COURT FILE AND PARTIES

COURT FILE NO.: CV-11-431525

DATE: 20130206

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Commissioner of Competition, Applicant

AND:

Yellow Page Marketing et al., Respondents

BEFORE: Lederman, J.

COUNSEL:
Derek J. Bell, for the Applicant

Igor Ellyn, Q.C., for Steve Green

Arie Gaertner, for Back Office Support SL for the Respondents

Jan Marks, acting in person

Brandon Marsh, acting in person,

HEARD: Written Submissions

COSTS ENDORSEMENT

[1] The Commissioner was successful in the application against the respondents and obtained final order relief including orders for restitution and administrative monetary penalties (“AMP”) against them. The Commissioner now seeks partial indemnity costs in the amount of $231,768.35, all inclusive, which includes the costs for the application and three interlocutory injunctions.

[2] The Commissioner seeks to justify this amount by submitting, inter alia:

(a) The matter related to recent amendments to the Competition Act which increased the maximum monetary penalties; that also increased the complexity. There had been no previous reported cases which considered these increased penalties and analogous research had to be conducted;

(b) Much time was spent reviewing cataloguing, redacting and coordinating investigation materials including close to 1,500 complaints from the public;

(c) Additional costs were incurred by reason of the expense of production sought by the respondents and consideration that had to be given to the law suits brought against the respondents in other jurisdictions.

[3] The only respondent who has filed written costs submissions to contest the Commissioner’s request for costs is Steve Green (“Green”).

[4] Green submits that the costs request is excessive and totally out of proportion in respect of the AMP awarded against him.

[5] In particular, he submits:

(a) The proceeding was “over lawyered” by the Commissioner and the hours and work to a large extent were duplicative and these redundant costs should not have to be borne by an unsuccessful party. Green submits that there should be a 25% reduction in the amount sought for this reason;

(b) A disbursement of $4,384.53 for computer legal research should be eliminated because in this day and age it should be considered part of a law firm’s overhead. Furthermore, a large proportion of legal research could have been conducted for free on ;

(c) Partial indemnity costs should be apportioned against each set of respondents in proportion to the aggregate award. Therefore, costs should be awarded in proportion to the amounts of the AMPs. Green submits that the $500,000.00 AMP imposed against him is 5.5% of the total AMPs that the court awarded in this case and he submits that the costs awards should be in the same proportion;

[6] With these factors in mind, Green submits that the sum of $9,365.83 (i.e. 5.5% of $170,287.80, being the net total of proposed costs after deleting the QL disbursement and reducing the overall amount by 25%) is a reasonable costs award against him in the circumstances of this case.

[7] I agree with the Commissioner that in essence this was a case of first impression and required appropriate research. In addition, the nature of the investigation and the conduct of the respondents here and in other jurisdictions required time consuming efforts. However, the number of lawyers and staff utilized for meetings and various steps was overdone and an unsuccessful party should not reasonably expect to pay for these redundancies. I believe that a 15% reduction in the overall fees of $191,788.50 is appropriate, reducing them therefore to $163,020.22.

[8] I find that the QL disbursement in this case is appropriate as it remains an acceptable legal research tool along with .

[9] I agree with the Commissioner that apportioning liability for costs is not appropriate within a group of parties who are all represented by the same counsel and acted together in the proceeding. Further there is no practical way to apportion fees having regard to the Rule 57 criteria as one cannot determine Green’s relative responsibility compared to the others in relation to the costs incurred in prosecuting this proceeding against all the respondents.

[10] It was found that the corporate entities were “only the vehicles for their principals, Marks and Green” and they were the primary principals in running this operation as a common enterprise. Given the fact that the scheme was one of common enterprise, it is not logical to apportion costs among the individual respondents based upon the amount of the AMPs.

[11] It is true that the AMPs awarded against the individuals were less than what was awarded against the corporations but that is more of a function of the statute which creates lesser maximums for individuals than for the corporations, and the awards in this case do not necessarily reflect the degree of blameworthiness of the respondents. In addition to AMPs, restitution was also awarded against each of the respondents including Green.

[12] As there is no meaningful way to separate out which costs relate to which respondents, the parties should remain jointly and severally liable for all of the Commissioner’s costs without prejudice to each having a claim over against the other for any excess paid (see Hill v. Church of Scientology (1994) 1994 10572 (ON CA), 18 O.R. (3rd),385 (C.A.) at para. 248).

[13] Therefore, having regard to all of the factors in Rule 57.01(1) and in particular what an unsuccessful party would reasonably expect to pay for proceedings of this nature, costs are fixed in the amount of $163,020.22 plus disbursements of $15,047.37 and all applicable taxes against the respondents jointly and severally, payable within 30 days.

Lederman J.

Date: February 6, 2013