SUPPLEMENTARY COSTS ENDORSEMENT

COURT FILE NO.: CV-10-414999-00A1

DATE: 20140918

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sanofi Pasteur Limited, Plaintiff

– AND –

UPS SCS, Inc., Honeywell Limited, Honeywell International Inc., Automation Components Inc., Industrial Technical Services (ITS) Inc., Airon HVAC Service Ltd., Airon HVAC and Control Ltd., and Enercorp Instruments Ltd., Defendants

– AND –

Maple Reinders Constructors Ltd., Maple Reinders Grup Ltd., Maple Reinders Construction Ltd., Heraeus Sensor Technology, USA, United Parcel Service of America, Inc., UPS Supply Chain Solutions, Inc., UPS Supply Chain Solutions General Services, Inc., Third Parties

– AND –

ACE INA Insurance, Maple Reinders Constructors Ltd., Automation Components Inc. and Heraeus Sensor Technology, USA, Fourth Parties

BEFORE: E.M. Morgan J.

COUNSEL:
Shawn K. Faguy, for the Plaintiff

Kathryn Podrebarac and Alan Melamud, for the Defendant, UPS SCS, Inc.

Kathryn Podrebarac and Timothy Morgan, for the Third Parties, USA, United Parcel Service of America, Inc., UPS Supply Chain Solutions, Inc., and UPS Supply Chain Solutions General Services, Inc.

David Young, for the Defendants, Airon HVAC Service Ltd. and Airon HVAC and Control Ltd.

Megan Shortreed, for the Defendants, Honeywell Limited and Honeywell International Inc.

Linda Matthews and Dustin Milligan, for the Defendant, Industrial Technical Services (ITS) Inc.

Hillel David, for the Defendant, Automation Components Inc.

Iain Peck, for the Third Parties, Maple Reinders Constructors Ltd., Maple Reinders Grup Ltd., Maple Reinders Construction Ltd.

Douglas McInnis, for the Fourth Party, ACE INA Insurance

HEARD: December 2-3, 2013 and February 12, 2014, with written submissions on costs

SUPPLEMENTARY COSTS ENDORSEMENT

[1] On June 5, 2014, I issued my Amended Costs Endorsement which followed my judgment dismissing the Plaintiff’s claim against all Defendants. I invited written submissions on costs from any third or fourth parties affected by my judgment, which I have now received. I have also received costs submissions from one Defendant that did not participate in the summary judgment motion.

[2] Before analyzing the specific requests, it is worth repeating the legal basis for awarding costs. As I said at para 11 of my Amended Costs Endorsement:

Costs are discretionary under section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. A number of factors to be considered in exercising that discretion are listed in Rule 57.01 of the Rules of Civil Procedure, RRO 1990, Reg 194, including the principle of indemnity for the successful party, the complexity of the matter, and the expectations of the unsuccessful party. Overall, the court is required to consider what is ‘fair and reasonable’ in fixing costs, having regard to perspective of all of the parties: Boucher v Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 OR (3d) 291 (Ont CA), at paras 26, 38. The successful party must be fair in what it charges the unsuccessful one, who must in turn be reasonable in its expectations of what it will be liable to pay.

[3] The Defendant, Automation Components Inc. (“ACI”), seeks costs of its defense of the action. ACI did not participate in the summary judgment motion, but did incur costs in defending the Plaintiff’s claim and in bringing what appears to me to have been a foreseeable Third Party Claim.

[4] Counsel for ACI seeks $100,000 on a partial indemnity basis. That amount reflects the fact that the action had progressed through the discovery stage before it was finally dismissed. ACI’s request is less than what I awarded three of the other Defendants as costs of the action (not including the motion), and more than I awarded one of the other Defendants as costs of the action. It strikes me as a reasonable request within the range of expectations of the Plaintiff for an action of this magnitude. It is supported by a Bill of Costs.

[5] Accordingly, the Plaintiff shall pay ACI costs in the total amount of $100,000.

