SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-08-00360246
ENDORSEMENT RELEASED: 20150911

RE:

TAN-JEN LTD.
Plaintiff

v.

LISA DI PEDE, TONY DI PEDE and
DI PEDE DESIGN GROUP INC.
Defendants

BEFORE: MASTER D.E. SHORT

COUNSEL:
Jeffrey Silver, Fax: 416-225-6702
for the Plaintiff

David Decker, Fax: 416-593-7760
for the Defendants

Reasons for Decision re Costs of Long Motion

Preamble

[1] My reasons found in full at 2012 ONSC 7004 commenced with the following description of the then state of this action:

[1] The Defendants, Mr. and Mrs Di Pede decided to build a new home in Woodbridge, Ontario. In September 2004, the plaintiff Tan-Jen Ltd. (“Tan-Jen”) entered into an agreement with Mr. Di Pede under which it was to produce and supply pre-cast elements for the exterior of the new home being built by the couple. The impressive home was completed, incorporating the Tan-Jen elements, but issues subsequently arose between the parties, which gave rise to this litigation.

[2] By way of the Notice of Action issued August 7, 2010, Tan- Jen commenced a claim against the defendants for breach of contract, wrongful retention of Tan-Jen's property, copyright infringement, conversion and detinue.

[3] In their counterclaim, the defendants claim an injunction restraining Tan-Jen from, amongst other things, copying “exactly” certain types of architectural elements and designs incorporated in their home and from modifying or adapting certain other architectural elements and designs. The defendants also seek in the counterclaim, that Tan-Jen deliver up various drawings, photographs and other documents and chattels related to the project.

[4] Extensive production has been made by the parties. Not only do the tabs in the briefs of documents run into the thousands, but many of the tabs contain ten to twenty different sub-productions such as individual drawings, photographs, or depictions of 3D modelling. With respect to her examination for discovery which commenced in October 2010, Mrs Di Pede deposes that her documents alone were organized primarily in a chronological order, contained in 25 volumes, with more than 900 tabs. She also points out that “the index alone to our book of productions is over 100 pages long.”

[5] Mr. Di Pede was examined for discovery for one week in April of 2010. The discovery of Mrs. Di Pede has been conducted, so far for 18 days or partial days

[6] Given the complexity of the action, Mr. Justice Moore, who addressed the scheduling of this case while he was presiding over the Toronto Long Trial List, determined that this matter ought to be case managed by me, as the assigned Case Management Master.

[7] Thus, after a number of attempted settlement conferences before me proved unsuccessful, I heard a group of motions in that capacity.

[2] On the date of those hearings, I heard three motions relating to specific matters. During and following the motions, I gave directions with respect to most of the then outstanding matters between the parties, including a number of procedural directions in a handwritten endorsement.

I. Disposition of Motions and Costs and Overview

[3] Ultimately my reasons concluded with these paragraphs:

[111] In the result my findings largely conform to the position put forward on behalf of the Di Pedes and subject to the specific items allowed during argument or in these reasons, the bulk of the Plaintiff’s motion is dismissed.

[112] I award them costs of the refusals and undertakings motion on a partial indemnity basis. There will be no costs of the motion relating to striking portions of Mrs Di Pede’s affidavit.

[113] If the parties are unable to resolve the appropriate quantum my usual costs submission protocol will apply.

[114] I am obliged to both counsel for the full set of materials they assembled and for their skilled advocacy in defining the issues before me.

[4] It seems to me that this case has expanded far beyond the degree of discoveries appropriate for admittedly somewhat unique dispute of this nature.

[5] In my lengthy reasons, I dealt with a large number of refusals and undertakings, which arose on the examination for discovery by counsel for the plaintiff. At that time, no discovery of the plaintiff had taken place as counsel has agreed that the discovery of the plaintiff would take place when the examinations of the defendants were completed.

[6] In my earlier reasons at paragraph 87, I observed with respect to the particulars required as to the claimed terms of the injunction being sought by the defendants with respect to certain elements incorporated in the construction:

“[87] Days of discovery on what the moving party would regard as ‘Infringing in any way the copyright that the plaintiff owns’ would not advance the court’s deliberation in making such an order.”

