SUPERIOR COURT OF JUSTICE – ONTARIO

(COMMERCIAL LIST)

COURT FILE NO.: CV-11-9069-00CL;

DATE: 20130110

RE: BELL EXPRESSVU LIMITED PARTNERSHIP, Plaintiff

AND:

CURT-MICHAEL PIECKENHAGEN, a.k.a. CURT MICHAEL PIECKENHAGEN, a.k.a CURT PIECKENHAGEN a.k.a CURT-MICHAEL PIECKENHAYEN a.k.a. CURTIS MICHAEL, KURT PIECKENHAGEN, MEGAN ANDERSON, JULITA PIECKENHAGEN, JULITA-LUISE PIECKENHAGEN a.k.a. JULIE LUISE, VERA PIECKENHAGEN, CHRISTOPHER BROOKS a.k.a. JASON BROOKS, 1125749 ONTARIO LIMITED, ECCELERATED DIGITAL, ACCELERATED DIGITAL COMMUNICATIONS INC., 121429 ONTARIO INC., 373041 ONTARIO INC., GRAYDON HALL PROPERTY MANAGEMENT LTD., GH CAPITAL CORPORATION, JASON BROOKS, JOHN DOHLEM, JOE HARVEY, JULIE LUISE, MARTIN MAI, CURTIS MICHAEL, JACK RUSHER, and ALAN PARSONS, Defendants

BEFORE: CUMMING J.

COUNSEL:
Christopher D. Bredt and Denise Bambrough, for the Plaintiff, Bell ExpressVu Limited Partnership

Melvyn L. Solmon and Nancy Tourgis, for the Defendants. 373041 Ontario Inc., Kurt Pieckenhagen, Julita Pieckenhagen, Julita Pieckenhagen, Julita-Luise Pieckenhagen, Vera Pieckenhagen, Christopher Brooks, Nicole Pieckenhagen, Graydon Hall Property Management Ltd. and GH Capital Corporation

Michael A. Spears, for the Defendants, Curt-Michael Pieckenhagen, 1125749 Ontario Limited, Eccelerated Digital, Accelerated Digital Communications Inc., and 121429 Ontario Inc.

COSTS ENDORSEMENT

Background

[1] My Endorsement in this proceeding dismissing motions brought by the Defendants was delivered on October 29, 2012: Bell ExpressVu Limited Partnership v. Pieckenhagen, 2012 ONSC 5650.

[2] Two groups of Defendants, the so-called “373 Defendants” and the so-called “Accelerated Defendants”, brought motions for summary judgment seeking to have the action dismissed on the basis that the Plaintiff, Bell ExpressVu Limited Partnership, failed to commence its action within the applicable limitation periods under s. 18(5) of the Radiocommunication Act and the Limitations Act of Ontario.

[3] The Defendants also brought motions to set aside the Anton Piller Order granted on an ex parte basis and to exclude the evidence obtained pursuant to this Order.

[4] (For ease of reference, I refer to the several motions simply in the singular, i.e. as the Defendants’ motion, given that all Defendants brought the same motions, identified together in respect of the issues and made and relied upon the same arguments.)

General Principles as to Costs

[5] Costs are in the discretion of the Court: s. 131, Courts of Justice Act, and Rule 57.01 of the Rules of Civil Procedure. In Ontario, the normative approach is first, that costs follow the event, premised upon a two-way, or loser pay, costs approach; second, that costs are awarded on a partial-indemnity basis; and third, that costs are payable forthwith, i.e. within 30 days. Discretion can, of course, be exercised in exceptional circumstances to depart from any one or more of these norms.

[6] Rule 57.01 (1) lists a broad range of factors for the Court to consider, including the result achieved in the proceeding, the complexity of the proceeding, the importance of the issues and whether any step in the proceeding was improper, vexatious or unnecessary.

