1162740 Ontario Limited, et al. v. Pingue, et al., 2015 ONSC 587
COURT FILE NO.: 48569/06
DATE: 2015/03/02
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1162740 ONTARIO LIMITED, JOSEPH PINGUE and SABATINO PINGUE JR.
M. Kenneth Douglas, for the Plaintiffs
Plaintiffs
- and -
VENANZIO PINGUE, 2077626 ONTARIO INC. and 912618 ONTARIO LIMITED
Timothy R. Pedwell, for the Defendants
Defendants
The Honourable Madam Justice L.M. Walters
COSTS ENDORSEMENT
[1] Following a very lengthy trial, the plaintiffs were granted judgment against the defendants in the amount of $592,671.43 plus applicable interest (accepting counsel’s calculation, the interest amount is $213,946.30). Declaratory relief was also granted removing Venanzio as an officer and director of 116. Further, it was determined that Venanzio was not a shareholder in the said corporation. At the conclusion of my reasons for judgment, I invited counsel to agree on costs and, when that proved impossible, I received written submissions.
[2] The plaintiffs have submitted a cost outline, including disbursements and HST in the amount of $396,010.71 on a substantial indemnity basis, and $472,432.61 on a full indemnity basis.
[3] The defendants dispute the plaintiffs’ entitlement to costs of the action, and in any event, argue that the plaintiffs have not submitted a proper Bill of Costs, and that the amounts claimed are excessive.
[4] Both counsel have filed briefs relating to their position on costs.
[5] In accordance with s. 131 of the Courts of Justice Act, costs are in the discretion of the trial judge and are to be determined taking into account those factors set out in Rule 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;
(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.
[6] In Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), Armstrong J.A. set out the following:
…the fixing of costs is not simply a mechanical exercise. In particular, the rule makes clear that the fixing of costs does not begin and end with a calculation of hours times rates. The introduction of a costs grid was not meant to produce that result, but rather to signal that this is one factor in the assessment process, together with the other factors in rule 57.01. Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.
[7] Although the Rules have since been amended, there is nothing in the amended Rules which suggests that there should be any departure from this objective.
[8] The plaintiffs made three Offers to Settle during the course of the proceedings. The first offer, dated September 28, 2011, was for the total sum of $750,000 plus interest and costs fixed in the amount of $250,000. The second offer on November 1, 2011 reduced this amount to $528,000 plus $231,000 for interest and costs.
[9] The final Offer, just prior to the commencement of trial, dated October 4, 2013 offered to settle the action for a fixed sum of $415,000.
[10] These Offers were open for acceptance until the commencement of trial.
[11] In my view, all three of these Offers were less than what the plaintiffs ultimately recovered at trial. Certainly, the first Offer was for a higher amount of damages, but with interest and costs (as determined here), the global amount is greater than the $1,000,000 named in that first offer. The defendant should have accepted one of these offers. If he had, more than 40 days of trial would have been saved.
[12] The defendants also served an Offer to Settle which included three different scenarios. Although somewhat convoluted, in my view, none of the offers are better than the judgment of the court. In the first two offers, Venanzio is to be a shareholder in 116, retains the properties purchased by 902, and has to repay significantly less than ordered by the court. The third proposal gives him $500,000 for his interest in 116, and he gets to keep the 902 properties.
[13] My reasons for Judgment make it perfectly clear that Venanzio was not entitled to reap any of the profits of 116. He did not pay for his shares. He is not a shareholder. Given his numerous breaches of fiduciary duty, he could not remain an officer or director of the corporation. There is no way the plaintiffs could or should have accepted these offers.
[14] It is important to remember that this was a case of breach of fiduciary duty and trust. The court found that Venanzio misappropriated thousands of dollars from his business partners and family members. He attempted to deceive the court. These are very important factors for the court to consider in determining costs.
[15] Mr. Pedwell is correct in stating that Mr. Douglas has not provided the court with a detailed Bill of Costs, however he has provided a description of services rendered, and the time and hourly rate charged. Given his years of experience, Mr. Douglas’ hourly rate is more than reasonable. As stated earlier, when the court fixes costs, it is not doing a line by line mathematical exercise. Instead, it must determine a fair and reasonable amount for the unsuccessful party to pay in all the circumstances.
[16] Mr. Pedwell has filed a Bill of Costs, and I note that his hourly rate is comparable to that claimed by Mr. Douglas. On a partial indemnity basis, he claims $169,390.92, and on a substantial indemnity basis, the amount is $267,165.26.
[17] I have not included the Motion for Removal of Solicitor of Record in determining these costs. Parayeski J. is seized with that matter.
[18] This trial was lengthy and complicated, due in large part to the thousands of pages of financial records that had to be reviewed. Matters were lengthened by Venanzio’s failure to admit things he should have, along with his ongoing efforts to deceive the court. Failure to bring disclosure motions prior to trial and a motion to have an expert testify at the eleventh hour caused more delay.
[19] I have not considered the letter of Tino. I accept that this matter was of great importance to all the parties, but I have not considered the impact of Venanzio’s conduct on the plaintiffs.
[20] After considering the factors set out in Rule 57.01(1) and the Offers to Settle, I am satisfied that the plaintiffs are entitled to substantial indemnity fees for this action. Costs shall be fixed in the amount of $350,000.00 inclusive of disbursements and HST.
Walters J.
Released: March 2, 2015
CITATION: 1162740 Ontario Limited, et al. v. Pingue, et al., 2015 ONSC 587
COURT FILE NO.: 48569/06
DATE: 2015/03/02
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1162740 ONTARIO LIMITED, JOSEPH PINGUE and SABATINO PINGUE JR.
Plaintiffs
- and -
VENANZIO PINGUE, 2077626 ONTARIO INC. and 912618 ONTARIO LIMITED
Defendants
COSTS ENDORSEMENT
Walters J.
Released: March 2, 2015