[7] I therefore concluded :

[91] Based on the case law before me I am of the view that the degree of specificity required at this stage of the litigation has been met with the responses already provided. However the applicable Rules should also be considered in coming to a firm conclusion in this case.

[8] In my overall opinion too much time and effort was expended by both sides with respect to these pre-trial issues.

[9] It seems to me the “Basic Question” that the parties need resolved is, “Can copyright be asserted in elements of the defendants’ home that would prevent the inclusion of those elements in homes constructed by other owners?”

[10] In my view that ought not to justify seemingly endless examinations and motions. As a consequence, I considered rule 29.2.03 (1) and the applicability of proportionality and imposed a limit on the future examination of the defendants of only two further hours.

II. Costs Submissions

[11] The parties were unable to agree on the quantum of costs payable, or whether, in fact, they were even payable, with the result that written submissions were provided by both counsel.

[12] When delivering my reasons I of course had not been made aware of any offers made to resolve the motions made by either party prior to the hearing.

[13] The impact of Offers to Settle on motions, as opposed to actions, is not fully defined In the Rules. Nevertheless, the practice of Toronto Masters has been to take such offers into account in determining the most appropriate order to be made, having regard to all the circumstances of the motion.

[14] My normal Costs Protocol, which was annexed to my reasons provides in part that counsel are to deliver:

“… A cost outline, maximum 5 pages in length together with no more than 5 pages of schedules and appendices”

[15] My protocol also contemplated “a reply, if needed, maximum 2 pages in length inclusive of schedules and appendices.

[16] My goal in cost determination is to normally have a manageable amount of information upon which to base a “broad strokes” determination of what is fair in the circumstances.

[17] In this case, the costs materials filed by the parties exceeded three quarters of an inch in thickness.

[18] The issues addressed included the impact on the quantum allowable flowing from the fact that the plaintiff’s counsel asserted that counsel for the defendant had personally given undertakings with respect to the expert’s report being obtained by the defendants and that the failure to produce a report ought to give rise to a costs sanction on the refusals motion against counsel personally.

[19] Because that position was taken, additional counsel needed to be prepared and in attendance in the event such personal liability in that part of the motion was lost.

[20] Mr. Silver took the position that Mr. Decker could not argue the motion in the circumstances. I disagreed and permitted Mr. Decker to argue the motion. The defendants include in their cost claim allowance for needing to have two counsel prepared and available pending the delivery of that ruling

[21] As noted above when Tan-Jen’s main motion was brought, the defendant Tony Di Pede had been examined for one week and his wife’s examinations encompassed a further 18 days.

[22] The submissions of the defendants detail the extent of materials received and refusals to agree to the grant of adjournments for potential cross examinations on affidavits filed on the motion. One such adjournment was granted by me in 2011. The costs of that adjournment were reserved by me at that time and are included in the amounts sought on this cost determination.

III. Rule 57

[23] Section 131 (1) of the Courts of Justice Act provides that “the cost 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 the costs shall be paid.”

[24] Rule 57 sets out the general principles to be considered in exercising cost discretion. The most recent major revision to the rules added provisions to the beginning of the list of factors to be considered in awarding costs. I have emphasized various points I found particularly instructive in my consideration of this rule, in the following extracts:

57.01 (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 issues;

(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;…. and;

(i) any other matter relevant to the question of costs.

[25] The rule further addresses the authority of the court to tailor an appropriate result:

(4) Nothing in this rule or rules 57.02 to 57.07 affects the authority of the court under section 131 of the Courts of Justice Act,

(a) to award or refuse costs in respect of a particular issue or part of a proceeding;

(b) to award a percentage of assessed costs or award assessed costs up to or from a particular stage of a proceeding;

(c) to award all or part of the costs on a substantial indemnity basis;

(d) to award costs in an amount that represents full indemnity; or

(e) to award costs to a party acting in person.

[26] I also note that the rule permits the establishment of an appropriate process for fixing costs:

(7) The court shall devise and adopt the simplest, least expensive and most expeditious process for fixing costs and, without limiting the generality of the foregoing, costs may be fixed after receiving written submissions, without the attendance of the parties

[27] Dealing specifically with the determination of costs on a motion, rule 57.03 provides:

Contested Motion

57.03(1) On the hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall,

(a) fix the costs of the motion and order them to be paid within 30 days; or

(b) in an exceptional case, refer the costs of the motion for assessment under Rule 58 and order them to be paid within 30 days after assessment.

