COURT FILE NO.: CV-10-8995-00CL
DATE: 20120725
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
BETWEEN:
Frank D’Addario, 1301965 Ontario Inc., and D’Addario Family Trust
Plaintiffs
– and –
EnGlobe Corp., Tony Busseri and Roberto Sansone
Defendants
P. Jervis, for the Plaintiffs
P. Howard and B. Brooksbank, for the Defendant, EnGlobe Corp.
A. Crawley and K. McGrann, for the Defendant, Tony Busseri
HEARD: September 12, 14, 15, 16, October 19, 20 and November 3, 2011; subsequent written cost submissions.
D. M. Brown J.
I. Positions of parties on costs for this hybrid trial
[1] By trial Reasons for Judgment dated March 30, 2012 (2012 ONSC 1918) I dismissed the plaintiffs’ action against the defendants and set a timetable for the filing of written cost submissions. The parties have filed their submissions.
[2] The defendant, EnGlobe Corp., claims, on a partial indemnity basis, total fees of $348,411.71, together with disbursements of $33,792.62. The defendant, Tony Busseri, claims, on a partial indemnity basis, fees totaling $266,894.85, together with disbursements of $13,041.99.
[3] In response the plaintiffs submitted that each party should bear its own costs. Alternatively, the plaintiffs argued that the partial indemnity costs sought by the defendants were grossly excessive. The plaintiffs filed detailed critiques of the costs claimed by both defendants, as well as their own bill of costs.
II. Entitlement to costs
[4] The plaintiffs advanced three arguments as to why, in this “highly unique case”, the court should not award costs to any party:
(i) First Argument: A finding of unlawful conduct was made against the defendants, even though it did not rise to the level of oppressive conduct; this unlawful conduct provoked the litigation; and, the case law permits the denial of costs to a successful party who provoked the litigation;
(ii) Second Argument: Many of the documents which grounded the oppression claim were in the possession of the defendants and only became known to the plaintiffs in 2010; and,
(iii) Third Argument: The plaintiffs, as minority shareholders, were deprived of their ability to vote or sell their shares while the injunction remained in place.
[5] The defendants succeeded on all issues at trial. I do not accept the plaintiffs’ submissions that no costs should be awarded. As to their First Argument contending that unlawful conduct by the defendants provoked them to sue, I assume the plaintiffs are referring to the following portion of my Reasons for Judgment:
[231] That said, Mr. Busseri’s transmittal of the information to Mr. Sansone by email did not accord with the request process prescribed by section 21 of the CBCA. EnGlobe should not have used the informal means of an email to respond to an oral request by Mr. Sansone for information about the D’Addario shares. To that extent EnGlobe’s conduct breached the reasonable expectation of a shareholder that the company would follow the disclosure mechanisms specified in section 21 of the CBCA.
[232] But did such a breach of the reasonable expectation of complying with the statutory disclosure process constitute conduct by Englobe, or its CEO, which fell within the terms "oppression", "unfair prejudice" or "unfair disregard" of a relevant interest? In my view it did not for two reasons.
[6] That analysis must be read in light of my overall findings in respect of the plaintiffs’ oppression claim:
[253] I have concluded that the specific acts of the EnGlobe Defendants, when looked at separately, did not constitute oppressive or unfair conduct. Stepping back and looking at them together as a whole, does that picture change? In my view it does not. The harm about which the plaintiffs complain – the freezing of their shares – resulted from a court order to which they consented in the context of an action brought by Mr. Sansone, who was represented by independent counsel. EnGlobe did not direct Mr. Sansone to start that litigation; it did not enter into an agreement with him that he should sue Mr. D’Addario; it did not agree to fund the litigation; it did not direct the litigation. The conduct of the EnGlobe Defendants, when looked at either singly or cumulatively, did not effect an oppressive or unfair result on the plaintiffs. I therefore dismiss their claim under section 241 of the CBCA.
