SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Svecgroup Limited v. 2765 Lakeshore GP Inc., 2765 Lakeshore LP, 2749 Lakeshore Inc., Empirical Capital Corp., Olympia Trust Company, Addison Wealth Management Inc., Daniles Lion Corporation, Eggo Management Inc., and North Horizon Holdings Inc., CV-25-757519 (“Svecgroup Action”);
RE: Batory Developments Ltd. v. 2765 Lakeshore GP Inc., 2765 Lakeshore LP, 2749 Lakeshore Inc., Empirical Capital Corp., Olympia Trust Company, Addison Wealth Management Inc., Daniles Lion Corporation, Eggo Management Inc., and North Horizon Holdings Inc., CV-25-756513 (“Batory Action”);
BEFORE: ASSOCIATE JUSTICE C. WIEBE
COUNSEL: Stephen Swartz for Empirical Capital Corp. (“Empirical”) and Olympia Trust Company (“Olympia”), together “the Mortgagees”;
Adil Habib for Svecgroup Limited (“Svecgroup”) and Batory Developments Ltd. (“Batory”), together “the Lien Claimants”;
DECISION: May 25, 2026
COSTS DECISION
1On May 25, 2026 I issued my Reasons for Decision wherein I dismissed the Mortgagees’ motion under Construction Act, R.S.O. c. C.30 (“CA”) section 47 to have the Svecgroup and Batory claims for lien discharged on account of an alleged priority of the subject mortgage.
2At the motion the parties served and filed costs outlines for the motion. The Mortgagees filed a costs outline that shows $15,575.83 in partial indemnity costs and $22,412.22 in substantial indemnity costs. The Lien Claimants filed a costs outline that shows $11,191.05 in partial indemnity costs and $15,435.02 in substantial indemnity costs. In my Reasons I ordered that the parties submit written submissions on costs of this motion. That has now happened. The following is my decision on costs.
3Clearly the Lien Claimants were successful and deserve costs. That is not disputed. The issue is the quantum of the costs award.
4The Lien Claimants argue that they should get their claim for substantial indemnity costs as shown in their costs outline, $15,435.02. They argue that this amount corresponds with the partial indemnity costs shown on the Mortgagees’ costs outline, $15, 575.83, and that therefore this amount is what the Mortgagees could reasonably expect to pay in costs in the event of a loss like this. I am not satisfied with this argument. The usual costs award is partial indemnity costs, with substantial indemnity costs to be ordered only in exceptional cases where the losing side acts quite unreasonably in some way. That is the test to be applied.
5The Lien Claimants argue that the Mortgagees have indeed acted unreasonably. I take guidance from the decision of Master Albert in Ledcor Construction Ltd. v. Canalfa Liberty Village Homes Inc., 2009 CarswellONT 1475. In this case Master Albert dealt with the issue of costs in a failed motion under CA section 47 by the defendant for summary judgment. The successful party sought substantial indemnity costs. Master Albert granted substantial indemnity costs using the following grounds: what was at stake; the scope of the motion as the moving party had substantially changed the scope; the reasonableness of the motion based on the evidence; expertise in the subject claims; and the knowledge of the risk. She focused on the reasonableness of the motion in light of the evidence.
6Applying these factors, I have concluded that the Lien Claimants should indeed be awarded their claim for substantial indemnity costs. Here are my reasons:
Stakes: The stakes of the motion were indeed high. Batory and Svecgroup were at risk of losing their claims for lien. The Mortgagees wanted to conclude their APS.
Scope: The scope of the motion changed dramatically. The motion began as a motion based on the priority rules in CA subsection 78(3) and (4) and turned into a motion based on the priority rules in CA subsections 78(5) and (6). This change occurred entirely because of the Mortgagees’ incomplete and evolving evidentiary record.
Reasonableness: The motion as originally conceived was not at all reasonable based on the evidence the Mortgagees proffered. The Mortgagees should have produced the CBRE appraisal at the outset. They did not. They only produced it on the day of the motion in response to the late Lien Claimants’ motion material, thereby causing a short adjournment. The contents of the CBRE appraisal then shifted the focus of the motion and undermined the reasonableness of the motion with the evidence proffered by the Mortgagees. The Mortgagees obviously did not examine their own evidence carefully throughout. They should have reconsidered their motion; but they did not. Instead, they insisted on the motion being heard on an urgent basis.
Expertise: In my view, expertise on the mortgage priority rules was not necessary. The statutory tests are clear. It was a matter of providing the evidence to meet the tests, which the Mortgagees grossly failed to do.
Knowledge of risk: The Mortgagees insistence on this motion despite the deficiencies in their material and their conduct carries a risk of a severe adverse costs order against them. This motion was akin to a motion for summary judgment; it had a high onus of proof. The Mortgagees had the choice of posting security and vacating the claims for lien. Instead, they selected this contested and risky motion and did so with a deficient evidentiary record.
7There is no other issue as to the quantum of the Lien Claimants claim. I find that the claim is also reasonable and within the reasonable expectation of what the Mortgagees would have to pay in substantial indemnity costs given what was shown in their own costs outline. There was discussion in the Lien Claimants’ material about an offer to settle, but I do not find it relevant to this issue. The Mortgagees pointed out that the Lien Claimants’ responding material was late, but this was because of, again, the Mortgagees’ insistence on proceeding with this motion quickly as they had scheduled it. The Lien Claimants’ lawyer made it clear that his trial schedule in other matters made that return date difficult.
8As a result, I award the Lien Claimants substantial indemnity costs of this motion in the amount of $15,435.02. This amount must be paid by the Mortgagees to the Lien Claimants on or before thirty (30) days from today.
DATE: June 4, 2026 ____________________________________
ASSOCIATE JUSTICE C. WIEBE