Nordion Inc. v. Life Technologies Inc., 2015 ONSC 1023

COURT FILE NO.: CV-11-00436281-0000

DATE: 20150217

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Nordion Inc., Plaintiff

AND:

Life Technologies Inc. and Applied Biosystems, LLC, Defendants

BEFORE: Justice W. Matheson

COUNSEL: Robert Harrison and Alex Cameron, for the Plaintiff

Bernie McGarva and David Stevens, for the Defendants

HEARD: In writing.

COSTS ENDORSEMENT

jUSTICE W. Matheson

[1] This action arises from the sale of a joint venture and a related arbitration before the Hon. Dennis Lane, Q.C. The plaintiff Nordion brought a motion seeking summary judgment against the defendants for more than $30 million and related relief under Rule 20 of the Rules of Civil Procedure. The defendants (together, “LIFE”) brought a Rule 21 motion asserting that the claims in this action are res judicata and an abuse of process, or, alternatively, that they should go to arbitration. In the further alternative, LIFE also asked for summary judgment.

[2] In my reasons for decision released January 7, 2015, I ruled against the defendants on res judicata and abuse of process, but granted their request to stay this action pending arbitration. Given my decision that the action be stayed, I did not proceed to decide either Nordion’s motion for summary judgment or LIFE’s related alternative summary judgment motion.

[3] The parties have since made written costs submissions, each side seeking a costs order in their favour.

[4] The parties agree that there should be no order as to costs of the summary judgment motions at this time, in that the action has been stayed and those motions were not disposed of. I therefore so order. For those costs, the parties are free to seek them in the arbitration if appropriate.

[5] There remains the relief sought by LIFE under Rule 21. Nordion seeks costs on the basis that it succeeded in defeating the Rule 21 motion based upon res judicata/abuse of process, which was the main basis for relief asserted by LIFE. Nordion seeks approximately $320,000 on a partial indemnity basis. Nordion furthers submits that there should be no costs of the alternative Rule 21 relief based on the arbitration clause because the issue of arbitrability has yet to be decided by the arbitrator.

[6] LIFE submits that given the divided success under Rule 21, the partial indemnity costs of each side on the two Rule 21 motions should be set off against the other. LIFE therefore submits that its partial indemnity costs regarding arbitrability should be offset against Nordion’s proper costs in relation to res judicata/abuse of process. LIFE made various assumptions leading to a partial indemnity costs claim of around $650,000 in respect of arbitrability and differing figures for Nordion’s claim. LIFE submits that the net result means that a costs order should be made in LIFE’s favour in the amount of approximately $315,000.

[7] These matters were hard-fought, with extensive materials and arguments. The parties agree that the amount at issue is substantial and the issues of high importance to the parties. The costs were high for both sides, though LIFE’s costs claim is significantly higher.

[8] Each side levels challenges against how the other side apportioned their costs along with other specific challenges.

[9] In the exercise of my discretion, I have considered the relevant factors under Rule 57.01 of the Rules of Civil Procedure. Without limiting that consideration, I highlight the following things as particularly significant:

(a) Both sides have invited an approach to costs that is based on the two specific outcomes under Rule 21. As between the Rule 21 motion regarding res judicata/abuse of process and the alternative relief of a stay in favour of arbitration, the former was the main focus of the argument before me and related materials.

(b) There was divided success. While Nordion succeeded in defeating the main relief sought by LIFE, which would otherwise have eliminated Nordion’s claim entirely, the action was stayed further to LIFE’s alternative relief. Although Nordion is free to raise its arguments about the scope of the submission to arbitration before the arbitrator, it remains the case that it lost its fight against the motion to stay these proceedings.

(c) The motion materials and arguments were extensive, and the approach taken to the issues made matters more complex than they ought to have been. While I do not conclude that this added complexity should be visited solely on one side or the other, the approach taken by LIFE markedly over-complicated the matter especially bearing in mind the position LIFE had already taken at the Lane Arbitration.

(d) The expert evidence on foreign law, which gives rise to a substantial portion of the costs claim for both sides, related to both res judicata and the arbitration clause.

(e) The overall claim by LIFE, including its quantum, the expert fees and its approach to apportioning its costs, results in an unreasonably high amount claimed.

[10] Taking everything into account, I conclude that based upon divided success and other relevant factors under Rule 57.01 there shall be no order as to costs.

Justice W. Matheson

Date: February 17, 2015