[7] Moreover, my findings on the issues of res judicata and the limitations period foreclose any serious argument by the plaintiffs that the defendants’ conduct in respect of the August 10 Email “provoked” them to sue following their receipt of a very healthy settlement in May, 2006. Specifically, I found as follows:
[282] Consequently, I conclude that by June, 2006 the plaintiffs had had ample opportunity to raise the issues of oppression and conspiracy to injure. Indeed, they specifically raised the issues in the D’Addario Pledge Action, as well as in their affidavits and factums in the Consolidated Pledge Action. The plaintiffs, who throughout were represented by counsel, had the opportunity to raise the issues advanced in this present action in the prior action and, if they had intended to pursue those allegations, they should have done so in the prior action. It is evident that they did not do so because they had negotiated a very healthy settlement with EnGlobe which they did not want to endanger. As Ferne D’Addario put it in her March 21, 2006 affidavit:
- In any event, after a very difficult period, the parties have managed to put this litigation behind them. This settlement will allow us to move forward with the only remaining litigation being Mr. Sansone’s claim…
The EnGlobe Defendants have successfully established that the principle of cause of action estoppel bars the issues pleaded by the plaintiffs in the present action.
[287] When did the plaintiffs know enough facts upon which to base an allegation of oppression against the EnGlobe Defendants and assert a statutory, not common law, claim against them? The factual analysis conducted above for the res judicata issue applies equally to the limitations period question. The plaintiffs knew enough facts on which to make an allegation of oppression by the end of May, 2006. They effectively made such an allegation in their February, 2006 factum, Ferne D’Addario’s February 24, 2006 email to Kevin O’Leary and Frank D’Addario’s May 28, 2005 email to Mr. Busseri. The discovery of the Computershare Email by the plaintiffs in September, 2006 did not restart the limitations period. In any event, the plaintiffs still waited more than two years until October 14, 2010 before amending their claim to assert an oppression claim.
[8] The Second and Third Arguments of the plaintiffs are simply attempts to re-argue issues which I decided against them at trial.
[9] There is no basis upon which to deprive the successful defendants of costs. They are entitled to awards of costs on a partial indemnity basis.
III. Quantum of costs: general principles
[10] No party sought an order referring the quantum of costs to an assessment before an assessment officer. Having reviewed the cost submissions I am satisfied that I can fix fair and reasonable costs on the basis of the materials filed by the parties. In fixing costs I need not conduct a line-by-line analysis, but given the large amount of costs claimed I must conduct a careful review of each bill of costs and consider the critiques made by the plaintiffs. Further, I must take into account the factors enumerated under Rule 57.01, including the time spent, the result achieved, and the complexity of the matter, as well as the application of the principle of proportionality in Rule 1.04(1.1).
[11] As well, I must consider the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3rd) 291 (C.A.) and Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.), specifically that the overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant. To that end, I have reviewed the Bill of Costs filed by the plaintiffs which I found most helpful in measuring, in part, the reasonable expectations of the unsuccessful parties with respect to costs.
IV. Quantum of costs: Hybrid trials using a combined written and oral records for witness evidence
[12] The trial conducted before me was a hybrid one in which the parties called viva voce evidence from key witnesses and, in addition, filed an extensive evidentiary record consisting, in part, of affidavits from key and other witnesses which had been prepared for and/or used on prior steps in this proceeding and the Sansone Pledge Action, as well as a large volume of transcripts of cross-examinations and examinations for discovery. In my Reasons for Judgment I described the extent of the written record filed at trial:
[14] The parties agreed that in addition to the viva voce evidence adduced at trial, and the associated briefs of exhibits, the evidentiary record for the trial would also consist of a large volume of affidavits previously sworn by parties and other witnesses in this proceeding (Ex. 1), the various cross-examinations thereon and related examinations (Ex. 3), an Agreed Statement of Facts (Ex. 2), and an affidavit sworn by Mr. Wesley Hall (Ex. 5). Counsel stated that some of the Exhibit 1 affidavits might not bear much relevance in view of the more limited issues put in play at trial. That was an understatement. If they were so irrelevant I query why they were filed in the first place. Nonetheless, in preparing these Reasons I have reviewed all of that evidence.
[13] I commend counsel for agreeing to use a hybrid form of trial for the adjudication of this proceeding. Hybrid trials, in my view, must see much greater use in our Court if the judiciary can hope to make timely justice available to the large number of litigants who appear before us.
[14] The submissions in the present case raised two issues of general importance about the cost-consequences of using a hybrid trial format. First, in considering the complexity of the proceeding (Rule 57.01(1)(c)) claims for trial preparation cannot be measured simply against the actual length of the hybrid trial conducted before the judge, in this case 5.5 days for evidence and 2 days of final argument. Since a judge must consider all of the evidence adduced on a hybrid trial, both that contained in the written record as well as the viva voce evidence heard at the trial, it follows that counsel’s trial preparation also reasonably must include time spent preparing the written record, as well as responding to and making final argument on evidence contained in the written portion of the trial record.
