SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO: CV-08-00358859
DATE: 20120216

Parties

RE: Simkeslak Investments Limited, Schooner Corporation Limited, Petobell Holdings Inc., Jayobell Holdings Inc., Phillip Matthews, and Jane Dobell, and Douglas C. Matthews, Thomas A. Matthews, and The Canada Trust Company, each in their capacities as Estate Trustees for the Estate of Arnold Colton Matthews deceased

Plaintiffs

• and -

Kolter Yonge LP Limited and Bazis International Inc.

Defendants

BEFORE: The Honourable Mr. Justice Glenn A. Hainey

COUNSEL:
P. David McCutcheon & Jeremy C. Millard,
for the Plaintiff

Fred Myers & Lauren Butti,
for the Defendant, Kolter Yonge LP Limited

HEARD: Written Submissions

ENDORSEMENT AS TO COSTS

[1] The parties agree that Kolter should be awarded costs but they disagree on the scale and the amount of costs that should be awarded.

Scale

[2] Kolter submits it should be awarded costs on a substantial indemnity basis because the plaintiffs’ allegations were “akin to accusations of fraud” and were unsubstantiated. Kolter argues that the plaintiffs’ claims involved unfounded serious allegations that amounted to “commercial hardball” and therefore warrant an award of substantial indemnity costs. Further, Kolter submits that the plaintiffs’ cross-motion was unreasonable and ought to attract substantial indemnity costs.

[3] The plaintiffs argue that Kolter should only be awarded costs on a partial indemnity scale as substantial indemnity costs are reserved for “the rare and exceptional cases where a party’s conduct in the litigation is reprehensible and justifies the unusual sanction of substantial indemnity costs”. (Hunt v. TD Securities Inc. (2003), 66 O.R. (3d) 481 (C.A.) and Drouillard v. Cogeco Cable Inc., [2007] O.J. No. 2531). They argue that the plaintiffs’ conduct was not reprehensible and their cross-motion was not brought unreasonably. They distinguish the cases relied upon by Kolter on the basis that they involve improprieties and circumstances that are not present in this case.

[4] I agree with the plaintiffs. I do not regard the plaintiffs’ conduct as reprehensible and I do not find that their cross-motion was unreasonable. Although Kolter was the successful party on the motions, I do not regard the positions taken by the plaintiffs as unreasonable. In my view, Kolter should be awarded its costs on a partial indemnity basis.

Amount

[5] Kolter’s claim for partial indemnity costs for the summary judgment motion and the additional costs of the entire action totals $159,003.50. The plaintiffs submit that this amount is excessive and argue that a fair and reasonable range of costs for the motion and the action is $70,000 to $80,000.

[6] The parties agree that in exercising my discretion under Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.33 and Rule 57.01 of the Rules of Civil Procedure, I must arrive at a costs award that is both fair and reasonable and which takes into account the reasonable expectation of the parties.

[7] Given the seriousness of the plaintiffs’ allegations and the large amount at stake in the action, I find that the plaintiffs had to reasonably expect Kolter’s costs to be significant. I have carefully reviewed Kolter’s Costs Outline and I find that the amounts claimed for the various tasks referenced therein appear to be reasonable. I do not find the costs awards relied upon by the plaintiffs in the three other summary judgment motions cited by them to be helpful in assessing a fair and reasonable amount to award Kolter for its costs since the situation in each of those cases was different from this case.

[8] In my view, the total amount claimed by Kolter of $159,003.50 for its costs on a partial indemnity basis is within a range of costs that I find to be fair and reasonable and within the reasonable expectation of the parties. Accordingly, Kolter is awarded its costs for the motions and the action on a partial indemnity basis in the amount of $150,000 payable by the plaintiffs.

HAINEY, J.

DATE: February 16, 2012