Court File and Parties

COURT FILE NO.: CV-22-80117 DATE: August 14, 2024 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sameer Kochhar, Plaintiff AND: McCall & Co., Andrew McCall a.k.a. James Vongkham-Houmphavong and Corey Rowe, Defendants

BEFORE: MacNeil J.

COUNSEL: Matthew Cino – Lawyer for the Plaintiff No one else appearing

HEARD: May 13, 2024

Reasons for Decision

Introduction

[1] The Plaintiff, Sameer Kochhar (“Mr. Kochhar”), made this motion, without notice, seeking default judgment as against the Defendants, McCall & Co., Andrew McCall a.k.a. James Vongkham-Houmphavong (“Mr. McCall”) and Corey Rowe (“Mr. Rowe”) for damages owing as a result of alleged breach of contract and fraud relating to an uncompleted renovation project.

[2] The Plaintiff filed two affidavits in support of his claim.

Facts

[3] In February 2022, Mr. Kochhar hired McCall & Co. to renovate the basement of his home in Guelph (the “Project”). Prior to hiring McCall & Co., Mr. McCall and Mr. Rowe told Mr. Kochhar that they were equal partners in the company.

[4] On February 12, 2022, Mr. Kochhar and McCall & Co. signed a contract that outlined, among other things, the scope, timing, and price of the Project (the “Contract”). The scope of work under the Contract included framing interior and exterior walls, drywalling, mudding and taping, priming and painting, the installation of 4 interior doors, construction of a full bathroom, flooring, stairs, all electrical, movement of HVAC ducts, haul away and disposal, and cleanup. Mr. Rowe signed the Contract on behalf of McCall & Co.

[5] One of the terms of the Contract dealing with cancellation, under the section titled “3. Timing”, reads:

The Contractor and Owner agree that should the Contractor not be able to commence the Work within 5 days from the commencement date specific in this Section, due to causes beyond the Contractor’s control such as inability to obtain a building permit, then the Contractor or Owner may cancel the Contract on written notice mailed to or delivered to the address of the other party shown in this Contract. The Contractor’s liability to the Owner shall be limited to the refund of any monies paid by the Owner to the Contractor, less any costs incurred by the contractor as previously agreed to by the Owner as specified below: (List these items here – for example it could be design fees or permit application fees) None.

[6] Work on the Project was to begin on February 12, 2022, and be completed by March 16, 2022. The Project was to cost $57,100.00, inclusive of HST, payable in two installments. The first installment in the sum of $35,000.00 was due on signing the Contract; and the second installment in the sum of $22,100.00 was due on completion. Both installments were subject to a 10% holdback.

[7] On February 12, 2022, the Plaintiff paid $31,500.00 in cash to Mr. Rowe as the first installment. Mr. Rowe accepted the payment on behalf of McCall & Co. and signed a confirmation of payment. When picking up the first installment payment at Mr. Kochhar’s residence, Mr. Rowe dropped off his tools and the Plaintiff gave him a key to the basement walkout door. Mr. Rowe advised that the materials for the Project would arrive and work would start on February 14, 2022. However, that did not happen.

[8] On February 15, 2022, Mr. Rowe advised the Plaintiff that materials would arrive that day and he would attend to start work on February 16, 2022. That did not happen.

[9] On February 16, 2022, Mr. Rowe sent the Plaintiff a purchase receipt for lumber and drywall totalling $5,025.79 and promised that both he and the material would arrive on February 17, 2022. The lumber and drywall arrived. Mr. Rowe did not show up.

[10] On February 18, 2022, Mr. Rowe advised the Plaintiff that bathroom materials would be delivered that same day and he would start work on February 22, 2022. The bathroom materials did not arrive and Mr. Rowe did not attend.

[11] On February 22, 2022, Mr. Rowe came to the Plaintiff’s house and used his key to the basement walkout to remove his tools.

[12] Mr. Rowe and Mr. McCall did not respond to the Plaintiff’s calls or texts between February 22 and 25, 2022.

[13] On February 25, 2022, Mr. Rowe contacted the Plaintiff and advised he would arrive to start work on the Project on February 28, 2022. The Plaintiff responded by text and email to both Mr. Rowe and Mr. McCall advising them that, if the work did not start the morning of February 28, 2022, he would terminate the Contract. Neither Mr. Rowe nor Mr. McCall showed up on February 28th. Mr. Kochhar terminated the Contract in writing and requested the return of the first installment payment.

