Badr v. 2305136 Ontario Inc., 2015 ONSC 1937

CITATION: Badr v. 2305136 Ontario Inc., 2015 ONSC 1937

COURT FILE NO.: CV-13-10312-00CL

DATE: 20150325

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Antoine Chahine Badr, Antoine Chahine Badr o/a Myant Consulting, Myant Consulting Inc. and B.O.T. International Ltd., Applicants

AND:

2305136 Ontario Inc., Vikeda International Logistics and Automotive Supply Ltd., Vikeda Industries Inc., Vikeda Ventures Ltd., Vikeda Enterprises Ltd., 2208824 Ontario Inc., G.L.A.D. Operations Inc., G.L.A.D. International Inc., Vincent Wong, Ken Wong, Danny Wong, Alex Kua and Kenneth King Yu Chan, Respondents

BEFORE: Mr. Justice H. Wilton-Siegel

COUNSEL: Scott Rosen, for the Respondents/Moving Parties

Christopher Stanek, for the Applicants/Responding Parties

HEARD: July 8, 2014

ENDORSEMENT

[1] The respondents in this application brought two motions respectively seeking to disqualify the applicants' solicitor and seeking security for costs. The motions were withdrawn by the respondents shortly before the return date. Counsel appeared on that date and argued the issue of costs. I will deal with the costs of each motion separately.

[2] There appears to have been no basis for the disqualification motion, which counsel for the respondents says he recognized after the cross-examination of his client. On his cross-examination, Mr. Wong was unable to identify any confidential information that was disclosed to Gowlings. His counsel says Mr. Wong was upset that Gowlings was acting after they had previously been engaged in certain matters in which Mr. Wong was involved together with Mr. Chahine and his companies. However, that is not a sufficient basis for a disqualification motion. The applicants in this application are therefore entitled to their costs attributable to the disqualification motion. However, such costs should be awarded on a partial indemnity scale, as the applicants cannot establish on a balance of probabilities that the motion was brought for tactical purposes.

[3] There was a basis for the security for costs motion which, however, disappeared when a similar action in Michigan was dismissed by the court in that jurisdiction on June 6, 2014. Unfortunately, Mr. Rosen could not advise Mr. Stanek that he had instructions to withdraw the two motions until July 1, 2014. By this time, Gowlings had completed its factum and a compendium, representing the preponderance of work on these motions. Apparently, Mr. Rosen was out of town and therefore did not contact Mr. Wong for two weeks after receiving the Michigan decision. The third week's delay resulted from the difficulties of communicating with his client who was in Asia.

[4] I conclude that the applicants are entitled to costs attributable to the security for costs motion that were incurred after June 6, 2014. The applicants would not have incurred the costs claimed after that date if Mr. Rosen had advised Mr. Stanek in timely fashion of his intention to seek instructions to discontinue the motions after receiving the Michigan decision. In the absence of such advice, and given the scheduled date for the hearing, the applicants had no choice but to prepare for the hearing.

[5] The applicants have not separated their costs of the two motions in their costs outline. They seek aggregate legal fees totalling $15,644.80 on a partial indemnity basis plus $258.22 in disbursements. The applicants say that the disqualification motion took approximately 75% of their time and had to be taken seriously as an attack on Gowlings’ reputation. The full transcript of the cross-examination of Mr. Wong in support of the motions is not before the Court. Based on the materials in the record before the Court, I have used a figure of 60%.

[6] The respondents say that the applicants spent an inordinate amount of time on the two motions. In the absence of dockets, it is not possible to reach more than an impression of the extent to which the time spent was excessive. However, I agree with the respondents that the amount of time spent by, and therefore the costs claimed in respect of, the summer student working for the applicants’ counsel on the factum, book of authorities and compendium is greater than would be expected for motions of this nature.

[7] I have not otherwise adjusted the rates or time of counsel, or the allocation of work among counsel for the applicants, as they appear reasonable given the nature and complexity of the matter. The respondents have not provided their own comparable costs outline in respect of this matter so there is no evidence before the Court of their reasonable expectations. However, I think that the respondents would have expected to pay more than the negligible amount that is now proposed by Mr. Rosen on their behalf.

[8] Based on the foregoing, I find fair and reasonable costs of the two motions to be $12,500 on an all-inclusive basis, which costs are payable forthwith by the respondents to the applicants.

Wilton-Siegel J.

Date: March 25, 2015