SUPERIOR COURT OF JUSTICE - ONTARIO
COMMERCIAL LIST
Court File No.: CV-11-9476-00CL
Date: 2012-04-23
BETWEEN:
ROYAL LASER CORP. and VENTURE STEEL INC .
Plaintiffs
- and –
RUBEN RIVAS, 1452939 ONTARIO LIMITED, CASSELS BROCK & BLACKWELL LLP and STIKEMAN ELLIOT LLP
Defendants
BEFORE: Justice Newbould
COUNSEL:
William E. Pepall and Jason Squire, for Cassels, Brock & Blackwell LLP
P. James Zibarras and Kevin D. Toyne, for the plaintiffs
Kimberly Boara Alexander, for the Rivas defendants
E N D O R S E M E N T
[ 1 ] On March 1, 2012 I dismissed this action by the plaintiffs against the defendants Cassels, Brock & Blackwell LLP ("Cassels") on a motion for summary judgment and ordered costs of the action in the favour of Cassels. On February 14, 2012, the date when the motion for summary judgment by Cassels was argued, I made an order on consent dismissing the action against Ruben Rivas and 1452939 Ontario Limited ("the Rivas defendants") with costs to be paid to the Rivas defendants in an amount to be agreed or determined by the court. Those costs have not been agreed.
[ 2 ] Cassels seeks costs on a partial indemnity basis of approximately $72,000 plus HST and disbursements inclusive of HST of $6,810 for a total of approximately $88,300. The Rivas defendants claim costs on a partial indemnity basis of approximately $91,000 plus HST and disbursements inclusive of HST of $10,600, for a total of approximately $102,250. The plaintiffs assert that Cassels should be entitled to costs of $20,000 and the Rivas defendants to costs of $10,000.
[ 3 ] Cassels had earlier brought a motion before Marrocco J. to strike out the statement of claim on the basis it disclosed no cause of action. The motion was successful and costs of $25,000 plus disbursements and HST were ordered to be paid by the plaintiffs to Cassels. On appeal the decision was reversed and the Court of Appeal awarded costs to the plaintiffs for the motion before Marrocco J. of $7,500 inclusive of disbursements and HST. How that sum was arrived at was not explained. The plaintiffs assert that this cost order of $7,500 is instructive for an appropriate range for Cassels.
[ 4 ] Cassels has not included in their cost claim before me anything for the work done on the prior motion to strike the statement of claim, but it is asserted by the plaintiffs that the records on the prior motion and on the motion for summary judgment were largely the same and thus much of the work for which costs are now sought should be deducted. In particular, it is claimed that portions of the factum on the motion to strike the statement of claim are the same as in the factum on the motion for summary judgment. With respect to the preparation of the affidavit material claimed by Cassels, it appears that none of that work claimed was from the previous motion to strike the statement of claim. The argument, of course, on a motion for summary judgment is much broader involving spending some time on establishing that there are no material factual differences requiring a trial, but I would in the circumstances make some deduction for the work done on the factum.
[ 5 ] With respect to the bald assertion by the plaintiffs of what the amount is that should be ordered, I find such statements of little help. The plaintiffs have not provided any information of the amount of work done on their behalf by their solicitors. While they are not obliged to have provided that information, it would have been helpful and it can be assumed that as much work was done on behalf of the plaintiffs as on behalf of the defendants.
[ 6 ] In Risorto v. State Farm Mutual Automobile Insurance Company (2003), 2003 43566 (ON SC) , 64 O.R. (3rd) 135, Winkler J. (as he then was) stated:
The attack on the quantum of costs, insofar as the allegations of excess are concerned, in the present circumstances is no more than an attack in the air. I note that State Farm has not put the dockets of its counsel before the court in support of its submission. Although such information is not required under Rule 57 in its present form, and the rule enumerates certain factors which would have to be considered in exercising the discretion with respect to the fixing of costs in any event, it might still provide some useful context for the process if the court had before it the bills of all counsel when allegations of excess and "unwarranted over-lawyering" are made. In that regard, the court is also entitled to consider "any other matter relevant to the question of costs". (See rule 57.01(1)(i).) In my view, the relative expenditures, at least in terms of time, by adversaries on opposite sides of a motion, while not conclusive as to the appropriate award of costs, is still, nonetheless, a relevant consideration where there is an allegation of excess in respect of a particular matter.