[7] The Court’s discretion to award costs is designed to further three main objectives in the administration of justice, being: (1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to encourage settlements; and (3) to discourage inappropriate behaviour by litigants in their conduct of the proceedings. See British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371; Fong v. Chan (1999), 46 O.R. (3d) (C.A.); Fellowes; McNeil v. Kansa General Insurance Co. (1997), 37 O.R. (3d) 464 (Gen. Div.) and; Skidmore v. Blackmore (1995), 1995 1537 (BC CA), 122 D.L.R. (4th) 330 (B.C.C.A.).

[8] In exercising its discretion, a Court must produce a result that is fair and reasonable in all the circumstances: Boucher v. Public Accountants Council (Ontario), (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.).

[9] The principles to be applied in the exercising of discretion in fixing costs are authoritatively set forth in Andersen v. St. Jude Medical, Inc., 2006 85158 (ON SCDC), [2006] O.J. No. 508 (Div. Ct.), 264 D.L.R.(4th) 557, 145 A.C.W.S. (3d) 786.

The Submissions as to Costs

[10] Extensive written submissions with respect to costs have now been received. The Defendants’ detailed submissions regarding costs relate largely to their motion for summary judgment.

[11] However, it is to be noted that the motion to set aside the Anton Piller Order was argued at length, involved many allegations of material non-disclosure and accounted for a significant portion of the Defendants’ facta. In my view, there was no arguable merit to the motion to set aside the Anton Piller Order.

[12] The Plaintiff seeks costs in respect of the dismissed motions on a substantial indemnity basis, quantified at $389,249.18, inclusive of fees at $332,797.50, HST of $43,263.67 and disbursements of $13,188.01. (On a partial-indemnity basis, the Plaintiff would seek fees of $296,794.28.)

[13] The Defendants respond that “There is absolutely no basis for a claim of substantial indemnity costs” as it “cannot be said that the...Defendants acted unreasonably or in bad faith”. The Defendants submit that the costs of their motion should be reserved to the trial judge as the issue in respect of the limitation periods remains a live issue at trial. In the alternative, they submit that, if costs are to be awarded to the Plaintiff, they be awarded on a partial-indemnity basis and be fixed at $100,000, inclusive of all taxes and disbursements.

[14] In my view, there is no good reason to depart from the normative approach whereby costs follow the event and are payable forthwith.

[15] The Defendants also assert that the amount claimed and time spent (some 784 hours by the Plaintiff’s lawyers involved) “is excessive” and that the dockets provided to the Defendants by Plaintiff’s counsel do not provide a “break-down by task”. However, the Costs Outline of the Plaintiff accords with the requirements of Rule 57 and the Plaintiff has produced, as requested by the Defendants, the dockets relied upon in support of its claim in the form of a 53 page time detail report. Moreover, in their reply costs submission (paragraphs 17 and 18) Plaintiff’s counsel effectively refutes the Defendants’ assertions made in their responding costs submission as to the history of the proceedings and in respect of the examinations and cross-examinations.

[16] It is noted that the Defendants, while not required to reveal their own costs or time expended by Defendants’ counsel, have chosen not to make such disclosure. Such information, while not conclusive as to the appropriate award of costs, would provide a relevant factor for consideration given that there is an allegation by the Defendants of excess on the part of the Plaintiff’s counsel. See Risorto v. State Farm Mutual Automobile Insurance Co. (2003), 2003 43566 (ON SC), 64 O.R. (3d) 135 (S.C.J.) at para. 10.

[17] The Defendants refer to the hourly rates of Plaintiff’s counsel as excessive, however, in making this charge, they inaccurately reference the actual rates charged by the Plaintiff’s counsel to their client rather than the substantially lesser rates actually sought by Plaintiff’s counsel on a substantial-indemnity rate basis.

[18] Indeed, it would appear that the rates claimed by both the senior counsel (Mr. Bredt and Ms. Bambrough) for the Plaintiff are less than the rate apparently charged to the 373 Defendants by their senior counsel (Mr. Solmon) and is equal to the rate apparently charged to the Accelerated Defendants by their counsel (Mr. Spears).

[19] The main issue raised as a defence by the Defendants in their summary judgment motion is their assertion as to the applicability of the Limitations Act and the limitation of action provision, s. 18(5), in the Radiocommunication Act.

