Carol Laakso Plaintiff – v. –, 2017 ONSC 4999

CITATION : Laakso v. Ranalli, 2017 ONSC 4999 COURT FILE NO. 93596/15 DATE : 20170823 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Carol Laakso Plaintiff – and – Tina B. Ranalli, David Brunning, Carlo Fascio, First Defense Absorbents Inc., and 2360617 Ontario Inc. Defendants Paul Mack, for the plaintiff Jonathon Burshtein, for the defendants Bale J.: REASONS FOR DECISION [ 1 ] The following are my reasons for decision in relation to the costs of the defendants’ motion for judgment, and the costs of the action.

Introduction [ 2 ] The plaintiff and Tina Ranalli each held forty-five per cent of the shares of 2360617 Ontario Inc. In September 2013, as a result of differences between them that they were unable to reconcile, it was agreed that Ranalli would purchase the plaintiff’s interest in the corporation. [ 3 ] One of the terms of the agreement was that the defendants would pay the amount owed to BMO on 236Ontario’s line of credit which indebtedness had been guaranteed by the plaintiff and Ranalli.

However, the defendants failed to do so, and in October 2014, the plaintiff paid the amount then owed, being the sum of $30,100.07. [ 4 ] In this action, the plaintiff claimed damages for “conspiracy, breach of fiduciary duty and oppression,” in the amount of $300,000, and punitive damages in the amount of $200,000. In addition, she claimed a fifty per cent contribution with respect to her payment to BMO, and costs of $4,600 “in respect of indebtedness to Bank of Montreal.” [ 5 ] In November 2016, the plaintiff delivered an offer to settle for $20,000, plus her costs to be agreed upon, or assessed.

Rather than accept the offer, the defendants moved for judgment arguing that the claim was statute-barred by

section 4 of the Limitations Act, 2002, and that as a result of the agreement pursuant to which the plaintiff sold her shares in 236Ontario to Ranalli, she was no longer a shareholder, and entitled only to enforce the share sale agreement. [ 6 ] The result of the defendants’ motion was that the plaintiff was awarded judgment in the amount of $30,130.07, but her action was otherwise dismissed. The oppression claim was statute-barred, and there was no evidence to support the claim for legal fees somehow related to Bank of Montreal.

However, the plaintiff’s claim for the amount paid by her on the guarantee survived, because the limitation period did not begin to run until the payment was made to BMO, less than two years before the action was commenced.

Positions of the parties [ 7 ] Although not directly stated in her written argument, it appears that the plaintiff is asking that her partial indemnity costs to the date of her offer be fixed at $6,734.80, plus disbursements, and that her substantial indemnity costs from the date of the offer be fixed at $59,565.69, plus disbursements. [ 8 ] The defendants deny the plaintiff’s entitlement to costs, and ask that they be awarded substantial indemnity costs, fixed at $22,553.59.

In the alternative, they say that if costs are to be awarded against them, the plaintiff’s costs should be referred for assessment, pursuant to rule 53.03(1)(b). [ 9 ] Using somewhat tortured logic, the defendants argue that the court should disregard the plaintiff’s offer to settle, because it “improperly required the defendants to pay the plaintiff’s costs” (rather than provide for the plaintiff to pay the defendants’ costs), and that “when costs are factored in, the offer was not more favourable to the defendants than the outcome of the proceeding.” Discussion [ 10 ] I do not accept the defendants’ position that the court should disregard the plaintiff’s offer to settle.

With respect to their first

argument, the plaintiff was entitled to make any offer that she chose to make, and if not accepted, such offer would either succeed in attracting the costs consequences of rule 49.10(1), or not, based upon the criteria set out in the rule. With respect to the second argument, the defendants are comparing the amount of the plaintiff’s offer inclusive of costs, with the amount of her judgment exclusive of costs – there is no justification for doing so.

Where the plaintiff’s offer is for an amount with costs to be assessed, and the offer is not accepted, an assessment of the plaintiff’s costs to the date of the offer is not required. The amounts to be compared are the amount of the offer, and the amount of the judgment obtained. [ 11 ] What both parties appear to have missed is that I would be fixing the costs of both the motion for judgment, and the action. Costs of the motion for judgment [ 12 ] The defendants were wholly successful on their motion for judgment, and are entitled to their costs of the motion.

The oppression claim and the claim for legal fees were dismissed, and somewhat ironically, they were also successful on the issue relating to the BMO line of credit. The plaintiff had taken the position that she remained a shareholder of 236Ontario, and that she was entitled to a fifty per cent contribution from Ranalli to the amount paid to BMO. However, I agreed with the defendants’ position that the plaintiff was no longer a shareholder, and entitled only to enforce the share sale agreement.

In the result, the plaintiff was entitled to full indemnity for the amount she paid to BMO. [ 13 ] The defendants’ costs of the motion for judgment will be fixed at $15,000. Costs of the action [ 14 ] The plaintiff made an offer to settle which complied with the provisions of rule 49.10(1), and obtained a judgment that was more favourable than the terms of the offer.

In the absence of any reason to order otherwise, she is entitled to partial indemnity costs to the date the offer was served, and substantial indemnity costs from that date. [ 15 ] The plaintiff’s partial indemnity costs to the date the offer was served were approximately $7,500, an amount that I find to be reasonable.

There is no reason for these costs to be referred to an assessment officer, as asked by the defendants. [ 16 ] However, the plaintiff’s claim for substantial indemnity costs of $66,990 from the date the offer to settle was served cannot be maintained, because all of those costs were incurred in relation to the motion for judgment, the costs of which have been awarded to the defendants.

Disposition [ 17 ] The costs of the action awarded to the plaintiff will be set off against the costs of the motion for judgment awarded to the defendants, with the result that the plaintiff will pay costs to the defendants fixed at $7,500. “Bale J.” Released: August 23, 2017 CITATION : Laakso v. Ranalli, 2017 ONSC 4999 COURT FILE NO. 93596/15 DATE : 20170823 ONTARIO SUPERIOR COURT OF JUSTICE Between: Carol Laakso Plaintiff – and – Tina B. Ranalli, David Brunning, Carlo Fascio, First Defence Absorbents Inc., and 2360617 Ontario Inc. Defendants REASONS FOR DECISION Bale J. Released: August 23, 2017