SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: A-11,618-08
DATE: 2014-01-09

RE: The Great Atlantic & Pacific Company of Canada Limited, Applicant

AND:

Economical Mutual Insurance Co., Respondent

BEFORE: The Honourable Madam Justice Patricia C. Hennessy

COUNSEL:
James C. Simmons, Q.C., for the Applicant

Leslie A. Wright, for the Respondent

HEARD: Written Submissions

ENDORSEMENT ON COSTS

[1] I received written submissions on costs following the decision on the application on which the applicant was successful in obtaining a declaration that there was a duty to defend on the part of the insurer.

[2] The applicant seeks costs in the amount of $23,228.50. they argue that costs should be paid on a substantial indemnity basis and rely on the decision in R.W. Hope Ltd. v. Dominion of Canada General Insurance Co. 2000 50991 (ON SC), [2000] O.J. No. 2143 (SCJ) where the judge on the application awarded costs on a solicitor and client basis on a duty to defend issue.

[3] The respondent does not dispute that the applicant was responsible to provide its own defence throughout the litigation, but takes issue with the number of hours spent on the matter. The respondent states that rate claimed is reasonable. In support of their position on the amount of time spent on the file, the respondent asserts that by comparison to the 93 hours spent by lawyers for the applicant, the respondent spent 40 lawyer hours. They did not however, compare their hourly rate to the very modest rate claimed by the applicant.

[4] I agree that the hours spent by the applicant included some duplication of effort over the many years that this file was open before it was argued.

[5] I have also considered the factors enumerated under Rule 57, including in addition to time spent, the result achieved and the complexity of the matter as well as the application of the principle of proportionality. In addition, I have considered the principles asserted 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, 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.

[6] I conclude that an award of costs in the amount of $20,000 inclusive of HST plus disbursements of $307.37 would be reasonable in all of the circumstances, and I order the respondent to pay that amount within 30 days.

The Honourable Madam Justice Patricia C. Hennessy

Date: January 9, 2014