[15] Second, in the particular circumstances of this case most of the affidavits, and a large number of the transcripts of cross-examinations, filed as part of the written trial record consisted of affidavits (and cross-examinations conducted thereon) filed on pre-trial motions which either were filed and argued, or initiated, but not proceeded with through to a hearing. For those motions actually argued, the motion judges and masters made awards of costs. That led the plaintiffs to make the following submission about the recoverability as trial costs of the time spent preparing those earlier affidavits or conducting those earlier cross-examinations:
The defendants proposed a summary trial in early 2010 to resolve the claims as pleaded, on all previous affidavit material filed on all of the previous motions in this and the previous related litigation (the Consolidated Pledge Action between 2005 and 2006 which was settled). Thus, the costs for preparing for voluminous affidavit material and cross-examinaiton on it, all which formed part of the record for the proposed mini-trial cannot form the basis for costs in this proceeding since it was previously dealt with.
[16] This submission engages an important issue of procedural policy. In my view the days of the so-called “conventional trial” in civil cases which uses only viva voce evidence must be put behind us. In a very real and pressing sense, if our courts do not discard the “conventional trial” as the norm in civil cases in favour of more creative and efficient modes of trial, public civil litigation in this province will atrophy. Our court lacks the resources to conduct each civil trial in a “conventional” fashion; they take too much time. In many cases, such as the present one, much of the factual evidence can be placed before the court in written form, whether by way of agreed statements of fact, affidavits of witnesses or out-of-court examinations of those witnesses. Any viva voce evidence at the trial should focus on enabling the trial judge to understand and decide credibility issues, including material disputed facts.
[17] Increasingly civil trials are preceded by motions, including summary judgment motions, in which an extensive written factual record is created, but the motion does not finally dispose of the action. To the extent possible and appropriate – questions ultimately regulated by the pre-trial scheduling judge or trial judge - parties should be able to make use of the evidentiary work product generated for those motions at a hybrid trial.
[18] How can the court encourage parties to make greater use of hybrid trials? One part of the answer to that question involves the cost treatment of the work product filed as the written evidentiary record at trial. Take, as an example, a trial which had been preceded by an unsuccessful motion for summary judgment brought by the plaintiff. Assume both sides “led trump” on the motion, resulting in affidavits which basically covered the factual waterfront. But, by reason of the existence of a credibility dispute, summary judgment was not granted. The motion was dismissed. Assume that the motion judge awarded no costs to either party. Further assume that the motion judge gave no directions for the trial. However, following the motion, both counsel agreed that a hybrid trial should be used and, as well, the affidavits and cross-examinations thereon filed on the summary judgment motion would form part of the evidentiary record at trial. The viva voce evidence at trial only would address the disputed evidence involving credibility issues. Assume further that at trial the plaintiff wins and, as part of its cost submissions, seeks to recover the costs of preparing the summary judgment affidavits and conducting the summary judgment cross-examinations, all of which formed part of the evidentiary record at trial, but in respect of which no order of costs was made by the summary judgment motion judge.
[19] What would happen if the trial judge awarded no recovery for the cost of preparing those affidavits and conducting those cross-examinations even though that evidence was placed before him or her for consideration? I think the answer would be obvious. Plaintiff’s counsel would think hard about ever agreeing in the future to conducting another hybrid trial. Why agree to a trial format when no possibility exists of recovering some costs for some of the evidence adduced at trial? In this example, the affidavits used on the summary judgment motion were not “spent”; they found their way into, and were considered as part of, the evidentiary record at trial. Why should a “no costs” order made earlier by a motion judge deprive a party of costs for evidence subsequently put before and used by the trial judge?
[20] In my view such a result would neither be fair nor reasonable. Moreover, it would act as a significant disincentive to parties increasing their use of the hybrid trial format. Some recovery for the costs of preparing those affidavits and conducting those cross-examinations should be allowed.
[21] Of course, certain parameters need to be placed on such an approach. First, if a party recovered costs prior to trial for the preparation of affidavits or the conduct of cross-examinations which later were used again at trial, no double recovery of preparation or examination costs should be permitted. The award of costs at trial should cover only any incremental costs associated with the use of that work product at trial. Second, a party cannot attempt to recover the costs for pre-trial affidavits or cross-examinations which were previously disallowed by simply “dumping” that work product into the trial record and claiming that because the work product appeared in the trial record costs should be awarded. To recover costs at trial the work product must be material to the issues placed before the trial judge for adjudication. Placing an affidavit irrelevant to the issues at trial into the evidentiary record does not justify any recovery for the costs of its preparation. As I commented in my trial Reasons for Judgment about the content of the written evidentiary record filed before me:
[21] Counsel stated that some of the Exhibit 1 affidavits might not bear much relevance in view of the more limited issues put in play at trial. That was an understatement. If they were so irrelevant I query why they were filed in the first place. Nonetheless, in preparing these Reasons I have reviewed all of that evidence.
