BRANTFORD COURT FILE NO.: CV-20-0182 DATE: 2022/01/10 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Ayesof Professional Inc. o/a St. Mary’s IDA Pharmacy Plaintiff – and – Revera Inc. Defendant
Mr. D. Touesnard, for the Plaintiff Mr. C. Casher, for the Defendant
THE HONOURABLE JUSTICE J. R. HENDERSON
COSTS ENDORSEMENT
[1] After a short trial on the liability issue, the plaintiff’s claim against the defendant (“Revera”) was dismissed. Revera now requests its partial indemnity costs of the action. The plaintiff acknowledges that Revera is entitled to its partial indemnity costs, but disputes the amount claimed by Revera.
[2] In its pleadings, and at trial, the plaintiff alleged that Revera had breached a pharmacy services agreement by terminating the agreement without providing proper notice to the plaintiff. In its defence Revera alleged that it had provided proper notice of termination.
[3] The matter initially came before Justice Braid by way of Revera’s summary judgment motion. After hearing submissions, Justice Braid dismissed the motion, with costs in the cause, and ordered a bifurcated trial, the first stage of which would be on the liability issue. Further, Justice Braid ordered that the affidavits filed on the motion from the three primary witnesses would constitute the evidence in-chief of those witnesses at trial, and that the cross-examinations would constitute the examinations for discovery.
[4] The trial of the liability issue, including submissions, took approximately three days of trial time. The only significant issue at trial was whether Sarah Poirier had hand delivered a Notice of Non-Renewal to Faisal Firoz on June 16, 2020. The resolution of that issue depended upon my findings as to the credibility of Ms. Poirier and Mr. Firoz.
[5] As discussed in my Reasons for Judgment, I found that Ms. Poirier had hand delivered the Notice of Non-Renewal in the manner she had described in her testimony. Therefore, I found that the agreement had been properly terminated, and I dismissed the plaintiff’s action.
[6] Revera now requests its partial indemnity costs of the action in the amount of approximately $78,639, including HST and disbursements. The plaintiff’s position is that partial indemnity costs should be awarded in the approximate amount of $26,000, plus HST and disbursements.
ANALYSIS
[7] Given the ultimate decision at trial, I accept that Revera is entitled to its costs of the entire action, including its costs of the summary judgment motion. I also accept that the costs should be awarded on a partial indemnity scale.
[8] The Bill of Costs submitted by counsel for Revera shows the time spent and the hourly rates charged by the two lawyers who provided services to Revera in this proceeding. Mr. Casher was the junior lawyer who was called to the Bar in 2019. He docketed more than 200 hours to this file, and he conducted the trial. His hourly rates ranged from $395 per hour in 2020 to $455 per hour in 2021.
[9] Mr. Moore was the senior lawyer who was called to the Bar in 2003. He docketed approximately 14 hours to the file, but he did not participate at the trial. His hourly rates ranged from $900 per hour to $950 per hour. The actual fees charged to Revera by its lawyers totalled approximately $109,000, exclusive of HST and disbursements.
[10] In order to calculate its request for partial indemnity costs, counsel for Revera have used the actual charges to Revera and reduced those charges to a figure that is approximately 60 percent of the substantial indemnity costs.
[11] It is important to remember that in calculating a costs award, a court should not simply multiply the hours docketed by the hourly rates and then adjust the product of that calculation for the appropriate scale of costs: see BNY Financial Corp.-Canada v. National Automotive Warehousing Inc., [1999] O.J. No. 1273 at para. 5, and Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634, 71 O.R. (3d) 291 (Ont. C.A.) at para. 26.
[12] Rule 57.01 of the Rules of Civil Procedure lists a number of factors that a court may consider in exercising its discretion to award costs. Overall, the goal of a costs award, as discussed in Boucher at paras. 24-26, is to fix an amount that is fair and reasonable for the unsuccessful party to pay to the successful party in the circumstances. Moreover, the costs award should be within the reasonable expectations of the parties: see Boucher at para. 38.
[13] As Justice Farley stated at para. 5 of BNY Financial, “essentially the question to be considered is what is the case reasonably worth in the circumstances.”
[14] In the present case I find that the liability trial was a very simple proceeding. There were no complex legal issues, the dispute before the court was entirely factual, and the one factual issue depended solely upon the assessment of the credibility of two witnesses.
