SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-11-9048-00CL
DATE: 20150702
RE: Alexander L. Bimman also known as Sasha Bimman and 2182474 Ontario Inc., Plaintiffs
AND:
Arkadi Neiman, Corayana Enterprises Limited, 1050828 Ontario Ltd., Canadian Investment & Consulting Central Corporation, Larwest Canada (Caribbean) Inc., 2182158 Ontario Ltd., 1765350 Ontario Inc., 1771636 Ontario Ltd., Edward Poberezkin, Victor Itkine, Roman Shmulik, Alex Glozman and Corayana Services Ltd., Defendants
BEFORE: Justice Gans
COUNSEL: Igor Ellyn and Belinda Schubert, for the Plaintiffs
Douglas Christie and David Rubin, for the Defendants
HEARD: In writing
COSTS and INTEREST ENDORSEMENT
Introduction
[1] I rendered judgment in this matter on April 16, 2015, after a 26-day trial conducted last Fall, now reported as Bimman v. Neiman, 2015 ONSC 2313 (the “Trial Judgment”). I was subsequently called upon by the Plaintiffs to reconsider and rectify certain aspects of my judgment in accordance with certain deficiencies or errors which the Plaintiffs suggested flowed from said judgment. I declined to embark upon the requested remediation for reasons expressed in an endorsement released on May 15, 2015, and reported as Bimman v. Neiman, 2015 ONSC 3076 (the “Remediation Motion”).
[2] I am now charged with the task of not only assessing the costs of the action, up to and including the Remediation Motion, but also to set the applicable rates of interest and the dates from which all such interest is said to run on the various aspects of the award ordered in the Trial Judgment.
[3] I hasten to observe that the Defendants seek to further complicate my task by asking me to consider separately and by way of set-off, as it were, the costs in respect of two pretrial motions heard by Marrocco J. (as he then was) and Newbould J., where each of my colleagues reserved costs of the motions before them to the trial judge.[^1] The Defendants also seek to deduct the costs associated with an amendment to the Statement of Claim in which an alleged ‘new cause of action’ was raised at the commencement of the trial. Although the amendment was permitted, the cause of action was, in the final analysis, not made out. Finally, the Defendants seek costs in respect of the Remediation Motion, costs which I awarded as part of the above-mentioned endorsement.
[4] I again observe, for what it might be worth, the fact that agreement between the parties could not be reached on even the most basic of issues, namely the amount and timing of interest, underscores the view expressed in the judgment proper, namely that this war will continue until the last of the combatants falls on his own sword, a stance which is more than a tad regrettable.
Background
[5] Briefly, the Plaintiffs commenced an oppression remedy action in June 2010 in which Bimman and his numbered company sought, among other things, to be taken out of their interest in a real estate investment company, CEL, on an undiluted basis. Other important ancillary relief was sought as well in respect of the Plaintiffs’ entitlement to other payments arising out of their participation, management and interest in CEL. To paraphrase the reasons of Justice Marrocco, delivered at the conclusion of the Summary Judgment Motion,[^2] the core issue for determination was whether and to what extent Bimman’s interest in CEL was diluted and whether the allegations of impropriety levelled against Bimman had any merit or bearing on the matters in issue.
[6] The Defendants, at least in respect of the manner in which their case was presented at trial, took the position that any dilution in the Plaintiffs’ interest in CEL was justified under the “business judgment rule.” They ultimately conceded, however, in the waning hours of the trial, that the granting of what was popularly called the JIN Mortgage gave rise to some form of relief under s. 248 of the OBCA.
[7] The Defendants’ case was not originally pleaded and pursued in such a seemingly benign fashion. As best as I understood their lengthy, if not prolix, defence and counterclaim,[^3] their initial tactical thrust focused on the Lambert Contracts by which they suggested, as the documentary evidence underscores, that Bimman engaged in acts of fraud, bad faith and concealment, all designed to deprive CEL and his other “partners” of their proper percentage interest in a rather modest contract. Somehow, not explained at trial, these allegations of fraud and concealment gave rise to a multimillion dollar counterclaim, one which was presumably linked to the fact that the Plaintiffs tied up the CEL properties in Manitoba with a caveat in support of their claimed interest to an undiluted 20% of the net worth of CEL, on top of a number of ancillary claims.