So, while a trial judge must review all evidence filed before him or her, it does not follow that a party is entitled to recover costs for all evidence filed before the trial judge.
[22] As will be seen from the analysis below, I have allowed some costs for work associated with the preparation of a few affidavits and attendances on a certain cross-examination associated with pre-trial motions, but the amount allowed totals only $4,020.00.
V. Costs claimed by EnGlobe Corp.
[23] EnGlobe filed two bills of costs. From March, 2007 until March, 2010 that defendant was represented by the Aird & Berlis firm. Its bill of costs for that period claimed fees of $118,853.23, together with disbursements of $11,049.13. EnGlobe also filed a bill of costs for its representation by Stikeman Elliott LLP from November, 2009 through to the end of trial in November, 2011. That bill of costs claimed fees of $299,558.48 and disbursements of $22,743.49.
A. Aird & Berlis bill of costs
[24] Mr. Crawley, in his cost submissions on behalf of Mr. Tony Busseri, helpfully set out a chronology of key steps in this proceeding. During the course of the Aird & Berlis retainer, the following key steps occurred:
(i) Pleadings were exchanged;
(ii) The defendants initiated a Rule 21 motion to strike the claim on the basis that the action was precluded by the Settlement Agreement or the doctrine of res judicata. That motion was never argued;
(iii) In 2007 there were “motions within the Rule 21 motion” concerning summonses issued to witnesses. The plaintiffs succeeded on those motions and the motion for leave to appeal; costs were awarded to the plaintiffs;
(iv) In 2009 refusals motions were argued before Master Graham who dealt with costs.
A few months after those motions EnGlobe retained new counsel, as did the plaintiffs. Following the retainer of new counsel the parties transferred the matter to the Commercial List, agreed to the hybrid trial format (November 5, 2010), and conducted several examinations for discovery. Against that overview, let me now deal with each criticism made by the plaintiffs of the Aird & Berlis bill of costs.
General correspondence and attendances with other counsel
[25] That bill recorded 142.25 hours of work by 10 different lawyers for “general correspondence and attendances with other counsel”. The plaintiffs submitted that amount of time was excessive and most likely related to motions which either were not brought or were determined in favour of the plaintiffs. I accept that submission. I reduce the time to 30 hours, allocate it to senior counsel, Mr. William Chalmers, who recorded most of the time for this item, and allow him a partial indemnity hourly rate of $300.00 as a 1994 call. That results in recoverable fees of $9,000.00 for “general correspondence and attendances with other counsel”.
Drafting of pleadings, etc.
[26] I accept the plaintiffs’ submission that the claim of $12,000.00 for drafting the pleading in this proceeding was excessive. The pleading drew heavily on that which EnGlobe had filed in the Sansone Pledge Action. I allow $5,000.00 for pleading preparation by Aird & Berlis.
Motion re: motion to strike/Motion re: appeal
[27] I accept the plaintiffs’ submission that no costs should be recovered as claimed in the categories “motion re: motion to strike” and “motion re: appeal”. The plaintiffs were awarded the costs of those steps.
Research re: Undertakings and Refusals; Preparation and attendance at motions relating to Undertakings and Refusals
[28] The plaintiffs submitted that no costs should be recovered for “research re: undertakings and refusals” on the ground that “there is no evidence of an undertaking and refusals motion in which costs were reserved to the trial judge against the plaintiffs”. EnGlobe did not reply to this submission.
[29] I accept that submission. My review of the Orders Brief (Ex. A) disclosed that the only undertakings/refusals motions were those argued before Master Graham and he dealt with costs in his reasons.
Prepare for and attend on examinations for discovery
[30] The plaintiffs submitted that no examinations for discovery took place while Aird & Berlis were solicitors of record and “this time was almost certainly time spent on cross examinations for motions brought by the defendants which were resolved successfully in favour of the plaintiffs and is not chargeable in any event”.