(2) Where a party fails to pay the costs of a motion as required under subrule (1), the court may dismiss or stay the party’s proceeding, strike out the party’s defence or make such other order as is just

[28] As indicated at the outset, my reasons on the motion awarded costs to the defendants, subject to submissions being received from both counsel with respect to any specific factors to be considered.

IV. Parties’ Position re Costs

[29] Counsel for the defendant made a number of points in support of the costs sought on his client’s behalf reference to the provisions of Rule 57 outlined above. Those submissions read in part:

“the amount claimed and the amount recovered in the proceeding

In the lawsuit, both parties claim damages in excess of $500,000.00, and an injunction. At the motion, Tan-Jen asked for many things, but its main motion was unsuccessful.

the complexity of the proceeding

The underlying lawsuit is complex. The main motion was voluminous.

the importance of the issues

The issues on the main motion were important, as they pertain to undertakings, refusals, and allegations and costs against counsel personally.

the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding.

The Di Pedes' request for an adjournment on May 17, 2011 should have been consented to. It was unreasonable to oppose it. If Tan-Jen had consented it would have been unnecessary to file materials requesting same and yet only partially responding to the motion. The attendance at motions court on May 17, 2011 would have been avoided.

On Tan-Jen's main motion, Tan-Jen filed extensive materials attempting to address the legal merits of its case, but which were irrelevant to its motion. Mr. Silver, on behalf of Tan-Jen, also made extensive oral submissions for many hours on December 12, 2011 with respect to many issues that may (or may not) need to be addressed at trial, but did not need to be addressed on the main motion. Further, a myriad of complaints and issues of a personal nature were raised by Tan-Jen throughout its extensive materials, ….These complaints and issues were irrelevant, but needed to be addressed by the Di Pedes.

whether any step in the proceeding was improper. vexatious or unnecessary or taken through negligence. mistake or excessive caution.

The materials of Tan-Jen include many personal attacks on counsel for the Di Pedes, which the Di Pedes submit is improper, vexatious and unnecessary. …. The numerous complaints against the Di Pedes' counsel have every appearance of being intimidation tactics to create the "chill effect" referred to often in the case law under Rule 57.07.

a party's denial of or refusal to admit anything that should have been admitted

None of the questions upon which Tan-Jan moved were ordered answered. Master Short correctly described the correspondence regarding these questions as having "excruciating detail". All the refusals were upheld. Tan-Jen did not, at the ultimate hearing of the motion, seek anything less than all of the relief which it had originally sought in its notice of motion. Tan-Jen should have considered withdrawing many of the questions.”

[30] These submissions were part of the materials filed in support for total costs awards sought in the sum of $70,825.73.

[31] There is something very wrong with our system. Here a motions’costs award of over $70,000 is sought and justified in part by noting that, if Mr. Decker’s usual substantial indemnity rate (reduced by him in the actual overall charge to the client)were used, the amount sought would total $112,819.20.

[32] Regardless of the importance to the parties of such a refusals motion, I am not prepared to accept that anything nearing that number is justified and appropriate in a case such as this.

[33] Tan-Jen in response filed an 11 tab, brief containing more than 50 pages, which included copies of two cases relied upon.

[34] The initial five-page submission sets out the tone of, and basis for, some of the arguments concerning clarification of the scope of the injunction sought by the defendants regarding any use of various cast elements. Examples of the arguments made on behalf of Tan-Jen are as follows:

“UNDERTAKINGS REGARDING INJUNCTION

8. Although by December of 2010 this action was already well over two years old, Mrs. Di Pede on discovery was still unable to advise what she was seeking to restrain Tan- Jen from doing in the injunction she sought. She had no idea whatsoever what differences were acceptable to her for Tan-Jen to do. Mr. Decker therefore personally undertook at the December discoveries to clarify with precision what was being sought on the injunction. Mr. Decker undertook to advise what differences in the precast designs for each element would be acceptable to the Di Pedes for Tan-Jen to produce. Mr. Decker subsequently denied giving these undertakings.