[8] Lead counsel for the Defendants, from the drop of the puck at trial, downplayed the importance of the Lambert Contracts and their impact on the decision-making process surrounding the raising of funds necessary to finance CEL in the formative days, a process counsel allowed was critical to the ultimate success of CEL. This approach, whether undertaken by plan or happenstance, meant that the allegations of fraud formed more a part of the Plaintiffs’ overall mantra than the Defendants’ defence or counterclaim, the latter of which I suggested in the Trial Judgment had all but disappeared or was unsupported by any damage evidence.
Positions of the Parties
The Plaintiffs’ Position
[9] The Plaintiffs seek to recover costs of this action, including the defence of the counterclaim, on a substantial indemnity basis. Indeed, in their written submissions, they do not seek costs on a partial indemnity basis even as an alternative.[^4] They suggest that the costs award should be in the sum of $1,324,419.70, inclusive of legal fees, disbursements, fees of experts and HST. The total costs claimed on a substantial indemnity basis actually surpassed the award of damages by category expressed in the Trial Judgment. They have provided me with a detailed brief of costs prepared, as requested, in the form and fashion of the old “High Court” bills of costs, with a break out related to benchmark events undertaken during the entire process. They have, as well, appended a detailed disbursement account, including the accounts of the experts and “others.”
[10] In addition, the Plaintiffs have provided me with an expansive written submission which they suggest supports their position that the conduct of the Defendants, which transcends the allegations of fraud and bad faith, amounts to “reprehensible, scandalous or outrageous conduct.”[^5] Furthermore, they have sought to underscore the foregoing with a chronology of the Defendants’ conduct during the action. The chronology covers, at 3,000 ft., some of the benchmark events in the action and is intended to suggest conduct that amounts to something more than litigation ‘oppression.’
[11] The Plaintiffs also assert that their own activities during the trial proper, in presenting evidence electronically and permitting “consultation” among experts, reduced the time for the actual presentation of evidence, for which they should receive some form of acknowledgement if not benefit.[^6]
[12] Finally, the Plaintiffs argue that when one has regard to the global results obtained, the Plaintiffs, while not beating any offers to settle, should suffer no diminution or set-off in respect of any individual aspect or benchmark event, such as the motions before Justices Marrocco or Newbould, or the motion to amend the Statement of Claim. In other words, the Plaintiffs argue that the instant case is not one where a distributive costs award should be made in any event.[^7]
The Defendants’ Position
[13] The Defendants take the position that the Plaintiffs should only recover costs on a partial indemnity basis as this case, notwithstanding the allegations of fraud and bad faith contained in the Statement of Defence and Counterclaim, reduced itself to an oppression remedy action in which the Plaintiffs recovered only a fraction of their total claims. Putting the matter simply, the Defendants take the position that the action and the conduct of the parties have not reached the threshold to warrant the “elevation” of this matter to one for which costs payable on a substantial indemnity basis would be warranted.
[14] They further assert, for a variety of reasons developed in some detail in their written submissions, that at worst, the Plaintiffs should be disentitled to the costs associated with each of the four aforementioned motions, the first two of which were launched during the ramp up to the trial in June 2011 (the Summary Judgment Motion, before Marrocco J.) and October 2013 (the JIN Mortgage Motion, before Newbould J.), one brought at the commencement of trial to amend the Statement of Claim, and, finally, the Remediation Motion brought after the release of the Trial Judgment.
[15] Finally, the Defendants argue quite strenuously, again for reasons expanded upon in their written submissions, that when one has regard to the general principles underpinning any award of costs, the partial indemnity bill should be reduced both in terms of fees and disbursements for some of the reasons discussed below.
The Four Motions
(1) Summary Judgment Motion
[16] The Defendants brought a summary judgment motion in June 2011 which, as previously indicated, was heard by Justice Marrocco.
[17] Essentially, the Defendants sought a declaration that the only operative agreements, as I so found, were the August and November Shareholders Agreements, and the purported amendments to the last mentioned agreement. Put otherwise, the Defendants attempted to short-circuit the Plaintiffs’ reliance on the VLOU and the Partnership Agreement, except as such might have some bearing on understanding the intention of the parties and their reasonable expectations as those concepts infuse an oppression remedy action.[^8]
[18] The Defendants also sought a declaration on the Plaintiffs’ percentage interest in CEL, which they suggest was limited to 5.6 % and not the 20% claimed.
