Township of Greater Madawaska v. Desjardins, 2025 ONSC 2624

COURT FILE NO.: CV-20-76
DATE: 2025-04-29
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Township of Greater Madawaska, Plaintiff / Defendant by Counterclaim / Moving Party
AND: Brigitte Desjardins and Gary Peter Kozak, Defendants / Plaintiffs by Counterclaim / Responding Parties

BEFORE: Jaye Hooper
COUNSEL:

• Catherine Temple for the Moving Party
• Hamish Mills-McEwan for the Responding Parties

HEARD: March 28, 2025

Decision on Bifurcation Motion

[1] This bifurcation motion was brought by the Township of Greater Madawaska (“Township”) seeking to separate the determination of an easement from the remaining issues in the litigation or, in the alternative, to separate liability from damages. The defendants/plaintiffs by counterclaim (“Property Owners”) own the property over which the Township claims this easement.

[2] The alleged easement impacts a portion of the Property Owners’ property that was undeveloped until February 2020 when they sought and received a building permit from the Township to build a pool and other structures upon it. Within this litigation, the Township seeks the removal of the pool and any other structures that encroach their easement. The Property Owners deny the existence of the easement and, in the alternative, argue that by issuing the building permit and approving the construction through inspections, the Township represented to them that the pool and structures could be constructed over the alleged easement. The Property Owners seek damages if forced to remove or relocate the pool and surrounding structures. They also seek punitive damages against the Township.

[3] During the Township’s submissions, and through answering the court’s questions, it became clear that the determination of the easement would not necessarily resolve liability. As a result, counsel for the Township focused her argument on the alternative – a bifurcation order that would separate liability from damages.

[4] For the reasons that follow, the motion for bifurcation is dismissed.

Procedural History

[5] A brief procedural history is relevant to the outcome of this motion. The Township originally commenced this litigation by notice of application in October 2020. The Property Owners took issue with this matter proceeding by application and brought a motion to convert the proceeding to an action. At an attendance before McNamara J., the parties consented to converting the application to an action. McNamara J.’s endorsement set out a brief timetable for the completion of pleadings. It is noteworthy that the endorsement specifically mentions the delivery of a statement of defence and counterclaim.

[6] The Township thereafter commenced the within action under Simplified Procedure contained in Rule 76 of the Rules of Civil Procedure. The counterclaim was also brought under Simplified Procedure. No parties objected to this action proceeding under Simplified Procedure.

[7] Discoveries were completed by July 2022 and the matter was set down for trial in November 2023. This bifurcation motion was scheduled at a case conference held in November 2024.

[8] The Township argues March 28, 2025 was the first available date for a long motion available in Pembroke. As the only full-time judge hearing civil matters in Pembroke, I am actively involved in the scheduling of all civil long motions and have difficulty accepting that an earlier date for this motion could not have been found. This motion could have been brought at any time after the close of pleadings and, at minimum, should have been brought after examinations for discovery were completed in July 2022. However, as this motion fails on other grounds, I have not considered the lateness of bringing this motion in my analysis.

Issue to be Determined on this Motion

[9] The following issue must be determined on this motion:

Should this Rule 76 proceeding be bifurcated into two separate hearings pursuant to Rule 6.1.01 of the Rules of Civil Procedure over the objection of the Property Owners?

The Law on Bifurcating Proceedings

[10] Rule 6.1.01 of the Rules of Civil Procedure sets out the discretion of the court to order separate hearings and the factors the court shall consider when one or more parties object to such an order:

(1) The court may order a separate hearing on one or more issues in a proceeding including separate hearings on the issues of liability and damages,

a. on a party’s motion with or without the consent of the other parties; or
b. at a conference under Rule 50, with the consent of the parties.

(2) In determining whether to order a separate hearing, the court shall consider:

a. whether ordering a separate hearing will dispose of some or all of the issues, shorten or simplify the rest of the proceeding or result in a substantial saving of costs;

b. whether the issues are clearly severable and can be heard separately without unduly repeating evidence or risking inconsistent findings of fact;

c. whether ordering a separate hearing would unduly prejudice or advantage a party, including the impact on any counterclaim, crossclaim, or third or subsequent party claim or, in cases where a jury notice has been delivered, on a party’s election to have the action heard by a jury;

d. the impact of ordering a separate hearing at the applicable stage in the proceeding; and

e. any other relevant matter.

(a) Will Bifurcation Shorten or Simplify the Proceeding Resulting in a Substantial Saving of Costs?

[11] The moving party concedes that a bifurcation motion will not save any time. It will, in fact, potentially double the trial time. Under Simplified Procedure, the action as currently constituted is required to be completed within 5 days. If the action were split in two, each portion of the trial would have a five-day limit.

[12] While counsel for the Township concedes that doubling the trial time is counterintuitive to an order for bifurcation, it submits that this is not actually prejudicial for two reasons:

a. Given the issues raised in the main action and counterclaim, the trial cannot possibly be heard within five days and will run over, resulting in a mistrial. [2]

b. As the Township has two separate law firms currently involved in this proceeding – one for the main action, the other for the defence to counterclaim – a bifurcation order will save the Township substantial legal fees as only one set of lawyers need be involved in the first trial.

