Paul Wurth Inc. v. Anmar Mechanical et al, 2015 ONSC 246

COURT FILE NO.: 14-49267

DATE: 2015-01-13

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Paul Wurth Inc., Plaintiff

A N D:

Anmar Mechanical and Electrical Contractors Ltd. and MAG Engineering & Constructors International Ltd., Defendants

BEFORE: The Honourable Mr. Justice C.S. Glithero

COUNSEL: D.A. Schmuck, for the Plaintiff, Applicant

H.J. Marin, for the Defendant, Respondent

Ruling on Costs

[1] By typewritten endorsement released December 12, 2014, I dismissed a motion by the plaintiff for an order requiring the respondents to participate in arbitration, for an order appointing an arbitrator, and an order staying this action pending the outcome of the arbitration.

[2] Counsel for the successful defendants seeks an award of costs on the basis of what is terrmed as “solicitor client costs”, which I will take as a request for costs on a “substantial indemnity basis”.

[3] The defendants submit such an award would be justified because defence counsel was not consulted in advance as to the return date of the motion, because the plaintiff’s factum and case law were not served on the defendants’ counsel until December 5, 2014, although the defence responding materials were filed on December 3, 2014 and because the plaintiff did not accept an offer to settle.

[4] The offer to settle was in writing and dated November 23, 2014 and proposed that the action against Anmar be dismissed, the action against MAG be discontinued, the motion be withdrawn with each side bearing its own costs, and that in return MAG would agree to arbitration. In my estimation that offer to settle was not on terms such that the defendants ought to be advantaged on the issue of costs. It called for a dismissal of the action against Anmar and a discontinuance of the action as against MAG, neither of which was achieved on the motion.

[5] The defendants further submit that another factor relating to an award of costs is that during argument plaintiff’s counsel advised that MAG was a shell company and accordingly Anmar was properly added to the action. The submission is that there was no evidence tendered to support that statement and accordingly it was made for an improper purpose. I don’t attach any importance to this, from a costs perspective, as it seems to me to have been a submission made on behalf of the plaintiff and one which may very well occupy significant time at trial. Within the motion materials of the plaintiff there was some evidence upon which the impugned proposition could be argued. I do not accept the submission on behalf of the defendants at paragraph 15 (b) of the costs submissions that Anmar was added for an improper purpose.

[6] In the result, I am of the opinion that an award of costs on a partial indemnity basis is appropriate.

[7] Defendants’ counsel was called to the Bar in 1976 and claims an actuarially rate of $490 per hour and a partial indemnity rate of $350 per hour, and on the basis of time spent in the amount of 38.90 hours, claims fees on a partial indemnity rate in the amount of $13,615.00

[8] On behalf of the plaintiff it is submitted that I should bear in mind that one of the Rule 57.01 factors is “the amount of costs that an unsuccessful party could reasonably expect to pay”. The plaintiff also submits that the offer to settle here was so unrealistic as to attract no meaningful consideration from an offer to settle respective, a submission with which I agree.

[9] Plaintiff’s counsel further, in effect, seeks to reargue the motion by submitting that the plaintiff was forced to bring the motion to obtain an order to enforce the contract provision requiring arbitration. While stripped of other relevant information, that submission is fair. What it leaves out however, is that the plaintiff was not forced to commence the action, but rather chose to do so rather than proceeding with arbitration. It also omits the fact that the plaintiff broadened the scope of the proceeding by naming as a party defendant an entity that was not subject to the arbitration agreement.

[10] The plaintiff also submits that the amount of time claimed by the defendants, and the hourly rates claimed, are excessive as it is said this was a relatively simple motion. The plaintiff’s counsel provides a costs outline in which it is said that Mr. Schmuck charges $350 per hour on a partial indemnity rate, the amount claimed by counsel for the defendants, with the two of them being essentially the same length of time at the Bar. Accordingly, the claim that the hourly rates charged are excessive is questionable.

[11] In terms of the amount of time spent, lead counsel for the plaintiff claims to have spent 7.60 hours, with a more junior counsel spending 15.70 hours, for a total of 23.30 hours versus 38.90 hours for the defendants. I am aware that extra time spent in preparation often leads to a shorter amount of time in court. I acknowledge that a more junior lawyer was used for much of the work by the plaintiff, thereby running up less costs. On the other hand, I cannot ignore the fact that the materials produced on behalf of the defendants were more persuasive.

[12] Lastly, I remind myself that this is not an exercise involving a simple calculation of the number of hours allowed and then multiplying by an hourly rate found to be appropriate.

[13] In terms of the factors contained in rule 57, I have regard to the principal of indemnity, but also that of the expectations reasonably held by an unsuccessful party, and add to that the fact that the amount in issue is in excess of a million dollars and hence is a matter of importance to the parties, and I also bear in mind my opinion that one of the grounds upon which this motion failed was that the plaintiff had already put the defendants to the costs of a full set of pleadings, which had the plaintiff been successful, would have been of questionable utility. And, of course, I have regard to outcome of the motion and my view that it was quite predictable.

[14] I am of the view that $10,000, inclusive of disbursements in the amount of $243.40 and inclusive of applicable HST on both fees and disbursements, would be appropriate and I fix costs in that amount payable by the plaintiff to the defendants within 30 days.

C. S. Glithero J.

Date: January 13, 2015