SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-10-410524

DATE: 20120207

RE: Brett A. McKinstry, Plaintiff

AND: Stone & Co. Limited and Stone Investment Group Limited, Defendants

BEFORE: Pollak J.

COUNSEL: Andrew MacDonald, for the Plaintiff
Allison Taylor, for the Defendants

HEARD: September 20, 2011

ENDORSEMENT RE COSTS

[ 1 ] I have read and considered the submissions of the parties, and I have taken into account the factors set out in rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. I am required to award costs that are reasonable and fair. See Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.).

[ 2 ] The summary judgment motion was dismissed. The parties’ positions with respect to costs is summarized as follows.

[ 3 ] The Plaintiff was entirely successful on the motion. The Plaintiff refers to Defence counsel’s correspondence prior to the motion advising that the issues on the motion should be limited and that an Amended Notice of Motion would be provided. That was not done and the Defendant moving parties proceeded on all issues. The Plaintiff submits that the Defendant’s unreasonable conduct in continuing the motion justifies an award of costs on a full indemnity basis in the amount of $47,720.00 plus disbursements of $2,567.21 for a total of $50,287.21 or alternatively, on a partial indemnity basis in the amount of $36,330 plus disbursements of $2,567.21 for a total of $39,597.21.

[ 4 ] The Defendant relies on a case review that shows that some cost awards in summary judgment motions have been in the $10,000 to $20,000 range with the top award at $30,000. It is submitted that the Plaintiff’s claim of approximately $50,000 (and even at partial indemnity basis of $36,000) is much higher than the average that has been awarded “and not justified on the basis of the record.”

[ 5 ] This court must consider the appropriate costs to be awarded in the circumstances of this particular case and is not in the position to compare the circumstances of those cases to the Defendants to the circumstances of this case.

[ 6 ] Further, the Defendants seek to rely on an “agreement that the relevant pages were before [the court]”. The Plaintiff submits that “[t]here was no agreement by the parties that all relevant sections of all relevant manuals were before the court” as has been alleged by the Defendant. To the contrary, the Plaintiff relied on the fact that certain documents were not produced by the Defendants on their motion even though the contract they were seeking to enforce incorporates these documents by reference.

[ 7 ] The Defendant also submits that specific references in the Plaintiff’s Bill of Costs should be rejected.

[ 8 ] The specific objections to the Plaintiff’s Bill of Costs are:

(a) [T]he Plaintiff repeatedly attended at trial scheduling court without clearing the dates with the Defendants’ counsel. An email communication to him to this effect is attached. All costs associated with those attendances should be disallowed.

The e-mail attached to the defendant’s submissions only mentions that this was done “repeatedly”. The Defendant does not provide further information or indicate how these amounts would be reduced.

(b) [S]ome of the dockets submitted relate to the period before the motion was even brought …

Counsel for the Defendant does not identify these entries. The notice of motion was served on December 7, 2010. My review of the Plaintiff’s Bill of Costs shows that five entries in the plaintiff counsel’s docket are dated before this date. On the partial indemnity scale, the fees for these five entries total $840.

(c) [O]ther [dockets] relate to email communications with the client whose content is unidentified and which may well relate to the litigation as a whole, some relate to time which is essentially clerical in nature in assembling material and arranging for its service, some relates to other letters which are unidentified and may not relate to the motion per se, and some are simply exorbitant ie. the expenditure of 25.8 hours on preparation of the factum on August 31, September 1, September 6-0 and 14, which is wholly unjustified ….

Counsel for the Defendant alleges that some of the dockets relate to email communications with the client where the content is unidentified. Counsel suggests that the communications may relate to the litigation as a whole. On my review of the Plaintiff’s Bill of Costs I note:

(i) Entries that only say “E-mail (or telephone) to/from Client”: Total = $360 (on a partial indemnity scale)

May 17, 2011

June 7, 2011

June 24, 2011

June 28, 2011

July 5, 2011

July 12, 2011

August 15, 2011

August 21, 2011

(ii) Entries that say “E-mail to/from Client” followed by correspondence to counsel for defendant: Total = $270 (on a partial indemnity scale)

June 23, 2011

July 13, 2011

July 25, 2011

(iii) Clerical Work

The following entries seem to relate to clerical work that was done by the lawyer: Total = $1440 (on a partial indemnity scale)

May 12, 2011

May 13, 2011

September 15, 2011

(d) Unidentified Letters

The majority of the letters mentioned in the docket are not identified and it is not possible to assess these amounts.