[31] I have gone back to review Exhibit 1, the Brief of Affidavits filed in the record at trial. Aird & Berlis prepared one affidavit – Wade Jamieson, November 21, 2008 – which I considered material to my trial deliberations.[^1] The affidavit was brief – 4 pages – and allow $1,000.00 for its preparation.
[32] In terms of the cross-examinations conducted while Aird & Berlis was on the record, my Reasons for Judgment referred only to that conducted of Mr. Busseri on May 29, 2008 as a witness on a pending motion. Mr. Chalmers attended on behalf of EnGlobe, but asked no questions. I do not allow any recovery for those costs. Although I reviewed the transcripts of the other examinations which took place in this action while Aird & Berlis were on the record, they provided very little evidence of any relevance for the trial, so I allow nothing for the costs associated with those examinations.
Summary on claimed fees for Aird & Berlis work
[33] By way of summary, I allow recoverable partial indemnity costs for work performed by Aird & Berlis in the amount of $15,000.00, broken down as follows:
Item
Amount allowed
General correspondence and attendances with other counsel
$9,000.00
Drafting of pleadings, etc.
$5,000.00
Motion re: motion to strike/Motion re: appeal
Nil
Research re: Undertakings and Refusals; Preparation and attendance at motions relating to Undertakings and Refusals
Nil
Prepare for and attend on examinations for discovery
$1,000.00
Total
$15,000.00
Disbursements
[34] The plaintiffs took no issue with the claimed disbursements of $11,049.13, inclusive of taxes, so I allow that amount.
B. Stikeman Elliott bill of costs
Receipt and review of file from Aird & Berlis and initial client meetings
[35] The plaintiffs submitted that while EnGlobe was free to choose new counsel during the proceeding, the plaintiffs should not be responsible for any costs associated with the new counsel coming up to speed. I agree. Accordingly, I disallow the amounts claimed in this portion of the Stikemans bill of costs.
General correspondence and attendances with other counsel
[36] EnGlobe claimed 8.28 hours for senior counsel and 23.16 hours for junior counsel. The plaintiffs contended that this time should be disallowed as it appeared to relate to new counsel’s efforts to familiarize themselves with the file. I disagree. Stikemans represented EnGlobe for two years in this litigation. Dealings with other counsel would be inevitable and necessary. The time claimed, when spread over two years, is reasonable. I make no adjustment to this item.
Drafting of pleadings and receipt and review of pleadings of other parties; motion re: amendment of Statement of Claim
[37] For the drafting of pleadings the Stikemans bill recorded one hour by senior counsel, 7.7 hours by a junior counsel who was a 2003 call, and 5.10 hours by another junior counsel who was a 2009 call. For the pleadings amendment motion the bill listed 12.44 hours by senior counsel, 15.68 by the 2003 associate and a further 38.13 hours by the 2009 associate. The plaintiffs submitted that since EnGlobe ultimately did not oppose the amendment to the Statement of Claim and the nature of the amendment was not complex, only 5 to 10 hours would should be allowed for this item.
[38] The 2010 amendment to the Statement of Claim added a claim sounding in oppression. Although the amendment ultimately went on consent, it was apparent that counsel had spent some time negotiating terms. The complexity of this proceeding justified senior counsel using the services of junior counsel, and it is evident from the bill of costs that senior counsel delegated many matters to junior counsel. However, in my view EnGlobe cannot recover for two junior counsel on this file; it was not so complex as to permit recovery for two junior counsel on a partial indemnity scale. As a result, I allow the time claimed by senior counsel and the 2003 associate, but disallow the time sought for the 2009 associate on these two particular steps. That results in recoverable costs of $9,964.50 ([$350 + $1,732.5] + [$4,354 + $3,528]).
Motion for expedited trial plan
[39] The plaintiffs submitted that this was essentially a consent attendance before a judge and only 3 to 4 hours of counsel time should be allowed. I will allow senior counsel’s time ($147.00) and 7 hours for junior counsel since it is important that care be taken when preparing proposed trial plans and careful work takes time. I allow a total of $1,722.00 for this item.
Preparation of affidavit of documents
[40] The plaintiffs seek to reduce the 58 hours of counsel time and 34.33 hours of clerk’s time to 5 hours of counsel time and all of the clerk’s time on the basis that the volume of documents was not extensive. The bill indicated that junior counsel spent more time on this matter than the law clerk. While junior counsel certainly have an appropriate role to play in supervising law clerks on document preparation – e.g. privilege review – these days most of this work can be done by trained law clerks. Consequently, I allow the law clerk’s time and reduce the time of junior counsel to 10 hours ($2,250.00). Since senior counsel must sign-off on any affidavit of documents, I allow the 2.84 hours claimed for his time. That results in recoverable costs of $5,990.40.