[15] Further, I find that, because of Justice Braid’s order, the parties were able to use much of the work done in preparation for the summary judgment motion as preparation for the liability trial. I also find that counsel for both parties embraced the spirit of Justice Braid’s order, and that the trial was conducted in an efficient manner.
[16] Consequently, the trial was not lengthy. The evidence was completed in the first two days of trial. The third day was spent dealing with submissions, both in written and oral form.
[17] I accept that the amount in issue was significant as the plaintiff had sued Revera for damages in the amount of $1.4 million. In that sense, I accept that the decision at trial was important to both of the parties.
[18] In consideration of these factors, plaintiff’s counsel submits that the partial indemnity costs requested by Revera exceeds the reasonable expectations of the parties. I generally agree with that submission by plaintiff’s counsel.
[19] One of the objections raised by plaintiff’s counsel was that this was a Brantford action that was tried in a Brantford (virtual) courtroom, but that Revera chose to retain a national law firm based in Toronto that charged hourly rates that were far higher than those that would have been charged by most lawyers who conducted trials in or around the Brantford courthouse.
[20] I agree that it may be appropriate in some cases to impose a blanket reduction of the legal fees charged by the law firm for the successful party before calculating a costs award in order to adjust for regional differences. However, in this case I find that it is not appropriate to do so.
[21] In this case I find that it was reasonable to expect Revera to retain a national firm based in Toronto because Revera itself is a national corporation that operates retirement facilities across Canada, and further because the subject property of this action was located in Burlington, Ontario, which is on the outskirts of Toronto.
[22] That being said, I repeat that an assessment of a costs award is not based upon a mathematical calculation. That is, it is not appropriate for a court to simply accept the time that is docketed to a file and the hourly rates charged by the lawyers, and then perform a calculation of a costs award, without regard to the nature of the case. Although the time spent on a file, the hourly rates, the experience of counsel, and the effective use of counsel are all factors for a court to consider, the real issue is what is fair and reasonable in the circumstances of the case.
[23] In my view, the amounts charged by Revera’s lawyers do not provide a reasonable starting point in this case for the assessment of partial indemnity costs for two reasons. First, the amount of time spent on this case by Revera’s lawyers seems to be excessive, particularly when one compares it to the time spent by plaintiff’s counsel. Plaintiff’s counsel docketed approximately 84 hours of time to this case. In contrast, on behalf of Revera, Mr. Casher docketed 210 hours and Mr. Moore docketed approximately 14 hours of time.
[24] Considering that the trial was relatively simple and related to one factual issue, I find that the amount of time spent on this case by Revera’s lawyers was more than was necessary. I do not wish to imply that excessive preparation by counsel should be discouraged. As between solicitor and client there can be exceptional value to the client if his/her lawyer is prepared to the point of being overprepared. However, the party who is required to pay a costs award cannot be expected to pay for overpreparation.
[25] Second, in a similar vein, the use of senior counsel who charged solicitor/client fees of more than $12,000 to this case is excessive. Given the simplicity of the issues in this case there was no need for senior counsel to be involved to such an extent. Again, there may be value to the client for senior counsel to be substantially involved in any case, but the party who is required to pay a costs award should not be expected to pay for extensive involvement of senior counsel in the circumstances of this case.
[26] In summary, I find that this was a relatively simple trial, but that the amount claimed was significant and the outcome of the trial was important to both parties. I find that it would be reasonable to expect the substantial indemnity fees for attending at and conducting a three-day trial of this nature to be approximately $5,000 per day.
[27] Accordingly, using a 60 percent factor, I assess the partial indemnity costs for the three-day trial in this case at $3,000 per day. In addition, I will allow a further amount of $20,000 on a partial indemnity basis for all other costs of the trial, including pleadings, affidavits, cross-examinations, exchange of documents, preparation for trial, and costs submissions. I will also allow a further amount of $2,500 for all work done on the summary judgment motion that was not otherwise covered by the costs award for the trial.
[28] Therefore, the total partial indemnity fees I will allow amounts to $31,500. I will add HST of $4,095 and disbursements of $4,373.25. In conclusion, I award partial indemnity costs to Revera in the total amount of $39,968.25, payable by the plaintiff within 60 days.
J. R. Henderson J. Released: January 10, 2022