Court File and Parties
CITATION: Pourshian v. Walt Disney Company, 2021 ONSC 7296
DIVISIONAL COURT FILE NO.: 629/19 and 632/16
DATE: 20211103
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Damon pourshian, Appellant/Respondent by Cross-Appeal
AND:
WALT DISNEY COMPANY, WALT DISNEY PICTURES INC., PIXAR ANIMATION STUDIOS, DISNEY ENTERPRISES INC., DISNEY SHOPPING, INC., WALT DISNEY STUDIOS HOME ENTERTAINMENT, DISNEY CONSUMER PRODUCTS AND INTERACTIVE MEDIA, WALT DISNEY STUDIOS MOTION PICTURES and AMERICAN BROADCAST COMPANY, INC., Respondents/Appellants by Cross-Appeal
BEFORE: Favreau J.
COUNSEL: Guy Régimbald, Michael Crichton and Ryan Steeves, for the Appellant/Respondent by Cross-Appeal
Timothy Lowman, for Respondents/Appellants by Cross-Appeal
HEARD at Toronto in writing
ENDORSEMENT
Favreau J.
Introduction
[1] On July 12, 2021, I released a decision granting the appellant’s appeal in part and dismissing the cross-appeal. I awarded costs in the amount of $25,000 to the appellant on the basis of an agreement between the parties.
[2] An issue has now arisen with respect to the costs of the motion before the Associate Judge.
[3] The appellant claims that he should be entitled to the costs of the motion below in the amount of $18,000. He says that I inadvertently failed to address this issue in my decision of July 12, 2021 and that, given that he was substantially successful on the appeal, he should get at least a portion of his costs before the Associate Judge. The respondents argue that the agreement did not contemplate a reversal of the costs order made by the Associate Judge and that I should not revisit the issue of costs.
[4] For the reasons below, I agree with the appellant and I make an order granting costs of the motion below to the appellant in the amount of $18,000.
Background
[5] The appellant has brought a claim for copyright infringement against nine defendants. All defendants, except for one, brought a motion before Associate Judge Graham to set aside service of the statement of claim on the basis that the Ontario court does not have jurisdiction over the claim.
[6] In a decision dated October 15, 2019, the Associate Judge held that service should be set aside with respect to all moving defendants except two. At the end of his decision, the Associate Judge invited the parties to make written submissions on costs.
[7] In a decision dated December 10, 2019, the Associate Judge awarded costs of the motion to the defendants in the amount of $20,000. The Associate Judge made this order based on his finding that the defendants were two-thirds successful on the motion.
[8] The appellant and the two defendants against which the action was not stayed appealed that decision to the Divisional Court. The appeals were argued on October 20, 2021.
[9] In advance of the appeals, the parties uploaded all their materials to CaseLines. Notably, the materials on CaseLines did not include a copy of the Associate Judge’s decision on costs. In addition, the costs outlines uploaded by counsel for both sides addressed the costs of the appeal but did not address the costs of the motions below. The only reference to the costs below in the appellant’s materials on the appeal were perfunctory statements in their respective notices of appeal and facta. Amongst the relief sought in his notice of appeal, the appellant sought “costs of this appeal, and the underlying motion…” and, in their notice of appeal, the appellants by cross-appeal sought “costs of this appeal, and the motion…” In his factum on the appeal, under the heading “Order Sought”, the appellant asked that the appeal be granted “with costs throughout”. The factum on the cross-appeal contained similar language.
[10] At the conclusion of the hearing of the appeal and cross-appeal, I asked counsel to try to agree on costs. On October 23, 2020, counsel wrote to the Court advising that they had reached an agreement. The letter stated as follows:
We represent the Appellants in Court File No. 732/19 and the Respondents in Court File No. 629/19. During the hearing of the appeals on October 20, a request was made that the parties confer on the issue of costs, and advise the Court if an agreement could be reached.
