Court File and Parties
COURT FILE NO.: CV-18-1598 DATE: 2024/12/13
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
MICHEL PINSONNEAULT and LANDSVIEW FARMS 185 INC. Plaintiffs
– and –
JOHN WILLIAM PHAIR a.k.a. BILL PHAIR, PHAIR SYSTEMS 2018 LTD. and PHAIR FARM AND BUILDING SYSTEMS LTD. Defendants
Counsel: Alexander Verrilli, for the Plaintiffs Thomas Masterson, for the Defendants
HEARD: In Writing
COSTS ON SUMMARY JUDGMENT MOTION
Tranquilli J.:
[1] By reasons reported at 2024 ONSC 4582, I granted summary judgment as against the personal defendants, Bill and Shirley Phair. I found there were genuine issues requiring a trial in respect of the claims against the corporate defendants and accordingly dismissed the plaintiff’s summary judgment motion as against those parties.
[2] The plaintiffs seek their substantial indemnity costs from the unsuccessful defendants, fixed in the amount of $36,073.73. The plaintiffs served an all-inclusive offer of $200,000 to resolve the action on a full and final basis which was open for acceptance until the commencement of the summary judgment motion. When one factors in the plaintiffs’ partial indemnity costs on the motion, the partial indemnity scale of costs for the entire action are $218,449.14, meaning the result was either more favourable or at least as favourable as the offer to settle. The plaintiffs acknowledge they were unsuccessful as against the corporate defendants, but submit the appropriate outcome is for the personal defendants to pay the total costs and for the issue of the corporate defendants’ costs to be in the cause.
[3] The defendants submit the plaintiffs realized only mixed success on the motion. The plaintiffs must reckon with the costs of the successful defendants on this motion. Ultimately, the plaintiffs are only entitled to partial indemnity costs. Where there is mixed success involving multiple defendants, the defendants note the “normal” course is for the unsuccessful defendants to pay the plaintiffs’ costs and the plaintiffs to pay the successful defendants’ costs: Moore (Litigation Guardian of) v. Wienecke, 2008 ONCA 162 at para. 37.
[4] The defendants also submit the plaintiffs’ bill of costs ought to be reduced to exclude fees and disbursements that were already addressed in the costs order of Leitch J. on the plaintiffs’ previous motion to strike. On a partial indemnity basis, this would mean the plaintiffs’ costs are $15,173.94. However, after equally dividing the defendants’ bill of costs as between the unsuccessful and successful defendants, the partial indemnity costs of the successful corporate defendants are $8,424.72. The personal defendants therefore propose a set off of the successful defendants’ costs so as to fix the net costs payable to the plaintiffs at $6,749.22. The total amount recovered by the plaintiffs would be $193,948.13, which is less than the Rule 49 offer of $200,000 all-inclusive, such that the plaintiffs are not entitled to costs on a substantial indemnity scale.
[5] I have given defence counsel’s able submissions careful consideration. In my view, while it is fair to adjust the plaintiffs’ bill of costs to avoid double recovery, the defendants’ proposal would otherwise lead to an unjust result in the circumstances. I am also satisfied they are entitled to their costs after the offer on a substantial indemnity basis.
[6] Notwithstanding the “normal” course when dealing with mixed success among multiple defendants, that same decision relied upon by the defendants also holds that Bullock or Sanderson orders alleviate such an injustice to hold the unsuccessful defendant responsible for either directly or indirectly paying the successful defendants’ costs: Moore, at para. 38.
[7] I recognize the causes of action as against the unsuccessful and successful defendants were different; that was the reason for denying summary judgment as against the corporate defendants. However, I do not consider the pith and substance of these actions to be truly independent of one another.
[8] The causes of action arose from the very same set of circumstances, being the return of funds improperly retained by the corporate defendant, Phair Farm and Building, after the cancelation of the contract. The plaintiffs’ decision to name all the defendants in the action and to pursue them in summary judgment was reasonable in circumstances where Phair Farm and Building failed to repay the funds advanced and where the individual defendants later personally guaranteed that same debt, and entered into a settlement with the plaintiffs, only to again default on that same amount owing. The second corporate defendant was named only because of difficulties in having Phair Farm and Building and the individual defendants account for what happened to the funds that were to have been repaid. The different claims all concern the very same debt.
[9] In further illustration to this point about the singular nature of the claims, the personal defendant Bill Phair was produced for discovery on behalf of both the successful and unsuccessful defendants and similarly delivered an affidavit in his name on behalf of all defendants in response to the summary judgment motion. I further query the extent of any distinction to be made among the defendants where the defendants’ bill of costs is also filed on a global basis and merely discounted on a 50% basis, as though the issues can be divided in so discrete a fashion.
[10] Although the plaintiffs may not have been successful in obtaining summary judgment as against all defendants, they were entirely successful in obtaining judgment on the single debt in issue. In this context, I find that a just result requires the individual defendants to pay all the plaintiffs’ costs of the action, including on behalf of the corporate defendants. The individual defendants are then entitled to be reimbursed a share of costs payable by the corporate defendants in the final disposition of the action.
[11] I accept the defendants’ submission that the plaintiffs’ bill of costs should be adjusted for costs that were already fixed in respect of the earlier motion to strike. Even allowing for that adjustment, I find this still puts the plaintiffs in a position where they have achieved at least as favourable a result as their all-inclusive Rule 49 offer, such that they are entitled to costs on a substantial indemnity basis. In any event, I would also observe that the defendants’ position on costs brought the plaintiffs’ total amount recovered exceedingly close to the Rule 49 offer.
[12] As to reasonableness and proportionality, I would further adjust the costs claimed to account for any duplication of effort, as I note multiple counsel were involved in the conduct of the action for the plaintiffs. The disparity between the bills of costs of the parties warrants consideration, wherein the plaintiffs’ full indemnity costs are $51,411.53 as compared to the defendants’ full indemnity costs at $25,922.21. However, I conclude this does not necessarily allow for an appreciation of the reasonable expectations of the parties, particularly on a mathematical basis. For example, the defendants’ failure to satisfy undertakings would suggest the defendants were not as engaged in the litigation as the plaintiffs. Indeed, the defendants’ conduct throughout the litigation necessitated the plaintiffs’ additional steps in what should otherwise have been a simple debt recovery.
[13] I therefore reduce the plaintiffs’ partial indemnity costs to the date of the offer from $29,703.24 to $24,000 on account of the costs already fixed on the motion to strike and for duplication or unreasonable/overlapping time.
[14] I see no reason to otherwise disturb the plaintiffs’ bill of costs as to the substantial indemnity costs of the motion itself after the date of the offer, at $6,370.49.
[15] The defendants Bill and Shirley Phair shall therefore pay the plaintiffs their costs of this motion and action, fixed in the amount of $30,370.49. The defendants Bill and Shirley Phair are entitled to claim a portion of these costs as against the successful corporate defendants in the final disposition of this action and in the discretion of the trial judge.
Justice K. Tranquilli
Released: December 13, 2024
Pinsonneault v. Phair, 2024 ONSC 6971
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
MICHEL PINSONNEAULT and LANDSVIEW FARMS 185 INC. Plaintiffs
– and –
JOHN WILLIAM PHAIR a.k.a. BILL PHAIR, PHAIR SYSTEMS 2018 LTD. and PHAIR FARM AND BUILDING SYSTEMS LTD. Defendants
REASONS ON COSTS
Justice K. Tranquilli
Released: December 13, 2024