SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 01-CV-222743

DATE: 20130729

RE: GREENBANKTREE POWER CORPORATION, Appellant

AND:

COINAMATIC CANADA INC., 200 DUFFERIN STREET HOLDINGS INC., GENERAL ELECTRIC CAPITAL CANADA INC., 450 WINONA DRIVE HOLDINGS INC., MCAP FINANCIAL CORPORATION IN TRUST FOR BRITISH COLUMBIA INVESTMENT MANAGEMENT CORPORATION, 1150 & 1200 KINGSTON ROAD HOLDINGS INC., 120 RAGLAN AVENUE HOLDINGS INC., METCAP LIVING MANAGEMENT INC., METRO-MATIC SERVICES LIMITED, Respondents

BEFORE: R. F. Goldstein J.

COUNSEL:
Ronald B. Moldaver, for the Appellant

Christopher J. Rae, for the Defendant Metcap Living Management Inc.

HEARD: March 26, 2013

COSTS ENDORSEMENT

[1] On March 20, 2013 I dismissed this appeal from a decision by Master McAfee and invited the parties to make submissions on the issue of costs. For the reasons that follow, costs on a partial indemnity basis in the amount of $16,000.00 are awarded to the Respondents.

QUANTUM CLAIMED

[2] The Respondents have submitted a costs outline seeking $20,540.16 at partial indemnity rates. The costs consist of fees in the amount of $17,486.00; HST of $2,273.18, and disbursements of $780.98. The fees charged are by one senior counsel (Mr. Campion); and two relatively junior counsel (Mr. Butler and Mr. Rae). Mr. Campion and Mr. Butler charged counsel fees for the appearance at the appeal. The largest fees charged are 17.8 hours by Mr. Butler for research and the preparation of material ($4,005.00 at partial indemnity rates); and 17.5 hours charged by Mr. Campion for preparation for the hearing including review of the appellant’s materials ($6,125.00 at partial indemnity rates).

[3] Mr. Moldaver, counsel for the Appellant, argues that the amounts charged by the Respondents are excessive, and that an amount of $7,500.00 inclusive of fees, taxes, and disbursements would be reasonable. He submits dockets for himself and his law clerk. He indicates that the total amount of time he spent on the appeal is 14.3 hours. His entries are broken down but time spent on each entry is not set out.

ANALYSIS

1. Applying the Factors in Rule 57.01:

[4] Rule 57.01 of the Rules of Civil Procedure sets out those factors that a court awarding costs may take into account. The parties have focused on some of those factors.

[5] The Respondents say that the amount claimed in the proceedings is a significant factor: R. 57.01(1)(a). The matter involved the sale of commercial properties several years ago. The Respondents potentially faced enormous costs in order to defend the accounting issue and greater costs if the claim was successful. Given the potential costs, the Respondents also say that the issues were quite important: R. 57.01(1)(d). The Appellant says that every issue worth arguing is important to the parties, but that in this case the quantum was relatively small.

[6] Although there is no test of proportionality involved in assessing costs, I agree that the Respondents were justified in expending significant sums in order to resist the appeal. There was, potentially, a significant amount of money at stake. With respect, the Appellant’s own actions undermine the argument that the quantum and the risks to the Respondents were small: the Appellant brought the motion for an accounting long after the properties were sold and long after the potential accounting issue had crystallized. If the amounts were that insignificant, why would the Appellant undertake this potentially costly litigation? I draw the inference that the real answer is this: the Appellant gambled that it might obtain what others might characterize as a windfall if the motion was successful and was prepared to take the litigation risk.

[7] The Respondents also say that the appeal was relatively complex: R. 57.01(1)(c). The appeal involved the doctrines of merger and election as well as the jurisdiction of a Master sitting as a referee. In contrast, the Appellant says that the doctrines are not complex, and that the issue to be decided was a relatively simply accounting issue. In my view, the legal issues involved were not highly complex, but the application to the particular facts raised some mixed issues of fact and law that became complex.

2. The Reasonable Expectations of the Parties

[8] The Respondents say that the significant fees incurred by them should have been expected by the Appellant. The parties were represented by top-level “downtown” senior counsel. The Appellant knew that the original motion and the appeal would be vigorously resisted by the Respondents and that the Respondents would expend significant resources in doing so. The Appellant, in contrast, says that the amount of time spent on the file is excessive. The Appellant points to Mr. Butler spending almost 18 hours putting the material together when it was the Appellant that had the burden of preparing the record and making the case. The Appellant also argues that the 17.5 hours spent by Mr. Campion are unreasonable given that he argued the original motion. Counsel for the Appellant points out that he, in contrast, spent 14.3 hours on everything. The Appellant also says that Mr. Butler’s 9.4 hours of preparation are unreasonable considering that he did not have a speaking role at the appeal. Finally, the Appellant points out that the 5.6 hours spent by Mr. Rae preparing the costs outline and submissions are prima facie proof that the amount of time spent is excessive.

[9] I agree with the Appellant that the costs set out in the Respondent’s dockets are somewhat excessive. It seems clear that a great deal of time was necessary in terms of preparation of material and argument, especially given the stakes. That said, some amounts (such as the amount spent by Mr. Butler on for hearing preparation) appear to have been incurred unnecessarily.

DISPOSITION

[10] Costs are in the discretion of the court: Rule 57.01. The governing principle is that the Court should set an amount that is fair and reasonable in the circumstances: Boucher v. Public Accountants Council for Ontario, 2004 14579 (Ont.C.A.), 71 O.R. (3d) 291, [2004] O.J. No. 2643 (C.A.). Those circumstances include the reasonable expectations of the parties. In my view, an amount of $16,000.00 inclusive of HST and disbursements is fair and reasonable in the circumstances. Those circumstances include the fact that the stakes, while not enormous, were certainly not insignificant. The amount also reflects what a sophisticated commercial party engaging a top-level “downtown” law firm could expect to pay. This amount is well within the range of costs awarded in similar matters. Accordingly, costs in the amount of $16,000.00 are payable by the Appellant to the Respondents.

R. F. Goldstein J.

Date: July 29, 2013