Court File and Parties

Court File No.: CV-18-77263 Date: 2023/09/19 Superior Court of Justice – Ontario

Re: Stayside Corporation Inc., Plaintiff And Cyndric Group Inc. and Richard Menard, Defendants

Before: Justice A. Doyle

Counsel: Peter Liston, Counsel for the Plaintiff Stéphane Hutt and Stéphane Émard-Chabot, Counsel for the Defendants

Heard: In writing

Costs Endorsement

[1] On August 10, 2023, the court granted an order adding 6773711 Canada Inc. (677) as a party to the claim and granted summary judgment dismissing the plaintiffs’ claim on the basis of the plaintiffs’ anticipatory breach.

[2] The parties were to provide costs submissions if they were unable to agree on the issue of costs.

[3] Having considered the parties’ costs submissions, the bills of costs and the Rules of Civil Procedure, this court orders costs in the amount of $50,000 in favour of the defendants (which includes the previous cost award of $4000).

Brief Background

[4] In August 2014, the parties executed an agreement of purchase and sale (APS) whereby the plaintiff 677 would purchase 50 acres of the defendants’ property. The severance of 50 acres from the total 100 acres was an essential element of the APS and a condition precedent to the land being transferred to the purchaser.

[5] Originally the responsibility of the severance lay with the defendants upon the receipt of $5000 from 677. When the original closing date passed, the parties amended the APS so that 677 was responsible for the severance.

[6] The APS contained a clause that “Time is of the essence”.

[7] After approximately 4 years, the plaintiffs had not completed the necessary steps to obtain a severance and therefore in April 2018, the defendants notified them that the contract was terminated on the basis of anticipatory breach.

[8] There was evidence before the court that the normal period to obtain a decision regarding severance from the municipality was 4 months.

[9] The plaintiff, Stayside, was successful in adding 677 as a party to the action and the defendants were successful in their motion to dismiss the claim on the basis that there was no genuine issue requiring trial.

Defendants’ Position

[10] The defendants are requesting the amount of $112,607.33 which are costs on a substantial indemnity basis. This includes a previous $4000 ‘in the cause’ award, stemming from the hearing before Justice Corthorn regarding the removal of the certificate of pending litigation (CPL) and the summary judgment motion.

[11] The defendants submit these costs are justified due to the final outcome, the complexity of the proceeding, the plaintiffs’ conduct which lengthened the proceedings unnecessarily and that the matter was of crucial importance to the defendants.

[12] The defendants argue that the plaintiffs knew that they had no rightful claim to the specific performance of the agreement of purchase and sale nor the right to maintain the CPL.

[13] As stated in Rona Inc. v. Sevenbridge Developments Ltd., a party’s conduct can result in costs being awarded on a substantial basis. In that case, the party knew that the lands were no longer unique and the reason to oppose the discharge of the CPL was to tie up the lands.

[14] The plaintiffs took no steps to proceed with their claim.

[15] Once the defendants served their motion material in June 2022, the plaintiffs sought an adjournment, attending the hearing without a lawyer and only at the last minute brought the motion to add 677 as a party to the claim which resulted in another court attendance.

[16] By handcuffing the defendants only asset for 9 years the plaintiffs caused irreparable financial hardship to the defendants.

[17] On March 11, 2022, the defendants served an offer to settle that provided that the plaintiffs’ would consent to the discharge of the CPL and the dismissal of the action.

[18] The offer to settle was not withdrawn and was not accepted and the defendants obtained a decision which was as favourable as the terms of the offer. The defendants are entitled to costs on a substantial indemnity basis from March 11, 2022.

Plaintiffs’ Position

[19] The plaintiffs argue that there were few disputed facts with very little testing of credibility and the record before the court consisted only of documentary and affidavit evidence and transcripts of cross-examination. There was only viva voce evidence before Justice Corthorn.

[20] The issues were not complex but were important to the parties.

[21] Regarding the plaintiff’s appearance on March 23, 2023, it was unrepresented and had attempted to retain Mr. Cullwick (amongst multiple lawyers in Ottawa). The defendants’ counsel contacted Mr. Cullwick who said he would only agree to be retained if he could obtain an adjournment as he needed time to prepare.

[22] On March 23, 2023, Justice Corthorn ordered the plaintiff to attend the next day and counsel who had just been retained had only a few hours to prepare. He was not aware that witnesses would be called and had not prepared for it and he had no access to the transcripts. The defendant relied on the endorsement of A.J. Fortier as to the timelines and process.

[23] At the commencement of the litigation, the defendant consented to the CPL and it is not a rational position that the defendants now argue that the plaintiffs knew from the outset that they had no rightful claim to specific performance.

[24] The plaintiffs were successful in adding 677 as co-plaintiff and hence the costs of that motion including the preparation of a factum and case research should be set off from any costs of the primary summary judgment motion.

[25] The costs claimed by the defendants are excessive. There are multiple lawyers involved in the file and the claim for costs offends the court’s overarching principal of proportionality with respect to the jurisprudential importance of the case and complexity of the proceeding.

[26] The plaintiff’s counsel was only given 10 hours preparation for the motion heard on March 24.

[27] Also, the defendant Mr. Menard knowingly breached the contract by mortgaging the property without the plaintiff’s knowledge.

[28] The defendant’s bill of costs shows full costs of over $35,000.

[29] There should be no costs award as a result of this conduct.

Legal Principles

[30] The costs of a proceeding are in the discretion of the Court (s. 131(1) Courts of Justice Act). 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 of Civil Procedure, R.R.O. 1990, Reg. 194, (“Rules”)).

[31] 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.

[32] 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.

Analysis

[33] The defendants were successful on the main motion for summary judgement. One of the bases for the motion was that the wrong party was before the Court. Late in the day, the Plaintiff brought a motion to add 677 who was party to the APS and this required another hearing of the matter.

[34] The plaintiffs did not move to prosecute this action. There was similar delay in proceeding with a severance pursuant to the APS. This was mentioned by Justice Corthorn when she vacated the CPL.

[35] However, the defendants were successful in adding 677 as a party but it is a pyrrhic victory in light of the fact that the action was dismissed.

[36] The plaintiff’s success in the motion is diminished by the fact that the motion was brought late in the day.

[37] A review of the defendants’ bill of costs shows the following:

• There were a number of individuals who worked on the file; and
• The hourly rates are reasonable.

[38] What Mr. Hebert charged in his work on the file is not helpful as his bill of costs is not before the court nor did he complete similar work as here.

[39] There was duplication of efforts including Mr. Hutte spent 29 hours in reviewing materials in parallel with Mr. Émard-Chabot. Also Mr. Émard-Chabot claims 10 hours for preparation of costs submission. The costs claimed are exorbitant as they total 332.5 hours.

[40] Also, costs are normally awarded on a partial indemnity basis and are only awarded on a substantial basis in exceptional circumstances.

[41] The claim for partial indemnity is approximately $75,000 and the Defendants did meet their offer to settle but there was time spent on the motion to add a party in which they were not successful.

[42] There were a number of adjournments as the defendant was not ready to proceed.

[43] The issues were not complex but important to the parties. It was a case based largely on agreed facts.

[44] Accordingly, the court awards the fair, proportional and reasonable cost in the amount of $50,000 (which includes the previous cost award of $4000).

Justice A. Doyle Date: September 19, 2023 Released: September 19, 2023