Vaughan Community Health Centre Corporation v. Annibale, 2015 ONSC 3107

NEWMARKET COURT FILE NO.: CV-14-1200-52-00

DATE: 20150514

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

VAUGHAN COMMUNITY HEALTH CENTRE CORPORATION

Applicant (Moving Party)

– and –

QUINTO ANNIBALE, SAM CICCOLINI, ROBERT COLELLI, MICHAEL DEGASPERIS and DR. ROBERT MAGGISANO

Respondents (Responding Party)

Albert G. Formosa/Faren H. Bogach, for the Applicant (Moving Party)

Craig T. Lockwood, for the Respondents (Responding Party)

HEARD: by written submissions

REASONS ON COSTS

DiTOMASO J.

THE PROCEEDINGS

[1] The Applicant seeks costs in the amount of $20,000 for the Applicant’s motion for an injunction heard on September 18, 2014 (the “Injunction Motion”) and costs in the amount of $16,070.78 for the Application heard on March 20, 2015 (the “Application”).

September 18, 2014 Motion

[2] The Applicant’s urgent Injunction Motion was heard by Douglas J. on September 18, 2014. The Applicant was substantially successful on the Injunction Motion. In accordance with the September 18, 2014 decision of Douglas J., the parties exchanged and filed cost submissions. The Applicant sought $20,000 in partial indemnity costs. The Respondents submitted that the issue of costs should be deferred to the judge finally disposing of the Application on its merits, or, alternatively that costs be fixed in the amount of $8,000 as an appropriate and proportional amount.

[3] In his October 2014 costs endorsement, Douglas J. found that the Applicant was substantially successful on the Injunction Motion, that the injunction was of moderate complexity, and reserved costs to the application judge.

March 20, 2015 Application

[4] The Applicant was entirely successful on its Application heard before me on March 20, 2015. My Reasons for Decision were delivered on April 17, 2015.

ANALYSIS – SEPTEMBER 18, 2014 MOTION

[5] The Applicant was substantially successful on this motion. The Applicant’s motion to enjoin the Respondents, being the voting members of the Applicant, from passing the Respondents’ resolution, or any part thereof, at any meeting of the members of the Applicant pending the outcome of this Application was granted. The Applicant seeks costs on a partial indemnity basis in the amount of $20,000.

[6] The Applicant submits that the costs are fair and reasonable and relies upon factors set out in rule 57.01 of the Rules of Civil Procedure and Andersen v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557 at paras 15-23 (Ont. Div. Ct.).

[7] The Applicant submits that the issues are very important in that the Respondents were seeking to pass a resolution that was contrary to the Applicant’s by-laws and the Corporations Act. The proposed resolutions sought to change the Applicant’s by-laws and remove directors. If the resolution passed, there would have been serious consequences for the Applicant. The Applicant would have been placed in an untenable position due to the improper dismissal of three directors and the illegal amendments of the by-laws. I agree that the issues were very important to the Applicant. I also agree that there was some level of complexity to the proceeding in that a detailed review and analysis of the Applicant’s by-laws was required. There is also a short timeline which increased the complexity of the proceeding.

[8] The Respondents refused to delay or reschedule their special members meeting which necessitated the Applicant bringing the interim injunction motion on an urgent basis.

[9] While the Applicant seeks partial indemnity costs in the amount of $20,000, the Respondents submit that the Applicants were unsuccessful in its attempt to restrain the Respondents from convening a meeting.

[10] I reject this argument. Rather, I agree with the Reasons of Douglas J. where he has found that the Applicant was substantially successful.

[11] However, costs follow the event and the Applicant as the successful party is entitled to costs on a partial indemnity scale.

[12] As for quantum, I find that $20,000 in costs claimed by the Applicants is excessive given the amount of time devoted to this matter. Senior counsel docketed 10 hours, junior counsel docketed 48 hours and a law student docketed 62 hours. While I do not find the hourly rates problematic, I do find the number of hours invested in this matter to be on the high side, notwithstanding a significant amount of work was performed by persons at lower rates.

[13] That having been said, I would discount the amount claimed for costs by $5,000 and fix costs on the motion in the amount of $15,000 inclusive of fees, disbursements and HST.

[14] I am guided by the principles set out in the Andersen decision as well as the principles set out in Davis v. Clarington (Municipality) 2009 ONCA 722. In the Davis case, the Court of Appeal has succinctly set out the applicable principles promoting the determination of costs on a fair, reasonable and proportional basis. I exercise my discretion under s.131 of the Courts of Justice Act under rule 57.01 of the Rules of Civil Procedure and pursuant to the relevant case law to fix costs in respect of the motion in the amount of $15,000 all in payable by the Respondents to the Applicant within the next 30 days for the Injunction Motion.

March 20, 2015 Application

[15] The Applicant was entirely successful on this Application heard before me on March 20, 2015. Costs follow the event on a partial indemnity scale.

[16] The Applicant claims costs in the amount of $16,070.78. The Respondents submit that this amount is excessive and given the nature of the proceeding and limited materials filed, the amount of $6,000 in costs with respect to the Application would be appropriate and consistent with the principles of proportionality.

[17] The Applicant submits that supplementary materials were prepared and delivered in respect of the Application including Supplementary Affidavit, Application Record, Factum and Book of Authorities as well as a review of the Respondents’ Application Record, Factum and Book of Authorities.

[18] The Respondents submit that in respect of quantum: (a) the materials filed in respect of the Application hearing were entirely duplicative of the materials filed in respect of the interim injunction hearing, with the only addition being a two page supplementary affidavit; (b) the Factum filed in respect of the Application hearing was largely duplicative of the Factum filed at the interim injunction; and (c) there were no cross-examinations on the affidavits.

[19] The Respondents also submit that while the matters in issue were of importance to both parties, the decision to commence formal litigation against the voting members to resolve such issues was unnecessary in the circumstances. I do not agree and reject this submission. Neither do I agree that $6,000 is an appropriate amount in respect of costs as submitted by the Respondents for the Application.

[20] However, I do agree that the amount of $16,070.78 is excessive given the duplication of materials and arguments advanced on the part of the Applicant.

[21] Adopting the same analysis as set out above in respect of the interim injunction motion and relying upon the same legal principles and authorities, I find that the amount of $10,000 all inclusive of fees, disbursements and HST is a fair, reasonable and proportional amount regarding this proceeding.

[22] The sum of $10,000 regarding the Application shall be paid by the Respondents to the Applicant within the next 30 days for the Application.

DISPOSITION

[23] For these reasons, I find that the Respondents shall pay to the Applicant the total amount of $25,000 for costs in respect of both the September 18, 2014 Injunction Motion and the March 20, 2015 Application. The amount of $25,000 shall be paid by the Respondents to the Applicant within the next 30 days.

DiTOMASO J.

Released: May 14, 2015