SUPERIOR COURT OF JUSTICE – ONTARIO
Court File No.: 476/08 (Orangeville)
Date: 20140625
RE: Kevin Thornhill and Jackie Normore
– and –
Highland Fuels Dundalk Ltd. and Gledco Industries (Glencairn) Ltd.
Before: D.L. Edwards J.
Counsel:
Gregory Brimblecombe, for the Plaintiffs
David A. Zuber, Jay Tausendfreund, for the Defendants
COST ENDORSEMENT
[1] By Reasons for Judgment dated May 5, 2014, I dismissed the plaintiffs’ claim and solicited costs submissions.
[2] The plaintiffs’ claim arose as a result of an oil leak from the plaintiffs’ outdoor fuel oil tank. The plaintiffs had claimed the costs of remediation that totalled $1,195,269.56.
[3] The defendants seek a cost award in the amount of $210,000 composed of the legal fees on a partial indemnity basis of $143,003.64 and disbursements of $77,167.87, both inclusive of HST. The defendants agree that the plaintiffs should be given credit for the sum of $750 that they paid pursuant to a previous cost award.
[4] Rule 57.01(1) of the Rules of Civil Procedure lists the factors that I shall take into consideration in making a cost award. The primary plaintiffs’ objections to the amount of costs claimed by the defendants are:
a) the costs exceed what an unsuccessful party could reasonably expect to pay;
b) there was an apportionment of liability at trial that should be reflected in the cost award; and
c) the importance of the issue should be considered.
[5] The plaintiffs submit that the legal fees sought by the defendants are excessive. They assert that the number of individuals involved in the file increased the hours required, and that the number of hours for which the defendants seek indemnity are more than one would have anticipated would be invested into a file such as this. The plaintiffs state that the total legal fees charged by the plaintiffs’ counsel was $99,727, which is significantly less than the $143,003.64 claimed by the defendants, and is a more reasonable amount. The fees sought by the defendants, in the plaintiffs’ view, are not those that an unsuccessful party could reasonably expect to pay.
[6] Further, the plaintiffs submit that the success at trial was divided as I had agreed with the plaintiffs’ position regarding the level of remediation. They submit that this was a very important issue. In the plaintiffs’ view, due to this divided success, any cost award should be reduced by at least one third.
[7] The plaintiffs also take issue with the type and amount of the disbursements incurred by the defendants. The sum of $4,803.55 was charged for photocopying for internal photocopies, and a further $3,692.63 for outside copying which the plaintiffs submit is excessive.
[8] The plaintiff objects to an expert report from AEC0M in the amount of $11,763.19, as this report was not filed, nor was the expert called to testify.
[9] Further, the plaintiffs object to certain minor disbursements such as a fee for ACL set up, $720 for demonstrative evidence, $37.72 for parking, and for car rental costs, hotel costs, parking costs, meals, and fuel for the defence counsel's vehicle.
[10] The defendants reject the argument that there was divided success, or that the fees should be reduced. First, they do not agree that one third of the trial preparation or trial time was devoted to the issue of the remediation level. Secondly, the courts, including the Ontario Court of Appeal, have resisted the concept of a distributive cost award based upon a divided success theory.
[11] The defendants assert that the size of the claim and the technical and scientific issues involved required significant preparation, and that the hours charged are reasonable. Further, the use of the junior counsel was reasonable in the circumstances.
[12] The defendants also submit that their partial indemnity rates are very reasonable and are approximately two-thirds of the actual rates charged. Further, the defendants’ Offer to Settle, in which they offered to pay the plaintiffs $550,000 in damages, $110,000 in pre-judgment interest and costs of $75,000 or costs to be assessed on a partial indemnity basis, far exceeds the amount recovered by the plaintiffs.
[13] The amount of legal fees claimed, exclusive of HST, is $126,548. In support of the legal fees claimed, the defendants note that this action spanned five years; there was a full trial preparation when the trial was scheduled in April 2013, but adjourned at the request of the plaintiffs; and the trial was approximately two weeks.
[14] The defendants submit that the charges for photocopying and printing are not excessive when one considers the voluminous nature of the documents for this case.
[15] The defendants assert that the expert report from AECOM was an appropriate expense. The defendants determined not to call Neil Wilcox from AECOM, nor to file his report, in order to streamline the trial process. Further, the plaintiffs requested an adjournment of the April 2013 trial date because they wished to have a report responding to the AECOM report. This demonstrated the importance that the plaintiffs attached to that report.
[16] They also note that $40,000 of their disbursements is for expert fees for four defendants’ experts, including AECOM, in contrast to the plaintiffs paying at least $42,000 for one expert.
[17] It is unclear to me whether the fees charged by the plaintiffs’ counsel of $99,727 are inclusive or exclusive of HST. Therefore, it is difficult for me to compare those fees with those claimed by the defendants. However, I am satisfied that the hours spent by the defence counsel were appropriate and proportionate to the size of the claim, and the complexity of the claim. I am satisfied that the hourly rates charged are appropriate. The use of juniors and clerks is a cost effective way to manage an action. The defendants’ Offer to Settle far exceeded the result that the plaintiffs obtained at trial.
[18] I do not accept that there was divided success at trial. The overriding issue before me was the liability of the defendants to the plaintiffs. The defendants were successful in having the claim dismissed and are entitled to their costs. Further, I reject the concept of a distributive cost award.
[19] I accept that the report from AECOM was a reasonable expenditure, and I accept that the defence counsel's decision not to call Neil Wilcox from AECOM resulted in a more efficient and cost-effective trial. I am not prepared to second-guess defence counsel's decision on this issue.
[20] The other disbursements charged by the defence counsel are reasonable disbursements incurred by the defence.
[21] I am satisfied that the costs are not in excess of what an unsuccessful party could reasonable expect to pay in the circumstances of this action: the amount claimed exceeded $1 million; there were complex, technical aspects to the trial; and it was approximately a two-week trial.
[22] I order that the plaintiffs pay costs to the defendants in the amount of $210,000 fixed, all-inclusive.
D.L. Edwards J.
DATE: June 25, 2014
COURT FILE NO.: 476/08 (Orangeville)
DATE: 20140625
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Kevin Thornhill and Jackie Normore
– and –
Highland Fuels Dundalk Ltd. and Gledco Industries (Glencairn) Ltd.
BEFORE: D.L. Edwards J.
COUNSEL: Gregory Brimblecombe, for the Plaintiffs
David A. Zuber, Jay Tausendfreund, for the Defendants
COST ENDORSEMENT
D.L. Edwards J.
DATE: June 25, 2014