ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 10-47525A1
DATE: 20120813
BETWEEN:
CASTONGUAY CONSTRUCTION (2000) LTD.
Plaintiff
– and –
COMMONWEALTH PLYWOOD CO. LTD. – LA COMPAGNIE COMMONWEALTH PLYWOOD LTÉE
Defendant
AND BETWEEN:
COMMONWEALTH PLYWOOD CO. LTD. – LA COMPAGNIE COMMONWEALTH PLYWOOD LTÉE
Plaintiff by Counterclaim
– and –
CASTONGUAY CONSTRUCTION (2000) LTD.
Defendant by Counterclaim
– and –
LAFARGE CANADA INC., MAURICE YELLE EXCAVATION LIMITED, 3632024 CANADA INC. c.o.b. as A.B.L. CONSTRUCTION INC., INSPEC-SOL INC., ZENIX ENGINEERING LTD., GENIVAR INC., and GENIVAR CONSULTANTS LIMITED PARTNERSHIP
Third Parties
Eric R. Williams and Kelly Hart, for Castonguay Construction (2000) Ltd., the Responding Party
J. Stephen Cavanagh, for Zenix Engineering Ltd., Genivar Inc. and Genivar Consultants Limited Partnership, the Moving Parties
HEARD: Written Submissions
Decision on costs
tOSCANO rOCCAMO j.
Overview
[ 1 ] On June 14, 2012, I released Reasons in respect of a motion brought by Zenix Engineering Limited, Genivar Inc., and Genivar Consultants Limited Partnership (hereinafter collectively referred to as “Zenix”) under Rule 21.01(3)(d) of the Rules of Civil Procedure for an order dismissing the Third Party Claim advanced against them by Castonguay Construction (2000) Ltd. (“Castonguay”), on the grounds that it was frivolous, vexatious and an abuse of the Court’s process.
[ 2 ] As my Reasons reflect, I concluded that the Third Party Claim survived attack on the basis that the law of privity could not be so relaxed as to grant Zenix the remedy it effectively sought, that being a waiver of any liability between Castonguay and Zenix arising from professional services provided by Zenix to Castonguay as consulting engineers on a building project. I found that, in the absence of any evidence of terms in the subcontract between Castonguay and Zenix contemplating a waiver of liability, it was not plain and obvious the Third Party Claim could not succeed.
[ 3 ] Accordingly, I dismissed the motion with costs to Castonguay on a partial indemnity basis.
[ 4 ] The Costs Outline delivered on behalf of Castonguay in respect of the motion claimed partial indemnity fees inclusive of disbursements and taxes of $13,857.30.
[ 5 ] The Costs Outline delivered on behalf of Zenix claimed partial indemnity fees of $11,306.46 inclusive of taxes and disbursements.
[ 6 ] Given that the motion proceeded on the issue of coverage, I did not expect any exchange of offers, and no offers were referred to the Costs Submissions of the parties.
Castonguay’s Position
[ 7 ] Castonguay correctly points out that there is a high burden on the moving party in a motion brought under Rule 21.01(3)(d) to demonstrate that it is “plain and obvious” that an action cannot succeed. Castonguay was fully successful in resisting Zenix’ motion and costs should follow the event. While Zenix was entitled to seek an early determination of the issue of coverage, it must bear the cost of taking that risk.
[ 8 ] Castonguay further submits that the issues raised on this motion were of critical importance to Castonguay and that the implications of success or failure were significant given the impact on Castonguay’s ability to pass on liability for a counterclaim of several hundred thousand dollars in the main action brought against Castonguay. A decision unfavourable to Castonguay would no doubt have been relied upon by the three other Third Parties who would have likely brought similar motions under Rule 21, had Zenix succeeded in its motion on coverage.
Zenix’ Position
[ 9 ] Zenix does not take issue with the hourly rates claimed by Castonguay, but with the number of hours expended.
[ 10 ] Zenix corrects the misimpression reflected in my Decision on Motion that an easy compromise on costs was possible due to my belief that partial indemnity costs for the motion claimed by Zenix totalled $11,306.46 as compared to $13,857.30 claimed by Castonguay. Zenix points out that the figure claimed by Zenix represented their costs of the entire action. That is because the motion, had it succeeded, would have resulted in the dismissal of the Third Party Claim against Zenix. By contrast, the costs sought by Castonguay were limited to costs on the motion.
