Court File and Parties

Court File No.: CV-15-00124000-0000 Date: 2025-10-03 Superior Court of Justice - Ontario

Re: 1440195 Ontario Inc., Plaintiff And: 1440194 Ontario Inc. and Mary Eduarda Simas as Estate Trustee for The Estate of Antonio Simas, Defendants

Before: The Hon. Mr. Justice R.E. Charney

Counsel: Jonathan Barr and Tiffany Sillanpää, Counsel for the Plaintiff Matthew Kersten and Sabrina Waraich, Counsel for the Defendants

Heard: In Writing

Costs Endorsement

Introduction

[1] On July 29, 2025, following 9 days of trial, I issued Reasons for Decision in this breach of contract case.

[2] In the final result, I found in favour of the Plaintiff in the amount of $405,199, representing the overpayment to the Defendant following the distribution of the proceeds from the sale of the company owned by the parties in 2012: 1440195 Ontario Inc. v. 1440194 Ontario Inc., 2025 ONSC 4420.

[3] While $405,199 is a significant award, it is a fraction of the $1,527,522 claimed in the Statement of Claim, and the $2,319,567 in the Plaintiff's closing submissions following the trial.

[4] In my Reasons for Decision, at para. 52, I divided the issues raised in the case into three main issues:

1. The Validity/Enforceability of the 2002 and 2009 Amending Agreements.
2. The Distribution of Profits after the 2012 Sale; and
3. The allocation of salaries between Mr. Simas and Mr. Amaro and the allocation of salaries between their spouses.

[5] The Plaintiff was successful on the second issue - The Distribution of Profits after the 2012 Sale – but unsuccessful on the first and third issues.

Positions of the Parties - Costs

[6] The Plaintiff, 1440195 Ontario Inc. (the "Plaintiff"), submits that it is entitled to $464,123.92 in costs and disbursements, on a partial indemnity basis. The Plaintiff asserts that it was the successful party in this action and is entitled to indemnification for the costs incurred in achieving this result.

[7] The Plaintiff takes the position that its Rule 49 offer of $620,000 plus interest, costs and disbursements on March 6, 2024 was "significantly closer" to the amount ultimately awarded than the Defendant's Rule 49 offer of $38,000 inclusive of costs, demonstrating that the Plaintiff made a genuine effort to settle the case while the Defendant did not.

[8] The Plaintiff also takes the position that the Defendant prolonged the trial because it did not bring a summary judgment motion to address the limitation period argument, in which the Defendant was successful on Issues 1 and 3.

[9] The Plaintiff also argues that the Defendant brought unnecessary interlocutory motions, although I note that the costs of those motions were dealt with at the time (see e.g., 1440195 Ontario Inc. v. 1440194 Ontario Inc., 2016 ONSC 3700: success on the motion evenly divided, no order for costs) and should not, therefore, be a factor in assessing costs at this stage. The Plaintiff appears to have included the costs of these interlocutory motions (claiming approximately $42,000 on a partial indemnity basis) in its Bill of Costs. Since these costs have already been ordered or otherwise addressed in the interlocutory proceedings, they will not be added to the costs of the trial as requested by the Plaintiff.

[10] The Defendants seek their costs in the amount of $307,623.75, on a partial indemnity basis.

[11] The Defendants take the position that they were successful on 2 out of the 3 issues raised by the Plaintiff, including what they argue was the Plaintiff's "core" issue: the validity/enforceability of the 2002 and 2009 Amending Agreements. The Plaintiff was successful on only 18% of their total claim ($405,199 awarded out of a total claim of $2,319,567). Accordingly, the Defendants argue that they were substantially successful and are entitled to their costs, with a partial discount to account for the Plaintiff's modest success.

[12] In the alternative, the Defendants argue that there was divided success, and each party should bear their own legal costs.

[13] With regard to offers to settle, the Defendant argues that neither party made an offer that was more favourable than the amount awarded by the Court, or an offer that was substantially closer to the result than the other and as such none of the offers should weigh in favour of either party with respect to the determination of costs.

Analysis

[14] Although the Plaintiff's success was limited to one out of three issues, the Plaintiff was the successful party. The Plaintiff was required to commence this proceeding in order to recover damages for the overpayment to the Defendant following the distribution of the proceeds from the 2012 sale of the company owned by the parties. While the Plaintiff did not recover all that it claimed, this should be taken into account in the quantum of costs, not the entitlement to costs: Chippewas of Nawash Unceded First Nation v. Canada (Attorney General), 2023 ONCA 787, at para. 6.

[15] In this regard, I adopt the summary set out by Merritt J. in ID Inc. v. Toronto Wholesale Produce Association, 2024 ONSC 1521, at paras. 59–60 (citations omitted):

Distributive costs awards have frequently been criticized by the Ontario Court of Appeal. Courts look at the overall outcome, not an issue-by-issue analysis of success…

Courts may award costs or refuse costs in respect of a particular issue or part of a proceeding under to r. 57.01(4)(a). Costs awarded to a successful plaintiff may be reduced to take into consideration the time spent on issues upon which the plaintiff was not successful…

[16] These factors may include the number of issues in which the Plaintiff was successful, the value of the successful issues against the total claimed, the relative importance of the various issues, and the amount of trial time devoted to each issue.

[17] I reject the Plaintiff's submission that the Defendant prolonged the trial because it did not bring a summary judgment motion to address the limitation period argument.

[18] Defendants who move for summary judgment on the basis of a limitations defence bear the burden of demonstrating that their defence can be made out without the need for a trial. In AssessNet Inc. v. Taylor Leibow Inc., 2023 ONCA 577, 168 O.R. (3d) 276, at paras. 34–36, the Court of Appeal explained:

The expiry of a limitation period is raised by a defendant as an affirmative defence, and the defendant has the burden of proving that defence. When the issue is raised by a defendant in a summary judgment motion, the defendant has the onus of establishing that there is no issue requiring a trial with respect to the limitation period.

[19] In the present case, the issue of discoverability by the Plaintiff was fact dependant and hotly disputed. The Defendant was successful in its limitation period defence in issues 1 and 3, but not issue 2.

[20] As the trial judge, I can safely say that this would not have been an appropriate case for summary judgment on the limitation period issue. The limitation period issue could not be readily bifurcated from the other issues at trial, and a motion for summary judgment would only have delayed the trial of the action and increased the expenses of both parties: Butera v. Chown, Cairns LLP, 2017 ONCA 783, at paras. 30–31; Truscott v. Co-Operators General Insurance Company, 2023 ONCA 267, at paras. 54 and 55.

[21] In my view, it was the Plaintiff who prolonged the trial by bringing claims that were statute barred and otherwise without merit (issues 1 and 3). This should come at the expense of the Plaintiff, not the Defendant.

[22] While not a precise method of calculation, I note that the Plaintiff's written closing submissions were 46 pages long. Pages 6 to 26 dealt with Issue 1, and the last 14 pages dealt with Issue 3. Only 6 pages dealt with Issue 2, in which the Plaintiff was successful. This division roughly reflects the time spent on each of these issues in the trial, and, it would appear, the time dedicated by the Plaintiff's counsel to researching the legal issues involved. A similar division applies to the Plaintiff's reply factum.

[23] Taking all of these factors into account, and the factors set out in Rule 57.01, I fix costs in the amount of $115,000, payable by the Defendants to the Plaintiff. In my view, this amount reflects a fair and reasonable assessment of what the costs should have been had the Plaintiff limited its claim to Issue 2.

Justice R.E. Charney

Date: October 3, 2025