AE Hospitality Ltd v George, 2015 ONSC 7370 dealt with the test for granting leave to appeal under Rule 62.02(4) of the Ontario Rules of Civil Procedure. On the issue of whether there was a “conflicting decision” as required by r. 62.02(4)(a), the fact that the motion judge declined to provide reasons on costs was not a sufficient conflict with existing case law. Further, Wilton-Siegel J. clarified that r. 62.02(4)(b) requires a party to demonstrate that there is “serious reason” to doubt that there was a proper basis for the costs award.

Background

The defendants sought leave to appeal a costs order which awarded costs in favour of the plaintiffs in the amount of $30,000. Before making the costs award, the motion judge requested cost submissions be provided by March 30, 2015. The plaintiffs provided costs submissions according to this timeline; the defendants did not. The motion judge issued his decision on March 31, 2015. After receiving the costs award, the defendants inquired whether the motion judge would still accept their costs submissions. Although the motion judge accepted and reviewed the costs submissions, he did not change his award. The defendants sought leave to appeal this costs decision. The defendants argued that because the motion judge confirmed his original $30,000 costs award without providing any reasons, they were unable to tell if necessary adjustments were factored into the motion judge’s costs award.

Decision

The test for granting leave to appeal under r. 62.02(4)(a) requires that there be a “conflicting decision” and that it be “desirable that leave to appeal be granted.” The defendants argued that in the circumstances, they were entitled to written reasons providing an indication as to whether an adjustment was made in light of their costs submissions, and that without such reasons it was impossible to determine the reasonableness of the cost award. The defendants further argued that the lack of reasons in the circumstances of the case conflicted with the decisions of the Court of Appeal in Toronto Standard Condominium Corp No 1633 v Baghai Development Ltd, 2012 ONCA 417 and in United States v Yemec, [2006] OJ No 510 (SC).

Wilton-Siegel J. did not accept this argument. His Honour noted “These decisions can only constitute conflicting decisions to the extent that they evidence a principle that written reasons are required in all circumstances. There is no statutory or case law authority for such a principle.” Wilton-Stiegel J. further noted that neither s. 131 of the Courts of Justice Act, nor r. 57 require a court to provide written reasons for costs award.

Wilton-Siegel J. went on to find that the defendants had not satisfied the test for leave under r. 62.02(4)(b). That is, Wilton-Siegel J. clarified that the test for leave under r. 62.02(4)(b) will only be satisfied where a party can demonstrate that there is “serious reason” to doubt that there was a proper basis for the costs award of the motion judge. On the facts of the case, the defendants were unable to meet this standard and leave was not granted.