SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: C-732-10
DATE: 2012-10-05

RE: Terrace Manor Limited, Applicant

AND:

Sobeys Capital Incorporated, Respondent

BEFORE: The Honourable Mr. Justice P. J. Flynn

COUNSEL: Stephen Longo, Counsel for the Applicant

Jennifer McAleer / Sarah Turney, Counsel for the Respondent

COSTS RULING ON APPLICATION

[ 1 ] The Applicant unsuccessfully sought an interpretation of certain provisions in the lease between the parties, beginning in 1993, which would have determined that the Respondent’s share of taxes be calculated from 2005 onward on a proportionate share basis.

[ 2 ] The Applicant sought judgment from the Respondent in the amount of $160,773.

[ 3 ] The lease is a long term lease, which, including options to renew, could extend to 2033.

[ 4 ] The Respondent now seeks partial indemnity costs of the Application in the total amount of $75,061.03, including $15,769.93 for disbursements.

[ 5 ] Then by letter of June 19, 2012, Respondent’s counsel submitted a further disbursements bill for court report and transcripts in the amount of $1,419.85, bringing the disbursements total to $17,189.78. She didn’t ask for an amendment to her partial indemnity costs claim.

[ 6 ] The Applicant says this request is excessive and out of proportion to the quantum, nature and complexity of the proceedings. I agree with that complaint.

[ 7 ] It is my function to fix costs that are fair and reasonable and in accord with the losing side’s reasonable expectation, as set out in the Boucher line of cases.

[ 8 ] To help me make that determination, the Applicant has set out the costs it would have claimed, if successful on the same event. On the same partial indemnity basis, the Applicant would have sought $40,893.41, including $2,853.41 for disbursements (not including any amount for his expert).

[ 9 ] In my view, this matter, concerning the interpretation of isolated provisions of the lease and the application of Ontario’s property tax and assessment regime was not particularly complex.

[ 10 ] While my determination certainly carried implications for the years beyond 2013, if the options to renew are exercised , I accept the Plaintiff’s view that the quantum definitely at stake was about $160,000.

[ 11 ] The Respondent says the partial indemnity costs it claims represents 50% of its actual costs. That means that it actually spent about $150,000 in the fight over that $160,000 issue. That certainly demonstrates excess to me.

[ 12 ] Moreover, the Respondent’s solicitors billed some 264 hours for their work on the file, including about 50 hours of student time. This must be compared to the 134 hours the Applicant’s solicitors charged, including only 9.5 student hours.

[ 13 ] I ruled that almost all of the authorities cited to me were of no help.

[ 14 ] I am not certain how much, if any, the parties’ reliance on experts played with my reasoning, but the Respondent’s expert charge of $11,725 was one of the main differences in the significant disbursement disparity between the parties.

[ 15 ] One must remember that this was the hearing of an Application and not a trial. Less than a full day was spent in argument.

[ 16 ] Respondent’s counsel has 12 years experience. Her actual hourly rate is $600 - $625 and she claimed $300 on a partial indemnity basis. She was assisted throughout by a junior called two years ago (actual rate $320- $350 and rate claimed $200).

[ 17 ] Counsel opposite has 14 years experience. His actual hourly rate is $475 and he would also claim $300 on a partial indemnity basis.

[ 18 ] So, the excess of which the Applicant claims is not in the partial indemnity rate claimed but rather in the amount of time spent by Respondent’s legal team. And I am not convinced that a junior was required to assist counsel at the hearing.

[ 19 ] Nor am I prepared to allow both of those lawyers to claim 11.0 hours each for attendance at the hearing including travel from Toronto when roughly four hours was spent in court.

[ 20 ] Applicant’s counsel asked me to award costs no greater than 50% of the partial indemnity costs claimed by his own client (or about $20,000). That is not a reasonable expectation. Rather, the reasonable expectation of the losing Applicant is, in fact, set out in the whole of the Applicant’s partial indemnity costs.

[ 21 ] Accordingly, I conclude that the fair and reasonable costs of the Respondent are $40,000, all inclusive and I order the Applicant to pay that amount to the Respondent within 30 days.

P.J. Flynn J.

Date: October 5, 2012