The parties have agreed that, in the event one side entirely wins both appeals, the costs award in favour of Mr. Pourshian or the Disney parties (as the case may be) for both appeals will be $30,000. The costs award will be payable within 30 days, subject only to the disposition of any further appeals. In the event that neither Mr. Pourshian nor the Disney parties entirely prevail in both appeals, the parties are content to leave the determination of costs to your discretion, having regard to the costs outlines, our agreement on $30,000 for complete victory, and the result of the combined appeals. [emphasis added]
[11] In my decision dated July 12, 2021, reported at 2021 ONSC 4840, I allowed the appellant’s appeal as against all but two defendants and dismissed the cross-appeal. In dealing with costs, I made the following order:
Following the hearing, counsel for the parties advised the Court that they had reached an agreement on costs. If one side was entirely successful on the appeal and cross-appeal, that side would be entitled to $30,000. Otherwise, the Court should determine the costs payable having regard to this amount. Mr. Pourshian has been substantially successful on the appeal and cross-appeal. In the circumstances, in my view $25,000 in costs for Mr. Pourshian is a fair amount.
Costs are awarded to Mr. Pourshian in the amount of $25,000 payable within 30 days.
[12] Following the release of my decision, the parties engaged in an exchange of emails for the purpose of settling the order from the appeal decision. In that context, the appellant’s counsel suggested that the order should include a term that the respondents pay $18,000 for his costs of the motion below. The parties did not agree on this issue and attended an appointment before the Registrar to settle the order. The Registrar declined to sign the order as proposed by the appellant and the parties came before me on a case conference. In that context, I agreed to receive submissions on the issue of whether the appellant should be awarded the costs below and, if so, the quantum.
[13] In the meantime, given that the respondents faced a deadline at the Court of Appeal for filing materials on a motion for leave to appeal, the parties agreed that the Registrar could sign an order that included the following term:
THIS COURT ORDERS that costs of both appeals, fixed in the amount of $25,000.00, be payable to Pourshian within thirty (30) days of the date of this Order. In relation to the matter of the costs of the motion below, such matter shall be addressed by way of a case conference with Justice Favreau and the parties.
Positions of the parties
[14] Both sets of parties agree that I am not functus given the terms of the order signed by the Registrar.
[15] The appellant argues that, given that he was substantially successful on the appeal, he should be entitled to a portion of his costs below. He seeks $18,000, which he submits is a reasonable amount given the outcome on the appeal. He argues that this is consistent with the principle that costs should follow the event.
[16] The respondents argue that the parties’ agreement was all encompassing, and that it was meant to address the costs below. On that basis, they argue that the appellant should not be awarded any additional costs for the motion below.
Preliminary issue regarding the appellant’s reply submissions
[17] The appellant served brief reply submissions on the issue of whether the agreement on costs was meant to address costs before the Associate Judge. The respondents object to these reply submissions on the basis that none were contemplated in my case management direction setting a schedule for the exchange of materials.
[18] The appellant’s counsel should not have sent these submissions without first getting the court’s permission. However, given that they are brief and that they address a new issue raised by the defendants, I have reviewed them and considered them in deciding this matter.
Analysis
[19] I find that it is appropriate in the circumstances of this case to make an order awarding a portion of the costs below to the appellant.
[20] As indicated, the parties agree that I am not functus. This is evident from the signed order that carves out the issue of the costs below.
[21] In any event, Rule 59.06(1) of the Rules of Civil Procedure provides that an “order that contains an error arising from an accidental slip or omission or requires amendment in any particular on which the court did not adjudicate may be amended on a motion in the proceeding” [emphasis added].
[22] In Kerr v. Danier Leather Inc., 2005 23095 (Sup. Ct.), the court relied on Rule 59.06(1) to award costs three years after an unsuccessful motion for summary judgment motion in circumstances where the respondent had failed to raise the issue of costs. In that case, at para. 34, the Court held that “[j]udgments or orders should reflect the true intention of the court and the court retains jurisdiction to amend a judgment or order where it does not reflect the court's intention… In the situation at hand, I would have dealt with the issue of costs had it been raised by the plaintiff before the Orders were finalized.” In my view, the same applies here.
