ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 11-53240
DATE: 30/05/2013

BETWEEN:

GENIVAR INC.

Plaintiff/Responding Party

– and –

STEVEN TAYLOR and BYTOWN ENGINEERING INC.

Defendants/Moving Parties

Adrian C. Lang and Kelly O’Ferrell for the Plaintiff
Paul A. Webber and James Wilson, for the Defendants

Decision As TO costs

C.D.A. McKinnon J.

Background

1A motion for summary judgment brought by the defendants was ordered stayed by me pending full discovery of the parties and the exchange of affidavits of documents. The reasons for decision can be found at: Genivar Inc. v. Steven Taylor and Bytown Engineering Inc., 2012 ONSC 6285.

2I ordered that submissions as to costs be made within 45 days of my decision. The costs submissions from both parties were in fact made within the time limits imposed. Unfortunately, due to an administrative error, the costs submissions filed on behalf of the successful party, Genivar Inc., were not brought to my attention. It is only when counsel for Genivar Inc. contacted the court earlier last week that it became known their costs submissions had been filed in December 2012. I simply assumed that costs had been agreed to by the parties when I did not receive the costs submissions filed on behalf of Genivar Inc. It is my hope that the parties have not been prejudiced as a result of this unfortunate administrative error.

Positions of the Parties

3Genivar Inc. seeks substantial indemnity costs in the amount of $45,520.17, payable forthwith, in any event of the cause, on the basis that the bringing of the motion for summary judgment was unreasonable. The Defendants, Steven Taylor and Bytown Engineering Inc., seek an order setting costs on a partial indemnity scale in the amount of $15,000.00, payable in the cause.

4Rule 20.06 of the Ontario Rules of Civil Procedure provides that on a motion for summary judgment the court has the discretion to award a successful party substantial indemnity costs where: (a) the party acted unreasonably by making or responding to the motion; or (b) the party acted in bad faith for the purpose of delay.

5Counsel for Genivar Inc. submit that Steven Taylor and Bytown Engineering Inc. acted unreasonably in bringing the summary judgment motion in the absence of documents and information in their exclusive possession, which I held to be necessary information for the hearing of the motion. There is no allegation of bad faith for the purpose of delay.

6Counsel for Steven Taylor and Bytown Engineering Inc. submit that much of the work done in preparation for the motion for summary judgment will be of use at any subsequent motion or trial and that costs payable on a substantial indemnity basis in any event of the cause would effectively prejudge the merits of the case for the Defendants. Furthermore, counsel point out that the motion for summary judgment was stayed, not dismissed. It is submitted that the case at bar is similar to Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 2011ONCA 764, which held that a case involving a non-compete clause was suitable for a summary judgment motion. Counsel for the Defendants state that they acted reasonably and in good faith in bringing the motion, relying on new law and navigating in somewhat uncharted territory.

Analysis

7In my reasons for decision I found that the motion brought by the Defendants was “clearly premature”, and that documentation and information in their possession and control was required to be produced before a summary judgment motion could proceed. However, I also held that the issue of whether any common law duty to not compete existed in the circumstances was arguably amenable to a motion for summary judgment.

8I am persuaded that much of the work product created in preparation for the motion is of real and lasting value to Genivar Inc. in the continuing proceedings and that the awarding of substantial indemnity costs, in any event of the cause, would potentially deprive the Defendants of a fair costs award at the conclusion of the proceedings, should their defence succeed.

9Notwithstanding that finding, I note that Genivar Inc. has clearly demonstrated that they wished to engage the Defendants in an orderly process of discovery and that the motion for summary judgment disrupted the orderly plan that had been proposed, adding unnecessary costs to the proceedings.

10Costs are entirely a matter of discretion for the motion judge. I am persuaded that Genivar Inc. should be awarded costs that would compensate them for the necessity of responding to a motion that was clearly premature.

11In the circumstances, I reject the invitation to set costs in the cause as suggested by counsel for the Defendants. I also reject the invitation to award costs on a substantial indemnity basis, payable forthwith, in any event of the cause, as suggested by counsel for the Plaintiff.

Disposition

12In the result, I have determined that the appropriate costs award is the sum of $20,000.00, inclusive of GST and disbursements, payable within 30 days, in any event of the cause.

C.D.A. McKinnon J.

Released: 30/05/2013

COURT FILE NO.: 11-53240
DATE: 30/05/2013

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

GENIVAR INC.

Plaintiff/Responding Party

– and –

STEVEN TAYLOR and BYTOWN ENGINEERING INC.

Defendants/Moving Parties

Decision on costs

C.D.A. McKinnon J.

Released: 30/05/2013