Court File and Parties

COURT FILE NO.: CV-22-112 DATE: June 6, 2023 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ROBERT JAMES NUNN and JACQUELINE GAYE NUNN, Plaintiffs/Responding Party AND: 2589580 ONTARIO INC., ASIMCO TEXTILES INC., ASIM BHATTI and SHERI-LYNN THOMPSON, Defendants/Moving Party

BEFORE: Justice J.S. Richard

COUNSEL: Christopher D. Salazar, for the Plaintiffs Rajiv Joshi, for the Defendants 2589580 Ontario Inc., Asimco Textiles Inc., Asim Bhatti Charles Haworth, for the Defendant Sheri-Lynn Thompson

HEARD: May 30, 2023

Endorsement

Motion

[1] The Plaintiffs commenced this action by way of a Statement of Claim issued July 22, 2022. In this action, the Plaintiffs seek the sum of $4,315,140.89, plus interest, on account of a mortgage loan made by the Plaintiffs to the Defendants. The Plaintiffs allege the Defendants defaulted on their mortgage obligations.

[2] The Plaintiffs served seven notices of sale pursuant to the terms of the said mortgage on August 4, 2022.

[3] The Defendants brought a motion on September 7, 2022 requesting various reliefs, including: an injunction restraining the Plaintiffs from exercising or continuing to exercise their Power of Sale, an Order staying or restraining the Plaintiffs from completing or closing any sale of the seven subject properties, payment into court, declarations that the seven notices of sale are null, void and improper, a declaration that calculations of interest and outstanding mortgage amounts are incorrect. In total, the Defendants sought eleven different remedies in its Notice of Motion.

[4] The parties engaged in discussions in the months following the filing of the Notice of Motion. During this time, the Defendants were attempting to find another lender in order to satisfy the Plaintiffs’ mortgage loan. Finally on March 27, 2023, the Defendants advised the Plaintiffs, by way of a letter, that they would not be proceeding with their motion, and the action could therefore proceed on its normal course. The Defendants sent a discovery plan with this letter.

[5] The Defendants never served a Notice of Abandonment on the Plaintiffs.

[6] The Plaintiffs now seek costs relating to the Defendants’ motion that was never heard, and argue they are entitled to them pursuant to rule 37.09 of the Rules of Civil Procedure. The Defendants argue that the Plaintiffs are seeking costs that are “interim costs” that ought not to be granted as they do not satisfy the test for this extraordinary relief.

Analysis

Abandoned motion

[7] Motions are governed by rule 37 of the Rules of Civil Procedure (the “Rules”). Rule 37.09 provides:

Abandoned Motions

37.09 (1) A party who makes a motion may abandon it by delivering a notice of abandonment.

(2) A party who serves a notice of motion and does not file it or appear at the hearing shall be deemed to have abandoned the motion unless the court orders otherwise.

(3) Where a motion is abandoned or is deemed to have been abandoned, a responding party on whom the notice of motion was served is entitled to the costs of the motion forthwith, unless the court orders otherwise.

[8] No notice of abandonment was delivered on the Plaintiffs despite requests being made by the Plaintiffs. The first question needing to be addressed, therefore, is whether or not the Defendants’ motion can be “deemed to have been abandoned,” within the meaning of rule 37.09(3).

[9] While there was no hearing date set during which the Defendants did not appear, given the fact that the letter advising that the motion would not proceed came over six months after the notice of motion was first served and, more significantly, only after the Plaintiffs were put in a position of having to respond to the Defendants’ motion record containing over 500 documents, the Defendant’s motion must be deemed to have been abandoned within the meaning of 37.09(3).

[10] As such, the Plaintiffs are entitled to costs.

“Interim” or “advanced” Costs

[11] The Defendants do not dispute the Plaintiffs are entitled to costs. They submit, however, that costs should be reserved until the final determination of the action. They argue that what the Plaintiffs are seeking are in fact “interim costs” or “advanced costs,” which are only to be granted in extraordinary circumstances. In other words, the Defendants are arguing that the Plaintiffs are seeking an advance on costs of the entire action. I disagree.

[12] If costs on an abandoned motion were to be considered “interim” or “advanced”, then rule 37.09(3) would not exist. The intention of rule 37.09(3) is to compensate a responding party who was obligated to go through the time and expense of responding to a motion that did not go ahead. In some circumstances, it compensates parties for not having had an opportunity to vindicate themselves (Re Cogan (2005), 74 O.R.(3d) 223).