[19] Justice Marrocco, in dismissing the motion, made the following order as to costs:
[23] Costs on this motion are reserved to the judge hearing the oppression action. Should it turn out that there is no merit to the plaintiffs’ oppression claim, the judge hearing that matter may wish to take such a determination into account when assessing whether plaintiffs or defendants should be required to pay the costs of this motion.
[20] I have reproduced several other paragraphs from Marrocco J.’s reasons, ones which I believe shed some light on what was intended by his costs order which admittedly did not provide for “costs to the plaintiff in the cause”:
[18] The dilution of Alexander Bimman’s shares is obviously the core issue in this litigation. Resolution of it will require the evidence of the individuals named as parties, as well as others who lent money to Corayana Enterprises Limited or, alternatively, were unwilling to do so. In addition, in the course of argument, counsel for the respondent maintained that relations between Alexander Bimman and the individual defendants soured because the defendants wrongfully concluded that Alexander Bimman tried to misappropriate money from the Manitoba redevelopment project for his personal benefit. Evidence concerning this issue will also be relevant to the oppression application. Given the facts in issue, the materials before me and the limited, albeit expanded, tools available to me when deciding whether there is a “genuine issue of material fact that requires a trial”, I am satisfied that there is a “genuine issue of material fact that requires a trial”. Accordingly, there will be a trial in this matter.
[19] There is no point in making an order at this time declaring that the current percentage ownership of share equity in Corayana Enterprises Limited is correctly set out in their Notice of Motion, dated December 14, 2010. If the plaintiffs’ shareholding has been unfairly diluted, then the percentage ownership set out in the December 14, 2010 Notice of Motion will change. Because the dilution of the plaintiff, Alexander Bimman’s, shareholding in Corayana Enterprises Limited is central to the oppression action and because the oppressive nature of the dilution of Alexander Bimman’s shareholding is a genuine issue of material fact requiring a trial, it is not appropriate at this time to make a declaration on this motion validating the defendants’ assertion concerning share ownership.
[20] Similarly, no useful purpose is served by deciding that the Corayana Shareholders’ Agreement constitutes the only agreement of the Investors, or that, by virtue of clause 1.02 of the Corayana Shareholders’ Agreement, all previous agreements amongst the Investors ceased to have any force and effect. The plaintiffs’ claim sounds in oppression. The reasonable expectations of the parties are relevant considerations. Accordingly, evidence concerning the circumstances surrounding the entering into of all of the agreements amongst the parties will likely be relevant. Making the order requested will not shorten the proceedings; it will only interfere with the judge hearing the oppression claim.
[21] In the final analysis, I am of the view that the Plaintiffs should recover their costs of the Summary Judgment Motion on a partial indemnity basis, which will be set as part of the overall costs at the conclusion of this endorsement.
[22] I would observe, parenthetically, that I was not persuaded that any deduction from any award in favour of the Plaintiffs should form part of the calculus found in the mathematical analysis suggested by the Defendants at paragraphs 33‑48 of their costs submissions.
(2) The JIN Mortgage Motion
[23] The Plaintiffs filed caveats in Manitoba against the subject property as part of their overall litigation strategy. These caveats were not abandoned, nor struck out during the course of the litigation, but formed the subject matter of various agreements which permitted CEL to sell two of the buildings to UCN upon payment of the proceeds into court.[^9]
[24] The Defendants brought a motion, not heard until mid‑October 2013, seeking the payment out of court of a portion of the UCN sale proceeds to discharge the JIN Mortgage and an order discharging, in whole or in part, the remaining caveats. The Plaintiffs countered with a cross‑motion, which the Defendants suggested in their costs submissions had “…literally asked for an interim order finding oppression...” and other relief sought at trial.[^10]
[25] Justice Newbould dismissed both motions with costs left to the trial judge, although he did fashion a half‑way house kind of award in the event the Defendants sought any form of payment out of court before trial which was, at that moment in time, a scant four months away. He did, however, chasten the Defendants for paying the legal fees of counsel out of the CEL coffers.