[23] In this case, the respondents do not appear to argue that I do not have the authority to address the issue of the costs before the Associate Judge. Rather, they argue that the agreement on costs encompassed the issue of costs below. I am not persuaded by this argument. On its face, the letter of October 23, 2021, addressed the costs of the appeal and not the motion below; as set out above, the letter referred to the costs “for both appeals”.
[24] The respondents purport to rely on their exchange of emails with the appellant’s counsel leading up to that agreement. In my view, while the wording of the letter sent to the court setting out the agreement between the parties is clear, the exchange of correspondence between the parties’ counsel does not detract from that wording. In their email, counsel for the respondents proposed that if their clients were entirely successful on the appeal and cross-appeal, “Disney will be awarded $30K, payable within 30 days of the conclusion of any appeal; the costs order of Master Graham will remain as is”. The correspondence goes on to say that “if Pourshian prevails on his appeal and the Disney appeal is dismissed, Pourshian will be awarded $30K, payable within 30 days subject only to the disposition of any further appeal.” In a subsequent email, the appellant accepted this proposal. Notably, while the proposal addressed what would happen to the costs below if the respondents were entirely successful, it is silent on what would happen to the costs below if the appellant was successful. It is hard to imagine that the agreement was meant to address the costs below as they relate to success by the appellant. If the appellant had been entirely successful on the appeal, there would be no basis for him to agree to forego a reversal of the order from the motion below. In any event, as set out in the letter, the agreement only applied if one side was entirely successful. Otherwise, the parties agreed that I could exercise my discretion to award costs based on various factors and the agreement is therefore not binding on the Court. My role at this point is to determine what is fair and reasonable in the circumstances of the case.
[25] I accept that inadvertence led to what happened here. However, the inadvertence was not on the part of the court. As mentioned, the parties did not upload the Associate Judge’s costs order to CaseLines nor did they address the issue at any time, including in their letter to the Court on March 23, 2020. Nevertheless, as in Kerr, the respondents should not be allowed to take the benefit of the appellant’s inadvertence. In the normal course, costs follow the event. There is no reason for departing from that principle in this case. Other than reliance on the agreement, the respondents have not argued that they will suffer any prejudice if the court addresses the issue of the costs before the Associate Judge at this point.
[26] In terms of quantum, the respondents argue that the appellant should not be awarded any costs for the motion before the Associate Judge because they were essentially successful on the motion. Alternatively, they argue that $18,000 is too high. I reject both these arguments.
[27] The outcome of the appeal is that the court found that the action can proceed in Ontario against seven of nine defendants. Six of those defendants opposed the Ontario court’s jurisdiction and it is hard to see how, overall, this remains a victory for the defendants as a whole.
[28] I also find that the amount of $18,000 proposed by the appellant is reasonable. While the appellants argue that this amount is too high for various reasons, an award of costs is not a mathematical exercise; the court is to award an amount that is fair and reasonable in the circumstances. The Associate Judge had awarded $20,000 to the respondents based on his review of the bills of costs and relative success of the parties. The appeal decision essentially reverses the outcome before the Associate Judge. It is now the appellant who was approximately two-thirds successful. $18,000 in costs is reasonable in the circumstances.
Conclusion
[29] Accordingly, I grant the appellant’s request that my order of July 12, 2021 be amended to order that the appellant is entitled to costs in the amount of $18,000 all inclusive for the motion below. This amount is to be paid within 30 days of today’s decision.
[30] Under the circumstances of how this issue arose, I make no order related to the costs incurred by the parties in participating in the case conference or making written submissions on the issue of the costs before the Associate Judge.
Favreau J.
Date: November 3, 2021