SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: Richard Hames, R. Hames Family Trust and BHCC Services Inc., Applicants

AND:

Stanley Greenberg, S. Greenberg Family Trust, Zvia Wered, Josip Zaborski, J. Zaborski Family Trust, Sabatino Cipro, S. Cipro Family Trust, 1327519 Ontario Inc., Residential Energy Savings Products Inc. and Consumer’s Choice Home Improvements Corp., Respondents

BEFORE: D. M. Brown J.

COUNSEL:
L. Munro, for the Applicants

J. Levitt, for the Respondents

HEARD: June 18, 2013; subsequent written submissions dated July 17 and 19, 2013; subsequent submissions on costs.

REASONS FOR DECISION - Costs

I. Positions of the parties on costs

[1] By Reasons dated July 24, 2013 (2013 ONSC 4410), I granted part of the applicants’ motion to remove from the record the respondents’ counsel, Mark A. Klaiman and his law firm, Klaiman, Edmonds, as counsel for the corporate respondents, but dismissed that part of the motion seeking to disqualify him from acting for the individual respondents.

[2] The individual respondents seek their partial indemnity costs in the amount of $7,239.57 from the applicants, payable within 30 days forthwith, on the basis that they successfully resisted the removal of their counsel of record.

[3] The applicants submitted that the individual respondents should not receive any award of costs because the applicants did succeed in removing Mr. Klaiman as solicitor of record for the respondent corporations which are controlled by the individual respondents. Instead, they submitted that the costs of the motion should be referred to the judge who decides the application. The applicants also pointed to a May 21, 2013 offer they made to the respondents under which they would withdraw their motion to remove Mr. Klaiman as counsel of record in return for the respondents agreeing to an expedited timetable for the hearing of the motion for interim funding relief under the OBCA, to the delivery of updated financial information to the respondents and to schedule a case conference before a judge of this Court. The offer was amended on June 3, 2013, following no response by the respondents, to include a requirement that the respondents pay the applicants’ costs thrown away of for the motion. In reply, the individual respondents argued that the offers made by the applicants contained terms extraneous to the issue on the motion and therefore the applicants did not “beat” their offer.

II. Analysis

[4] I have taken into account the factors enumerated under Rule 57, including the time spent, the result achieved, and the complexity of the matter, as well as the application of the principle of proportionality: Rule 1.04(1). In addition, I have considered the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3rd) 291 (C.A.) and Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.), specifically that the overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant.

[5] This was not a complex motion. The factual record was somewhat large, but not complicated. Counsel filed further submissions following the hearing due to the release of the Supreme Court of Canada decision in McKercher. In practical terms, success was divided. Although Mr. Klaiman was permitted to continue to represent the individual defendants, I removed him as counsel of record for the respondent corporations which are controlled by the individual defendants. The applicants’ May 21, 2103 offer dealt with more than just the issue on the motion, so I have not taken it into account for the purposes of awarding costs.

[6] Given the divided success, I think the most fair and reasonable award of costs would be to fix the costs of the motion and make those costs payable in the cause of the application. As to the quantum, this was not a complex motion, but the timing of the release of the McKercher decision did necessitate some additional work by counsel. I conclude that an award of partial indemnity costs in the amount of $4,000.00 would be a reasonable one in the circumstances, and I order those costs payable in the cause of the application.

III. Case management directions

[7] Having read the chronology of events set out in the affidavit of Ruth Aleixo filed as part of the applicants’ cost submissions, I change the view I expressed in the July 24 Reasons about not making any case management order in this application, and I will case manage this application. I understand that the parties may attempt to mediate their dispute. As well, further to Mr. Klaiman’s email to my office dated October 2, 2013, I see that counsel have booked a 9:30 before me for October 25, 2013. Notwithstanding any proposed mediation, I would ask counsel to come prepared on October 25 to discuss a schedule to take this application through to its hearing on the merits.

D. M. Brown J.

Date: October 12, 2013