[13] I do not accept either of these arguments. First, the declarations sought by the Township within the main action make the mode of procedure optional. The Township could have commenced this proceeding under ordinary procedure but chose not to. The Township also made this tactical decision when it was known that the Property Owners intended to bring a counterclaim. If the Township was concerned that the trial could take longer than five days, it should have brought the action in ordinary procedure. It cannot now do an end-run around the strict time limits under Rule 76 through a bifurcation motion.

[14] Second, while bifurcation may reduce the legal costs to the Township, the only reason the Township has two sets of counsel is because the allegations raised in the counterclaim triggered insurance coverage. On the other hand, creating two proceedings would cause the Property Owners’ costs to be significantly higher as they would be facing two trials. When balancing legal cost exposure, the court is being asked to save a municipality and insurance company their legal fees while increasing the fees to individual litigants. That is highly unfair and prejudicial to the Property Owners.

[15] I also doubt that the Township’s insurer will simply sit out of the first trial when any findings of facts made by that trial judge will be binding on it in the second trial. My doubt on cost savings to the Township is heightened by the fact that liability issues are raised within the counterclaim and will be litigated in the first trial. As a result, I find it is more likely than not that both sets of counsel for the Township will seek to be involved in the first trial and there will be no real cost savings that result.

[16] I therefore do not accept that bifurcation will result in any cost savings. It will double trial time. For that reason alone, it should not be granted.

(b) Are the Issues Clearly Severable?

[17] The Township submits that successful bifurcation motions often separate liability from damages. Once liability is determined, there is often a greater chance of resolving damages, eliminating the need for the second trial altogether.

[18] The Property Owners are seeking damages for the cost of removing and/or relocating the pool and structures if required to do so once liability is determined. They are also seeking punitive damages against the Township. While the cost of removing and/or relocating the pool and surrounding structures is clearly severable, punitive damages are not. Punitive damages are damages awarded in civil cases to punish a defendant for its conduct. In order to determine whether the Property Owners have proven an entitlement to punitive damages, the judge would need to understand the actions of the Township that could possibly support such an award. This would include hearing about the issuance of the building permit and subsequent inspections by the Township during the construction. Evidence from the liability trial would therefore need to be repeated in the damages trial.

[19] An alternative option is to allow punitive damages to be included in the first trial with the second trial only involving damages related to the removal and/or relocation of the pool and surrounding structures. I do not believe this is necessary. One of the reasons Simplified Procedure was created was to streamline the process and force litigants to make the concessions necessary to keep the trial time to five days. While punitive damages cannot be resolved ahead of trial, surely the cost of removing and/or relocating the pool and surrounding structures can be determined prior to trial. These are fixed costs that should be assessable. Allowing the second trial to proceed only on the removal/relocation costs would, in effect, give the parties a pass on making concessions to streamline this trial. I am not prepared to allow this.

(c) Would the Bifurcation of the Proceeding Prejudice or Advantage a Party?

[20] I have already found that a bifurcation order would prejudice the Property Owners.

Conclusion

[21] For the reasons above, the bifurcation motion is dismissed. The parties will attend before the court at the next Civil Trial Management Court on June 9, 2025 at 11:30 a.m. to set a five-day trial date. That attendance will be virtual.

Costs

[22] At the conclusion of the hearing, I asked both parties to upload their respective cost outlines (including any offers to settle) to Case Center. I undertook not to look at these outlines or the offers until I had written my decision. Having dismissed the motion, I have now reviewed those cost outlines and offer to settle to consider costs. While I have not allowed for written cost submissions and have relied solely on the cost outlines and offer filed, I have done so to adopt the simplest and least expensive process for fixing costs: Rule 57.01(6) of the Rules of Civil Procedure.

[23] The only offer to settle was from the Township seeking an agreement from the Property Owners to a bifurcation order. As I have not granted this order, there are no offers to settle to consider when awarding costs.

[24] I have reviewed the factors under Rule 57.01(1) and find that this motion was not complex but was an important issue to the parties. While the Township was not successful in this motion, there is no justification for awarding anything higher than partial indemnity costs against it.

[25] The Property Owners’ fees on a partial indemnity basis are $7,667.50. This is less than half of the fees within the Township’s Bill of Costs. I therefore find that the Township would reasonably expect to pay at least this amount in a cost award given what it has paid to its own lawyers.

[26] I therefore award the Property Owners their partial indemnity costs of $7,667.50 inclusive of HST.

Justice Jaye Hooper
Date: April 29, 2025

Endnotes

[1] The Property Owners also raised a preliminary issue of the use of transcripts on this motion, but that issue was resolved on consent prior to hearing. As a result, I have not addressed it herein. The only issue argued before me was whether there should be bifurcation of this proceeding.

[2] During argument, I raised the possibility of the court extending the five-day trial limit and was advised by both counsel that this was not possible under Rule 76. I have reviewed the trial provisions of that Rule and agree with the parties. They will have to take whatever steps are necessary to have this matter heard within the strict five-day time limit.