COURT FILE NO.: CV-08-00365112

DATE: 20120718

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: IPEX Inc., Plaintiff / Responding Party

AND:

Lubrizol Advanced Materials Canada Inc., and Lubrizol Advanced Materials, Inc., Defendants / Moving Parties

BEFORE: Justice E. P. Belobaba

COUNSEL:
Peter E.J. Wells and Joanna Vatavu for the Moving Parties / Defendants

Benjamin Zarnett and Jessica Kimmel for the Responding Party / Plaintiff

HEARD: February 23 and May 10, 2012 with additional written submissions

costs award

[ 1 ] In a decision released on May 18, 2012, I dismissed the defendants’ motion for summary judgment. The plaintiff is therefore entitled to costs on a partial indemnity basis. The question is how much. There are two issues: apportionment and quantum.

[ 2 ] The plaintiff succeeded on three of the four main arguments that were before me: the limitations issue, the implied condition of fitness for purpose and the post-contractual conduct issue. The defendants were successful in their submission that the disclaimer clause excluded the negligence (and indemnity) claim - the negligence claim was therefore effectively dismissed. This was a significant success for the defendants but it accounted for about 25% of the motion. In terms or overall apportionment, considering each side’s time and effort as reflected in the material filed on this motion, my best estimate is 3:1. In other words, the costs award payable to the plaintiff should be reduced by 25%.

[ 3 ] This was a relatively complicated and hard-fought motion. Given what was at stake, namely the plaintiff’s multi-million dollar damages claim, both sides spent a great deal of time not only on the motion but also on the supplementary submissions that were requested by the court. I was not surprised to discover that each side’s costs even on a partial indemnity basis were at or over $100,000.

[ 4 ] The plaintiff asks for about $140,000 in fees and about $2500 in disbursements. The defendants, however, point out that the plaintiff had six lawyers billing time on this matter, four of whom were senior counsel with more than ten years. The defendants, on the other hand, were able to prepare and argue the motion with one senior lawyer and one junior lawyer (plus two very brief consultations with two other senior lawyers that together totalled about three hours.) The plaintiff’s legal team docketed about 540 hours overall; the defendants’ about 400 hours.

[ 5 ] The defendants say that a fair and reasonable costs award should take into account that the time spent on this motion by the plaintiff exceeded the time spent by the defendants by about 35%. There is merit in this submission. However, a purely arithmetical comparison of docketing time or senior lawyer counts, although instructive, is not necessarily reliable and should never, by itself, be determinative. In my view, having reviewed the costs outlines and the complexity of the legal issues, a reduction of about 20%, rather than the suggested 35%, would be appropriate.

[ 6 ] Taking the $140,000 requested by the plaintiff as the starting point, I reduce this amount by 20% to $112,000. I then add the $2500 in disbursements and apportion the $114,500 quantum on a 3:1 basis. This leads to a costs award, on a partial indemnity basis, of $85,875, exclusive of taxes. Standing back and considering again the factors set out in Rule 57.01 and the Court of Appeal’s admonition in Boucher v. Public Accountants Council of Ontario, (2004) 71 O.R. (3d) 291 (ON CA)[^1] I am satisfied that a costs award of $85,000 all-inclusive is fair and reasonable.

[ 7 ] Costs are therefore fixed at $85,000 payable forthwith to IPEX by Lubrizol.

Date: July 18, 2010 Belobaba J.

[^1]: My primary obligation as a judge in fixing costs is to consider the factors set out in rule 57.01(1) and fix an amount that is fair and reasonable to the unsuccessful party in the particular proceeding rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council of Ontario, (2004) 71 O.R. (3d) 291 (ON CA) at para. 26 .