SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-11-442449
DATE: 20140714

RE: JET WAVE CORP., also known as JET WAVE INC., Plaintiff

AND:

IPSMARX TECHNOLOGY INC., Defendant

BEFORE: Mr. Justice Graeme Mew

COUNSEL:
M. Katzman, for the Plaintiff

Risa Sokoloff, for the Defendant

HEARD: In Writing

ENDORSEMENT on costs

[1] The defendant’s motion for summary judgment was dismissed on 9 June 2014 (2014 ONSC 3370).

[2] In my endorsement, I expressed the provisional view that the plaintiff should receive costs of the motion on a partial indemnity scale. I asked for written submissions.

[3] The dispute between the parties involves a claim for damages arising from the supply by the defendant to the plaintiff of an allegedly faulty communications system. The plaintiff operates a business which it says is dependent on the communications system supplied by the defendant. Had the defendant’s motion been successful, the plaintiff’s recovery of damages would have been limited to a maximum of $52,195, a fraction of what the plaintiff claims its damages are.

[4] The motion was brought early in the action – no examinations for discovery have taken place yet – and turned, in large measure, on the contractual documents and whether they had the effect of limiting the plaintiff’s claim for damages.

[5] There was a dispute at the outset of the motion hearing about the evidence before the court. A timetabling order had contemplated the following:

a. Plaintiff’s responding motion record to be delivered by 30 August 2013;

b. Cross-examination on affidavits (if any) to be completed by 29 November 2013;

c. Defendant’s factum and book of authorities to be delivered by 28 March 2014; and,

d. Plaintiff’s responding factum and brief of authorities to be delivered by 18 April 2014.

[6] No cross-examination on affidavits took place. However, on 7 February 2014 the defendant delivered reply materials and on 25 April 2014, after already delivering its factum, the plaintiff delivered a sworn supplementary affidavit by way of sur-reply evidence.

[7] This led to a preliminary objection at the beginning of the motion regarding the admissibility of the sur-reply materials. The defendant declined an offer from the court to adjourn the motion if the defendant was prejudiced by the inclusion of the sur-reply evidence. Although there is no doubt that there was non-compliance with the scheduling order, no actual prejudice was asserted let alone established.

[8] The defendant, while conceding that the plaintiff should be entitled to partial indemnity costs of the motion for summary judgment, argues that those costs should be reduced to reflect the plaintiff’s non-compliance with the scheduling order. The defendant also says that there was duplication of effort arising from counsel on the motion being briefed by the instructing solicitor of record for the plaintiff.

[9] The parties’ non-compliance with the scheduling order arose – in part at least - from the fact that in settling the order, the parties did not include provision for the delivery of reply evidence. As it was, the evidence objected to was delivered a month before the hearing. Under such circumstances (bearing in mind the absence of prejudice) the defendant’s objection to the introduction of the evidence was bound to fail and should not form the basis for a reduction of the costs otherwise payable to the plaintiff.

[10] The practice of engaging counsel – and I use that term to describe the function of retaining the services of a barrister or advocate – to appear for a party at a hearing or trial should not be discouraged by disallowing costs reasonably incurred to brief counsel. While any lawyer licensed by the Law Society of Upper Canada has a right of audience in the Superior Court, the adversarial system benefits from the involvement of counsel who, because of their knowledge of a particular area of law or because of their advocacy skills, are engaged on a limited retainer or brief by a lawyer of record. Good advocates assist the court and thereby help the litigation process operate more efficiently.

[11] The plaintiff seeks partial indemnity costs of $16,087.10 inclusive of disbursements and HST. The senior lawyer working on the file had carriage of the litigation and acted as instructing solicitor. Counsel appearing on the motion was more junior in terms of years at the bar, and had a considerably lower hourly rate.

[12] The defendant did not submit a costs outline at the motion, despite the usual practice (and the plaintiff having done so). It is not therefore possible to gauge what the defendant would have regarded as reasonable partial indemnity costs in the event the result had gone the other way. However, the defendant submits that, having regard to what the unsuccessful party should reasonably be expected to pay, an award of $7,000 all-inclusive would be appropriate.

[13] I find the time spent, the rates charged, and, in particular, the division of labour between the lawyers to have been reasonable. The motion took the best part of a day to argue and was capably presented. I see no reason to tinker with the plaintiff’s bill and, accordingly, award the plaintiff costs of the motion on a partial indemnity scale, fixed at $16,087.10.

Mew J.

Date: 14 July 2014