SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: 10-17240 (Hamilton)
DATE: 2014/03/10
RE: Category 5 Imaging Ltd. (Plaintiff) v. Angelo Antoniadis and Clarke Productions (1982) Limited (Defendants)
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL:
Louis A. Frapporti, for the Plaintiff
Erik Savas, for the Defendants
HEARD: By written submissions dated January 16, 20, 21 and 27, 2014
E N D O R S E M E N T – C O S T S
[1] Category 5 Imaging Ltd. is the Plaintiff in an action brought against Angelo Antoniadis, its former officer, director and shareholder, and Clarke Productions (1982) Limited, Mr. Antoniadis’ subsequent employer. Clarke Productions brought a summary judgment motion against Category 5, seeking dismissal of the action as against Clarke Productions. It also sought an interim order seeking a stay of the action pending the hearing of the summary judgment motion or alternatively, a stay of the previous order of Justice Taliano requiring Clarke Productions to produce certain documents relevant to its digital printing business.
[2] By Endorsement dated December 31, 2013,[^1] I dismissed Clarke Productions’ motion for a stay of the action or a stay of Justice Taliano’s production order pending the hearing of the summary judgment motion. Costs of the stay motion were left to be determined based on written submissions.
[3] As the successful party on the motion, Category 5 seeks the immediate payment of the costs of the motion by Clarke Productions. In Category 5’s submission, its costs should be payable on a substantial indemnity basis, based on conduct by Clarke Productions that Category 5’s counsel characterized as unreasonable and vexatious. Among other things, Category 5 alleged that Clarke Productions unnecessarily lengthened the proceeding by failing to produce certain of the documents that it alleged were competitively sensitive, without providing any reasonable basis for that assertion. Category 5’s counsel also argued that Clarke Productions did not propose any reasonable terms whereby it might comply with Justice Taliano’s production order and also protect its commercial interests.
[4] The position of Clarke Productions is that a fair and reasonable order in this case would be to reserve the issue of costs to the judge hearing the summary judgment motion. It also argued that if fixing costs at this time, the appropriate scale of costs was on a partial indemnity basis. According to Clarke Productions, it was justified in bringing the motion for an interim stay in order to protect its business pending the hearing of the summary judgment motion, which may result in its being released from the action. In its submission, it would be reasonable and prudent to await the outcome of the summary judgment motion before a determination is made as to whether Clarke Productions should pay Category 5’s costs on the stay motion.
[5] The successful party on a motion has a reasonable expectation of being awarded costs in the absence of special circumstances.[^2] Unless the court is satisfied that a different order would be more just, costs of a contested motion are fixed and ordered payable within 30 days.[^3] In the usual case, costs are payable on a partial indemnity basis. Substantial indemnity costs are awarded only on an exceptional basis, saved for extenuating circumstances such as situations where there has been egregious conduct or where the motion was brought unreasonably.[^4]
[6] In this case, I have concluded that Clarke Productions should be ordered to pay Category 5’s costs of the stay motion within 30 days on a partial indemnity basis. I see no sufficient justification for departure from the usual costs order for a contested motion.
[7] Category 5 was completely successful on the stay motion. There is nothing in its conduct of the motion that would justify denying the payment of its costs. In that regard, in their written submissions, Clarke Productions’ counsel referred to certain correspondence between counsel after the motion was heard on the issue of costs prior to the exchange of formal submissions. Although not expressly stated to be without prejudice, this correspondence set out the parties’ respective positions on resolution of the issue of costs. I agree with Category 5’s submission that it would not be appropriate for me to take that correspondence into account in determining the issue of costs. To do so would be inconsistent with the public interest in encouraging parties, to the extent possible, to settle disputes between them, including the issue of costs. It would also be inconsistent with the spirit (if not the letter) of rule 49.05 of the Rules of Civil Procedure, which provides that an offer to settle shall be deemed to be an offer of compromise made without prejudice.
[8] I also see no sufficient basis for deferring the costs issue to be determined by the judge hearing the summary judgment motion. As noted in my reasons for refusing the stay motion,[^5] the production of documents pursuant to Justice Taliano’s order may well result in the disclosure of information that would be relevant in deciding the summary judgment motion, and such information would also be of assistance to Category 5 in the preparation of an expert report on damages. Category 5 requires that information to prepare its case against not only Clarke Productions but also Mr. Antoniadis, against whom the action will continue whatever the outcome of Clarke Productions’ summary judgment motion. In these circumstances, Clarke Productions should be responsible for Category 5’s costs of the stay motion even if Clarke Productions is successful on the summary judgment motion, in my view.
[9] As well, I consider a partial indemnity award to be the appropriate basis for setting costs in this case. In this regard, I made no specific finding in my previous reasons that was critical of Clarke Productions for failure to produce documents long after the time for production set out in Justice Taliano’s order, nor was there any reason to do so in order to reach a decision on that motion. In any case, I do not consider the bringing of the motion by Clarke Productions to have been unreasonable, nor do I consider the conduct relied on by Category 5 as being anything close to constituting egregious conduct that would justify a substantial indemnity costs order.
[10] Category 5’s counsel provided a costs outline indicating partial indemnity costs in the amount of $11,648. In the circumstances, I found the amounts claimed to be generally reasonable, but consider a modest reduction to be in order, in the context of a half day hearing of a motion of not unusual complexity. In all the circumstances, I would fix costs at $10,000, inclusive of disbursements and tax.
[11] Accordingly, an order will issue fixing Category 5’s costs of the stay motion at $10,000 inclusive of disbursements and tax, and requiring Clarke Productions to pay that amount to Category 5 within 30 days.
The Honourable Mr. Justice R.A. Lococo
Released: March 10, 2014
2013 ONSC 1366
COURT FILE NO.: 10-17240 (Hamilton)
DATE: 2014/03/10
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN:
Category 5 Imaging Ltd.
Plaintiff
- and -
Angelo Antoniadis and Clarke Productions (1982) Limited
Defendants
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL: Louis A. Frapporti, for the Plaintiff
Erik Savas, for the Defendants
ENDORSEMENT – COSTS
Lococo J.
Released: March 10, 2014
[^1]: 2013 ONSC 7989.
[^2]: See Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.) at para. 21.
[^3]: See paragraph 57.03(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[^4]: Empire Life Insurance Co. v. Krystal Holdings Inc., [2009] O.J. No. 1095 (S.C.) at para 19.
[^5]: 2013 ONSC 7989, at para 18.