ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-466694-00CP
DATE: 20140815
BETWEEN:
EXCALIBUR SPECIAL OPPORTUNITIES LP
Plaintiff
– and –
SCHWARTZ LEVITSKY FELDMAN LLP
Defendant
Margaret L. Waddell, for the Plaintiff
Tim Farrell, for the Defendant
Proceedings under the Class Proceedings Act, 1992
HEARD: In Writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] By Reasons for Decision dated July 8, 2014, I dismissed the certification motion of the Plaintiff, Excalibur Special Opportunities LP (“Excalibur”). See Excalibur Special Opportunities LP v. Schwartz Levitsky Feldman LLP, 2014 ONSC 4118.
[2] The parties have agreed about the matter of costs, save for the matter of the disbursement in relation to two affidavits sworn by J. Peter Coll.
[3] Independent of the Coll disbursement, the parties agree that the Defendant, Schwartz Levitsky Feldman LLP (“SLF”), shall have costs of $97,500 plus HST.
[4] Mr. Coll is a senior American lawyer with the New York City law firm of Orrick LLP. He has expertise in American securities law, and his firm has submitted an account of $107,660.25 USD.
[5] The proposed class action had a class of 57 investors and involved, amongst other things, a negligent misrepresentation claim against SLF, which is an auditor. Since 50 of the 57 investors were Americans, Mr. Coll provided opinion evidence about the American law with respect to negligence claims against auditors and about the difference in limitation periods across the United States.
[6] Excalibur, which says nothing about the quantum of Mr. Coll’s account, submits that this expense was not within their reasonable contemplation, because the evidence was not required for the purposes of the certification motion and Mr. Coll’s opinion about the choice of law was premature.
[7] Mr. Coll’s opinion was arguably premature because the relevance of it concerned a choice of law issue that SLF had not pleaded in its Statement of Defence, and, therefore, for the purposes of the certification motion, it could be assumed that Canadian law applied. It was premature because Silver v. Imax Corporation, 2009 72334 (Ont. S.C.J.) is authority that the certification motion is not the place for the court to make a determination about the application of foreign law.
[8] Excalibur submits that the unnecessary and premature opinion of Mr. Coll compelled it, out of an abundance of caution, to retain its own opinion expert at great and unnecessary expense. It submits that in these circumstances, it is fair that both parties bear the expense of their respective expert’s reports.
[9] I note parenthetically that Excalibur did not disclose the quantum of the “great and unnecessary expense,” but I surmise that its silence explains why it was also silent about the quantum of Mr. Coll’s account.
[10] In support of its submission that Mr. Coll’s opinion is premature, Excalibur notes that on the failed certification motion, I held that joinder of the investor’s claims was the preferable procedure for prosecution of their complaints against SLF. It followed that should the foreign members of the putative class take up this option, then the Coll opinion would continue to be available and might be relied upon by SLF.
[11] Excalibur submits, therefore, that it would be premature to include in any cost award any amount in respect of Mr. Coll’s opinion, and that it would be unfair to Excalibur to impose this cost burden on it at this stage of the litigation.
[12] Excalibur points out that I took a similar approach to deferring costs in Lipson v. Cassels Brock and Blackwell, 2013 ONSC 6354, where the costs of the successful certification motion were divided into two parts, with one part being payable in the cause, recognizing that the litigation work effort would continue to be used in the proceeding.
[13] Excalibur submits that the Coll opinions are part of the litigation work product of SLF that will continue to be of use to it as the case progresses. It states that should no foreign investor ultimately join in the action, then SLF will not have “lost” its opportunity to recover the disbursement, because it will still be open to it to seek reimbursement of the disbursement as a cost in the cause.
[14] I am prepared to agree with Excalibur that Mr. Coll’s opinion was not necessary for the certification motion, although it did perhaps have some utility in at least framing aspects of the debates about a global class action, the common issues, and the preferable procedure.
[15] I do not, however, agree that seeking payment of the disbursement for Mr. Coll’s opinion is premature. I do not agree that his opinion may become useful later if American investors decide to join Excalibur in its Ontario action.
[16] As I see it, the utility of Mr. Coll’s opinion is spent. Mr. Coll’s opinion was about the choice of law in the context of a proposed class proceeding. Given the non-certification of the class action, whether there is any meaningful choice of law issue is now an entirely individual issue depending on the residence of the individual co-plaintiffs who may or may not join Excalibur’s action.
[17] Mr. Coll’s opinion might coincidentally have some utility for some putative members, but for others, the opinion will be unhelpful. Mr. Coll’s opinion was given in the context of a proposed class action and that context no longer exists, subject to an appeal of my decision.
[18] As I view the matter, in the context of defending a proposed class action that involved an overwhelming number of American investors, it was within the reasonable expectation of Excalibur that SLF would obtain expert advice about the potential application of American law and how it might influence the proposed class action. The advice would have value to the action both before and after certification assuming certification were granted. The opinion, however, is only useful in the context of 57 investors’ claims moving forward as a class action. Its utility has now been spent, unless there is an appeal and my decision is reversed.
[19] Thus, as I view the matter, this is the appropriate time to address what is a disbursement that Excalibur should have reasonably contemplated. The disbursement has no meaningful carry forward value. I, therefore, conclude that the disbursement should be allowed at this time.
[20] SLF also sought $700 for the costs of the motion to settle costs. I make this award.
[21] Orders accordingly.
Perell, J.
Released: August 15, 2014
COURT FILE NO.: CV-12-466694-00CP
DATE: 20140815
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
EXCALIBUR SPECIAL OPPORTUNITIES LP
Plaintiff
– and –
SCHWARTZ LEVITSKY FELDMAN LLP
Defendant
REASONS FOR DECISION – COSTS
PERELL J.
Released: August 15, 2014