SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

COURT FILE NO.: CV-12-9879-00CL
DATE: 20131209

RE: ALLAN GUTTMAN, JON SCHACHTER, LEAPINGCROFT ENTERPRISES INC. and SCHACHTER AND ASSOCIATES INC.,
Applicants

AND:

WILLIAM E. DUBÉ JR. and TALKING ROCK HOLDINGS LTD.
Respondents

BEFORE: Newbould J.

COUNSEL:
Daniel F. Chitiz and Erica Young, for the applicants

Rahul Shastri and David Winer, for the respondents

ENDORSEMENT

[1] The parties have been unable to agree on the costs to be paid to the applicants.

[2] The applicants seek costs on a substantial indemnity basis. Substantial indemnity costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings. See Orkin, The Law of Costs, 2d ed. (Canada Law Book) at page 2- 216 and Young v. Young 1993 133 (SCC), [1993] 2 S.C.R. 3. There is no basis for awarding costs on this elevated scale in this case.

[3] On a partial indemnity basis, the applicants seek costs of $46,900 for fees, inclusive of HST, and disbursements of $18,034, inclusive of HST, the disbursement largely made up of fees to two professional witnesses. The respondents say that the costs should be fixed at $30,000 inclusive of fees and disbursements and that costs should not be paid for the fees of the professional witnesses.

[4] Regarding the fees, the respondents do not quarrel with the hourly rates charged, but say too much time was spent and there was duplication caused by having too many lawyers working on the matter. The applicants claim for a total of 169.8 hours against a total of 84.3 hours shown on a bill of costs provided by the respondents. Mr. Shastri did by far the largest amount of work on behalf of the respondents, whereas there were three lawyers who each did a great deal of work for the applicants.

[5] The respondents say there was duplication of work in particular between the two junior lawyers on the matter for the applicants, Ms. Ramsey and Ms. Young. However, in reviewing the bill of costs I cannot discern a lot of duplication. For the most part, when each did work on the same portion of the case, such as drafting three supporting affidavits, it cannot be said that the hours would have been less if only one of them was drafting affidavits.

[6] I recognize that on a case such as this, it can be expected as in most cases that it is necessary for an applicant to spend more time in building a case than a respondent in defending it. I do think that a little excessive time was spent in preparation for the cross-examinations. I see nothing wrong with senior and junior counsel attending on a case conference. That is a reflection of the different work done by each and it is usually helpful to have a junior who often is more familiar with the details of a case.

[7] This was a case of some importance to the parties. Taking into account the factors in rule 57.1, including what the respondents could reasonable expect to pay in partial indemnity costs, and considering what an overall amount would be reasonable, I fix the costs at $40,000 inclusive of HST.

[8] Regarding disbursement, fees of $14,982.54 paid to the two accountants called by the applicants are claimed. They were required as fact witnesses as their evidence as to what took place was central to the dispute. They could not be expected to review and prepare affidavits, prepare and attend at cross-examinations on their affidavits and prepare and attend at the hearing to give evidence without being paid for their time. I agree with Pattillo J. in Canada Trust Company v. Russell Browne et al, 2011 ONSC 4400 who in that case held that a lawyer called as a fact witness in respect of his work in question was entitled to be paid at his normal rates. In this case, the accounts of the accountants are reasonable and should be paid by the respondents.

[9] The other disbursements are not contested. I fix the disbursements to be paid by the respondents at the amount claimed of $18,034, inclusive of HST.

[10] In the result, the total costs to be paid by the respondents to the applicants are fixed at $58,034, to be paid within 30 days.

Newbould J.

Date: December 9, 2013