[20] Essential to the Defendants’ position is the assertion that, by exercising reasonable diligence, Bell ought to have discovered the unlawful conduct of the Defendants at an earlier time, i.e. in 2007 such that the statutory limitation periods were operative so as to provide a complete defence.

[21] However, the evidence (see in particular paragraphs 59 to 85 of the Endorsement) at the three-day hearing on the return of the motions established that fraudulent concealment by the Defendants through misrepresentations was designed to mislead the persons investigating the Defendants’ conduct in 2007 and prevented the investigators from discovering the evidence of the unlawful activities of the Defendants (see paragraph 63 of the Endorsement).

[22] Rule 20.06 provides that the court may fix costs on a substantial-indemnity basis if (a) the Defendants acted unreasonably by making the motion, or (b) the Defendants acted in bad faith for the purpose of delay. Unlike the Rule as it provided before 2010, there is not a presumption that an unsuccessful summary judgment motion was unreasonably brought.

[23] In my view, the Defendants, represented by experienced and able counsel, knew, or ought reasonably to have known, that their motion for summary judgment would quite probably be unsuccessful given the multiple factual issues for trial and the evidence to date. Given the principles articulated in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 2011 CarswellOnt 13515, Defendants’ counsel would be well aware of almost certain failure of the motion and that costs might well be awarded on a substantial-indemnity basis.

[24] Considerable time and effort was necessarily required to be expended by the Plaintiff in responding to the motion, as set forth in paragraph 20 of their reply costs submission. The Defendants took the risk of bringing a motion for summary judgment with knowledge of the danger of losing and being responsible for costs. Given the importance of the issues which the Defendants sought to have determined by their motion, their only reasonable expectation would be that the Plaintiff would necessarily do everything it could to prepare for and present a case with the highest prospect of success.

[25] The factual and legal issues which had to be determined on the Defendants’ motion were numerous and complex. Findings of credibility were implicit to a determination of these significant factual issues.

[26] In my view, and I so find, it was unreasonable within the meaning of Rule 20.06 for the Defendants to have brought their motion for summary judgment. Paragraph 84 of my Endorsement sets forth my conclusion from the evidentiary record:

[84] The Defendants’ motions for summary judgment involve essential credibility determinations, issues as to different limitation periods applying to different causes of action (which are dependent on disputed facts), disputed law on these issues, contradictory evidence by seven witnesses, six motion records of some 1,254 pages, the transcripts from the Rule 39 examinations of two former Bell employees, of three present and former employees of Industry Canada, the cross-examinations over two days each of the Defendant Curt-Michael and the main Bell investigator, Wayne Gow, some 76 exhibits from the examinations and cross-examinations, some 613 pages of information provided by way of answers to undertakings and questions taken under advisement and lengthy facta. The normal production of documents and oral examinations for discovery needs to take place before any determination of the issues raised in this action. The “full appreciation test” requires a trial.

[27] The Defendants also argue that there is no existing precedent with respect to the interpretation of s. 18(5) of the Radiocommunication Act. However, the Defendants’ reliance upon this statutory provision was only one of several grounds relied upon by the Defendants in bringing their motion. Even if the Defendants had been successful in respect of this one issue, it would not have resulted in the dismissal of the Plaintiff’s action.

[28] In my view, it would be apparent to the Defendants’ counsel in bringing the summary judgment motion that the “full appreciation test” could not be satisfied by the Defendants in the circumstances of the cast at hand. The Defendants raise issues with their motion that call for multiple findings in respect of material facts in dispute and credibility on the basis of conflicting evidence in respect of a number of witnesses. It would be apparent that the summary judgment motion could not serve as an adequate substitute for a trial in ensuring a just result.

Disposition

[29] For the reasons given, I award costs to the Plaintiff on a substantial-indemnity basis which I fix in the amount of $363,488.01, inclusive of fees at $310,000, HST of $40,300 and disbursements of $13,188.01. The costs are payable on a joint and several basis by all defendants and are payable forthwith, i.e. within 30 days.

CUMMING J.

Date: January 10, 2013