SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: C-519-09
DATE: 2013-11-13

RE: Logikor Inc., Plaintiff

and

Bessey Tools Inc., Bessey Tools Ltd. and Bessey Tool GmbH & Co. KG.,

all of which Corporations carry on business as Bessey Tools North America,

Defendants

BEFORE: The Honourable Mr. Justice P.J. Flynn

COUNSEL: Brian R. Law, Counsel for the Plaintiff

Ronald F.B. Woynarski, Counsel for the Defendants

ENDORSEMENT

[1] As I said in my Reasons for Judgment, this nine day trial, full of confusing and conflicting evidence, was over a simple contract issue: “Was there a contract?”

[2] In the end, the Plaintiff’s claims were totally rejected. However, the Defendants’ counterclaim was dismissed as well. In fact, no evidence was led on the counterclaim.

[3] During the course of the trial, the Plaintiff conceded it had no basis for its claim against Bessey Tools GmbH & Co. KG, but it never did withdraw its claim or abandon it formally. It did however abandon during the course of the trial its claim for breach of fiduciary duty.

[4] My task is now to fix the fair and reasonable costs in favour of the entitled party, costs which are in the reasonable expectation of the losing side.

[5] The end result of this trial amounts to a complete vindication of the Defendants.

[6] The Plaintiff concedes that the Defendants should be entitled to their costs of the action but claims entitlement itself to costs in respect of trial delay and the dismissed counterclaim.

[7] The Defendants seeks costs in the total amount (rounded) of $355,600 of which $151,330 is in respect of disbursements.

[8] Counter posed to that claim, the Plaintiff has delivered its own costs claim in the total amount (rounded) of $48,470 of which $1,685 is for disbursements.

[9] For the most part, the Plaintiff accepts as reasonable the amount of time spent and the rates charged by Defendants’ counsel and clerks. It takes issue with the Defendants’ claim for the time charges of Mr. Woynarski’s junior at trial, which he says, without any explanation, should be at the rate of a student-at-law. I disagree with that proposition.

[10] Moreover, the Plaintiff’s position is that because the Defendants are only entitled to partial indemnity costs and because the Defendants’ claim for disbursements is inflated, the net amount payable by the Plaintiff to the Defendants should only be $128,000 (rounded).

[11] The Defendants claim substantial indemnity costs because the unreasonable conduct of the Plaintiff compounded the complexity of the proceedings, citing as examples:

(i) the Plaintiff’s refusal to disclose its pricing formulae and Mr. King’s unwieldy and sometimes evasive evidence on the issue of price, including the proffering of voluminous irrelevant evidence;

(ii) the Plaintiff’s failure to disclose all relevant documents, including original accounting records referred to by the Plaintiff’s expert;

(iii) the evidence of Mr. King at oral examinations for discovery and as changed later by Plaintiff’s counsel in respect of the application of a specific pricing formulae which triggered the counterclaim (of course without a pricing formulae – as Mr. King testified in trial – the counterclaim could never succeed);

(iv) knowing that its position was that the contract was not about price, the Plaintiff nevertheless relied upon an expert’s report which estimated damages in the range of $540,000 - $670,000;

(v) while the Plaintiff conceded at trial that it had no claim against Bessey Germany, it did not actually withdraw that claim; and

(vi) the abandonment at trial of the Plaintiff’s claim for breach of fiduciary duty.

[12] While the Plaintiff made no real Offer to Settle, the Defendants served several Offers, two of which (December 7, 2011 and September 11, 2012) they argued were “active at trial”.

[13] The December 7, 2011 Offer was for the action to be dismissed without costs for 20 days and thereafter capable of being accepted by the Plaintiff paying substantial indemnity costs. It was said to expire one minute after the trial commenced.

[14] The Defendants’ September 11, 2012 Offer simply provided for the action and counterclaim to be dismissed without costs and was again said to expire one minute after the trial commenced.

[15] I agree with Plaintiff’s counsel that the Defendants’ December 7, 2011 Offer by its composition was not a valid Offer. I also agree with Plaintiff’s counsel that the Defendants’ September 11, 2012 Offer was not served “at least” seven days prior to trial – but only just!

[16] However, while the costs consequences of Rule 49 have therefore not been triggered, I am still able to consider that last Offer in coming to a determination of the fair and reasonable cost to which the Defendants are entitled.

[17] I am completely in agreement with Plaintiff’s submission that the Pettit, Schwarz accounts, amounting to $24,875, relied upon by the Defendants, ought not to be allowed as a disbursement, for the reasons set out in the Plaintiff’s submissions. I also agree that the Rudson accounts of February 5 and 28, 2011 in the total amount of $16,625 ought not to be allowed. That report was not relied upon at the trial.

[18] As well, since the counterclaim was dismissed, some portion of the Rudson account of September 7, 2012 dealt with the addendum report of September 6, 2012 concerning the counterclaim damages and so I would disallow $4,000 or roughly one-third of this account.

[19] So, I would reduce the disbursements claimed by the Defendants by $45,500.

[20] While the Defendants did not commission the comprehensive expert’s report until about a month before the case was originally scheduled for trial, resulting in the trial being adjourned and then brought a motion to amend their defence, resulting in a further trial delay as well as extensive additional production and discovery, the Plaintiff must share the blame here because of Mr. King’s shifting story on price.

[21] In the end, the Defendants led no evidence to support the counterclaim.

[22] I would therefore fix the Plaintiff’s costs in the total amount of $25,000, all inclusive. And I would fix the Defendants’ costs in the total amount of $255,000, all inclusive.

[23] The net result of this is that the Plaintiff shall pay to the Defendants the all inclusive sum of $230,000.

P.J. Flynn J.

Released: November 13, 2013