ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 2611-03
DATE: 20131106
B E T W E E N:
G. C. BUTCHER LTD.
Ian N. McLean, Counsel for the Plaintiff
Plaintiff
- and -
SUPERIOR PROPANE INC.
Erik Penz, Counsel for the Defendant
Defendant
HEARD: June 12, 2013
ellies j.
REASONS FOR DECISION ON COSTS
[1] Superior Propane Inc. was successful in its motion for summary judgment and now seeks costs both with respect to the motion and with respect to the main action. It claims $164,329.73 in costs, taking into account an offer to settle it made on May 9, 2011. Alternatively, it seeks the sum of $141,852.34 in costs, on a partial indemnity basis throughout.
Positions of the Parties
[2] Of the factors set out in Rule 57.02, Superior focuses on three in particular, namely:
(a) the amount that G. C. Butcher Ltd. claimed in the proceedings;
(b) the complexity of the proceedings; and
(c) Butcher’s conduct that tended to lengthen unnecessarily the duration of the proceedings.
[3] To these, I would add one more:
(d) the principle that the costs awarded must be fair and reasonable.
[4] The submissions made on behalf of Butcher are brief. I will make reference to them as I discuss the factors listed above.
The Amount Claimed in the Proceedings
[5] The Statement of Claim in this case was issued in 2003. In it, Butcher claimed damages totalling $900,000 and prejudgment interest. It was not until 2007 that Butcher finally provided an expert report quantifying those damages at $648,000 to $790,000. Even the low end of this range is significant, although not particularly high when compared to the amounts claimed and awarded regularly by this court in commercial matters.
[6] Superior correctly points out that the amount claimed for prejudgment interest became a significant component of Butcher’s claim as these proceedings dragged on, eventually exposing Superior to a claim of nearly $200,000. However, this exposure is more than offset by the amount of prejudgment interest that accumulated on Superior’s counterclaim. Indeed, the delay in this case appears to have worked largely in Superior’s favour, because Butcher has been ordered pay prejudgment interest to Superior in the amount of more than $144,000 on a counterclaim of approximately $55,000.
The Complexity of the Proceeding
[7] During the motion, Butcher argued that its claim ought to proceed to trial on grounds other than those that were plain and obvious from the wording of its claim. Although I agree that this should be taken into account in determining the costs that should be awarded, it affected only the motion and not the entire action, which was a relatively straightforward commercial claim and counterclaim.
Butcher’s Conduct in Unnecessarily Prolonging the Proceedings
[8] During the course of the litigation, Butcher continuously attempted to place the matter on the trial list without properly fulfilling its discovery obligations. This resulted in more time being spent by counsel for Superior, who was required to pursue Butcher for productions and fulfillment of undertakings. For the most part, however, this extra effort was limited to letter writing. The plaintiff did move for an order returning the action to the trial list after it had been struck-off, but it was not necessary for counsel for Superior to appear on that motion and there is no indication that Superior ever sought its costs with respect thereto. Although the plaintiff’s representative was examined for discovery on two occasions, it appears that the second was merely a continuation of the first, rather than being necessitated as a result of further productions.
Costs Must be Fair and Reasonable
[9] According to counsel for Butcher, Superior’s Bill of Costs shows that there were 19 individuals who put time into this matter on behalf of Superior. Butcher submits that there must have been duplication of effort on the part of at least some of these individuals. That makes sense. However, it is clear that many of the individuals who worked on the file were merely “passing through”, as often happens when a case moves slowly and the clerks, articling students, and lawyers working on it progress in seniority at a more normal pace. The delay in this case was attributable to Butcher, for the reasons I have expressed.
[10] Nonetheless, I find that the time spent on certain aspects of this matter by those individuals who remained with the file is excessive. Specifically, the 31.7 hours spent by Mr. Penz in 2009 on settlement and the 223.9 hours spent by Mr. Penz and four others on the summary judgment motion, for which preparation appears to have begun two years before it was heard, is more than I believe is reasonable.
[11] The fixing of costs is not simply a mechanical exercise involving a calculation of hours times rates. Overall, the objective is to fix costs at an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings, rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), at para. 26.
[12] In my opinion, neither of the amounts sought by Superior is fair and reasonable. Absent the May 2009 offer to settle, I would have awarded $80,000, all-inclusive, on a partial indemnity basis. Taking into account the roughly $22,500 difference between the two amounts that arises as a result of Butcher’s failure to do better than the offer to settle, I fix costs in the all-inclusive amount of $100,000.
Order
[13] For the foregoing reasons, Butcher shall pay Superior’s costs of the action and the motion in the amount of $100,000, inclusive of HST and disbursements.
Ellies J.
Released: 20131106
COURT FILE NO.: 2611-03
DATE: 20131104
ONTARIO
SUPERIOR COURT OF JUSTICE
G. C. BUTCHER LTD.
Plaintiff
– and –
SUPERIOR PROPANE INC.
Defendant
REASONS FOR DECISION ON COSTS
Ellies J.
Released: 20131106