CITATION: 1022403 Ontario Ltd v. Man-Shield (NWO) Construction and Rainy River District School Board, 2019 ONSC 2416
DIVISIONAL COURT FILE NO.: DC-18-010-00
COURT FILE NO.: CV-10-019-00
DATE: 2019-04-16
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
1022403 ONTARIO LTD. c.o.b. as MIRMIL PRODUCTS
Plaintiff (Respondent)
- and -
MAN-SHIELD (NWO) CONSTRUCTION INC. and RAINY RIVER DISTRICT SCHOOL BOARD
Defendants (Appellants)
C. Skipper, for the Plaintiff (Respondent)
R. Johansen, for the Defendants (Appellants)
HEARD: via written submissions
Madam Justice T. J. Nieckarz
Reasons on Costs
OVERVIEW:
[1] These Reasons on Costs relate to the Respondent’s motion for security for costs of the pending appeal as against the Appellant, brought pursuant to Rule 61 of the Rules of Civil Procedure. The motion was heard by me on October 4, 2018, and was dismissed by reasons delivered January 4, 2019.
[2] The Appellant (“Man-Shield”) now seeks costs of the motion in the amount of $12,255.13 inclusive of fees, disbursements and H.S.T. The Respondent (“Mirmil”) does not dispute Man-Shield’s entitlement to costs as the successful party. At issue is the quantum of costs and whether costs should be ordered payable in any event of the cause as requested by Mirmil.
Legal Principles:
[3] An award of costs is a matter in the discretion of the judge by virtue of s. 131(1) of the Courts of Justice Act. Rule 57.01 of the Rules of Civil Procedure sets out the factors to be considered by the court in determining costs. Read in conjunction with s. 131 of the Courts of Justice Act, the court has wide discretion (Steinberg et. al. v. Adderley, 2019 ONSC 1524 at para. 15).
[4] A costs award must be fair and reasonable. It should also reflect the reasonable expectations of the parties and seek to balance the indemnity principle with the fundamental objective of access to justice. (Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.) at paras. 37-38; Andersen v. St. Jude Medical Inc. at para. 22).
Position of Man-Shield:
[5] Man-Shield takes the position that an award of costs on a partial indemnity basis in the amount of $12,555.13 is a fair and reasonable amount for Mirmil to pay based on the Rule 57.01 factors and the circumstances of this case. Specifically, Man-Shield argues:
a) The time was reasonably spent and the costs reasonably incurred in defence of the motion.
b) The motion was “reasonably complex” due to the existing case law and inherent nature of motions for security for costs. The law and its application to the facts of this case required a careful analysis to properly prepare and present the case.
c) The issue was of importance to Man-Shield and its ability to pursue an appeal without the added financial burden or prejudice of an order for security for costs.
d) Mirmil’s conduct in pursuing the motion, particularly once it received Man-Shield’s response to the motion and financial disclosure, was unreasonable.
e) Man-Shield made an offer on September 7, 2018 for a “dismissal of motion without costs” that remained open until after the commencement of the motion.
f) Not having provided its own Bill of Costs, Mirmil’s submissions as to the reasonableness of Man-Shield’s Bill of Costs should not be accepted. Man-Shield relies on Smith Estate v. Rotstein, 2011 ONCA 491, 2011 CarswellOnt 5677 (C.A.) at para. 50, which provides that:
In my view, there is no requirement for the losing party, who is not seeking costs, to file a bill of costs although it is preferable that he or she does so. However, if the losing party chooses not to file a bill of costs, this is a factor that the judge, who is assessing costs, may take into account when considering the reasonable expectations of the losing party.
Position of Mirmil:
[6] Mirmil takes the position that $6,506.26 inclusive of fees, disbursements and H.S.T. is a fair and reasonable amount for it to pay on account of the unsuccessful motion. Overall, Mirmil takes issue with the amount of time expended by Man-Shield’s counsel in the defence of the motion and takes the position that it was excessive in the circumstances of the case. Specifically, Mirmil argues that:
a) A total of 44 hours for two lawyers to work on the materials for the motion is excessive and “wholly outside the norm”, taking into consideration that Man-Shield’s responding materials comprised of two Affidavits, one of which was 3 pages long and the other was 7 pages. The Factum was 15 pages long. Mirmil submits that a total of 24 hours is more than sufficient for the product that was filed and submits that the Bill of Costs of Man-Shield should be reduced accordingly.
b) Similarly Mirmil takes issue with the time claimed for Man-Shield to respond to written interrogatories. The time claimed is 8.5 hours. Mirmil states that of 20 questions that were asked, only 13 were answered and of those questions answered, 3 of the questions simply referred to attached documents. Mirmil submits that 5 hours is reasonable.
c) Mirmil further submits that the 7 hours claimed by Man-Shield for counsel preparation and attendance at the motion is excessive. The oral argument of the motion took less than an hour. Mirmil submits that even allowing for generous travel time and waiting time for the motion (which completed just prior to noon), 4 hours is ample.
d) Mirmil takes no issue with the 2 hours of preparation claimed for costs submissions or the disbursements claimed.