9. All of this of course exacerbated the inconsistent and contradictory positions Mrs Di Pede took on her discovery regarding what elements she believed to be similar. Although it was her mandate to replicate the Hotel Dassault as per her emails made at the time in 2004 and 2005; as per her productions; and as per her admissions on

discovery, on her December 8th discovery, Mrs. Di Pede incredulously repeatedly stated that 113 Pine Valley Cr. was completely different from the Hotel Dassault.”

[35] I note as well that counsel for the plaintiff does argue that many of the documents sought in his initial motion were only produced after the motion was served. Thus, the fact that nothing new was ordered on the motion should not restrict his entitlement to some costs for having to bring the motion in the first place.

V. Offers to Settle

[36] I believe it is relevant to set out the two offers to settle which Tan-Jen run now relies upon in seeking to have me adjust my original partial indemnity costs in favour of the defendants.

[37] The first deals with plaintiff’s original motion and is dated twelve days before the then scheduled motion return date:

“OFFER TO SETTLE

The Plaintiff offers to settle its motion returnable December 12, 2011 on the following terms:

1. The defendant Lisa Di Pede shall attend on February 27, 28 and 29, 2012 to complete* her examination for discovery and to answer those questions set out in the Forms 37C (other than … [various questions listed] attached to the Notice of Motion.

2. The defendants shall pay to the plaintiff the costs thrown away on the examination for discovery of the defendant Lisa Di Pede held March 15, 2011 limited to the two invoices of Professional Court Reporters in the amount of $1,694.89.

3. The defendants shall pay the plaintiff its cost of this motion on a partial indemnity basis within 30 days of December 12, 2011.

4. This offer to settle is open for acceptance up until the commencement of the hearing of the motion.

*Does not include re-attendance for undertakings and questions refused not part of this motion.”

[38] The other offer by the plaintiff’s counsel deals with the defendants’ cross motion:

“OFFER TO SETTLE

The Plaintiff offers to settle the defendants' cross-motion returnable December 12, 201l on the following terms:

1. Mr. Latanville will be produced for examination for discovery on behalf of Tan-Jen Ltd. for 18 days the weeks of March 26th, April 23rd (except the 23rd itself), May 7th and May 28th (except for the 28th itself) of 2012.

2. All parties and all counsel will use best efforts to conduct themselves in a civil and cordial manner during all discoveries. [my emphasis]

3. Copies of the exhibits made at the examination for discovery of the defendant Lisa Di Pede shall be provided to the defendants at their expense upon payment. With respect to exhibits made on days for which no transcript has been ordered, the defendants' lawyer shall identify and provide a list of those exhibits by January 15, 2012. Copies of the exhibits shall be provided by February 15, 2012.

4. The completion of Mrs. Di Pede's examination for discovery will be limited to three further days to take place on February 27, 28 and 29, 2012 (does not include re-attendances for questions arising from answers to undertakings and for questions arising from answers to questions refused ordered answered).

5. If this offer to settle is accepted by on or before November 15, 2011 then the parties shall bear their own costs of this cross-motion. If this offer to settle is accepted after November 15, 2011, then the defendants shall pay the plaintiff its cost of this cross-motion on a partial indemnity basis.

6. This offer to settle is open for acceptance up until the commencement of the hearing of the cross-motion. “

[39] I have reproduced these offers in some detail in order to demonstrate the problems faced in assessing the impact of an offer to settle on a motion such as this. In many ways these offers addressed case management in timetabling matters which would normally simply be addressed between counsel and not require court intervention.

[40] In his cost submissions, counsel for the plaintiff asserts with respect to the cross-motion:

25. This motion was unnecessary. Tan-Jen was always agreeable to the primary relief sought on the cross-motion even before that motion was contemplated.

26. The defendants sought an order to discover the plaintiff. Not only has Tan-Jen never refused to be produced, but even before the cross-motion was brought, Tan-Jen offered to be produced for more days than the defendants even then sought in their notice of motion. In a letter sent in May of 2011, Tan-Jen offered to be produced for 20 days. In their notice of motion subsequently served, the defendants sought to discover Tan-Jen for ten days.

27. Although the defendants sought orders for many other matters/issues, the only relief granted was regarding the date by which the plaintiff's further supplementary affidavit of documents had to be served.

