Court File and Parties
Court File No.: CV-21-00663554-0000 Date: 2023-05-19 Superior Court of Justice - Ontario
Re: FCP (BOPC) LTD., ARI FCP HOLDINGS INC., and CPPIB FCP HOLDING INC., Applicants – and – CALLIAN CAPITAL PARTNERS INC., CALLIAN CAPITAL PRIVATE WEALTH MANAGEMENT INC. and CERIECO CANADA CORP., Respondents
Before: Justice E.M. Morgan
Counsel: John C. Wolf and Brendan Jones, for the Applicants Michael Bookman, Brendan Monahan, and Daniel Babin, for the Respondent Cerieco Canada Corp.
Heard: Cost submissions in writing
Costs Endorsement
[1] This case was a contest between a commercial landlord – the Applicants – and a second indemnifier of the tenant’s – Cerieco Canada Corp. (“Cerieco”). The Applicants sought an order directing the sheriff to pay to them $478,170.90 held pursuant to a garnishment they had obtained, along with payment of outstanding rent in the amount of $505,954.32, subject to a future reconciliation. They achieved both.
[2] Cerieco who fought the motion on all points, as was its right. It was ultimately unsuccessful in its defense. Its counsel contends that because I ordered that the rents be reconciled by the Applicants down the road, the results of the Application were “mixed”. That is not the case. Cerieco sought to deny liability under its indemnity agreement. The Applicants achieved what they set out to achieve; Cerieco did not.
[3] As the successful party, the Applicants deserve their costs.
[4] Pursuant to subsection 7.14 of the Lease, the Landlord is contractually entitled to its reasonable legal costs on a substantial indemnity basis:
7.14 COSTS Tenant shall be responsible for and pay to Landlord immediately after written demand all costs incurred by Landlord, including, without limitation, reasonable compensation for all time expended by Landlord's own personnel, reasonable legal costs on a substantial indemnity basis, and all other costs of any kind whatsoever, arising from or incurred as a result of any default of Tenant or any enforcement by Landlord of any of Tenant's obligations under this Lease or any other agreement or obligation of Tenant to Landlord, in connection with Tenant's lease of the Premises.
[5] In Bossé v. Mastercraft Group Inc. (1994), 123 DLR (4th) 161, the Court of Appeal instructed that, “As a general proposition, where there is a contractual right to costs the court will exercise its discretion so as to reflect that right. However, the agreement of the parties cannot exclude the court's discretion; it is open to the court to exercise its discretion contrary to the agreement.” In other words, “[w]here the court has ‘good reason’, it may refuse to enforce a contractual term”: Burr v. Tecumseh Products of Canada Limited, 2023 ONCA 135, at para 131. I see no such good reason here.
[6] Counsel for the Applicants has submitted a Costs Outline establishing costs on a substantial indemnity scale in the amount of $56,620.75, inclusive of disbursements and HST. Counsel for Cereico has submitted a Costs Outline showing fees of $33,660.00 on a substantial indemnity scale, plus disbursements of $10,212.13 and HST. In other words, the parties are well under $10,000 apart. For a piece of litigation as contentious and extensively fought as this, that is not a great difference.
[7] As indicated, this was a hard-fought battle. The fact that it took only 2 hours of court time to argue the Application belies the amount of evidence gathering and legal research that went into compiling the record and making the case. Cereico put the Applicants to the test of their legal mettle, and the Applicants won. I am not inclined to second guess their counsel with respect to the hours they invested in this success, especially where the parties are not all that far apart in their costs.
[8] Costs are always discretionary under section 131 of the Courts of Justice Act. I will exercise my discretion here to simply round down the Applicants’ cost request as a matter of convenience.
[9] Cereico shall pay the Applicants costs in the all-inclusive amount of $56,000.
Date: May 19, 2023 Morgan J.