Analysis:
[7] I agree with the position of Mirmil that the amount claimed by Man-Shield on account of costs of the motion is excessive. While the issue may have been of some importance to each party, it was not overly complex and the brevity of the materials both with respect to the affidavits and the facta submitted, along with the brevity of argument at the hearing of the motion reflect this. There also appears to be some duplication of work as between junior and senior counsel that warrants a discount.
[8] Having said this, while I agree that a discount in the amount claimed by Man-Shield is warranted, I am not inclined to order the amount suggested by Mirmil. Absent a Bill of Costs from Mirmil that gives me some indication of the time spent by Mirmil’s counsel with respect to the motion, it is difficult to assess its position with respect to its expectation of costs incurred by Man-Shield. While not obliged to disclose what it expended on costs with respect to the motion, the lack of evidence of what Mirmil expended is relevant to the determination of what is reasonable and what it might reasonably have expected to pay. The failure to provide this evidence somewhat diminishes Mirmil’s criticism of Man-Shield’s costs claims. See Amelin Resources, Inc. v. Victory Energy Operations, L.L.C., 2019 CarswellOnt 309, 2019 ONSC 239, 300 A.C.W.S. (3d) 255 (Ont. S.C.J.) at para. 16.
[9] Having considered the parties’ submissions, Rule 57.01 and Man-Shield’s Bill of Costs, I find that a reasonable award of costs for the motion for security for costs is $7,500.00 inclusive of H.S.T. and disbursements. The most significant reduction in Man-Shield’s claim for costs derives from the time spent preparing materials for the motion.
[10] With respect to payment of costs, Rule 57.03(1)(a) provides that costs shall be ordered payable within 30 days unless the court is satisfied that a different order would be more just. Mirmil argues that costs payable in any event of the cause is a more just disposition.
[11] Mirmil argues that Man-shield currently has an Order for costs made against it by the Honourable Madam Justice Pierce from the trial judgment of $386,000.00. If Man-Shield is successful in the appeal, the costs will simply be payable by Mirmil at the conclusion of the appeal, along with any other costs ordered by the Divisional Court. If Man-Shield is unsuccessful in the appeal before the Divisional Court, the costs of this motion will simply be deducted from any costs payable to Mirmil by Man-Shield.
[12] Man-Shield filed responding submissions to Mirmil’s submissions on costs, but did not address this issue and took no position. Despite this, pursuant to Rule 57.03(1)(a) I must still be satisfied that the order requested by Mirmil is more just than requiring costs payable within 30 days.
[13] In the circumstances of this case I find that there is no reason to displace the presumptive rule that costs are to be payable within 30 days. Rule 57.03(1)(a) presumes a “pay-as-you-go” model for costs of interlocutory proceedings. The merits of the overall case and whether the costs awarded on account of the trial against Man-Shield will be upheld by the Divisional Court remains to be determined. There is no evidence that Man-Shield will be unable to pay the costs ordered at trial or the costs of the appeal to Mirmil, so as to necessitate a set-off of the costs of this motion. There is no evidence of financial hardship to Mirmil if it is required to pay the costs of the motion within 30 days. As such, costs are ordered payable within 30 days of the date of this decision.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz
DATE: April 16, 2019
CITATION: 1022403 Ontario Ltd v. Man-Shield (NWO) Construction and Rainy River District School Board, 2019 ONSC 2416
DIVISIONAL COURT FILE NO.: DC-18-010-00
COURT FILE NO.: CV-10-019-00
DATE: 2019-04-16
SUPERIOR COURT OF JUSTICE - ONTARIO
1022403 ONTARIO LTD. c.o.b. as MIRMIL PRODUCTS
Plaintiff (Respondent)
- and -
MAN-SHIELD (NWO) CONSTRUCTION INC. and RAINY RIVER DISTRICT SCHOOL BOARD
Defendants (Appellants)
Reasons on Costs
Nieckarz J.
DATE: April 16, 2019
/lv