[ 7 ] In Frazer v. Haukioja , 2010 ONCA 249 , it was contended that the trial judge erred in awarding costs against the defendant. LaForme, J.A. for the court stated:
Dr. Haukioja argued before the trial judge that Grant Frazer's counsel docketed almost twice as much time as his own. This, he says is relevant to Dr. Haukioja's reasonable expectations and establishes that he could not reasonably have expected Mr. Frazer's counsel to have invested so much more time than his own.
The answer to this argument is found in the submissions of Grant Frazer that were made to this court.
In making his finding with respect to the application of that part of rule 57.07(1)(0.b) “the amount of costs that an unsuccessful party could reasonably expect to pay…” the trial judge noted Mr. Haukioja’s failure to provide adequate information as to his own legal costs incurred. He also agreed with the observations of Nordheimer J. in Hague v. Liberty Mutual Insurance Co. , 2005 13782 (ON SC) , [2005] O.J. No. 1660 at para.16 that, “the failure to volunteer that information may undermine the strength of the unsuccessfully part’s criticisms of the successful party’s requested costs.” In that regard, his decision is entirely consistent with the authorities, and in particular the dicta of the Divisional Court in Andersen , “the inference must be that the [unsuccessful] Defendants devoted as much or more time and money” as did the successful Plaintiffs: Andersen v. St. Jude Medical Inc ., 2006 85158 (ON SCDC) , [2006] O.J. No. 508 (Ont. S.C.J.) at paras. 24 to 27 .
[ 8 ] If the time spent on the various matters by Cassel’s solicitors on its face looked excessive, that would be a factor to be taken into account. However my review of the time claimed does not so indicate.
[ 9 ] This was an action in which there was both a motion by the plaintiffs to stay the summary judgment motion of the defendants, which was withdrawn by the plaintiffs on the day it was scheduled to be argued, and for which “wasted costs” were ordered by Cumming J. to be dealt with on the return of the summary judgment motion, and this motion for summary judgment involving a close review of a factual record. It involved several attendances at 9:30 a.m. appointments and involved a number of affidavits and cross-examination on six deponents. As in any claim for negligence against a professional, and in this case against several professionals at Cassels, it could be expected that the matter would be vigorously contested.
[ 10 ] The hourly rates claimed by Mr. Pepall (called in 1976) of $300 and of Mr. Squire (called in 2000) of $225 are reasonable. If anything, the rate for Mr. Pepall is less than what in my view could be claimed, and is obviously driven by the fact that the defence was funded by LawPro which has a lower fee schedule than the fees that would normally be charged to corporations or law firms for this kind of work. In my view that fact that LawPro has this low rate is no reason to be reducing what would otherwise be a reasonable partial indemnity rate.
[ 11 ] I see no reason why the claim for costs thrown away on the withdrawn motion of the plaintiffs to stay the summary judgment motion should not be allowed. On the face of it, it is not clear that the work done was useful in defending the summary judgment motion, but I must be cognizant that some of it might have been.
[ 12 ] Taking into account the factors referred to in rule 57.01(1) and considering what would be an overall reasonable cost award, including what the plaintiffs could reasonably expect to pay, I fix the cost to be paid by the plaintiffs to Cassels in the amount of $75,000 inclusive of disbursements and HST.
[ 13 ] Regarding the claim for costs on behalf of the Rivas defendants, I have some difficulty with the amounts claimed. On their face, several of the items appear to have far too many hours claimed. It appears that a great deal of the costs sought is for dealing with clients and not for the various tasks covered by the rules and applicable tariff. I do not include in this criticism time that would be spent with preparing a client for cross-examination on an affidavit or examination for discovery. Part 1 of Tariff A provides for “a fee for any step in a proceeding authorized by the rules… and counsel fee for motions, applications, trials, references and appeals” to be determined in accordance with s. 131 of the Courts of Justice Act and the factors in rule 57.01(1). While costs are a discretionary matter for a judge, proceedings not authorized by the rules should not be included in a cost order and discussions with clients and correspondence not directly germane to the particular step in the action should not be allowed. See Saltsov v. Rolnick , [2010] O.J. No. 5606 (Div. Ct) disallowing a claim for work in connection with voluntary mediation not required by the rules.