[ 11 ] Zenix has calculated the portion of its costs attributable to the motion at $4,488.11 on a partial indemnity basis, and at $7,043.49 on a full indemnity basis. Castonguay’s fees on the motion are noted to be $19,950.00 plus disbursements plus taxes on a full indemnity basis.
[ 12 ] Zenix invokes the principle of proportionality enshrined in Rules 1.04(1.1) and 57.01(1)(0.b) of the Rules of Civil Proceedure that dictates partial indemnity costs be fixed in an amount comparable to the “amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed” (Rule 57.01(1)(0.b).
[ 13 ] After considering the able submissions of counsel, I fix costs on this half day motion at $7,000.00 plus disbursements and taxes for the reasons which follow.
[ 14 ] First, I would not have expected Zenix’ costs of the action to be significantly different from the costs on the motion given that the parties had not undertaken much more than the exchange of pleadings.
[ 15 ] Secondly, I observed that Castonguay’s motion record was much more expansive in the way of affidavit evidence and related materials on coverage than that of Zenix, and would for this reason alone have generated more in the way of hours expended for preparation of materials and preparation for the motion.
[ 16 ] Thirdly, the motion was relatively complex and would have justified extensive legal research, analysis and preparation with respect to the development of the concept of privity. There was also significant time and effort spent by Castonguay on the motion dissecting the contractual and coverage implications of the main contract between Castonguay and the owner of the premises, as well as the CGL policy between Castonguay and Intact Insurance, from which Zenix effectively sought to benefit.
[ 17 ] Fourthly, the “stakes” on the motion were clearly greater for Castonguay as it potentially faced three other motions from the other Third Parties on coverage had Zenix succeeded on the motion.
[ 18 ] Finally, I observe that Zenix’ submissions on costs provide a breakdown of time expended on the motion which reflects that Mr. Cavanagh devoted 15.5 hours for preparation of materials and preparation for the motion. The breakdown did not appear to include a half day appearance fee. Factoring in this omission, the hours expended by Mr. Cavanagh and Mr. Williams were not materially different. I also observe that the time expended by Mr. Cavanagh`s law clerk, Ms. Crawford, was only 3 hours as compared to 15 hours claimed for a student, D. Campbell’s assistance at an actual rate lower than that of Ms. Crawford. The difference in time expended by Ms. Crawford, on behalf of Castonguay and D. Campbell, would partly be explained by the more extensive motion record and supplementary motion records filed on behalf of Castonguay.
[ 19 ] On the other hand, there were no hours spent on the motion by junior counsel to Mr. Cavanagh as compared with 60 hours claimed on behalf of Mr. Hart, junior counsel to Mr. Williams, for legal research, drafting of the motion and motion preparation. Although no time was charged for the attendance of either Mr. Hart or Mr. Campbell on the motion itself, no explanation is provided for the significant costs in preparation expended by Mr. Hart. In my opinion, there was some duplication of effort here which was not fully justified in this matter.
[ 20 ] Accordingly, I allow approximately 20 hours of preparation for Mr. Hart, and an additional 5 hours preparation for student-at-law, Mr. Campbell.
Conclusion
[ 21 ] In the result, I fix partial indemnity costs on this motion, having regard to the issues raised, the importance of outcome on the motion on the one hand, and the principle of proportionality on the other hand, in the amount of $7, 000.00 for fees plus disbursements, plus taxes, payable forthwith by Zenix to Castonguay.
Madame Justice Toscano Roccamo
Released: August 13, 2012
COURT FILE NO.: 10-47525A1
DATE: 20120813
ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: CASTONGUAY CONSTRUCTION (2000) LTD. Plaintiff – and – COMMONWEALTH PLYWOOD CO. LTD. – LA COMPAGNIE COMMONWEALTH PLYWOOD LTÉE Defendant AND BETWEEN: COMMONWEALTH PLYWOOD CO. LTD. – LA COMPAGNIE COMMONWEALTH PLYWOOD LTÉE Plaintiff by Counterclaim – and – CASTONGUAY CONSTRUCTION (2000) LTD. Defendant by Counterclaim – and – LAFARGE CANADA INC., MAURICE YELLE EXCAVATION LIMITED, 3632024 CANADA INC. c.o.b. as A.B.L. CONSTRUCTION INC., INSPEC-SOL INC., ZENIX ENGINEERING LTD., GENIVAR INC., and GENIVAR CONSULTANTS LIMITED PARTNERSHIP Third Parties DECISION ON MOTION Toscano Roccamo J.
Released: August 13, 2012