Court File and Parties

COURT FILE NO.: CV-12-334SR (Brantford)
DATE: 2013-10-02
SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Turfpro Investments Inc., Plaintiff

and

Vern Heinrichs and Victor Heinrichs, Defendants

BEFORE: The Honourable Mr. Justice D.J. Gordon

COUNSEL:
P. Amey for the Plaintiff/Moving Party

I.A. Duncan and M.A. van Bodegom for the Defendants/Responding Parties

SUPPLEMENTARY ENDORSEMENT re: COSTS

[1] In my prior endorsement, released August 9, 2013, I granted the plaintiff’s motion for summary judgment for the amount claimed, namely $994,728.92, plus interest from April 1, 2012. I also requested written submissions on the issue of costs.

[2] In his initial submissions, Mr. Amey, counsel for the successful plaintiff, requests a partial indemnity cost award of $32,500, inclusive of HST and disbursements. In response, Mr. Duncan, counsel for the defendants, suggests the appropriate award ought be $20,000.

[3] There is no dispute as to the plaintiff’s entitlement to a partial indemnity cost award. The disagreement is with:

(a) docketed hours claimed by plaintiff’s counsel;

(b) appropriate partial indemnity hourly rate; and

(c) the reasonable expectation of the parties as to a cost award, having regard to the use of senior counsel as opposed to delegating some work to junior counsel.

[4] The plaintiff’s claim against the defendants was on a guarantee. An ordinary commercial dispute evolved into a complex matter as a result of the multitude of defences raised by the defendants. Significant time was required in addressing the resultant issues, including extensive cross-examinations and preparation for the summary judgment motion. Nevertheless, the additional expense and delay of a trial was avoided.

[5] Although the plaintiff seeks partial indemnity costs, in my view there is a strong argument for substantial indemnity costs in the circumstances of this case as noted in the preceding paragraph.

[6] Time dockets provided by Mr. Amey indicate recorded time of 79.3 hours. Additional time was required for cost submissions, said to be one hour. The time claim in the Bill of Costs, however, is 77.9 hours.

[7] Mr. Duncan identifies the docketed time of plaintiff’s counsel as 70.8 hours. In so doing, he neglected to include time recorded for attendance on the summary judgment motion and time for costs submissions.

[8] In result, the hours claimed in the Bill of Costs is accepted. Although, there is no real challenge regarding docketed time, I have reviewed Mr. Amey’s records. It is clear to me that not all time has been recorded.

[9] Mr. Duncan challenges the partial indemnity rate claimed by Mr. Amey. Mr. Amey reports his initial substantial indemnity rate as being $450 per hour, raised to $475 during the lawsuit. In his Bill of Costs, Mr. Amey uses $350 per hour throughout as the partial indemnity rate, averaging approximately 75 per cent of his substantial indemnity rate.

[10] According to Mr. Duncan, the appropriate partial indemnity rate ought be 66 per cent. In reply, Mr. Amey says he does not disagree with the concept of treating partial indemnity costs as two-thirds of substantial indemnity costs. He also acknowledges a reduction in the rate for travel time.

[11] As hereafter discussed, costs are no longer determined by use of a formula.

[12] The last dispute focuses on the reasonable expectation of the parties for a cost award, having regard to the use of senior counsel. Mr. Duncan argues some of the work could have been performed by junior counsel and, therefore, suggests a reduction of about $4,000.

[13] In reply, Mr. Amey points out that Mr. Duncan has not identified the work that ought to have been delegated to junior counsel. Further, he says the defendants are precluded from a challenge based on their reasonable expectations given that the time dockets of their two counsel have not been provided for comparison.

[14] The overriding principle in assessing costs is determining what is fair and reasonable. One factor is the expectation of the parties. Assessing costs does not simply involve the application of a formula (see Boucher v. Public Accountants Council, 2004 14579 (ON CA), [2004] O.J. No. 2634 (O.C.A.)).

[15] There is no obligation on the defendants to disclose the time dockets of their counsel. However, it is difficult, if not impossible, to assess their reasonable expectations without this information. It is not enough to simply say the cost claim is too high having regard to reasonable expectations. Some evidence or, at least, specific details as to any challenge are required.

[16] Here, all I have is the time dockets for plaintiff’s counsel. When there is no real challenge to time claimed, the only logical conclusion is that expense incurred by the defendants is comparable to that of the plaintiff.

[17] This lawsuit involved a significant amount claimed to be owing by the defendants to the plaintiff. The defences raised by the defendants, none of which were successful, delayed the plaintiff in obtaining a determination. In result, plaintiff’s counsel was required to invest considerable time and skill in the file.

[18] I am not persuaded some of the work ought to have been delegated to junior counsel. Given the amount at stake, and the complexity of issues raised by the defendants, it was entirely appropriate for Mr. Amey to attend on the cross-examinations and on the hearing of the motion. Further, there can be no dispute any lesser hourly rate of junior counsel would likely be offset by the additional time required. In essence, the experience of Mr. Amey results in less time, a benefit to both sides.

[19] I decline to determine an appropriate partial indemnity hourly rate. As stated, the assessment of costs does not follow a formula and, hence, a percentage is but one factor to consider.

[20] Having regard to all of the above factors, I award partial indemnity costs to the plaintiff, fixed in the amount of $30,000, inclusive of HST and disbursements.

D.J. Gordon J.

Released: October 2, 2013