



COURT OF APPEAL FOR ONTARIO

CITATION: Zesta Engineering Ltd. v. Cloutier, 2014 ONCA 762

DATE: 20141030

DOCKET: C52951 and C52999

Laskin, Gillese and Pardu JJ.A.

BETWEEN

Zesta Engineering Ltd.

Plaintiff (Appellant)

and

David Cloutier, Michael Jefferies, Hi-Cap
    Technologies, Guiseppe Durante, Keith Sanger, James White and Kelvin
    Technologies Inc., Douglas Christie, 798068 Ontario Limited and Derek Peatling

Defendants (Respondents)

AND BETWEEN

David Cloutier. Guiseppe Durante
    and Kelvin Technologies Inc.

Plaintiffs by Counterclaim (Respondents)

and

Zesta Engineering Ltd.

Defendant to the Counterclaim (Appellant)

AND BETWEEN

Zesta Engineering Ltd.

Plaintiff (Appellant)

and

Joe Durante and Wendy Durante

Defendant (Respondent)

Sarit Bather and Moya Graham, for the appellant

Morris Cooper, for the respondents Douglas Christie and
    798068 Ontario Limited

Heard: October 17, 2014

On appeal from the judgment of Justice David G. Stinson
    of the Superior Court of Justice, dated October 21, 2010.

APPEAL BOOK ENDORSEMENT

[1]

Zesta Engineering Ltd. appeals against Christie and his company on the
    issues of costs and pre-judgment interest.

A.
Costs

[2]

Zesta settled and then abandoned its appeal on liability and damages,
    leaving costs and pre-judgment interest as the only outstanding issues.  It thus
    requires leave to appeal costs.  See
Murano v. Bank of Montreal
.

[3]

Zesta raises two issues requiring leave: first, it submits that the
    trial judge erred in failing to award costs of the first trial against Christie
    on the basis that as counsel he knowingly led false evidence at the first
    trial; and second, Zesta submits that the trial judge erred in failing to award
    substantial indemnity costs of the second trial.  Zesta contends that both
    errors are errors in principle, warranting our intervention.

[4]

We do not agree with Zestas submissions.  On Zestas first submission
    the trial judge declined to award costs of the first trial against Christie
    because Zestas claim  essentially that Christie committed a fraud on the
    court  was not pleaded at the second trial, and thus was not the subject of any
    finding.  This was a proper exercise of the trial judges discretion.

[5]

On Zestas second submission, the trial judge was aware of the competing
    considerations and applied the right test in declining to award substantial
    indemnity costs.  Again, we see no error in the exercise of his discretion.

[6]

Accordingly, leave to appeal costs is refused.

B.
Pre-judgment interest

[7]

Zesta claimed pre-judgment interest in the Statement of Claim.  Perhaps
    through inadvertence, pre-judgment interest was not dealt with at the close of
    the trial or in the submissions on costs.

[8]

In our view Zesta is entitled to pre-judgment interest.  There are no
    considerations that would warrant refusing to award it.  Accordingly, the
    appeal on pre-judgment interest is allowed, and Zesta is entitled to
    pre-judgment interest on the damages award against Christie and his company
    from the date the cause of action arose, which is the date of conversion.  The
    rate of pre-judgment interest shall be four per cent.

[9]

Zesta was partly successful on its appeal, and is entitled to a modest
    costs award.  We award it $5000, inclusive of disbursements and applicable
    taxes.


