Court File and Parties
Court File No.: CV-24-00723370-0000
Date: 2025-02-10
Court: Superior Court of Justice - Ontario
Applicants: Ronghai Chen and Jianlin Feng
Respondents: Jiaxiang Huang a.k.a. Jason Huang, 2614069 Ontario Inc., IBC Ventures Inc., Golden Ocean Investment Corporation, Yong Shi, Xin Di Huang, Kit Ying Teresa Lo, NIA Law Professional Corporation, Pintteng Tan o/a Tan & Associates, Kevin Lee, Wing Chao-Ma, Angel Uniform Ltd., Ufeel Scrubs Inc., Wu Law Professional Corporation, Kurt Anthony Sunn, 710561 Ontario Limited, Chia Mao Hsiang, Yadong Zhao, Ting Ting Lam, Xiaoli Yu, Yutong Ge, Haoxiang Liang, 14455169 Canada Inc., Linda Hung-I Chao, Katherine Wong Professional Corporation, Jian Jiang, Yinghua Guan, JX Law Professional Corporation, Canwell Asset Management Inc., 11202898 Canada Inc., Bo Xiao, Volodymyr Chagrov, John Doe Purchaser, John Doe Solicitor for Mortgagees in Possession, and John Doe Solicitor for Unknown Purchaser
Before: Edward M. Morgan
Counsel:
- Jonathan Mesiano-Crookston, Stephen Barbier, and Ye Yuan, for the Applicants
- Dominique Michaud and Joey Jamil, for the Respondents 710561 Ontario Limited, Linda Hung-I Chao, Chia Mao Hsiang, Yadong Zhao, Ting Ting Lam, Xiaoli Yu, and Yutong Ge
- Michael Myers and Parjot Benipal, for the Respondent Jian Jiang
Heard: Cost submissions in writing
Costs Endorsement
[1] The Applicants challenged the validity and enforceability of a second and third mortgage registered against a property owned by a company in which they were shareholders. I held that the two mortgages are valid and enforceable, and invited submissions on costs.
[2] The second mortgagee has subsequently written to me indicating that it will not be making cost submissions. The property has been sold under power of sale, and the second mortgagee has had the money owing to it, including all legal costs, paid out of the proceeds of sale.
[3] The sale of the mortgaged property apparently did not yield sufficient proceeds to pay the third mortgagee the debt owing to it. Nevertheless, the third mortgagee was successful in the court Application and is entitled to costs thereof.
[4] Counsel for the third mortgagee points out that the loan document calls for the debtor to pay costs on a solicitor and client basis. This type of clause in a mortgage is generally enforceable, and means that the third mortgagee can claim costs on a substantial indemnity scale: Everest Finance Corporation v. Jonker, 2023 ONCA 87.
[5] The third mortgagee seeks costs of the Application in the amount of $85,779.60. To this it adds the legal fees of the second mortgagee and the legal fees of the solicitor who handled the sale of the property. The third mortgagee submits that these amounts were paid out of the proceeds of sale of the property, thereby eroding the amount that would have been left to pay the third mortgage.
[6] I understand why the third mortgagee would like to recoup the legal costs of the second mortgagee and those resulting from the sale. But those are amounts that represent losses on the third mortgagee’s loan. They are not its costs of the Application in the sense that the courts use the word “costs”.
[7] The third mortgagee’s Bill of Costs establishes that the amount claimed in respect of substantial indemnity costs reflects the amount of work done on the file. It is a reasonable amount under the circumstances.
[8] The Applicants shall pay the third mortgagee the all-inclusive amount of $85,779.60 as costs of this Application.
Date: February 10, 2025
Edward M. Morgan
Cited Cases
Case Law
Legislation
(None cited)