Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC

[Indexed as: Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC]

75 O.R. (3d) 638

[2005] O.J. No. 160

Docket: C41648

Court of Appeal for Ontario

Doherty, Borins and Sharpe JJ.A.

January 24, 2005

Conflict of laws -- Forum conveniens -- Plaintiff sending steel coils from Ontario to West Virginia for processing by defendant -- Plaintiff bringing action in Ontario for breach of contract and negligence and [page639] serving defendant in West Virginia -- Stay of proceedings granted -- West Virginia being more convenient forum than Ontario.

Conflict of laws -- Jurisdiction -- Plaintiff sending steel coils from Ontario to West Virginia for processing by defendant -- Plaintiff bringing action in Ontario for breach of contract and negligence and serving defendant in West Virginia -- Defendant's insurer filing notice of intent to defend on behalf of defendant without defendant's consent after defendant had indicated that it intended to contest jurisdiction of Ontario court -- Stay of proceedings granted -- No real and substantial connection existing between forum and either defendant or subject matter of action -- Notice of Intent not constituting bar to granting of stay.

NOTE: The catchlines above relate to a decision of the Superior Court of Justice. An appeal of this judgment to the Court of Appeal for Ontario (Doherty, Borins and Sharpe JJ.A.) was dismissed, with the appeal with respect to costs allowed, on January 24, 2004 14550 (ON SC), 2005, 70 O.R. (3d) 758. The endorsement of the court was as follows:

Counsel

Patrick Summers, for appellant.

John Judge and Manizeh Fancy, for respondent.

Endorsement

[1] BY THE COURT: -- The appellants can only succeed on this appeal by convincing us that the motion judge erred with respect to both jurisdiction simpliciter and forum non conveniens.

[2] We see no error on the part of the motion judge with respect to forum non conveniens that would justify the intervention of this court. That determination was a discretionary order entitled to considerable deference on appeal. In her overall review of the jurisdictional issues raised, the motion judge fully considered all factors pertaining to forum non conveniens including those favouring the appellant. We are satisfied that in concluding that Ontario was not the most convenient forum for the resolution of this litigation, the motion judge fully and fairly considered and applied the correct legal test.

[3] There was ample evidence to support the motion judge's conclusion that West Virginia is the natural forum for this dispute. The respondent carries on business in West Virginia and does not carry on business in Ontario. The appellant sought out the services of the respondent. The appellant purchased the steel coils in Illinois, sent them to Centria in Ohio (the party the respondent asserts is liable for any defects) for embossing and then to the respondent's premises in West Virginia where they were was processed. The appellant collected the steel from the respondent in West Virginia after the work had been done for delivery to itself Ontario.

[4] The allegedly wrongful activity took place in West Virginia and the proper law, whether in contract or in tort, is almost certainly that of West Virginia. Apart from the fact that the appellant is an Ontario corporation, the steel coils giving rise to the [page640] claim are here and the appellant's witnesses as to damages will be from Ontario, there is little to connect this case to Ontario. On this record, it was clearly open to the motion judge to conclude that Ontario should decline jurisdiction on grounds of forum non conveniens.

[5] The conclusion we have reached regarding forum non conveniens is sufficient to dispose of this appeal and accordingly it is not necessary for us to consider the issue of jurisdiction simpliciter.

[6] The motion judge awarded the respondent costs of $36,000 for fees and $5,932.27, both figures inclusive of GST. The appellant seeks leave to appeal the costs order. We grant leave to appeal and allow the appeal.

[7] While the motion judge's costs award is entitled to deference on appeal, in our view, she erred in principle by awarding costs of this magnitude for a motion of this kind. The respondent claimed a counsel fee of $44,535.54 for this motion, based on well over 100 hours of time at a rate of $350 per hour. While the motion judge did reduce the fees by some 20 per cent, we are still left with a very substantial award. This area of law is admittedly complex and the issue was important. However, this case was not complex factually and the argument proceeded on the basis of settled principles of law. The appellant's claim was reduced to approximately $80,000 shortly after this motion was launched. The motion was argued in two hours and there was one day of cross-examinations.

[8] In our view the motion judge erred in principle in awarding $36,000 for counsel fee. The motion judge did not have the benefit of this court's judgments in Boucher v. Public Accountants Council of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 48 C.P.C. (5th) 56 and Moon v. Sher, 2004 39005 (ON CA), [2004] O.J. No. 4651, 246 D.L.R. (4th) 440, both of which emphasize "the overriding principle of reasonableness". In our view, the motion judge erred in failing to stand back from the fee produced by the raw calculation of hours spent times hourly rate and assessing the reasonableness of the counsel fee from the perspective of the reasonable expectations of the losing party. The issue was not, of course, what the respondent's counsel was entitled to charge his or her own client, but rather what amount was reasonable to impose upon the loser. Viewed in that light, we cannot accept that it was reasonable for a motion of this nature to expect the appellant to indemnify the respondent for almost three weeks of work charged at the highest hourly rate under the costs grid.

[9] Accordingly, we grant leave to appeal costs, allow the appeal and reduce the counsel fee to $15,000, an amount we [page641] would still regard as generous in the circumstances. The amount awarded for disbursements was not in issue on appeal.

[10] For these reasons the appeal with respect to costs is allowed, but otherwise the appeal is dismissed. In view of the divided success on appeal, we would award the respondent costs in the amount of $8,000 inclusive of GST and disbursements.