COURT FILE NO.: CV-21-549-00
DATE: 2023 02 03
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NORMAN TOWING O/A 7344508 CANADA INC.
A.J. Kania, for the Plaintiff/Defendants by Counterclaim
Plaintiff/Defendant by Counterclaim
- and -
RIORDAN LEASING INC.
K.D. Reason, for the Defendant/Plaintiff by Counterclaim
Defendant/Plaintiff by Counterclaim
- and -
NARMAN ABRI also known as NORMAN ABBRY
Defendant by Counterclaim
HEARD: In Writing
COSTS ENDORSEMENT
LEMAY J
[1] On December 16th, 2022, I granted a motion by the Plaintiff (and the Defendant by Counterclaim) to set aside the default judgment issued by Harris J. on the basis that the Defendant’s Statement of Defence and counterclaim had not been issued by the Court Office and could not have been properly served. I also granted the Defendants request, nunc pro tunc, for an order confirming that the Statement of Defence and Counterclaim had been issued on June 18th, 2021. It is now time to fix the costs for this motion.
The Positions of the Parties
[2] The Plaintiff is Norman Towing and the Defendant by Counterclaim is Mr. Abri, who is the principal of Norman Towing. I will refer to them as the Plaintiffs. They seek costs in the sum of $12,500.00 inclusive of HST and disbursements on a partial indemnity basis. These costs are sought on the following grounds:
a) The Defendant should have consented to the Plaintiffs’ request to have the default judgment set aside.
b) The Defendant adopted a very aggressive approach to the litigation of the motion to set aside the default judgment.
c) Mr. Abri’s lack of English skills resulted in the costs for this motion being enhanced.
[3] Counsel for the Defendant argued that success was, at worst, divided on this motion and that there should therefore be no costs for this motion. In the alternative, if I am going to grant costs to the Plaintiffs, then those costs should be limited to $5,000.00 inclusive of HST and disbursements.
Law and Analysis
[4] The factors that must be considered by a Court in assessing costs are set out in Rule 57.01. On this case, the most relevant factors are:
a) Which party was successful?
b) The importance and complexity of the issues.
c) The conduct of any party that tended to either shorten or unreasonably lengthen the proceedings.
d) The reasonable expectations of the losing party.
[5] I start with the Defendant’s argument that success was divided on this motion and that, therefore, there should be no costs awarded. In support of that position, counsel references a number of Court of Appeal decisions, including Lowndes v. Summit Ford Sales Ltd., 2006 CanLII 11654 (ONCA), 48 C.C.E.L. (3d) 194). Those decisions stand for the proposition that, where the costs of an appeal (or a motion) are substantially divided, an award of costs will not be made. I accept that as a general statement of law. However, costs are a discretionary matter, and I must step back and consider the events giving rise to this motion.
[6] Those events are described in detail in my reasons on the motion. However, it is worth noting the following points:
a) The Defendant only ever attempted to serve its Statement of Defence and counterclaim on Mr. Abri, although it asked counsel for Norman Towing whether he would accept service.
b) The Defendant did not advise Norman Towing’s counsel that it was seeking a noting in default on the Counterclaim and the motion for a default judgment was not served on Norman Towing’s counsel.
c) Norman Towing’s counsel moved promptly to set aside the default judgment once he became aware of it, as he was also retained by Mr. Abri.
d) The Defendant adopted an aggressive approach to the setting aside of the default judgment right up until the moment when counsel for the Defendant discovered on November 18th, 2022 that the Counterclaim had not been properly served and that there was a real risk that it was precluded by the Limitations Act.
[7] This history is indicative of an aggressive approach on the part of the Defendant to this litigation. In my view, it should have been clear to the Defendant from the outset that the default judgment would be set aside. The fact that the Defendant sought to maintain the default judgment even though it was untenable is, in my view, a factor that supports an award of costs to the Plaintiffs. It also supports my determination that the Defendant should pay the Plaintiffs some costs for this motion.
[8] Mr. Abri was required to bring the motion to set aside the default judgment, and was required to pursue that motion right up to the hearing in November of 2022. The costs that had been incurred to that point were unnecessary, and had been incurred by the Defendant’s aggressive approach to the motion to set aside the default judgment.
[9] This brings me to the importance and complexity of the issues. The issue, a default judgment, is of significant importance to the Plaintiffs as it would have resulted in personal liability for a significant portion of the claim. The issues relating to the motion to set aside the default judgment were of moderate complexity, especially given Mr. Abri’s language barriers. The motion for the nunc pro tunc order was more complicated.
[10] Then, there are the reasonable expectations of the parties. The substantial indemnity bill of the Defendant for just the nunc pro tunc portion of the proceeding was $9.000.00 all inclusive. The Defendant has not included any bills of costs for the work prior to the hearing on November 18th, 2022 or for the attendance that day. As a result, the costs that the Plaintiff is seeking for the whole motion are not unreasonable. However, counsel for the Defendant argues that, since the Plaintiff was willing to settle the motion to set aside the default judgement for the sum of $5,000.00 all-inclusive, that the Plaintiff’s costs (even if ordered) should be limited to this amount.
[11] I disagree for three reasons. First, the fact that the Plaintiff was prepared to compromise in advance of the hearing does not mean that he should be held to that compromise after the hearing. Second, for the reasons that I have outlined above, the Defendant’s position on the motion to set aside the default judgment was both aggressive and untenable. Finally, the nunc pro tunc motion was an indulgence. While the Defendant was successful in that motion, it was the Defendant who was seeking to cure a defect. In my view, these factors support the Plaintiff’s request for a significant part of his partial indemnity costs throughout this motion. I would not order the full $12,500.00 that the Plaintiffs are seeking, as they were not successful on the nunc pro tunc portion of the motion. Instead, I would award all inclusive costs of $10,000.00.
[12] I would also note that the aggressive posture adopted by the Defendant in this case is conduct that is to be discouraged. An award of partial indemnity costs for a significant portion of both motions will hopefully bring home to the Defendant this Court’s concerns with the approach that the Defendant took to both obtaining the default judgment and the Defendant’s insistence on resisting an order setting that judgment aside.
Disposition
[13] For the foregoing reasons, the Defendant, Riordan Leasing Inc., shall pay to the Plaintiff, Norman Towing, the sum of $10,000.00 in costs inclusive of HST and disbursements within thirty (30) days of today’s date.
LEMAY J
Released: February 3, 2023
COURT FILE NO.: CV-21-549-00
DATE: 2023 02 03
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NORMAN TOWING O/A 7344508 CANADA INC.
Plaintiff/Defendant by Counterclaim
- and -
RIORDAN LEASING INC.
Defendant/Plaintiff by Counterclaim
- and -
NARMAN ABRI also known as NORMAN ABBRY
Defendant by Counterclaim
COSTS ENDORSEMENT
LEMAY J
Released: February 3, 2023