[14] Mr. Rowe picked up the lumber and drywall from the Plaintiff’s driveway and returned it to Home Depot. Mr. Rowe pocketed the $5,025.79 cash refund from Home Depot.

[15] No money has been returned to the Plaintiff by McCall & Co., Mr. McCall, or Mr. Rowe.

Criminal proceeding

[16] Guelph Police Service subsequently charged Mr. McCall and Mr. Rowe with fraud over $5,000, under s. 380(1)(a) of the Criminal Code of Canada, for accepting payment for work that was not completed. Section 380(1)(a) reads:

380 (1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars;

[17] Mr. Rowe appeared before Justice Amlin on August 24, 2023. Mr. Rowe elected to be tried by the Judge that day in the Ontario Court of Justice. The Crown alleged Mr. Rowe defrauded the Plaintiff of the full amount of the first installment payment. The facts as summarized by the Crown were as follows:

(a) On February 12, 2022, Mr. Kochhar signed a contract with Mr. Rowe and Mr. McCall for the renovation of Mr. Kochhar’s residence in Guelph. The contractor was McCall and Company. (b) Upon signing the contract, Mr. Kochhar provided Mr. Rowe with $31,500.00 in cash as a first installment. It was agreed that the work would begin at the residence on February 14, 2022. (c) Prior to signing the contract, there were numerous visits to the residence by both Mr. Rowe and Mr. McCall. Mr. Kochhar and Mr. Rowe discussed the specifics of the renovation and agreed on the work to be completed. (d) On February 14, 2022, neither Mr. Rowe nor Mr. McCall showed up to work at the residence, but Mr. Rowe advised Mr. Kochhar that they ordered approximately $5,000 of materials to arrive by the end of the week. Those materials arrived on February 17, 2022 from Home Depot. (e) Between February 14 and February 28, 2022, no renovation work was started. (f) Mr. Kochhar sent both Mr. Rowe and Mr. McCall several emails, text messages, and numerous phone calls, but only Mr. Rowe replied providing Mr. Kochhar with differing excuses. (g) On February 28, 2022, Mr. Kochhar cancelled the contract and demanded his money back. Neither Mr. Rowe nor Mr. McCall ever attended the residence to complete the agreed upon renovation, nor did either of them refund his funds. (h) Sometime after February 17, 2022, but prior to March 3, 2022, Mr. Rowe attended at the residence and picked up the material delivered to Mr. Kochhar’s home by Home Depot. (i) On March 3, 2022, Mr. Rowe attended at Home Depot and returned the material that had been dropped off at Mr. Kochhar’s home, being 250 pieces of 2 x 4 wood, and 80 pieces of drywall. (j) Mr. Rowe received a refund of those items, in cash, totalling $5,025.79, and he put that money in his pocket and left the store. This is captured on the store surveillance footage which was obtained by police. That amount of cash was never returned to Mr. Kochhar.

[18] Mr. Rowe pleaded guilty to the charge. A joint submission as to sentencing was made by the Crown and the defence for Mr. Rowe to receive a suspended sentence for a two-year probation order, counselling as directed by the probation officer, and 60 hours of community service, among other relief.

[19] In support of the joint submission, counsel for Mr. Rowe submitted:

“… [I]f this matter had gone to trial and he is found guilty, I don’t think the Crown would have any issue asking for custody, and I’m not sure the Court - - I think the Court would have sent him to custody after a trial if he’s convicted.

My friend has pointed out that this plea before the court is pretty much likely going to be the death of him in terms of the civil matter. It’s certainly going to make the case much stronger against him in the civil case, I think. And with respect to that, because of that collateral consequence, it’s a much more meaningful guilty plea in the circumstances of this particular offence and this particular offender, the joint submission is not inappropriate and is not going to be contrary of the public interest, or bring the administration of justice in[to] disrepute.”

[20] Later on in his submissions before Amlin J., defence counsel continued:

“… I maybe wasn’t as clear about the status of the civil case. Mr. Rowe never filed a defence to that, so it’s not - - this is not going to be a case that [is] protracted and litigated. He’s accepting responsibility. This proves that he’s accepted criminal responsibility for this, which will affect damages, but he did not file a statement of defence so he’s currently at default with that and will be ordered to pay the amount as asked would [be] my guess. … [S]o, it’s just my expectation that he - - because he didn’t file a defence, he would be ordered to pay the $60,000 as requested.”