Prepare for and attend on examinations for discovery
[41] The examinations covered by this category consumed no more than 5 days. EnGlobe claimed 30 hours for senior counsel, 125 hours for two junior counsel and 8.5 hours for its law clerk. The plaintiffs submitted that the time sought was “grossly excessive” and should be reduced to the time of the examinations (30 hours), plus 10 to 15 hours of preparation time. The bill of costs submitted by the plaintiffs disclosed that their senior counsel spent 78 hours on this item, and junior counsel 22 hours, for a total of 100 hours.
[42] I agree that the preparation time claimed for junior counsel is excessive. Some review of the previous examinations would be required in order to avoid duplication and asking any relevant questions not previously posed, and preparation of new questions would be required in light of the amendment to the Statement of Claim. I will allow recoverable time of 29.67 hours for senior counsel and 30 hours preparation time by the 2009 associate, for a total of $17,134.50.
Preparation for Trial
[43] EnGlobe claimed for over 300 hours of trial preparation time by counsel. The plaintiffs contended that amount was excessive and something closer to 60 hours (1 hour preparation time for each hour of trial time) would be more appropriate. The plaintiffs’ bill of costs disclosed 100 hours of preparation time by counsel, but it also included a separate category of “legal research” which recorded about 130 hours of junior counsel time. No doubt some of that was for trial preparation. As well, some time recorded in the “prepare for and attend trial” category most likely related to trial preparation.
[44] It is apparent from the bill of costs that senior counsel spent considerable time preparing for trial: 121.52 hours against 53 hours of claimed trial attendance time. Senior counsel conducted all aspects of the trial. The plaintiffs made no objection to the claimed trial time. I regard the preparation time claimed by senior counsel to be reasonable as representing slightly more than a 2:1 preparation to trial attendance time ratio.
[45] EnGlobe also claimed preparation time for the 2009 associate (189.18 hours), an articling student (59.12 hours) and law clerk (17.17 hours). EnGlobe took the lead in drafting an Agreed Statement of Facts. That obviously took time and I found it most helpful. The plaintiffs’ claims involved several different areas of law, so the services of an articling student were appropriate. The overall amount of time claimed for junior counsel, however, is too high given the extensive preparation undertaken by senior counsel. Accordingly, I allow EnGlobe all time claimed for preparation by senior counsel, 50 hours for preparation by junior counsel, and $2,000.00 for time claimed for the student and law clerk. That results in recoverable costs of $55,782.00.
Attendance at trial
[46] The plaintiffs took no objection to the $30,082.45 claimed by EnGlobe for attendance at trial.
Closing submissions
[47] EnGlobe filed detailed written closing submissions. EnGlobe seeks to recover 46 hours for work performed by senior counsel, 117.41 by junior counsel and 70.61 for the articling student’s work. The plaintiffs submitted that the amount was excessive in light of the large amount of time claimed for trial preparation which likely included work used for final argument.
[48] The final written submissions filed by EnGlobe were most helpful. However, on a partial indemnity assessment, in light of the significant time spent by senior counsel on the written final submissions, I think a reasonable recovery would see an allowance of 46 hours for all the work performed by the associate and student, an amount equivalent to that spent by senior counsel. Accordingly, I reduce the time claimed for the associate and the student to 23 hours each, which results in total allowable fees for this item of $22,655.00.
Summary on claimed fees
[49] By way of summary, I allow recoverable partial indemnity costs for work performed by Stikeman, Elliott in the amount of $158,056.05, broken down as follows:
Item
Amount allowed
Receipt and review of file and intial client meetings
Nil
General correspondence
$8,109.00
Drafting of pleadings; motion to amend
$9,964.50
Motion re: expedited trial plan
$1,722.00
Preparation of affidavit of documents
$5,990.40
Examinations for discovery
$17,134.50
Preparation for trial
$55,782.00.
Attendance at trial
$30,082.45
Closing submissions
$22,655.00
Total
$151,439.85
Disbursements
[50] The plaintiffs did not object to the $22,743.49 in disbursements contained on the Stikemans bill of costs
C. Conclusion on costs claimed by EnGlobe
[51] By way of summary, I award EnGlobe partial indemnity costs of $166,439.85 for fees and $33,792.62 for disbursements, both inclusive of GST/HST, for a total of $200,232.47.
