Court File and Parties

Court File No.: CV-18-00000190 (Brockville) Date: 2023-08-10 Superior Court of Justice - Ontario

Re: TALL SHIPS LANDING DEVELOPMENTS a division of METCALFE REALTY COMPANY LIMITED, Applicant And: LEEDS STANDARD CONDOMINIUM CORPORATION NO. 41, 2085971 ONTARIO INC. operating as EASTERN ONTARIO PROPERTY MANAGEMENT GROUP and MICHAEL BUDDE, Respondents

Before: Mr. Justice Graeme Mew

Counsel: Nadia Authier and Anthony Imbesi, for the applicant Antoni Casalinuovo, for the respondents

Heard: In writing, at Brockville

Costs Endorsement

[1] This application was originally commenced in 2018. It arose from a dispute between the parties concerning a Shared Facilities Agreement (“SFA”) which provides for the mutual use, maintenance, repair, replacement, governance and cost sharing of the building shared facilities, easements and shared building services of a mixed-use building in Brockville known as Tall Ships Landing (the “Property”).

[2] The respondents successfully obtained a stay of the application pending exhaustion of an alternative dispute resolution process provided for in the SFA. In my reasons for granting that stay (reported at 2019 ONSC 2600), I limited my award of costs to those incurred in relation to the motion for the stay of proceedings, an earlier attendance before Abrams J. on a motion for an injunction, and “an amount to reflect time spent in connection with this application that will not be captured by any award of costs that may be made by an arbitrator”. I fixed those costs at $30,000 with the caveat that I would, if requested, “deal with any outstanding issues of costs that are not resolved by any arbitration that may take place”.

[3] The arbitration has now taken place.

[4] In respect of the issue of costs, Arbitrator Dizgun stated, at paragraph 5 of his costs award dated 1 May 2023, that:

I do not read J. Mew’s Reasons on this matter of costs to suggest that I am to deal with the costs of the application not ordered by him. I read his reasons at paras 45-46 to simply say that if a party is not satisfied that certain work done in the application was equally applicable to the arbitration and also implicitly awarded by the arbitrator as part of the costs awarded of the arbitration, J. Mew remains seized on that point regarding costs. In other words, if the costs award in the arbitration failed to satisfy a party that the remaining costs of the application had been dealt with, that party could reattend to make submissions to J. Mew on the matter of the “remaining” costs of the application.

[5] The learned arbitrator correctly understood what I was attempting to convey in my earlier reasons.

[6] The respondent, Leeds Standard Condominium Corporation No. 41 (“LSCC 41” or “the respondent”) takes the position that little or none of the material used on the application was reused or recycled for the purposes of the arbitration. It claims that its “sunk/wasted” costs in this application are $64,797.63 inclusive of HST and disbursements. This is the total amount of fees and disbursements incurred, as between solicitor and client, less the $30,000 which I previously awarded by way of costs on a partial indemnity scale.

[7] The applicant takes a contrary view, arguing that a significant portion of the evidence filed in response to this application was reused in the affidavits filed in the arbitration. The applicant points to comparison charts which it prepared detailing what it describes as “the extensive almost verbatim re-use of the evidence, including exhibits from the 2019 LSCC 41 Affidavits filed in the Application”. In addition to the comparison tables, the applicant has also provided the original affidavits with highlighting to identify the paragraphs that were subsequently reused in the arbitration.

[8] The applicant adds that LSCC 41 filed a transcript of the cross-examination of Simon Fuller from the application in the arbitration, and that the transcript of the cross-examination of another deponent, Doug Bellevue, was available for use at the arbitration (but was not actually used, presumably – the applicant says – for strategic reasons).

[9] These concerns aside, the applicant observes that the costs sought – $64,797.63 – have been calculated by reducing the respondent’s full indemnity costs ($94,797.63) by the amount recovered in the prior cost award on a partial indemnity basis, thereby effectively seeking its full indemnity costs of both the motion and the application. The applicant also points out that its costs include those associated with the relief sought against the respondent Eastern Ontario Property Management Group (the former Property Manager for both LSCC 41 and the building shared facilities) and Michael Budde, who was the owner of one of the residential condominium units and a director of LSCC 41. The applicant asserts that such costs were already addressed in the initial costs award. The applicant also points out that the arbitrator apportioned costs for LSCC 41’s claim and Tall Ships Landing Developments (“TSL”)’s counterclaim in the arbitration.

[10] The respondent, no doubt anticipating some of these arguments, while conceding that some exhibits overlap, states that its witnesses and their corresponding affidavits used in the arbitration were substantially different because they provided evidence on different allegations and responded to statements from different witnesses and dealt with an expanded time frame than that addressed in the application. Furthermore, the causes of action raised in the arbitration were different from TSL’s oppression claims that were advanced in the application.

[11] The respondent says that it attempted to settle its claim for the outstanding costs of the application by way of an offer dated 5 May 2023, in which the respondent stated that it was willing to accept the all-inclusive sum of $50,000 for its “sunk” costs.

[12] I do not accept the central premise of the respondent’s position that, at best, minimal material used on the application was used (or of use) in relation to the arbitration. The comparison charts prepared by the applicant and the highlighted transcripts strongly suggest otherwise. Furthermore, while the causes of action asserted in the application and the arbitration may not have been identical, the essence of the allegations of oppressive conduct and bad faith essentially overlapped.

[13] I am, however, prepared to recognise that there are some costs which were, effectively, “sunk” or “wasted” costs, that were not recognised in my previous costs award and were of no value in relation to the arbitration.

[14] In fixing those costs I am not required to undertake a detailed assessment. As the Court of Appeal stated in Zesta Engineering Ltd. v. Cloutier, at para. 4:

…[T]he costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.

The overarching principle in fixing costs is that of reasonableness: Davies v. Clarington (Municipality), 2009 ONCA 722, at para. 52.

[15] I would fix LSCC 41’s “sunk/wasted costs” in this application in the all-inclusive amount of $15,000 (this is intended to include not only the “sunk/wasted” costs, but also those associated with the attendances before me on 23 June 2021 and 26 June 2023, as well as the preparation of costs submissions).

Mew J. Released: August 10, 2023