[21] The Crown also relied on the fact of the civil proceeding in agreeing to the joint submission, submitting:

“… I was asking for a restitution order but it wasn’t till this morning that my friend had advised me of the civil case that’s ongoing, so I’m not going to seek restitution. I think at some point that situation is going to work itself out and I believe Mr. Kochhar is going to get some money back through the civil process. …”

[22] In her oral reasons for sentence, Amlin J. held:

“… As the Crown has quite accurately indicated you were left holding the bag and you are accepting responsibility for your part in what happened, and Mr. Edwardh [defence counsel] acknowledges that you know what is going to happen to the civil suit now that you made this admission of guilt and you have not filed a defence. So you really have got yourself wrapped up in a mess here. And the proposal in terms of sentencing is quite extraordinary. This is the kind of thing that people go to jail for, but I have a joint submission presented to me by two senior counsel who obviously spent lots of time and hard work to get to this resolution, so I am not going to interfere with it, but I am going to put you on probation in the form of a suspended sentence. It is going to be two years, and I am going to go through the terms and conditions. …”

[23] Mr. Rowe was sentenced to a suspended sentence with a probation term for two years, 60 hours of community service, and other ancillary orders. There was no monetary restitution ordered.

[24] Mr. McCall is wanted for his criminal charges and did not appear for any of his court dates. There is a Bench Warrant for his arrest.

Civil proceeding

[25] On November 15, 2022, the Plaintiff issued the statement of claim.

[26] On February 24, 2023, Mr. Rowe was effectively served with the statement of claim.

[27] The statement of claim was amended on May 12, 2023 by the Order of Sheard J. to change Mr. McCall’s name from “Andrew McCall” to “Andrew McCall a.k.a. James Vongkham-Houmphavong” and to dispense with service of the statement of claim and amended claim on McCall & Co. and Mr. McCall.

[28] Mr. Rowe was served with the amended statement of claim on May 30, 2023.

[29] None of the Defendants delivered a statement of defence within the time required by Rule 18.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. They were noted in default on June 12, 2023.

Issues

[30] The following issues are to be determined on this motion:

(a) Is the Plaintiff entitled to compensatory damages in the amount of $31,500.00? (b) Is the Plaintiff entitled to punitive damages in the amount of $30,000.00? (c) Should there be a declaration that the monetary amounts found owing constitute debts and liabilities that survive any order of discharge from bankruptcy the Defendants may obtain?

Analysis

(a) Is the Plaintiff entitled to compensatory damages in the amount of $31,500.00?

[31] Based on the record before me, including the affidavits of Sameer Kochhar with attached exhibits, sworn October 11, 2023 and February 27, 2024, I am satisfied that default judgment can be granted.

[32] The Defendants were noted in default. Pursuant to Rule 19.02(1)(a) of the Rules of Civil Procedure, a defendant who has been noted in default is deemed to admit the truth of all allegations of fact made in the statement of claim. Rule 19.05(2) provides that a motion for default judgment before a judge shall be supported by evidence given by affidavit if the claim is for unliquidated damages.

[33] A plaintiff is not entitled to judgment on a motion for judgment or at trial merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment: Rule 19.06.

[34] In the statement of claim, the Plaintiff claims damages as against the Defendants for damages for theft, conversion, conspiracy, civil fraud, breach of contract, breach of trust, fraudulent misrepresentation, misappropriation, and unjust enrichment and sets out the quantum of general damages caused by the Defendants’ conduct. The facts pleaded by the Plaintiff are deemed admitted by the Defendants. I am satisfied that the Plaintiff has pleaded sufficient facts to establish that the Defendants engaged in conduct that resulted in the Plaintiff making payment to the Defendants for renovation work that was never undertaken or completed, and to support a judgment on liability as well as damages in favour of the Plaintiff. In his criminal proceeding, Mr. Rowe admitted those facts and was found guilty of fraud over $5,000. The motion is supported by evidence found in the affidavits filed by the Plaintiff, including a copy of the transcript of the guilty plea and sentencing of Mr. Rowe.

[35] Accordingly, I grant default judgment in the amount of $31,500.00 in favour of the Plaintiff as against the Defendants, jointly and severally, for damages.

(b) Is the Plaintiff entitled to punitive damages in the amount of $30,000.00?

