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[14] I agree with McCowan that the preconditions in my prior order had been met or rendered
moot. The first precondition was rendered moot by McCowan obtaining ex parte orders to
continue. That placed an entity legally capable of directing the litigation at its helm. Those orders
to continue were obtained relying on evidence that supported a transmission of Eagle’s interest in
these actions to its trustee in bankruptcy and, subsequently, a transmission of interest from the
trustee to McCowan. As set out in my endorsement dated April 27, 2021, McCowan’s evidence
supported that the trustee had determined that McCowan had security over this litigation and
provided authority to McCowan to “now take over the ongoing litigation.”
[15] The second precondition was satisfied when McCowan, through its lawyers, posted the
$150,000 in security for costs.
[16] Despite Royal One previously raising challenges to both the validity of McCowan’s
security interest in Eagle’s assets and the trustee authorizing McCowan to take over the litigation,
Royal One has not moved to set aside the orders to continue or otherwise challenge McCowan’s
right to continue these actions. Instead, Royal One (ultimately) consented to the lift-stay orders.
However, Royal One argues that it was under no obligation to consent. Since it did not oppose the
motions, it submits that the timing of consent is irrelevant and there is no basis for an adverse costs
award. Consent was merely a courtesy, not a requirement.
[17] I recently addressed a similar argument in Symmban Stroud Inc. v. 2384359 Ontario Inc.,
2022 ONSC 2118, albeit in a non-lien action. In that case, the plaintiff would not consent to an
order setting aside a noting in default. The defendants brought a formal motion for set aside, which
the plaintiff did not oppose. When the defendants sought their costs of the motion, the plaintiff
argued that it had no obligation to consent, had not opposed, and thereby should not be liable to
the defendants for costs of a motion that they inevitably had to bring. I did not accept that argument
in the circumstances of the case.
[18] In Symmban, I agreed with the plaintiff that, generally, a plaintiff is under no strict
obligation to consent to setting aside a noting in default. However, I held that a plaintiff is not
insulated from an adverse costs award where its consent is unreasonably withheld (para. 25). On
the facts of that case, I found that the plaintiff had not genuinely or reasonably felt that the
defendants should have to satisfy the court on the circumstances of default before being entitled to
defend and had not reasonably required evidence explaining the default before it could consider
its position (para. 24). The plaintiff had offered to consent, but only upon payment of unreasonably
high costs thrown away from a prior substituted service motion. Although not opposing set aside,
the plaintiff argued that payment of those costs should be a condition of set aside, in pursuit of
which the defendant’s affiant was cross-examined. In the end, I held that the plaintiff had wasted
both judicial resources and court time by forcing an unnecessary motion to be brought (para. 34),
warranting a costs award against the plaintiff.
[19] Royal One’s delay in providing formal consent is certainly not as egregious as the
circumstances in Symmban, but this case nevertheless has some similarities.
[20] Nothing before me supports that Royal One was disputing that the preconditions to a lift-
stay in my prior order had been satisfied or that Royal One needed time to consider its position.