ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CHRISTOPHER HEER operating as HEER LAW and JOHN SIMPSON operating as SHIFT LAW
Applicants
– and –
2202240 ONTARIO INC. operating as NOR ENVIRONMENTAL INTERNATIONAL and LOUIS BROWN
Respondents
John Simpson, for the Applicants
Louis Brown, for the Respondents
HEARD: May 1, 2015
FAIETA, j
REASONS FOR DECISION
[1] The Applicants bring this application under sections 23 and 24 of the Solicitors Act, R.S.O. 1990, c. S. 15, and Rule 14.05(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for judgment against the Respondents in the amount of $7,119.00 for an unpaid invoice for legal services dated October 2, 2014, plus interest and costs. The Respondent Brown is the sole shareholder of the corporate Respondent. Pursuant to Rule 15.01(2), leave was sought, unopposed, and granted to permit Brown to represent the corporate Respondent on this application. Brown is located in North Bay, Ontario. This Application was heard by teleconference call pursuant to Rule 1.08 of the Rules on consent of the parties after the Respondents failed to attend the hearing of this Application a few days earlier in Toronto.
[2] The Respondents commenced a patent infringement action in 2012 in the Federal Court of Canada. In order to assist with that litigation the Applicants and the Respondents entered a retainer agreement dated August 18, 2014. Under the agreement, the Respondents hired the Applicants to do the following:
…provide legal services and advice in connection with a review of the validity of Canadian Patent No. 2,285,748. This review is to be limited in scope to assessing the merits of the anticipation and obviousness allegations presently made by the defendants in Federal Court File No. T-806-12.
[3] An invoice dated October 2, 2014 was issued by the Applicants to the Respondents. It outlines the following charges that totaled 18 hours of work.
August 19, 2014: Studying 748 Patent and considering claim constructions, reviewing prior art allegations and certain correspondence and commentary from L. Brown regarding prior art.
August 20, 2014: Continued review of comments from L. Brown; reviewing selections of Canadian patent file history; reviewing referenced cited claims of corresponding U.S. patents; considering claim construction issues; corresponding with L. Brown regarding further documents for review; corresponding with L. Brown regarding call on prior use systems.
August 22, 2014: Reviewing and considering correspondence on secondary indicators of non-obviousness from M. Udeschini; correspondence with M. Udeschini regarding review.
August 24, 2014: Reviewing and considering correspondence from L. Brown regarding US patent file history; further reviewing and considering pleaded prior art.
August 25, 2014: Further review and consideration of pleaded prior art; further review of 748 patent claims in view of prior art.
August 27, 2014: Further review of 748 patent claims and patent and considering claim constructions; further review of pleaded prior art and considering anticipation and obviousness arguments; preparing and sending preliminary conclusions to L. Brown and M. Udeschini.
[4] Brown submitted that the work performed by Heer on August 27, 2014 was unnecessary. In support of this assertion he referenced an email dated August 19, 2014 to Heer which asked whether it is:
…possible to conduct your review in such a way that should you expose a weakness we can discuss it prior to investing additional time? Essentially a series of go/no go steps.
[5] A few minutes later Heer responded:
If there is a strong prior art reference for anticipation, we can flag that for you when we come across it and seek instruction from you as to whether to proceed with reviewing the rest of the prior art documents. Otherwise, we will need to review all the prior art documents pleaded to assess the strength of their obviousness allegations.
[6] There is no evidence that the Respondents objected to this approach, nor is there any evidence that the Applicants did not follow this approach.
[7] In my view, the work completed by the Applicants on August 27 (or anytime earlier) was not undertaken contrary to the “go/no go” direction as understood by Heer. It was suggested that Heer “blazed through work” on August 27 in order to increase his billings without telling the Respondents that such work was being undertaken. In fact, the evidence shows that the work on August 27 was a direct result of the Respondents’ demands. Specifically, Brown asked Heer on August 26 to complete his legal review within a two-week timeframe from the date of the retainer, within the 40 hour estimate provided and with an account, rather than wait until Heer returned from vacation in mid-September 2014. In response, Heer delivered an email with his preliminary conclusions and a draft invoice, as requested by the Brown, on August 27, 2014. That draft invoice is now the invoice at issue as Heer did not perform any further work, nor did the Respondents ask Heer to do so.
[8] The Respondents submit that the Applicants’ work resulted in duplication given that they had hired counsel in the United States as well. However, there was no evidence that this in fact occurred. As well, there were only four patents involved in the U.S. litigation. There were 10 other patents at issue in the Canadian litigation.
[9] Finally, the Respondents also submit that they were not satisfied with the quality of the advice. There is no evidence that the quality of the advice was substandard.
[10] Judgment is awarded in the amount of $7,119.00 plus pre-judgment interest of 1.3 percent.
[11] The Applicants seek their costs of this Application on a substantial indemnity basis. The Respondents did not accept an Offer to Settle in the amount of $9,000.00 that was made on April 30, 2015. The Applicants claim $6,775.91, which includes disbursements of $404.61, on the basis that the Respondents’ conduct has been “reprehensible, scandalous or outrageous.” It is my view that the Respondents’ conduct was not “reprehensible, scandalous or outrageous”, however I acknowledge that the unsubstantiated comments about Heer’s professionalism come close to satisfying that standard. As well, the proportionality of the costs claimed to the amount in dispute is also an important consideration. In the end, an award of costs should be an amount that is fair and reasonable for the unsuccessful party to pay.[^1]
[12] I award costs of $2,200.00, which includes disbursements of $404.61, to the Applicants.
Mr. Justice M. Faieta
Released: May 14, 2015
CITATION: Heer et al. v. 2202240 Ontario Inc. et al. 2015 ONSC 3098
COURT FILE NO.: CV-15-521717
DATE: 20150514
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CHRISTOPHER HEER operating as HEER LAW and JOHN SIMPSON operating as SHIFT LAW
Applicants
– and –
2202240 ONTARIO INC. operating as NOR ENVIRONMENTAL INTERNATIONAL and LOUIS BROWN
Respondents
REASONS FOR JUDGMENT
Mr. Justice M. Faieta
Released: May 14, 2015
[^1]: Elbakhiet v. Palmer, 2012 ONSC 2529, [2012] O.J. No. 2890; rev’d 2014 ONCA 544, 121 O.R. (3d) 616 (C.A).