[26] It is unclear from the endorsement whether or not the motions judge had before him the series of offers to settle the subject motion, offers which have been provided to me as part of the Defendants’ brief. The Defendants take the view that in light of the various offers, which are less than clear, a stalemate had been reached on the eve of the return of the motion and that “it was futile to proceed with the hearing of the motions,” which hearing occupied the better part of a day before Justice Newbould.
[27] I do not intend to parse the minutiae of the offers to settle. In the final analysis, I am of the view that neither side came away as a clear winner at day’s end. Hence, in exercising my discretion, there will be no order as to costs of the motion and cross‑motion, the reconciliation in respect of which will take place when the overall costs are set.
(3) Motion to Amend the Statement of Claim
[28] The Plaintiffs decided, on the eve of trial, to notify the Defendants that an amendment of the Statement of Claim would be sought to challenge the purported dilution effects of the cash calls pursuant to the criminal interest rate provisions of the Criminal Code (s. 347). I do not intend to repeat the essence of the amendment, which I felt legally obliged to permit, and my reasons for so doing. That saga is set out at Bimman v. Neiman, 2014 ONSC 5965. In the final analysis, however, I did not accept the Plaintiffs’ argument on the applicability of the criminal interest rate provisions, based upon the limited evidence that was introduced on consent at trial.
[29] I did, however, make the following observations in the endorsement allowing the last minute amendment, which I believe are of some moment in respect to the exercise of my discretion regarding the costs associated with this motion:
[17] Furthermore, having regard to the fact that the now designed attack on the transaction first came to light as the plaintiffs were considering its “reasonableness” as part of the preparation for trial on the oppression, I believe it would be of some moment to defer a full determination of this issue after all the dust settles. In other words, I am inclined to permit the amendment on this ground so that full argument can be advanced on a complete evidentiary record.
[18] Before closing, I make the following observations. As I indicated to counsel during argument, under the oppression remedy sections of the OBCA, I have plenary powers which would permit me to declare invalid the loan-share transactions if I were so persuaded, a remedy which presumably is subsumed in the Court’s power after concluding that the transaction offends s. 347 of the Code. Therefore it may ultimately turn out that the amendment was nothing more than the plaintiffs’ use of “belts and suspenders”. If that should be the case, the plaintiffs should be aware that cost consequences might thereafter flow.
[19] The motion is hereby allowed, to be revisited at the conclusion of the trial. I am hopeful however that the evidence of the actuaries engaged toward the end of the preparation for trial will speak from an agreed statement of facts and conclusions. In any event, and while I will hear argument on this issue, I am inclined to the view that the defendants should be compensated for their costs of this motion and the retainer of their actuarial expert, who was retained only on a “hurry-up” basis.[^11]
[30] In my view, some reckoning should be accorded the Defendants for having to meet this proposed amendment which was launched at the 11th hour, and which threw everyone unnecessarily into a tizzy. This, too, will be dealt with in the final reconciliation.
(4) Remediation Motion
[31] I do not intend to repeat the details of the relief sought and the disposition of the motion. Those details are set out in the endorsement referenced in paragraph 1, above. In the result, the motion was dismissed with costs. Since this motion was brought after the judgment was rendered, no consideration need be given to the distributive costs issues raised by the Plaintiffs in their brief.
[32] I have considered the issues which gave rise to the motion in the first place, the applicable law and the submissions of counsel. I have considered the foregoing against the backdrop of the general principals regarding costs, set out below. The Defendants shall have their costs of the motion, which I fix at $5,000. This sum will be deducted from the global costs award.
General Principles Regarding Costs
[33] There is very little to separate the parties in terms of their respective positions on the principles applicable to a judge’s discretion in awarding costs. Where they part company, in addition to the threshold issue of whether or not the Plaintiffs should be entitled to costs on a substantial indemnity basis for some or all of the costs associated with the action, is to be found on which of the many principles should be applied and emphasized in this costs award. They both agree that the starting position is to be found in s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”) and Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), both of which are set out below.
[34] Section 131(1) of the CJA provides as follows:
Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.