(e) Exorbitant Time Docketed for Preparation of Factum

Counsel for the defendant alleges that the amount of time billed for preparation of the factum (25.8 hours, or $7,740) was not reasonable and should be reduced by 50% (to $3,870).

[ 9 ] To justify the amount claimed, the Plaintiff relies on the following:

(a) 57.01(0.b) The amount of costs that an unsuccessful party could reasonably be expected to pay.

The intensity of the Motion for Summary Judgment on all the issues in the lawsuit was apparent to the Defendants.

It is submitted that the Defendants, must have been taken to voluntarily assume the risk of the cost consequences of their approach.

(b) Rule 57.01(1)(a) The amount claimed and the amount recovered.

All of the claims of the Plaintiff were asked to be dismissed by the Defendants. The Defendants were unsuccessful.

(c) Rule 57.01(1)(c) The complexity of the proceeding.

The constellation of the factual matrix and the legal issues in dispute including contract interpretation, shareholder rights, compensatory damages, defamation, unilateral contract, and the common employer direction all requiring argument in one day made the motion complex. The Defendants alone relied on 27 authorities. The Motion Records with exhibits were voluminous.

(d) 57.01(1)(f)(i) Whether any step in the proceeding was improper, vexatious or unnecessary.

Counsel for the Defendants conceded in a letter on June 17, 2011 that a number of issues on the Motion for Summary Judgment were likely to be viewed as triable issues and also indicated an Amended Notice of Motion withdrawing certain issues would be forthcoming. Instead the Defendants proceeded on all issues at the Motion.

(e) 57.01(1)(i) Any other matter relevant to the question of costs.

The Plaintiff submits that the Defendants proceeded with the summary judgment motion on issues they knew were likely triable issues, and in the motion they unjustifiably discredited Mr. McKinstry by, for instance, wrongly accusing him of failing the IFIC course in his first attempt. It is submitted that such conduct demonstrates bad faith on the part of the Defendants. Further, specific allegations of delay and bad faith are relied upon by the Plaintiff, but there is no evidence before the court to evaluate these allegations.

[ 10 ] I do not agree that an exorbitant amount of time was spent on the factum. The preparation of a factum is extremely important.

[ 11 ] I do not agree that the Defendants’ conduct in proceeding with the motion was such to merit an award on a substantial indemnity basis, but in considering all of the above and all of the factors in this case, the costs claimed by the Plaintiff are not, in my opinion, outside of the range of what the Defendants could have reasonably expected to pay if unsuccessful. The Defendants should have foreseen that a properly prepared defence to the motion for summary judgment would cost the Plaintiff the amount he has claimed and as such, if the Defendants were unsuccessful in their motion they would be held liable for such costs.

[ 12 ] I therefore award costs on a partial indemnity scale in the amount of $36,330 plus disbursements of $2,567.21 to Mr. McKinstry to be paid by the Defendants. This amount includes all applicable taxes.

[ 13 ] The Defendant is a company which cannot be characterized as unsophisticated in its business dealings. It was very important for the Plaintiff to present a thorough defence to the motion. The Plaintiff’s entire claim against the company could have been dismissed. One of the reasons the Plaintiff was successful in defending this motion was the extensive preparation of counsel for the Plaintiff. The costs claimed to prepare a thorough defence to this motion were, in my opinion, necessary and reasonable in the circumstances of this case. Further, the Defendant, as a sophisticated company, must have reasonably expected that the Plaintiff would incur such costs.

[ 14 ] I find that the Defendants should reasonably have expected that, if unsuccessful, the quantum costs claimed by the Plaintiff would be incurred.

Pollak J.

Date: February 7, 2012