[ 14 ] $13,402 is claimed under the heading General Preparation, File Analysis, Determination of Strategy for the following:
Including (but not limited to) telephone discussions with clients, solicitors, and the Court; preparation of correspondence to clients, the Court and solicitors; receipt and review of correspondence and documentation; obtaining and reviewing legal research in preparing opinion; attendance at meetings with clients.
[ 15 ] Virtually all of this is not a proper item for a cost award on a partial indemnity basis. Meetings with clients, preparing opinions, and calls with and correspondence to clients generally are not in my view properly chargeable. None of this has anything to do with any particular proceeding. I do not see opinions to clients as ever being allowable.
[ 16 ] Telephone discussions with clients, solicitors and the Court are included in several heads of work claimed, as is correspondence with clients, solicitors and the Court. I recognize that discussions with clients regarding some things such as pleadings and examinations may be necessary, but I fail to see how communications with “the Court”, without more information, are properly chargeable.
[ 17 ] The plaintiffs take the position that because they raised settlement discussion shortly before the date for the argument of the motion for summary judgment, work done by the Rivas defendants in finalizing their written submissions should be disallowed. I disagree. The action against the Rivas defendants was not settled by the date that their factum was due and they had to take the prudent step to prepare and file all necessary materials. No time for arguing the motion is claimed as the motion was settled without the need to attend in court to argue it.
[ 18 ] One of the items claimed is $1,595 for a motion for particulars that was not proceeded with. Included in the work charged are telephone discussions with clients, solicitors, and the Court, preparation of correspondence to clients, the Court and solicitors, receipt and review of correspondence and documentation, attendance at meetings with clients, preparation of motion materials including notice of motion and affidavits. Why this material was prepared in the first place is problematic. When the statement of claim was first served in January 2009, Mr. Zibarras advised that they were in the process of appealing the decision of Echlin J. and were agreeable to having the matter stayed until the appeal was finalized. In spite of that, a request to inspect documents and a demand for particulars was served on behalf of the Rivas defendants. Mr. Zibarras again pointed out that if the appeal were successful, the new action would be moot and he questioned why costs were unnecessarily being incurred. After the appeal from the decision of Echlin J. was dismissed, no motion for particulars was brought by the Rivas defendants. Even if all of the description of the work claimed for this item was properly claimed, of which I am very doubtful, I would not allow any of the claim.
[ 19 ] A claim of $4,165 is made for work done on a motion for leave to issue a third party claim against Cassels and Stikeman. Included in the description of the work done are telephone discussions with clients, solicitors, and the Court, preparation of correspondence to clients, the Court and solicitors and receipt and review of correspondence and documentation. Again, why all of this work was done is problematic. The plaintiffs took the position that such a motion was premature until it was known whether the two law firms would be made defendants, which was the subject of a pending motion, in which case cross-claims could be made. The two law firms objected to the order sought adding them as third parties. Morocco J. dismissed the motion to add the two law firms as defendants and in his endorsement also dismissed the motion to add the two law firms as third party defendants. Apparently Morocco J. had not realized, or had forgotten, that during the argument the parties had agreed to adjourn the motion to add third parties, and he issued a subsequent endorsement adjourning the motion. Once the appeal from the order of Morocco J. was allowed and the action proceeded, the Rivas defendants did not make any cross-claim against the two law firms. In my view a substantial deduction for this claim should be made.
[ 20 ] The hourly rates claimed by Mr. Colson (called in 1979) of $350 and of Ms. Alexander (called in 2002) of $225 are reasonable.
[ 21 ] Taking account the factors referred to in rule 57.01(1) and considering what would be an overall reasonable cost award, including what the plaintiffs could reasonably expect to pay, I fix the cost to be paid by the plaintiffs to the Rivas defendants in the amount of $65,000 inclusive of disbursements and HST.
Newbould J.
DATE: April 23, 2012