ONTARIO

SUPERIOR COURT OF JUSTICE

(Commercial List)

COURT FILE NO.: CV 10-9024-00CL
DATE: 20131001

B E T W E E N:

ALVARO D'ANTONIO

Shaun Laubman and Rocco DiPucchio, for the Plaintiff

Plaintiff

• and -

ELIO MONACO, ROKO DZEKO and 2167661 ONTARIO LIMITED

Jeffrey Kramer, for the defendant Elio Monaco

Defendants

HEARD: in writing

MESBUR J

REASONS ON COSTS:

[1] In this oppression case I found in favour of the plaintiff, D'Antonio, on the issues of

a) whether the defendant Monaco breached his fiduciary obligations to the defendant 216 and whether D'Antonio had been oppressed;

b) whether the property management agreement in favour of Monaco was enforceable, and should Monaco have paid himself; and

c) the appropriate method to grant the parties a corporate “divorce”.

[2] While I accepted D’Antonio’s argument that Monaco did not own 50% of 216’s shares, I rejected D'Antonio’s claim to own two thirds of the shares. Instead, I generally accepted his alternative argument and found him to own 55% of the shares.

[3] D’Antonio now seeks his costs of the action. He asks for costs fixed at $175,000 all inclusive. His actual fees and disbursements to his counsel come to $293,495 all inclusive, (rounded). He has delivered a partial indemnity Bill of Costs for $138,323, all inclusive, also rounded. His substantial indemnity Bill of Costs is for $202,282 all inclusive, also rounded.

[4] D'Antonio says he should receive close to substantial indemnity costs first because of the rule 49 offer he delivered on May 8, 2013. The judgment was as favourable or more favourable to him on the issues of repayment of management fees and the terms of the buy-sell to effect the corporate divorce. While the judgment was slightly less favourable than D'Antonio’s alternative position on share ownership (57% as opposed to the 55% ordered), he points to the fact that the terms of his offer were severable. He says he should receive substantial indemnity costs on at least the first two issues.

[5] D'Antonio also points to the fact that he was entirely successful in the action, albeit on his alternative claim for relief. He therefore suggests he is entitled to his costs of the action. He says he should be entitled to an elevated costs award because of the findings of oppression and breach of fiduciary duty against Monaco, as well as because of his success on most of his rule 49 offer.

[6] Taking all these factors into account, D'Antonio suggests that the figure of $175,000 is appropriate as a slightly discounted substantial indemnity bill. He discounts the figure to reflect the fact that he was not completely successful on his alternative argument.

[7] Unsurprisingly, Monaco takes a contrary view. He says there should be no order as to costs. He suggests success at trial was divided, with D'Antonio only enjoying success on oppression and the property management fee issue. Monaco takes the position that he enjoyed more success on the issue of share ownership. He characterizes this issue as the main issue at trial.

[8] Alternatively, Monaco says that if costs are awarded, D'Antonio’s costs are excessive. He raises the following complaints about D'Antonio’s Bill of Costs:

a) 27 hours is excessive for preparing pleadings;

b) There was no hearing of a motion to remove the property manager, so no costs should be recoverable for preparation of motion materials;

c) No costs should be awarded for a case conference or 9:30 appointment unless the presiding judge specifically provides for costs;

d) Excessive time is claimed for discoveries;

e) No costs should be recoverable for a privately arranged mediation;

f) Trial preparation time of nearly three times the time of trial is excessive;

g) Two counsel for trial were not necessary, and only one counsel fee should be assessed;

h) Photocopies costing $1,316 seem to relate to documents that were not filed at trial, and are therefore not assessable. Similarly a disbursement of $450 to Jerrold Greenspan is also not properly assessable.

[9] D'Antonio responds by saying oppression was the main issue at trial. He says success was not divided, particularly since his rule 49 offer had severable terms. He points out Monaco has failed to provide his own bill of costs. D'Antonio relies on cases like Angoss Software Corp. v. Scott[1] which hold that a party’s attack on an opposing party’s fees and costs is no more than an “attack in the air” when that party has not submitted evidence of its own fees and costs. I agree. Without any evidence to the contrary, I can only assume Monaco incurred similar costs as did D'Antonio. It hardly lies in Monaco’s mouth to say D'Antonio’s costs are “too high” or “excessive” when I have no idea of what Monaco himself paid for the same services.

[10] D'Antonio also points out that until the trial itself, Monaco had two counsel representing him. I do not know, however, whether both counsel participated in all pretrial events. Two counsel may be a cost-saving measure if, for example, only junior counsel appears on some events, and there is no duplication of services. That said, I have little quarrel with two counsel representing D'Antonio in the circumstances of this case.

[11] I agree with D'Antonio that success was not divided. D'Antonio enjoyed substantial success in the action, particularly in relation to the issues of breach of fiduciary duty, oppression and the property management fees. On these issues, he “beat” his offer.

[12] I also find D'Antonio enjoyed significant success on his alternative argument on share ownership. As a result, I conclude he is entitled to his costs of the action. The issue is what is the appropriate scale and quantum.

[13] It seems to me that D'Antonio’s costs should be somewhere between substantial and partial indemnity fees. He should receive substantial indemnity fees from May 8, 2013 onward on the issues of breach of fiduciary duty and property management fees to reflect the fact that the judgment was as favourable to him on these issues as what he proposed in his May 8 offer.

[14] D'Antonio is also entitled to costs on the issue of share ownership. Those costs should only be on a partial indemnity basis, and should be somewhat discounted to reflect the fact that although successful, D'Antonio did not enjoy as much success on this issue as the alternate position he took in his pleadings.

[15] Fixing the costs of an action is not an exercise in second guessing counsel. As the court put it in Tri-S Investments v. Vong,[2]

A judge’s function in fixing costs … is to perform a summary analysis of the cost of the services of counsel for the successful party … to ensure that the magnitude of the claimed costs is in keeping with what is warranted in the circumstances. I do not view it to be the court’s function when fixing costs to second-guess successful counsel on the amount of time that should or could have been spent to achieve the same result, unless the time spent is so grossly excessive as to be obvious overkill.

[16] As I see it here, I have no way to determine whether the time spent is “so grossly excessive as to be obvious overkill”. I do not quarrel with the time spent, particularly in the absence of Monaco’s bills of costs as a comparator.

[17] I also have no quarrel with the rates cited in D'Antonio’s bill of costs. The partial indemnity rates claimed fall within the ranges set out in the “Information for the Profession” by the Costs Subcommittee of the Civil Rules Committee. Monaco raises no issue about the reasonableness of D'Antonio’s lawyers’ actual billing rates.

[18] Taking all these factors into account, D'Antonio is entitled to his costs of the action, fixed at $145,000 all inclusive.

MESBUR J

Released: 20131001

[1] 2013CarswellOnt 8847 (Div.Ct.)

[2] [1991] O.J. No. 2292 @ page 12