28. The motion was unnecessary and the defendants achieved minimum success. Tan-Jen ought to be awarded its costs of this motion as per the costs outline at Tab7.”

[41] Conversely counsel for the defendants dissects the offers and argues “a comparison of the offer to settle to the result of Tan-Jen's main motion clearly demonstrates that the offer does not assist Tan-Jen in its bid to change the costs award”.

[42] The court ought not to have to decipher each exchange between counsel in determining whether or not to adjust the cost award made following the delivery of a judgment. Nevertheless, the materials filed give some flavour of the difficulties that had to be faced by both sides in endeavouring to move this case forward.

VI. Quantum Generally

[43] The conclusion of the submissions on behalf of the Di Pedes, who were successful on the motion, reads in part:

“69. … Tan-Jen argues that the costs of these motions should be comparable to other undertakings and refusals motions. In reply, Tan-Jen made its motion much more than a regular undertakings and refusals motion by raising a myriad of issues, and filing extensive affidavits and voluminous other material.

71. Tan-Jen says that the Di Pedes have just sought too much. Tan-Jen argues that the quantum must be fair and reasonable, and in accordance with Tan-Jen's reasonable expectations. Tan-Jen does not suggest, however, how much the Di Pedes should be awarded if Tan-Jen must pay costs.

72. Tan-Jen, however, says that the Di Pedes should have to pay Tan-Jen $40,441.20 in costs (all in, with respect to all motions) on a partial indemnity basis (most of the time relates to the main motion: Tan-Jen seeks $3,039.70 for the May 17, 2011 adjournment and $30,212.00 for the rest of its main motion - a total of $33,251.70 for the main motion). These numbers therefore clearly represent the "fair and reasonable expectations" of Tan-Jen.

73. The case law establishes that "fair and reasonable expectations" are meant to be objective, not subjective. (See Re Maple Screw (Toronto) Ltd., 2007 37685 (ON SC), 2007 Carswell Ont. 5791, 36 C.B.R. (5th) 142 per: Registrar Nettie.) In the Di Pedes' case, there are significant factors which warrant the court awarding them more than the amount Tan-Jen seeks, including:

(a) the Rule 57.01 factors, …

(b) many bald allegations, made throughout its material by Tan-Jen, were unsupported by evidence. Those kinds of allegations take little time to make. However, it takes considerable time and attention to detail to demonstrate that such allegations are false. On all the motions, and these costs submissions, the Di Pedes were faced with such a task.

74. Tan-Jen submits in paragraphs 31 and 32 that the Di Pedes have "very deep pockets", while Tan-Jen has "modest means". Tan-Jen effectively suggests that it should pay less than what the award might otherwise be, because of its "modest means". This will allow Tan-Jen to have "equality of arms". In reply, the Di Pedes state that there is no evidence in support of the position that Tan-Jen has "modest means". Tan-Jen vigorously pursued all elements of its motion. The Di Pedes should not be obliged to subsidize that.”

VII. Conclusion:

[44] In a world where the volume of contested serious Motions dictates the need to reserve judgments, I find it unfair to other counsel and parties to require the court to delay their matters in order to focus at length on a costs fight that is longer and more detailed than many other normal substantive motions.

[45] I must confess that in this case, as a consequence, there was a reluctance on my part to wade back into this quagmire.

[46] Having now done so, I have now determined to take a machete approach to cutting through this jungle with a view to reaching an amount that I feel is fair in all the circumstances and takes into consideration to some degree, all of the nuances and issues raised by counsel in their detailed submissions.

[47] I determined to award $30,000 (plus HST on that amount) as “all in”, net costs (including the cost of preparation of costs submissions ) payable by the plaintiff to the Di Pedes with respect to these motions.

[48] This takes into account both the quantum sought by Tan-Jen had it been successful and the potential impact of the offers, notwithstanding that I accept the relief obtained probably in many respects surpassed the proposed results upon which the offers were predicated .

[49] I have an additional concern. This action has taken too long to reach this stage; the costs now awarded ought not to present a obstacle to this matter moving forward to resolution or trial. As a consequence I am granting the plaintiff, a period of 120 days from the release of these reasons, to pay the costs awarded.

Master D. E. Short

DATE: September 11, 2015

DS/ R.112