VI. Costs claimed by Mr. Tony Busseri
[52] Mr. Busseri filed a bill of costs seeking partial indemnity costs in the amount of $266,894.85 for fees and $13,041.99 for disbursements.
Invesitgation for claim; Rule 21 motion (for the period November, 2006 until July, 2007)
[53] The plaintiffs submitted that (i) since Mr. Crawley, counsel to Mr. Busseri, had been acting for him with respect to matters involved in the Sansone Pledge Action, little time would be required to investigate the claim started by the plaintiffs in late 2006, and (ii) the Rule 21 motion brought by the defendants ultimately was not brought and the defendant was not successful on other motions.
[54] I accept the plaintiffs’ submissions on this point. The 100 hours of lawyers’ time claimed for this item is excessive in light of counsel’s understanding of the issues gained from the Sansone Pledge Action. I reduce the allowable time to 20 hours of Mr. Crawley’s time, resulting in recoverable costs of $4,500.00.
Preparation of affidavit of Mr. Busseri for Rule 21 motion (July, 2007 to February, 2008)
Cross-examination of T. Busseri, undertakings motion and conversion of Rule 21 motion to a Rule 20 motion (May, 2008 to November, 2009)
[55] The plaintiffs submitted that none of the 116 hours of time claimed for the preparation of the affidavit item should be allowed because the Rule 21 motion, in the result, was not brought. Similarly, the plaintiffs argued that no time should be allowed for the cross-examination of Mr. Busseri because it related to a motion decided in the plaintiffs’ favour by Newbould J. and, as well, the research for the Rule 21 motion was not recoverable. Alternatively, the plaintiffs contended that no more than 10% of the time incurred properly related to the trial process.
[56] Exhibit 1 included a 22-page affidavit from Mr. Busseri sworn February 28, 2008.[^2] I reviewed that affidavit as part of my consideration of the trial evidence; it contained material evidence. I allow $3,000.00 for its preparation as trial costs. As I mentioned above, I did find that the transcript of the Rule 39.03 examination of Mr. Busseri contained relevant evidence. That examination took 4 hours; Mr. Crawley was present as counsel for Mr. Busseri. I allow $1,020 in costs for that attendance.
D’Addario/Sansone settlement; cross-examination of Mr. Sansone (November/December, 2009)
[57] The plaintiffs submitted that no time should be allowed in respect of the D’Addario/Sansone settlement as it did not involve Mr. Busseri and that only 8 hours should be allowed for the cross-examination of Mr. Sansone.
[58] I accept that submission. A review of the November 18, 2009 transcript of the examination of Mr. Sansone revealed that Mr. Crawley’s role was a modest one. I allow $2,160.00 for this item.
Summary judgment motion; pleadings motion; examinations of Messrs. Busseri and Sansone (February to September, 2010)
[59] The plaintiffs submitted that the defendant’s proposed Rule 20 motion did not proceed, the parties instead agreed to a form of summary trial, the pleadings motion was not opposed and the time for the examinations should be limited to 30 hours.
[60] I allow some time for the motion to amend the Statement of Claim, for the same reasons I set out above in respect of the EnGlobe bill of costs, and I allow time for the preparation for and attendance at the two examinations. I allow 30 hours for the preparation for and attendance at the examination of Mr. Busseri and 16 hours for similar work for the examination of Mr. Sansone. To that I add 10 hours for all matters relating to the pleadings motion. The cost of the examination time I calculate using Mr. Crawley’s rate; that for the pleadings matter the rate of his associate since the uncontested nature of the motion indicated that this work could be delegated to an associate. That results in $13,800.00 of fees in respect of Mr. Crawley [46 hours x $300/hour] and $1,800.00 of fees in respect of Ms. Loosemore [10 hours x $180/hour] for total recoverable fees of $15,600.00.
Attendances at Commercial List; affidavit of documents; amended defence; examinations of Mr. D’Addario, Mr. Busseri and Mr. Harris (September, 2010 to January, 2011)
[61] The plaintiffs submitted that the attendances at the Commercial List were on consensual 9:30 appointments, the discovery of Mr. D’Addario only took a few hours, time for Mr. Busseri’s examination was dealt with in the previous category, and the examination of Mr. Harris lasted only 4 hours.