[36] The Plaintiff seeks punitive damages in the amount of $30,000, a 1:1 ratio to compensatory damages. He submits that this is a reasonable and appropriate amount in the circumstances of this case.

[37] Punitive damages can be awarded on a motion for default judgment: Elekta Ltd. v. Rodkin, 2012 ONSC 2062, at para. 24.

[38] In Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, at para. 94, Binnie J., for the majority of the Supreme Court of Canada, provided the following general guidance respecting punitive damages:

(a) Punitive damages are imposed only if there has been “high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour”. (b) Where they are awarded, punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff and any advantage or profit gained by the defendant, having regard to any other fines or penalties suffered by the defendant for the misconduct in question. (c) Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence and denunciation. (d) The purpose of punitive damages is not to compensate the plaintiff, but to give a defendant his or her just desert (retribution), to deter the defendant and others from similar misconduct in the future (deterrence), and to mark the community’s collective condemnation (denunciation) of what has happened.

[39] In Gennett Lumber Company v. John Doe a.k.a. Milton Harvey et al., 2019 ONSC 1345, the defendant participated in a complex fraudulent scheme that resulted in significant losses to the plaintiff, a family-owned lumber company. The defendant was convicted of possession of property obtained by fraud and received a conditional sentence. The plaintiff sued the defendant for damages for civil conspiracy and made a motion for default judgment for liquidated damages and punitive damages. At para. 33, the court held that, in applying the Whiten principles to that case, Gennett Lumber’s entitlement to punitive damages was well-justified as the fraud perpetrated against Gennett Lumber met the standard of “high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour.” Further, the court concluded that it was “hard to see how simply returning the funds fraudulently acquired would be sufficient, particularly with the goal of deterrence in mind”. The plaintiff was awarded $100,000 in punitive damages.

[40] In Bank of Montreal v. 1886758 Ontario Inc., 2022 ONSC 4642, the plaintiff made a motion for default judgment and related relief in a debt collection and fraud action against the defendants. Perell J. awarded the Plaintiff, Bank of Montreal, punitive damages in the amount of $150,000.00 as claimed, as he concluded this was a proportionate response to the victimization of the bank and the public (at paras. 34 and 39).

[41] In this case, I am satisfied that the Defendants’ misconduct was intentional and deliberate and extreme in nature such that is it is deserving of full condemnation and punishment. Punitive damages are rationally required to act as a deterrence. The Defendants took $31,500.00 of the Plaintiff’s money and failed to return it when the Contract was terminated, despite the Plaintiff requesting same. They were callous of the Plaintiff’s rights and acted in a highly unethical manner. Mr. Rowe had the opportunity to repay at least $5,025.79 from the Home Depot return, and he chose not to. The Plaintiff was vulnerable and clearly an innocent victim. He trusted the Defendants and they encouraged him to do so with their continued representations that the materials would be arriving and work would be starting soon. The Plaintiff was left with no renovated basement, no renovation materials, and lost $31,500.00 to the Defendants, a substantial amount of money. The Defendants’ conduct was deliberate and clearly unjustified. They were aware of the impact that the loss of the monies had on the Plaintiff. The Defendants profited from their misconduct.

[42] Mr. Rowe was granted a suspended sentence in great part because of the ongoing civil proceeding and the assumption that the Plaintiff would receive compensation and punitive damages therein. This was a specific factor raised by defence counsel and taken into consideration by the Judge in the criminal proceeding. Given the sentence in the criminal proceeding, I find that an award of punitive damages here would not amount to double punishment. Rather, it would denounce the Defendants’ conduct and signal the need for general deterrence of renovators/contractors defrauding homeowners by failing to undertake and/or perform construction work in return for payment received.

[43] In my view, a significant award is needed to deter the Defendants and others from exploiting the vulnerability of homeowners. The criminal sanction imposed on Mr. Rowe specifically contemplated that he would be facing an award of damages against him, including $30,000.00 in punitive damages, in the context of this civil action. Allowing the Defendants to simply return the Plaintiff’s funds is inadequate in the face of the lenient criminal sentence and the fact that Mr. McCall has not answered for his criminal charges. The Defendants acted in conjunction with one another and were both responsible for making representations to the Plaintiff, contracting with him for the Project, and then defrauding him of the first installment payment. The Plaintiff was vulnerable, and the harm incurred was specifically directed at him. I also accept that the need for deterrence “militates for a higher award of punitive damages in the context of financial fraud”: Gennett Lumber, at para. 48. After weighing the factors set out in Whiten, I conclude that an award of $30,000.00 in punitive damages is a rational and proportionate response to the deliberate and reprehensible misconduct of the Defendants, which resulted in serious injury to the Plaintiff and which has only been punished in part: McIntyre v. Grigg, at paras. 82, and 85-87.

