ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-0056-00
DATE: 2012-11-19
B E T W E E N:
1188710 Ontario Limited trading as Burnett Construction
Mr. D.B. Shanks, for the plaintiff
Plaintiff
- and -
Gregory Gartner and Suzanne Gartner
Ms. R. A. Clinker, for the Defendants
Defendants
HEARD: by written submissions at Thunder Bay, Ontario
Regional Senior Justice H.M. Pierce
Reasons for Costs on Motions Heard June 28, 2012, and August 9, 2012
[ 1 ] A construction lien case was set down for trial in January, 2012 with a trial date of August 15, 2012 agreed upon. On June 28, 2012, the defendants moved to set aside their notice of discontinuance of counterclaim and adjourn the trial so that a subrogated claim in connection with a fire loss at the property could be started and heard with the construction lien claim. The plaintiff successfully resisted that motion.
[ 2 ] The plaintiff claims its costs of the June 28 th motion on a substantial indemnity basis, arguing that the defendants’ conduct is worthy of sanction. It contends that the motion to adjourn was based on a tactical decision to frustrate and beggar the plaintiff. As the plaintiff expressed it in its written submissions:
Given the Defendants had already been fully paid by their insurer for the fire loss that was the subject of the counterclaim, the counterclaim was unnecessary for the Gartners, and attempting to add new parties in the circumstances was nothing more than a blatant attempt to delay a meritorious claim and have the Plaintiff run out of patience and funds.
[ 3 ] The plaintiff seeks substantial indemnity costs for the June 28 th motion of $6,462.41 inclusive of fees, disbursements and tax.
[ 4 ] The defendants submit that costs on a partial indemnity scale are warranted. They argue:
• the motion was based on the Rules of Civil Procedure and the defendants should not be punished for bringing such a motion;
• the motion was intended to avoid a multiplicity of proceedings and inconsistent verdicts; and
• although the defendants sought a delay of the trial, the delay being sought was not lengthy.
[ 5 ] The defendants also argue that the plaintiff’s bill of costs is excessive, in that the time billed to the client for Mr. D. Shanks is $445 per hour and for the clerk at $160 per hour. It is their position that the maximum partial indemnity rate for solicitors recommended in the Information to the Profession is $350 per hour for partial indemnity in more complicated matters. As well, the maximum recommended rate for law clerks on a partial indemnity scale is $80 per hour.
[ 6 ] The defendants point to their own solicitor’s accounts of $2,678.26 on a partial indemnity scale and $3,299.76 on a substantial indemnity scale, both figures inclusive of disbursements and tax. They submit this is the true measure of the parties’ reasonable expectations. Finally, they ask the court to award costs of this motion of $2,600 - $3,500.
[ 7 ] The plaintiff replies that the motion to delay the trial was a tactic because carriage of the counterclaim they attempted to reinstate was in the control of their insurer, not the defendants personally. At the time of the motion, the defendants had been paid out their claim for fire loss, such that their insurer was the only party interested in a prospective counterclaim. At the time of the motion, the insurer had no motion before the court to reinstate the counterclaim.
[ 8 ] As to the reasonable expectations of the parties, the plaintiff submits that counsel for the defendants billed for 14 hours of her time in bringing the motion, whereas the plaintiff’s counsel spent 10.4 hours in defending the motion. I note that counsel for the defendants was called to the bar in 2006 and charges an hourly rate of $175 per hour on a substantial indemnity scale. Thus, the defendants’ bill is naturally less, based only on a lower hourly rate.
[ 9 ] It is not an answer to say that the motion was not tactical because it was brought pursuant to the Rules of Civil Procedure. As I found on the motion, the insurer had not even decided to claim against the plaintiff at the time the motion was argued. It does not lie in the mouth of the defendants to argue that there will not be delay in re-scheduling the trial and a multiplicity of proceedings will be avoided when there is no second action in play.
