XDG Ltd. v. 1099606 Ont. Ltd.,

• Jurisdiction: Ontario
• Judge: O'Driscoll, E. MacDonald and Caputo, JJ.
• Citation: (2004), 186 O.A.C. 33 (DC)
• Court: Superior Court of Justice of Ontario (Canada)
• Date: 14 January 2004

XDG Ltd. v. 1099606 Ont. Ltd. (2004), 186 O.A.C. 33 (DC)

MLB headnote and full text

Temp. Cite: [2004] O.A.C. TBEd. AP.100

XDG Limited (plaintiff/respondent) v. 1099606 Ontario Limited and General Electric Capital (defendants/appellants)

(57/03)

Indexed As: XDG Ltd. v. 1099606 Ontario Ltd. et al.

Court of Ontario

Superior Court of Justice

Divisional Court

O'Driscoll, E. MacDonald and Caputo, JJ.

April 23, 2004.

Summary:

A trial of a consolidated construction lien action was directed to determine the priority as between the lien claimants (represented by the plaintiff) and the defendant mortgagee.

The Ontario Superior Court, in a decision reported at [2002] O.T.C. 1062, held that the lien claimants had priority. The court award­ed costs against the mortgagee on a substan­tial indemnity basis. One of the lien claim­ants (Green Roofing Ltd.) was awarded party and party costs fixed at $9,000. The mortga­gee appealed, seeking an order setting aside the judgment and costs order; dismissing the lien claimants' claims to priority over the mortgage; and awarding it costs of the trial and appeal on a partial indemnity scale. Green Roofing cross-appealed, requesting costs on a substantial indemnity basis.

The Ontario Divisional Court dismissed the appeal. The court allowed the cross-appeal and awarded Green Roofing costs of the trial and cross-appeal fixed at $40,000.

Practice - Topic 6923

Costs - General principles - Power to award or fix costs - A consolidated con­struction lien action involved a priority dispute between lien claimants and a mort­gagee - The trial judge concluded that the lien claimants had priority - One of the lien claimants was awarded $9,000 in costs on a party and party basis - The lien claimant appealed the costs award - The Ontario Divisional Court found that the award of $9,000 was unreasonably low and awarded the claimant costs of the trial and cross-appeal fixed at $40,000 - The court stated that "The process of fixing these costs is inherently arbitrary but it must be done in a manner that 'reasonably and without arbitrary diminution acknowledges the efforts legitimately expended in that connection'" - See paragraphs 38 to 49.

Practice - Topic 6931

Costs - General principles - Discretion of court - The Ontario Divisional Court stated that a costs award was a discretionary decision and even after the introduction of specific costs grids, the court retained an inherent power in relation to costs that was not exhausted by statute - A court retained the authority to diverge from statutory guidelines if it considered it fair and rea­sonable to do so - In Toronto (City) v. First Ontario Realty Corp., the Superior Court concluded that, despite the new rules and Costs Grid, judges were left with a very broad statutory discretion and were entitled to consider anything that was relevant to the question of costs when determining by whom and to what extent costs were to be paid - The new rules indicated that trial judges were to fix costs - Only in exceptional circumstances were cases to be referred to assessment - Gener­ally, the practice of a reviewing court was to grant judges deference in all decisions not vital to the disposition of a lawsuit - See paragraphs 7 and 8.

Practice - Topic 7601

Costs - Taxation of costs - General - [See Practice - Topic 6931].

Practice - Topic 8361

Costs - Appeals - Appeals from taxation - General - [See Practice - Topic 6931].

Cases Noticed:

Stein Estate v. Ship Kathy K, [1976] 2 S.C.R. 802; 6 N.R. 359, refd to. [para. 4].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1, refd to. [para. 4].

Cosyns v. Canada (Attorney General) et al. (1992), 53 O.A.C. 127; 7 O.R.(3d) 641 (Div. Ct.), refd to. [para. 5].

Basedo v. University Health Network - see Basdeo et al. v. University Health Net­work et al.

Basdeo et al. v. University Health Network et al., [2002] O.T.C. 54 (Sup. Ct.), refd to. [para. 7].

Toronto (City) v. First Ontario Realty Corp. (2002), 59 O.R.(3d) 568 (Sup. Ct.), refd to. [para. 7].

Delrina Corp. v. Tridel Systems Inc. et al., [2002] O.J. No. 3729 (Sup. Ct.), refd to. [para. 8].

Noranda Metal Industries Ltd. et al. v. Employers Liability Assurance Corp. et al., [2002] O.T.C. 288; 49 C.P.C.(4th) 336 (Sup. Ct.), refd to. [para. 8].

Bank of Nova Scotia v. Liberty Mutual Insurance Co. et al. (2003), 178 O.A.C. 254 (Div. Ct.), refd to. [para. 8].

Clarke v. Technical Marketing Associates Ltd. (1992), 8 O.R.(3d) 734 (Gen. Div.), refd to. [para. 15].

Upper Mapleview Inc. v. Stolp Homes (Veterans Drive) Inc. et al. (1997), 35 O.T.C. 233; 36 B.L.R.(2d) 31 (Gen. Div.), refd to. [para. 17].

Schaeffer (David) Engineering Ltd. v. D.T.A. Investments Inc. (1998), 37 C.L.R.(2d) 26 (Aus.), refd to. [para. 30].

561861 Ontario Ltd. v. 1085043 Ontario Inc. et al. (1998), 66 O.T.C. 305; Kirsh's C.L.C.F. 78.50 (Gen. Div.), refd to. [para. 30].

Carpenter et al. v. Malcolm (1985), 6 C.P.C.(2d) 176 (Ont. H.C.), refd to. [para. 48].

Counsel:

Leonard Ricchetti, for the appellant, Gen­eral Electric Capital Canada Inc.;

Irwin Duncan, for the plaintiff/respondent, XDG Limited;

Anthony Speciale, for the cross-appellant, Wm. Green Roofing Inc., a lien claim­ant.

This appeal and cross-appeal were heard at Toronto, Ontario, on January 14, 2004, by O'Driscoll, E. MacDonald and Caputo, JJ., of the Ontario Divisional Court. The court delivered the following endorsement on April 23, 2004.