[62] Unfortunately Mr. Busseri’s bill of costs aggregated a number of discrete tasks in this one item, making it difficult to understand how much work was spent on each. Some time – 10 hours - is allowable for discussing scheduling matters, even where they resulted in consent attendances at the Commercial List. Time is recoverable for work involved in preparing for and attending the examinations of Mr. D’Addario and Mr. Harris, and I allow 20 hours. I previously set the time recoverable for the examination of Mr. Busseri. I also allow 10 hours for preparing the amended defence and 10 hours for answering undertakings. That results in 40 hours of Mr. Crawley’s time, or $12,000.00.
Agreed Statement of Facts; trial preparation; document brief (February/March, 2011)
Trial preparation and closing arguments (August to November, 2011)
[63] I shall deal with both these trial-related items together.
[64] The plaintiffs contended that the time claimed is excessive because the agreed statement of facts was not a substantial document and the trial document brief consisted of affidavits, exhibits and cross-examinations previously filed in court.
[65] I allow time for both Mr. Crawley and Ms. Loosemore on these items. As I mentioned above, I found the Agreed Statement of Facts to be most useful. Further, the preparation of the document briefs was done in a professional way: notwithstanding that they contained previously filed material, it was apparent considerable time was spent organizing and indexing them. Also, a comparison of the trial preparation and trial attendance times claimed by EnGlobe and Mr. Busseri reveal that legal counsel for EnGlobe spent significantly more time on these items which reflected what I took to be the lead role assumed by EnGlobe in conducting the defence at trial. Put another way, the trial preparation and attendance time claimed for Mr. Busseri’s counsel proportionately reflected this apparent division of labour between defence counsel.
[66] I allow Mr. Busseri $20,000 for the February/March, 2011 trial preparation time claimed and $45,000 for the August through to November, 2011 trial preparation and trial attendance time claimed. This results in recoverable trial preparation and attendance costs of $65,000 for Mr. Busseri. This compares to the $108,519.45 for similar work I allowed EnGlobe which, in my view, reflects a fair and proportionate recovery for trial work given the roles played by each defendant in the overall defence. I find that the overall costs allowed to both defendants for trial preparation and attendance - $173,519.45 – is fair and reasonable. Given the volume of evidence contained in the written record to which the defendants had to respond, the reasonableness of the amount of time they expended on trial-related matters cannot be measured simply by the length of the trial. In a hybrid trial, such as this one, the reasonableness of trial-related time needs to be measured by reference to both the written evidentiary record as well as to the viva voce record. Although I appreciate that the amount of trial-related costs I have allowed is significant, I consider it fair, reasonable and proportionate in light of the overall record filed at this trial, the complexity of the issues, and the level of factual detail engaged by this trial (which can be seen from the length of my Reasons for Judgment).
Summary on claimed fees
[67] By way of summary, I allow recoverable partial indemnity costs for work performed by Crawley Meredith Brush LLP in the amount of $103,280.00, broken down as follows:
Item
Amount allowed
Investigation of claim
$4,500.00
Preparation of Busseri affidavit
$3,000.00
Cross-examination of Busseri
$1,020.00
Cross-examination of Sansone
$2,160.00
Summary judgment motion; pleadings motion; examinations of Messrs. Busseri and Sansone
$15,600.00
Affidavits of documents; discoveries
$12,000.00
Agreed statement of facts; preparation for first scheduled trial
$20,000.00
Preparation for and attendance at trial
$45,000.00
Total
$103,280.00
Disbursements
[68] The plaintiffs did not object to the $13,041.99 in disbursements contained on the Crawley Meredith Brush LLP bill of costs.
[69] That results in an award of partial indemnity costs to Mr. Busseri of $116,321.99, inclusive of GST/HST.
VII. Summary
[70] By way of summary, I award partial indemnity costs to both defendants. I fix the partial indemnity costs payable to EnGlobe at $200,232.47 for fees and disbursements, inclusive of taxes, and I fix the partial indemnity costs payable to Tony Busseri at $116,321.99 for fees and disbursements, again inclusive of taxes. I order the plaintiffs to pay EnGlobe and Mr. Busseri those amounts.
D. M. Brown J.
Released: July 25, 2012
COURT FILE NO.: CV-10-8995-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Frank D’Addario, 1301965 Ontario Inc., and D’Addario Family Trust
Plaintiffs
– and –
EnGlobe Corp., Tony Busseri and Roberto Sansone
Defendants
SUPPLEMENTARY REASONS FOR JUDGMENT - COSTS
D. M. Brown J.
Released: July 25, 2012
[^1]: Ex. 1, Volume 7, Tab 2. [^2]: Ex. 1, Vol. 4, Tab 4.