[13] The Defendants mistakenly rely on British Columbia (Minister of Forests) v. Okanagan Indian Band, (2003) SCC 71 (“Okanagan Indian Band case”) as they argue that the entitlement of costs is usually determined by the reference to the outcome. They take the position that it is an inherent unfairness in requiring an opponent to finance his or her opponent’s litigation, and for this reason, the award of interim cost is “extraordinary” and is “rarely exercised.” While I do not disagree with this statement, it is simply not applicable in this case. The Okanagan Band case involved a group that was being actioned by the provincial government, and its defence depended on its claim of a constitutional right. It was a group of very limited financial means whose interests affected the public (see paras. 27-30), and whose access to justice would have been severely impaired. Accordingly, and rightfully so, interim costs were awarded in that case as the Supreme Court of Canada upheld that the purpose of interim costs is “to avoid unfairness by enabling impecunious litigants to pursue meritorious claims with which they would not otherwise be able to proceed.” [para 34].

[14] The Plaintiffs are not seeking an advance on costs, or financing of their litigation. If they were they would undoubtedly fail as their matter is a purely private one. What they are seeking is compensation for time and money spent responding to a motion that ultimately never went ahead. In other words, they want to be compensated for the Plaintiffs’ added and unnecessary step in this action. These are not interim or advanced costs. They are motion costs, and they are not only awarded in the ordinary course of civil litigation to prevent inefficiencies and unnecessary delays and expense to litigants, they are formally entrenched in our Rules.

[15] Thus, pursuant to rule 37.09(3), costs ought to be awarded.

Costs in the Cause

[16] In the alternative, the Defendants submit that if costs are awarded, they request that they be made in the cause, and therefore payable once the result of the main action is determined. They argue, moreover, that costs in the cause are appropriate in these circumstances as the motion did not proceed, and so success remains undetermined.

[17] While costs are generally awarded to the successful party on a motion, rule 37.09(3) serves a different purpose. It serves to avoid unnecessary steps leading to inefficiencies, and unnecessary time and expense on the responding party. Thus, for reasons already mentioned, in addition to the fact that there is some suggestion that the Defendants may be insolvent, or almost insolvent, which is supported by the Defendants’ own evidence that they were unable to secure another lender, costs shall be payable forthwith, as is provided for in rule 37.09.

Quantum of Costs

[18] The Plaintiff submits that the September 7, 2022 motion that was brought by the Defendants, although not brought under rule 20 as a summary judgement motion, was, for all intents and purposes, a summary judgment motion. On this basis, the Plaintiffs seek costs on a substantial indemnity basis pursuant to rule 20.06.

[19] Rule 20.06 provides:

20.06 The court may fix and order payment of the costs of a motion for summary judgment by a party on a substantial indemnity basis if,

(a) the party acted unreasonably by making or responding to the motion; or

(b) the party acted in bad faith for the purpose of delay. O. Reg. 438/08, s. 14.

[20] The Plaintiffs’ bill of costs filed in support of this motion shows that a strict application of a substantial indemnity award would grant them $40,536.21 (inclusive of HST). Alternatively, a partial indemnity calculation would result in an award of $30,709.57 (inclusive of HST).

[21] Summary judgment motions, when successfully brought, dispose of the entire case as the court deems there is no genuine issue for trial. It is also well settled in caselaw that when summary judgment motions are abandoned, “entitlement to costs is entirely governed by rule 37.09, “but subject to reference to rule 20.06 in appropriate cases” (Skycharter v. Eaton Corp., (2005) 6 C.P.C. (6th) 376, at para. 17).

[22] The next question to be answered, therefore, is: was the Defendants’ motion a summary judgment motion even if it was not brought under rule 20? The only way to answer this question is to ask whether or not a successful outcome for the Defendants would have disposed of the entire action as there would have been no genuine issue left for trial.

[23] Among the eleven reliefs sought in their Notice of Motion, the Defendants sought among other interim reliefs, an interim injunction and an order to stay the sale of properties. At paragraph (k), however, they sought:

An order and declaration that the Mortgage Payout and Re-advancement Agreement, dated February 10, 2022, in the underlying account is in good standing, that the Defendants are not in default on the mortgage, and that the mortgage is current.

[24] The Plaintiffs’ Statement Claim, and therefore the entire action, rests entirely on the allegation that the Defendants are in default on the mortgage agreement of February 10, 2022. Thus, had the Plaintiffs’ motion been successful on all eleven remedies sought, the Plaintiffs’ motion would have essentially been dismissed, thereby leaving no issue for trial. It is quite possible, however, that they would not have succeeded on the relief sought at paragraph (k), and only on the others that were temporary in nature. Thus, while the relief at (k) can be deemed one that would be the subject of a summary judgment motion, the others were not.

[25] In addition, even if the Defendants were only seeking the declaration that they were not in default, substantial indemnity costs pursuant to rule 20.06 are only awarded when a party “acted unreasonably” or “acted in bad faith for the purpose of delay.” I find that the Defendants did not act either unreasonably or in bad faith as they were trying to find another lender in order to satisfy the Plaintiffs’ mortgage loan, and that they were transparent with the Plaintiffs in their attempts.

[26] The Plaintiffs’ bill of costs being reasonable, pursuant to rule 37.09, I award costs to the Plaintiffs in the amount of $30,709.57 (all inclusive), payable forthwith.

Justice J Richard Date: June 6, 2023