COURT FILE AND PARTIES

COURT FILE NO.: CV-11-9143-00CL
DATE: 20120515
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: AUTOWORKERS (AJAX) CREDIT UNION LIMITED IN LIQUIDATION (BY ITS LIQUIDATOR, DEPOSIT INSURANCE CORPORATION OF ONTARIO), Plaintiff

AND:

CUMIS GENERAL INSURANCE COMPANY, Defendant

BEFORE: CUMMING J.

COUNSEL:
Evert Van Woudenberg and James R. Cook, for the Plaintiff
Jamieson Halfnight and Brent Vallis, for the Defendant

COSTS ENDORSEMENT

[ 1 ] The parties have provided written submissions in respect of costs relating to the plaintiff moving party’s unsuccessful motion for partial summary judgment: see Autoworkers (Ajax) Credit Union Limited v. Cumis General Insurance Company, 2012 ONSC 172.

General Principles as to Costs

[ 2 ] Costs are in the discretion of the Court: s. 131, Courts of Justice Act, R.S.O. 1990, c.C.43 and Rule 57.01 of the Rules of Civil Procedure. In Ontario, the normative approach is first, that costs follow the event, premised upon a two-way, or loser pay, costs approach; second, that costs are awarded on a partial indemnity basis; and third, that costs are payable forthwith, i.e. within 30 days. Discretion can, of course, be exercised in exceptional circumstances to depart from any one or more of these norms.

[ 3 ] Rule 57.01 (1) lists a broad range of factors for the court to consider, including the result achieved in the proceeding, the complexity of the proceeding, the importance of the issues and whether any step in the proceeding was improper, vexatious or unnecessary.

[ 4 ] In exercising its discretion, a court must produce a result that is fair and reasonable in all the circumstances: Boucher v. Public Accountants Council (Ontario), (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). In doing so, a court is also to be mindful of the principle of proportionality, namely, that the court shall make orders that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding: Rule 1.04 (1).

[ 5 ] The principles to be applied in the exercising of discretion in fixing costs are authoritatively set forth in Andersen v. St. Jude Medical, Inc., 2006 85158 (ON SCDC), [2006] O.J. No. 508 (Div. Ct.), 264 D.L.R.(4 th ) 557, 145 A.C.W.S. (3d) 786.

Submissions of the Parties

[ 6 ] The defendant responding party, Cumis, seeks costs in the total amount of $116,164.95 on a substantial indemnity basis, invoking Rule 20.06 (a) whereby substantial indemnity costs may be awarded against an unsuccessful moving party if the moving party acted unreasonably in making the motion.

[ 7 ] Cumis refers to failed summary judgment motions in other cases involving DICO and Cumis in support of its argument re costs that DICO acted unreasonably in bringing the motion in the case at hand. My decision is properly based simply upon the summary judgment motion brought before me. In my view, DICO acted reasonably and responsibly in bringing such a motion. In my view, there is no reasonable argument that costs should be awarded on a substantial indemnity basis.

[ 8 ] As stated above, in the normal course costs ordinarily follow the event. However, the losing moving party plaintiff, DICO, submits that although unsuccessful on its motion this was a “close call” in which many of the plaintiff’s arguments were accepted or at least found preferable. The case involves somewhat unique and complex issues. The work undertaken and costs incurred in the motion for summary judgment have a considerable benefit in the action generally and to some considerable extent should not properly be considered as being wasted costs. Hence, DICO argues that exceptionally, in respect of its motion, costs should follow and be payable in the cause. See Marini v. Muller, 2001 CarswellOnt 201 (S.C.J.).

[ 9 ] Notwithstanding the considerable force to DICO’s submission, in my view, the normative rule should apply and costs should follow the event, being awarded on a partial indemnity basis.

[ 10 ] The fees incurred by Cumis for the work of its expert, BDO, in the amount of $36,489.96 should be left aside to follow the cause as determined at trial. Leaving that expert’s fee aside, Cumis seeks $62,849.47 for fees on a partial indemnity basis, inclusive of applicable taxes and all disbursements.

Disposition

[ 11 ] Taking into account the general principles in respect of costs as set forth above, coupled with the relevant factors in the summary judgment motion under consideration, I order that DICO pay costs to Cumis on a partial indemnity basis in the amount of $50,000 for fees plus $6,500 for HST in respect of fees plus $1,669.96 for disbursements, inclusive of HST.

CUMMING J.

Date: May 15, 2012