[44] Based on the foregoing, I award to the Plaintiff $30,000.00 in punitive damages as against the Defendants, jointly and severally.

(c) Should there be a declaration that the monetary amounts found owing constitute debts and liabilities arising out of civil fraud such that the monetary amounts found owing survive any order of discharge from bankruptcy the Defendants may obtain?

[45] The Plaintiff seeks a declaration that the monetary amounts found owing by the Defendants constitute debts and liabilities pursuant to sections 178(1)(d) and/or (e) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“the BIA”) such that the monetary amounts found owing survive any order of discharge from bankruptcy the Defendants may obtain.

[46] Sections 178(1)(d) and (e) of the BIA read:

178 (1) An order of discharge does not release the bankrupt from

(d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others;

(e) any debt or liability resulting from obtaining property or services by false pretenses or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim;

[47] Section 2 of the BIA defines the term “property” to include money.

Section 178(1)(d)

[48] The language used in s. 178(1)(d) refers to fraud or misappropriation in the context of a fiduciary relationship. In Frame v. Smith, [1987] 2 S.C.R. 99, 1987 CarswellOnt 347, at paras. 39-42, which was adopted and applied by the Supreme Court in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, at paras. 26-27, it was noted that relationships in which a fiduciary obligation has been imposed seem to possess three general characteristics:

(i) The fiduciary has scope for the exercise of some discretion or power. (ii) The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests. (iii) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.

[49] I am not persuaded that the evidence before the court establishes that the Defendants were acting in a fiduciary capacity of the property of the Plaintiff. That is, I do not find that the Plaintiff could reasonably have expected that the Defendants would act in his best interests in relation to any funds advanced to the Defendants for the purpose of renovating the basement thereby relinquishing their own self-interests and agreeing to act solely on behalf of the Plaintiff and that the Plaintiff relied upon the Defendants to exercise their discretion in the Plaintiff’s best interests: Hodgkinson v. Simms, [1994] 3 S.C.R. 377, 1994 CarswellBC 438, La Forest J., for a majority of the Supreme Court of Canada, at paras. 25-37.

Section 178(1)(e)

[50] The language used in s. 178(1)(e) refers to fraudulent conduct. The four elements of the tort of civil fraud are as set out in Bruno Appliance and Furniture Inc. v. Hryniak, 2014 SCC 8, at para. 21, as follows:

(i) a false representation made by the defendant; (ii) some level of knowledge of the falsehood of the representation on the part of the defendant (whether knowledge or recklessness); (iii) the false representation caused the plaintiff to act; and (iv) the plaintiff’s actions resulted in a loss.

[51] I find that the test for civil fraud as it relates to the Defendants’ conduct is met. The Defendants falsely represented to the Plaintiff that they would start and complete the Project, and that representation caused the Plaintiff to give them his money, and that action resulted in a loss to the Plaintiff. These facts were admitted to by Mr. Rowe at his criminal trial, for which he was found guilty of fraud.

[52] However, I decline to grant the declaratory relief requested by the Plaintiff as it relates to s. 178(1)(e) of the BIA as I find that it is premature and hypothetical. There is no allegation in the record before me that the Defendants have filed an assignment in bankruptcy or have resisted the payment of amounts claimed by the Plaintiff on the basis that their discharge from bankruptcy extinguished any debt owed to the Plaintiff. In this regard, I agree with and adopt the reasoning of the court in Royal Bank of Canada v. Elsioufi, 2016 ONSC 5257, at para. 7, wherein Dunphy J. declined to make an advance declaration under s. 178(1)(e) on the basis that the court lacked “jurisdiction to make such a hypothetical declaration before the issue actually arises”.

[53] As Stinson J. held in B2B Bank v. Batson, 2014 ONSC 6105, at paras. 12-14 and 18, the time for determination of whether a claim survives a bankruptcy discharge is more properly determined when the creditor subsequently seeks to enforce the pre-existing liability or judgment debt and the debtor relies on his or her discharge as a basis for resisting enforcement, based on the legal regime in force at that time. This is also in keeping with the seminal case of Solosky v. Canada (1979), [1980] 1 S.C.R. 821 (S.C.C.), at paras. 16 and 18, wherein the Supreme Court of Canada identified two criteria that must be satisfied in order to grant declaratory relief: the declaration does not concern “future” or “hypothetical” rights; and the declaration is capable of having some “practical effect in resolving the issues in the case”.