[35] Rule 57.01 of the Rules provides:
(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the proceeding;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party's denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
[36] Furthermore, both parties agree that it is well-settled law that when fixing costs, the court does not simply engage in a scrutiny of every docket and every invoice claimed. Rather, it attempts to fix an amount of costs that is fair and reasonable in the circumstances of the case for the unsuccessful party to pay.[^12]
[37] I have reviewed the very thorough and expansive submissions of the parties, including the detailed analysis and bills of costs, as requested, of time spent by counsel at each benchmark event and amounts paid by way of disbursements. I have considered the factors enumerated under Rule 57, specifically the time spent, the results achieved, the complexity of the matter, as well as the application of the principle of proportionality, found at rule 1.04(1). In considering the results achieved, I have measured those against the amounts claimed at first instance, the latter of which far and away exceeds the amounts awarded. I have also taken into consideration the fact that the Plaintiffs retained three sets of counsel, which by definition creates incalculable duplication of costs.
[38] Finally, I have also considered the issues surrounding the allegations of fraud and bad faith and everything that flowed from those allegations up to trial, including the counterclaim. I hasten to observe that Plaintiffs’ counsel had his own issues attempting to segregate the costs associated with the defence of that counterclaim beyond merely the pleadings, which I have previously observed left a lot to be desired.[^13]
[39] On balance, I am satisfied, having regard to the matters described above, that a payment of costs to the Plaintiffs on a partial indemnity basis only is appropriate in all the circumstances.[^14] I decline to award costs of any aspect of this case on a substantial indemnity basis since I am not persuaded that there was clear evidence throughout of “reprehensible, scandalous or outrageous conduct” to warrant an award of elevated costs, even though, I dare say, that the allegations of Bimman’s alleged misdeeds loomed large throughout the stages of the proceedings ramping up to trial.[^15] In any event, I am of the view that the award of punitive damages sounded a note of condemnation to the “lead” Defendants for their sometimes inappropriate behaviour.
[40] I am, therefore, setting costs in respect of the fee portion of the account on a partial indemnity basis, inclusive of GST and HST, at $527,104, from which amount $5,000 is to be set-off in relation to the costs payable to the Defendants in respect of the Remediation Motion.[^16]
Disbursements
Experts
[41] I now turn to the issue of the disbursements and in particular, the fees sought to be recovered in respect of the expert witnesses, amounts with which the Defendants take great exception.
[42] As certain of my colleagues have observed, the quantum of fees charged by experts is a troubling issue for courts settling costs. No doubt experts, who are an essential ‘evil’ in all manner of litigation, expect to and should be compensated for their time and effort — provided of course that they act in accordance with their mandate as impartial “advisors” to the triers of fact. However, Edwards J. observed the following in a recent decision:
An expert can simply not charge what he or she considers appropriate and then expect through counsel that such fee will be deemed acceptable by the court. Reasonableness and fairness will dictate whether a disbursement, and in this case, whether an expert’s fee is assessable in whole or in part.[^17]
[43] The Defendants argue that the barometer against which the fees of the Business Valuator should be gauged is the fees charged by their own valuator. In this case, the former charged more than three times what the latter charged. While that amount is some yardstick against which I should assess the disbursement, it is not dispositive of the issue, even though certain of the work product undertaken by the Plaintiffs’ valuator was jettisoned just prior to the opening of trial.
[44] That said, I have already observed in the Trial Judgment that I had some serious reservations about the work product of the Defendants’ Valuator. Under the circumstances, I am of the view that a 25% ‘discount’ would be fair and reasonable in respect of these accounts, particularly when one has regard to the fact that the Plaintiffs’ case changed at the time of trial, rendering academic some of the prior work done and the fees incurred. Hence, the disbursement of the Business Valuator will be set at $169,137, plus HST of $21,987.81 and disbursements, if any.
[45] Insofar as the Real Estate Appraiser’s fee is concerned, I am hard‑pressed to understand or rationalize the disparity in the accounts rendered by the two appraisers, particularly since the Defendants’ Appraiser was from Manitoba and had local knowledge. The reports of these two gentlemen were virtually indistinguishable and in the final analysis, as I observed in the Trial Judgment, little but a theoretical issue separated them. Furthermore, the Plaintiffs, by retaining an appraiser from outside Manitoba, did so at their peril. There were no doubt other skilled local appraisers whose fees would have been less than someone from the GTA and who could have been retained. I am thus persuaded that the amount suggested by the Defendants of $35,000 plus HST of $4,550, plus disbursements if any, is more than fair and reasonable for this expert.