[6] Turning to the costs sought against the Plaintiff by the Third Parties, there are two competing considerations. The general rule is that a plaintiff should not be held liable for the costs incurred by third parties added to the litigation by one or more defendants: Lewis v Jay, 1934 125 (ON CA), [1934] OR 307 (Ont CA); Cohen v Brin, 2013 ONSC 1302 (Master, at para 72. McLachlin J. (as she then was) summarized this principle in Milina v Bartsch, 1985 454 (BC SC), [1985] BCJ No 2789, at para 4 (BC SC), “The plaintiff did not sue the third party, did not want him in the case and was not responsible for joining him.” Ontario courts have tended to refuse to order the payment of costs by a plaintiff to a third party where the defendant had a complete defense and the addition of the third party was unnecessary or done merely out of an abundance of caution: see Royal Bank of Canada v Gentra Canada Investments Inc., [2000] OJ No 3028, at para 9 (SCJ), affirmed 2001 6996 (ON CA), [2001] OJ No 2344 (Ont CA).

[7] On the other hand, there are cases where costs to third parties are warranted – particularly where “the third party proceedings followed naturally and inevitably upon the in institution of [the plaintiff’s] claim”: Greater Toronto Airports Authority Assn. Inc. v Foster Wheeler Ltd., 2011 ONSC 3377, at para 53, citing Milina, at para 5. Newbould J. observed in Guarantee Co. of North America v Resource Funding Ltd., [2009] OJ No 3279, at para 6 (SCJ), quoting Crédit foncier franco-canadien v Bennett (No. 2) (1964), 1964 449 (BC CA), 47 W.W.R. 369, at para 10 (BC CA), that this principle is within the scope of discretion authorized under section 131 of the Courts of Justice Act: “The question depends upon the circumstances of each particular case and the discretion must, of course, be exercised judicially.”

[8] The summary judgment motion determined that the Defendants had a complete defense to the main claim. This was based on the fact that the Court of Appeal’s decision in Madison Developments Ltd. v Plan Electric Co. (1997), 1997 1277 (ON CA), 36 OR (3d) 80 undermined the Plaintiff’s claim at law. I do not think that the Defendants were required to bring their motion at an earlier stage, and I understand why it was brought after they had engaged in some considerable fact finding on which to premise their contract interpretation and legal arguments. Nevertheless, the Third Party Claims were at least partially precautionary; I do not think they were unnecessary, but neither were they imperative.

[9] That said, it would not have been difficult for the Plaintiff to foresee that the Defendants would have an assortment of subcontractors, suppliers, etc. The very nature of the claim and its sheer size undoubtedly suggested to the Plaintiff that the Defendants would do all they could to either minimize or share their liability, and that this might take the form of third party proceedings. I note that this observation is echoed by the Fourth Party, ACE INA Insurance (“ACE”). As insurer of the Honeywell Defendants, ACE does not seek its own costs award, but has made submissions supporting the payment of costs by the Plaintiff to the Third Parties.

[10] The Third Parties, USA, United Parcel Service of America, Inc., UPS Supply Chain Solutions, Inc., and UPS Supply Chain Solutions General Services, Inc. (“UPS US), who played a more major role in the matter than the other Third Parties, seek just over $87,700. They had to investigate the matter and prepare pleadings, and take a number of procedural steps. The Third Parties, Maple Reinders Constructors Ltd., Maple Reinders Group Ltd., Maple Reinders Construction Ltd. (“Maple”), seek just over $12,300. The Third Party, Heraeus Sensor Technology, USA (“Heraeus”), seeks just over $16,700.

[11] Under the circumstances, I will exercise my discretion by ordering the Plaintiff to pay roughly half of what each of the Third Parties is requesting in costs.

[12] The Plaintiff shall pay the following amounts in respect of costs to the Third Parties:

UPS US - $43,850.00

Maple - $6,150.00

Heraeus - $8,350.00

[13] These amounts are inclusive of disbursements and HST.

Morgan J.

Date: September 18, 2014