[54] While counsel for the Plaintiff relies on Water Matrix Inc. v. Carnevale, 2018 ONSC 6436, in support of the request for the advance declaratory relief, that case is distinguishable from what is before me. In Water Matrix, judgment had been previously obtained as against the defendants and, after judgment had been rendered, a receiver was appointed for the defendants’ assets. The defendant, A. Carnevale, filed an assignment into bankruptcy and an order of discharge was issued in relation to her bankruptcy. Water Matrix obtained an order granting it leave under s. 69.3 of the BIA to seek a declaration that the amounts owed by Ms. Carnevale pursuant to the judgment had not been discharged by the order of discharge. Water Matrix then brought a motion seeking a declaration under s. 178(1)(d) and (e) of the BIA that the discharge order did not release Ms. Carnevale from the debt owing to it. That motion was granted. Unlike in Water Matrix, here, the Defendants have not filed an assignment into bankruptcy or received an order of discharge and so the relief requested is premature and hypothetical.

[55] I am satisfied that it is appropriate to declare that the Defendants’ judgment debt arose by reason of the Defendants obtaining the Plaintiff’s property by false pretenses or fraudulent misrepresentation, which declaration characterizes the debt or liability reflecting the language of s. 178(1)(e) of the BIA. Other courts have taken a similar approach: see Bank of Montreal v. 1886758 Ontario Inc., at para. 45; and B2B Bank v. Batson, at para. 19.

Costs

[56] The Plaintiff seeks payment of his legal costs on a substantial indemnity basis in the amount of $21,644.30 (inclusive of HST), plus disbursements in the amount of $1,431.62. A bill of costs was filed by counsel for the Plaintiff in this regard.

[57] Costs are discretionary. A successful party is presumptively entitled to costs on a partial indemnity scale. However, costs can be awarded on a substantial indemnity basis if the conduct of a party is reprehensible, scandalous or outrageous and worthy of sanction: Young v. Young, [1993] 4 S.C.R. 3, 1993 CarswellBC 264, at para. 260.

[58] Given the nature of the claims and the findings made in this case, I am satisfied that ordering costs on a substantial indemnity basis is warranted, and is fair and reasonable in the circumstances. Accordingly, the Defendants, jointly and severally, are ordered to pay the Plaintiff his costs of the action and the within motion on a substantial indemnity basis, fixed in the amount of $23,075.92, all inclusive.

[59] Counsel for the Plaintiff advised that, on May 10, 2023, Sheard J. had ordered costs in the amount of $1,000.00 with respect to the motion to amend the statement of claim and dispense with service of same on McCall & Co. and Mr. McCall, but that this was not accounted for in the filed bill of costs before me. Accordingly, $1,000.00 will be deducted from the costs ordered herein to account for that previous costs award, and the amount of costs payable to the Plaintiff by the Defendants shall be $22,075.92, all inclusive.

Conclusion

[60] The Plaintiff’s motion for default judgment is granted. In the result, the following orders are made:

(a) The Defendants are jointly and severally liable to the Plaintiff for $31,500.00 plus prejudgment interest pursuant to the provisions of the Courts of Justice Act, R.S.O. 1990, c. C.43, from the date of the issuance of the statement of claim and plus postjudgment interest pursuant to the Courts of Justice rate from the date of this decision. (b) The Defendants are jointly and severally liable to the Plaintiff for the sum of $30,000.00 as punitive damages. (c) The Defendants are jointly and severally liable to the Plaintiff for the sum of $22,075.92, inclusive of HST and disbursements, for costs of the action and this motion. (d) The court declares that the Defendants’ judgment debt or liability in this case arose by reason of their obtaining the Plaintiff’s property by false pretenses or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim.

[61] The Plaintiff requested an order that he may reapply to the court for further directions and ancillary orders arising in respect of satisfaction of this judgment. That order is granted; however, I am not seized.

[62] The remaining relief requested in the Plaintiff’s Notice of Motion, dated October 23, 2023, is hereby dismissed.

MacNEIL J. Released: August 14, 2024