Other Disbursements
[46] The Defendants suggest that the Plaintiffs should not be entitled to recover their fees in respect of the actuary retained. These accounts total $2,599, inclusive of HST. They were rendered on the eve of trial, which suggests to me that the criminal interest rate issue was part of “hurry‑up” offense, if not a “Hail Mary” play for the goal line. I cannot find a corresponding number for the actuarial costs incurred by the Defendants since they retained an actuary in the Collins Barrow firm, who were their Business Valuators as well.
[47] While I think there was some merit in chasing down this issue, if only to add some more possible ammunition to the oppression remedy evidence, I am not persuaded that a full recovery of this fee should be visited on the Defendants. Since I cannot break out the Defendants’ actuarial costs, I am of the view that the Plaintiffs should recover one half of the total disbursement, or $1,299.50.
[48] The Defendants also take issue with the accounts of Filmore Riley, a firm of Manitoba solicitors, and ASH Management, the former property managers of the subject property. I am persuaded from a review of those accounts that they are recoverable, without further explanation.
[49] I have also come to the same conclusion in respect of the account of William G. Horton Professional Corporation. While at first blush I would have thought that enlisting the services of an arbitrator cum mediator, and former litigator, was “over‑kill,” I am not prepared to second guess Mr. Ellyn in terms of what he thought was necessary in respect of the trial preparation of a client who, as I observed, thought he was the best lawyer in the room. Furthermore, the hourly rate charged was fair and reasonable.
Conclusion – Costs
[50] Since the other disbursements incurred are not objected to, I will leave it to counsel to work out the details of the final sums referable to the fees and disbursements in line with the aforesaid reasons. I will not deign to summarize the same in the event that I make an arithmetic error.
Interest
Prejudgment Interest
[51] The Plaintiffs’ and Defendants’ submissions regarding the applicable rates of prejudgment interest are found at paragraphs 1 and 9 of their costs submissions, respectively. They are summarized below:
Item
Amount
Plaintiffs: PJI
Date and Rate
Defendants: PJI
Date and Rate
11.08% interest
858,468.31
22,177.68
2% p.a. from 31‑12‑13
5,538.84
0.5% p.a. from 31‑12‑13
Return of capital
125,000.00
55,371.37
7% per SHA + 7% from 31‑12‑13
55,360.09
7% per SHA + 7% from 31‑12‑13
DMF
112,068.00
10,826.08
2% p.a. from 18‑6‑2010
0.00
Art. 6.02 of SHA not triggered
CEL’s legal fees
22,248.12
1,076.04
2% p.a. from 16‑11‑12
143.54
0.5% p.a. from 31‑12‑13
Punitive damage
25,000.00
0.00
0.00
TOTAL
1,142,784.40
89,451.17
61,042.47
[52] As can be seen from the above chart, there is a difference of $28,408.70 between the Plaintiffs’ and the Defendants’ calculations of total prejudgment interest owing. This is due largely to a disagreement as to whether to apply a rate of 0.5% p.a. (Defendants) or 2.0% p.a. (Plaintiffs), primarily in relation to my finding of Bimman’s interest in CEL.
[53] Counsel are now in agreement that the operative prejudgment interest rate is that which was specified by the Defendants, 0.5%, which is in accord with the rates published by the Ministry of the Attorney General in accordance with s. 127 of the CJA. Hence, the amount of interest recoverable on Bimman’s interest in CEL, to the date of the Trial Judgment, is $5,538.84.
[54] I am at a loss to reconcile the arithmetic difference on the interest payable on his “capital” account. Since it yields all of an $11 difference, I have given the nod to the figure found in the Plaintiffs’ side of the ledger.
[55] I agree with the Defendants that interest on Bimman’s interest on the DMF should run from the date of the judgment for the reasons expressed by the Defendants in their brief. Hence, no prejudgment interest will be payable on the $112,068.
[56] I agree with the Defendants that interest on the legal fees paid by CEL shall run from the valuation date to the date of judgment at the operative prejudgment interest rate. This yields an amount payable of $143.54.