[ 10 ] I find that the motion was brought for tactical reasons, undoubtedly to discourage the plaintiff from litigating its claim on the merits. Even if a second proceeding had been ready to start, it is naïve to think that the court can schedule a trial of at least two weeks after a “short adjournment,” given the current trial commitments of the court and the manpower available to the bench in this region. Counsel are to be discouraged from committing to trial dates and then seeking last minute adjournments, thereby wasting court resources. In my view, this conduct of the litigation is worthy of sanction, as contemplated by the case law. For these reasons, I find that costs on a substantial indemnity scale are justified.
[ 11 ] As to the quantum of costs, I agree that the hourly rates for clerk time warrant reduction from $144 per hour to $100 per hour. The costs for Mr. D. Shanks are allowed at $400 per hour, and for Mr. W. Shanks are allowed at $360 per hour, all on a substantial indemnity basis.
With those adjustments, the plaintiff shall have its costs on a substantial indemnity scale as follows: fees at $5,452; disbursements at $148.36, plus HST at $708.76 for a total of $6,309.12. The defendants shall pay to the plaintiff costs fixed at $6,309.12 within thirty days.
The August 9 th Motion
[ 12 ] As I have noted, trial in this case was scheduled for August 15, 2012. On August 2, 2012, the defendants served an expert report on the plaintiff. On August 8 th , the motion record and responding materials were served and filed. Despite the late service, counsel argued a motion on August 9 th for a ruling as to whether the expert report could be used at trial, or for an adjournment, to permit the plaintiff to respond to the expert report. The defendants did not seek leave to submit a late expert’s report; consequently, the plaintiff prepared a motion to strike the expert’s report for failure to seek leave. The defendants were refused leave to file the report or to adjourn the trial.
[ 13 ] I found that the late service of the expert report constituted a last ditch effort to circumvent my earlier order refusing an adjournment of the trial. The decision on this motion reads, tartly, “The defendants ought not to be able to manipulate the rules for strategic advantage. The motion is dismissed.”
[ 14 ] The plaintiff seeks full indemnity costs of $6,744.63 in light of the reprehensible conduct. The defendants submit there was no clear finding of “reprehensible, scandalous or outrageous conduct” so that that partial indemnity costs should be awarded. The defendants suggest the range of these costs should be $2,000 - $2,500.
[ 15 ] Substantial indemnity costs should be limited to rare and exceptional cases. Full indemnity costs will be rarer still. In my view, this case calls for an award of substantial indemnity costs to demonstrate the court’s displeasure in the conduct of the action. If the earlier motion to adjourn the trial was ill-advised, the second attempt to trigger an adjournment of the trial (in light of the refusal of an adjournment) was even more so. A party who practices brinksmanship does so at the risk of his costs.
[ 16 ] The defendants object to the quantum of costs claimed. They cite their own solicitor’s account of $2,525.71 including HST and disbursements, charged on a substantial indemnity basis as proof of the reasonable expectations of the parties. In assessing this bill, I note that Ms. Clinker’s hourly rate is $175 per hour on a substantial indemnity basis whereas Mr. D. Shanks’ hourly rate is $400.50. The defendants’ counsel spent 11.6 hours on the motion while the plaintiff’s counsel spent only 8 hours. It cannot be said that the time claimed on the motion is excessive.
[ 17 ] I allow fees for the plaintiff on a substantial indemnity scale as set out above, noting an arithmetic error in the calculation of the clerk’s fees for revising the notice of motion and affidavit.
[ 18 ] With those adjustments, the plaintiff shall have its costs on a substantial indemnity scale as follows: fees at $5,060; disbursements at $43.22; and HST at $657.80 for a total of $5,761.02. The defendants shall therefore pay to the plaintiff costs fixed at $5,761.02 within thirty days.
“Original Signed by”
Regional Senior Justice H.M. Pierce
Released: November 19, 2012
COURT FILE NO.: CV-12-0056-00
DATE: 2012-11-19
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: 1188710 Ontario Limited trading as Burnett Construction Plaintiff - and – Gregory Gartner and Suzanne Gartner Defendants REASONS FOR COSTS ON MOTIONS Pierce J.
Released: November 19, 2012
/hf