ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 10-50242
DATE: 2014/04/16
BETWEEN:
JOHN SHANNON
Plaintiff
– and –
YOU I LABS INC. and JASON FLICK
Defendants
Paul K. Lepsoe and Michael Beeson, for the Plaintiff
Stephen J. Maddex, for the Defendants
HEARD: By Written Submissions
DECISION ON COSTS
Kane J.
Overview
[1] This is an action under simplified procedure for damages to recover $100,000 indebtedness owing or awarded as such pursuant to an oppression claim.
[2] The plaintiff brought a motion:
(a) to amend his statement of claim to include an alternative claim for oppression pursuant to s. 241 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the “CBCA”);
(b) to compel the defendants to answer three undertakings from examination for discovery;
(c) to compel the defendants to produce the following documents:
(i) all bank records in 2008 and 2009 of the defendant corporation (“You”);
(ii) salary paid to Jason Flick, Steven Russell and Andrew Emond by the You and Flick Software Inc. (“Software”) between June 30, 2008 and June 30, 2010;
(iii) invoices to and from You between June 30, 2008 and June 30, 2010;
(iv) copies of any debt or equity financing obtained by You from June 30, 2008 to date; and
(v) all relevant documents in possession of Flick Software Inc.
Positions of Parties
[3] The plaintiff seeks costs of this motion on a total indemnity scale in the amount of $10,452. Hours docketed total 44.
[4] The defendants seek costs of this motion on a partial indemnity basis in the amount of $12,951, all in. Full indemnity totalled $18,444, all in. Docketed time is 40.5 hours.
Factors
[5] The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and include:
(a) Level of complexity and importance of the issues,
(b) Proportionality as to complexity and importance of issues (Rule 1.04 (1) (1.1),
(c) Level of success, including amount claimed,
(d) Unreasonable conduct which unduly lengthens the proceeding (unnecessary, vexatious, improper, negligence, mistake or excessive caution)
(e) The scale of costs,
(f) Offers of settlement,
(g) The principle of indemnity,
(h) Lawyer’s level of experience,
(i) Time spent,
(j) Hourly rate claimed,
(k) The amount the losing party would reasonably expect to pay.
Level of Complexity and Importance of Issues
[6] The issues on the motion were relatively simple.
Proportionality as to Complexity and Importance of Issues (Rule 1.04 (1) (1.1)
[7] The action is brought under simplified procedure and is limited to $100,000, although the plaintiff stated his damages total some $280,000.
[8] The issues are treated as important by the parties.
[9] The costs requested by each are proportionate to the amount of the claim and the volume of questions presented on this motion.
Success Including Amount Claimed
[10] Although not all relief requested was granted, the plaintiff was largely successful on this motion. That level of success is summarized as follows:
(a) to amend statement of claim to include claim for oppression: granted, para. 29;
(b) to compel the defendants to answer three undertakings: granted requiring answers to questions 210, 213 to 215 and to produce audited or unaudited financial statements, but from the defendant corporation only, for the financial years 2008, 2009 and 2011: granted, paras. 29 and 36 to 38.
(c) To produce banks statements, salary records, invoices, to and from the defendant corporation and debt or equity financing, from the defendant corporation, for specified years: granted, paras. 30 to 32, 33, 35, 39 (a) to (d).
[11] Given the level of success, the plaintiff is entitled to costs. The relief determined on this motion disentitle the plaintiff to costs. Defendants’ request for costs is denied.
Conduct Unnecessarily Lengthening Proceeding
[12] This is not a determining factor. Each party has a list of conduct of the other party they assert was unreasonable, unnecessary, constitutes over reaching and increased cost. The court is to determine entitlement to costs, not conduct a sub-trial as to the limitation period, validity of fraud allegations or yet to be proven allegations. The cross allegations under this heading negate one another.
[13] Counsel to their credit, have on occasion compromised and periodically waived strict compliance with certain procedural rules, in order to get this matter on to trial. Those accommodations, such as agreeing to list this action for trial while preserving the right of either party to proceed thereafter with a motion regarding productions and undertakings, cannot now be relied upon to demonstrate improper conduct.
Offers to Settle, Scale of Costs, Hourly Rates and Time Spent
[14] No offers were presented.
[15] The conduct relied upon is not so egregious as to warrant costs higher than partial indemnity.
[16] The docketed time by each firm is high, but comparable.
Amount Unsuccessful Party Would Reasonably Expect to Pay
[17] The costs awarded herein are within what an unsuccessful party should expect to pay on this motion.
Disposition
[18] Having considered all of the above factors the defendants are ordered to pay costs to the plaintiff, on a partial indemnity scale fixed in the amount of $7,800, inclusive of HST and disbursement, within 30 days.
Kane J.
Released: April 16, 2014
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOHN SHANNON
Plaintiff
– and –
YOU I LABS INC. and JASON FLICK
Defendants
DECISION ON COSTS
Kane J.
Released: April 16, 2014