[57] Finally, the parties are both in agreement that no prejudgment interest is payable on the separate award of punitive damages meted out against Messrs. Itkine and Neiman, pursuant to s. 128(4)(a) of the CJA.
[58] The total prejudgment interest that I have calculated is $61,053.75, which sum added to the total damages awarded of $1,142,784.40 equals $1,203,838.15.
Postjudgment Interest
[59] Postjudgment interest on the aforesaid sum will accrue from the date of judgment at the prevailing rate prescribed by s. 129 of the CJA, which I am advised is 2% p.a.
Disposition
[60] There is money standing to the credit of this action with the Accountant of the Superior Court. These funds are more than sufficient to discharge the award of damages and costs.
[61] While I think the suggested proposal has more than some validity to it, I cannot endorse the methodology set out by the Defendants at Part III of their costs submissions, as some or all of the awards and orders made throughout this trial may be subject to an appeal by one or both parties.
[62] While I am reluctant to stay seized of this matter at this moment in time, I may be contacted to either sign a judgment or order that gives effect to the Trial Judgment and this endorsement or assist the parties in coming to some half‑way point that will allow them to get on with their respective lives and businesses.
GANS J.
Date: July 2, 2015
[^1]: Respectfully, reserving the costs of pretrial motions to the trial judge in a complex and drawn out action, while somewhat efficacious in circumstances where the end result of the trial might be in doubt, presents several potential difficulties. One major issue arises in attempting to reconstruct, if not intuit, as it were, the thought processes of the motions judge at the time and “on the ground,” particularly since the parties in this case had exchanged offers to settle the motions on the eve of the motions.
[^2]: Bimman v. Neiman, 2011 ONSC 4274 at para. 18.
[^3]: That comment is not to suggest that the Plaintiffs’ pleading by someone other than trial counsel was a work of unparalleled pleadings mastery. It was anything but a clear and cogent piece of draftsmanship.
[^4]: While the argument is couched in terms of a substantial indemnity claim, the Plaintiffs’ Bill of Costs brief contains a partial indemnity calculation. The amount sought at this level of indemnification is globally $1,067,852.85, the breakdown in respect of which is the following: fees ($635,615.24), HST on fees ($82,629.98), disbursements ($21,501.91) and experts’ fees ($328,105.72).
[^5]: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 at para. 26.
[^6]: As I recently observed in an Advocates’ Society presentation, while I am thankful that the Plaintiffs, in particular, undertook the presentation of evidence electronically, this modality does not warrant kudos. Indeed, I suggested that to lead evidence in fossil form might result in the imposition of a costs sanction in undertaking a process that is not litigation efficient and adds to the time of trial.
[^7]: Citing Stetson Oil & Gas Ltd. v. Stifel Nicolaus Canada Inc., 2013 ONSC 5213 at para. 27, referring to Murphy v. Alexander (2004), 236 D.L.R. (4th) 302 (Ont. C.A.), and Oakville Storage & Forwarders Ltd. v. Canadian National Railway (1991), 5 O.R. (3d) 1 (C.A.).
[^8]: Bimman, like Itkine, ‘played’ lawyer throughout this trial, based upon my observations of the two of them. However, when push came to shove, Bimman abandoned any notion that the VLOU and the Partnership Agreement were anything but interpretive tools.
[^9]: It was clear from the evidence of Itkine, and from the Counterclaim and para. 52 of the Defendants’ costs submissions, that these caveats were a festering sore which rankled the Defendants throughout.
[^10]: Defendants’ costs submissions, para. 53.
[^11]: Bimman v. Neiman, 2014 ONSC 5965 at paras. 17‑19.
[^12]: Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (C.A.).
[^13]: Plaintiffs’ costs submissions, paras. 54‑55.
[^14]: See also Eastern Power Ltd. v. Ontario Electricity Financial Corp., 2012 ONCA 366.
[^15]: Toronto Star Newspapers Ltd. v. Fraleigh, 2011 ONCA 555.
[^16]: I do not believe HST needs be calculated as it is not exigible on a matter of a set‑off.
[^17]: Hamfler v. 1682787 Ontario Inc., 2011 ONSC 3331 at para. 18; Ryan v. Rayner, 2015 ONSC 3310 at para. 10.