-examinations of the CECCE’s representatives and provided oral and written submissions.

[14] They submit that CECCE should have anticipated that the intervenors were going to participate and foreseen associated costs. The intervenors’ involvement avoided two separate summary judgment motions on the same issues and similar facts.

CECCE’s Position

[15] CECCE submits that OnPoint is entitled to $15,000 in costs for the following reasons:

• It failed to file a bill of costs in advance of the hearing and before the end of the hearing and this fact justifies a reduction of costs;
• There is nothing in this case that justifies a departure from the general principle that costs be awarded on a partial indemnity basis;
• The case was not complicated;
• The request to admit was served after the completion of the parties’ affidavit, cross-examinations and factums;
• The fact that CECCE asserted its right to a bilingual hearing does not justify increased costs;
• The sum claimed is $241,129.00 plus interest not $400,000 as suggested by OnPoint;
• CECCE had partial success as the court dismissed OnPoint’s claim for unjust enrichment; and
• OnPoint should not claim for fees in the action and the court should only consider fees incurred for the summary judgment motion.

[16] In summary, OnPoint’s claim for costs should be $23,088.37 with reduction of 30% for the fact that CECCE had partial success of 30%, and a reduction of 5% for its claim of the extra time on the basis of it being a bilingual hearing.

[17] CECCE submits that the intervenors should receive $5,000 all-inclusive as they did not contribute any new argument to the hearing.

General Legal Principles

[18] The costs of a proceeding are in the discretion of the court (s. 131(1) Courts of Justice Act, R.S.O. 1990, c. C.43). That discretion must be exercised on a principled basis (Davies v. Clarington Municipality, 2009 ONCA 722, 100 O.R. (3d) 66, at para. 40). Fixing costs is not merely a mechanical exercise; the amount awarded should, considering all the circumstances, be fair and reasonable (Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.)). In a proper case, costs may be awarded against a successful party (r. 57.01(2) of the Rules).

[19] As stated in Boucher, the court must be fair and reasonable when exercising its discretion to award costs and the parties’ expectation concerning the amount of a costs award is a relevant factor to be considered.

[20] Rule 57.01(1) of the Rules contains a non-exhaustive checklist of factors that guide the court in its reasoning when awarding costs in the exercise of its discretion under s. 131 of the Courts of Justice Act.

Discussion

[21] Firstly, even though there was mixed success, the major issue of the motion was whether the portables were improvements. OnPoint was successful on this main issue.

[22] Regarding the filing of the bill of costs, in Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, et al, 2014 ONSC 4715, at paras. 9-13, the court notes that the bill of costs was not filed before the motion in accordance with the rules. The CECCE’s bill of costs indicates costs on a partial indemnity basis of over $80,000.00. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: Rule 57.01(1)(0.b).

[23] The motion was not complex, but it did involve counsel urging the court to make certain factual findings based on the evidence and provide extensive legal submissions. See Baldwin v. Daubney, [2006] O.J. No. 3919 at paras. 31-32; Das v. George Weston Limited, 2018 ONCA 1053, at para. 241. As stated by Justice Spence in Baldwin, this novel issue factor is a consideration and will be a matter of degree (at paras. 31 and 32).

[24] As stated by the Ontario Court of Appeal in Das “It can refer to a legal issue that has not previously been decided in the specific fact situation presented in a particular case” (para. 242). At para. 245, the Court of Appeal states that it “is not an all or nothing thing, but rather operates along a continuum”.

[25] Here, there were other cases that dealt with the issue of whether portables were improvements, albeit not under the current Act.

[26] I find in this case that the issue to be decided was novel in the sense that it has not been decided in the specific factual context in which it is raised.

[27] The applicable case law and principles set out the factors to consider. Therefore, the claim of novelty will have little or no impact on the costs awarded here.

[28] As stated by the Ontario Court of Appeal in Laczko v. Alexander, 2012 ONCA 872, partial indemnity costs are generally awarded. At para. 2, Justice Weiler stated “costs should be awarded on a partial indemnity basis unless justice can only be done by complete or substantial indemnification: see Foulis v. Robinson (1978), 21 O.R. (2d) 769 (C.A.). As an established practice, justice will only require substantial indemnification where there has been “reprehensible, scandalous or outrageous conduct on the part of one of the parties”: Young v. Young, [1993] 4 S.C.R. 3, at p. 134.”

[29] I do not see this as a case where costs should be awarded on a substantial indemnity basis as I do not find that the respondents’ conduct rose to the level required under Laczko.

[30] The award of costs must reasonably reflect the amount of time and effort which was warranted by the proceedings. It is not simply an arithmetic calculation.

[31] The reasonable and proportionate cost to be awarded to the intervenors for their contribution is $9,500 (inclusive of disbursements and HST) on a partial indemnity basis. Their contribution to the motion was helpful to the court in their presentation of the case law, providing academic materials and submitting helpful materials such as Mr. Zion’s affidavit and the transcript of their cross-examination of CECCE’s representative.

[32] With respect to OnPoint’s request for increased costs due to the bilingual nature of the hearing, a litigant is entitled to bilingual proceedings. This is not the basis to request more costs, see Cardinal v. Perreault, 2020 ONSC 4825, at paras. 17-18; Don Fry Scaffold Service Inc. v. Canadian Bonding Corp., at para. 12; Whitfield v. Whitfield, 2016 ONCA 581, at para. 82. In Cardinal at para. 18, the Court commented that the proceeding could have been more efficient and less costly if the party had been represented by a bilingual lawyer. However, OnPoint has the right to retain who they wish but must be made aware that by not doing so, they are not entitled to elevated costs. Also, of course, the Law Society Rules of Professional Conduct 3.2 A and B require lawyers to advise their clients of their linguistic rights.

[33] On a review of OnPoint’s bill of costs, it is clear that some of the preparatory work which dealt with the main action was necessary for the motion for summary judgment.

[34] Having reviewed OnPoint’s bill of costs and attached accounts and its success on the main issue, the reasonable and proportionate costs on a partial indemnity basis to be awarded to OnPoint is $35,000 (all inclusive of disbursements and HST).

Justice A. Doyle Date: May 11, 2023