ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-13-1106-00
DATE: 2015 10 21
BETWEEN:
NORTHFIELD (WATERLOO) DEVELOPMENT INC.
R. Thapar, for the Plaintiff (Defendant to the Counterclaim)
Plaintiff
(Defendant to the Counterclaim)
- and -
NORTH AMERICAN ACQUISITION CORPORATION
M. Maurer, for the Defendant (Plaintiff by Counterclaim)
Defendant
(Plaintiff by Counterclaim)
COSTS DECISION
EMERY J
[1] The defendant and plaintiff by counterclaim North American Acquisition Corporation (“American”) was successful on its motion to amend the statement of defence and counterclaim for the reasons expressed in my endorsement released on August 4, 2015. The plaintiff Northfield (Waterloo) Development Inc. (“Northfield”) opposed the motion, arguing that the proposed amendments raised new claims that were untenable at law because they were statute barred.
[2] American seeks it’s costs on a substantial indemnity basis in the amount of $14,484.29 or alternatively, it’s costs on a partial indemnity basis in the amount of $9,843.38. In support of it’s claim for costs, American first submitted a costs outline dated July 27, 2015 in which time for two counsel is claimed. Mr. Schein is shown as expending 4.6 hours of legal time at $590 an hour on a substantial indemnity basis, and $395 on a partial indemnity basis. Mr. Maurer is shown as having expended 21.1 hours of time at $300 an hour on a substantial indemnity basis, and $200 an hour on a partial indemnity basis.
[3] American filed a second costs outline that substantially resembles the first except that the amount of time shown as expended by Mr. Maurer has been increased to 30.1 hours. The increased time is claimed by American for the time it took Mr. Maurer to review Northfield’s responding material prior to the motion.
[4] It is important to remember that American’s motion was for leave to amend its statement of defence and counterclaim. An order of this nature is mandatory under Rule 26.01 unless prejudice could be shown that could not be compensated by way of an adjournment or costs. The defence to the motion that the proposed amendments raised a new claim that invoked a statutory bar borrowed heavily from the case law that has developed under Rule 21. It is for this reason that a party who seeks to oppose a motion for leave to amend a pleading on this basis bears the onus of satisfying the court that the claim is untenable at law. This would require that party to show that the proposed amendments raise a new claim, and that the new claim is certain to fail because it is clearly subject to a limitation defence and barred by statute.
[5] Northfield opposed American’s motion on this basis and failed to discharge that burden.
[6] American is entitled to its costs of the motion as the successful party. However, American should not receive its costs on a substantial indemnity basis unless it can show the unusual circumstances required by the case law for the court to award such costs. Substantial indemnity costs should only be awarded against a party in rare and exceptional circumstances, where reprehensible, scandalous or outrageous behaviour merits an award of costs at that level: Mortimer v. Cameron, 1994 10998 (ON CA), [1994] O.J. No. 277. In Davies v. Clarington, 2009 ONCA 722 the Court of Appeal confirmed that substantial indemnity costs are rarely awarded and only when reprehensible or egregious conduct is found.
[7] The court may also award substantial indemnity where a successful party has served an offer to settle and where the result has met or exceeded the terms of that offer to settle. On this motion, American has not made a reference in its costs submissions to any such offer to settle served prior to the date the motion was heard.
[8] I propose to exercise the discretion to award costs of this motion as a step in the proceeding under section 131 of the Courts of Justice Act having regard to the factors set out in Rule 57.01 that I am to consider. In particular, I note the time claimed by Mr. Schein and Mr. Maurer to prepare the necessary motion materials including the supporting affidavit, the time to review the responding materials and the time to prepare for argument of the motion. The issues on the motion were moderately complex having regard to the interplay between the question of whether the amendments introduced a new claim or simply added to claims based on material facts already pleaded, and the law on limitation periods. Finally, I also take into account the importance of the matters at stake on the motion for each of the parties.
[9] Although American seeks costs for Mr. Schein and Mr. Maurer, the costs outline does not delineate the actual work provided by each counsel on the motion. I therefore find it difficult to determine whether the time expended by each counsel was reasonable, or whether the time of two lawyers was necessary to provide the services required.
[10] The costs outline indicates that Mr. Schein was called in 1980 and is a counsel of 34 years standing. Mr. Maurer was called in 2007, and has therefore been a lawyer for 8 years. Since American’s submissions and its costs outline do not describe Mr. Schein’s role on the motion, I am disallowing any time claimed for him as Mr. Maurer was counsel who appeared on the motion.
[11] The question of costs comes down to what is fair and reasonable for American to receive as costs on a partial indemnity basis, and what Northfield could reasonably expect to pay as the unsuccessful party. These are cardinal principles enshrined in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] 71 O.R. (3d) 291 (Ont. C.A.) and Moon v. Sher, 2004 39005 (ON CA), [2004] O.J. No. 4651 and the many cases that have followed those authorities.
[12] Mr. Thapar submits on behalf of Northfield that the motion was opposed in good faith, and in any event was a simple motion to argue. Mr. Thapar submits that as the motion was for leave to amend pleadings, the materials filed by American were not substantial and there were no cross-examinations. He submits that only two hours be allowed to Mr. Schein and 20 hours be allowed to Mr. Maurer on the principle found in Boucher and other cases that the court is to consider the reasonable expectations of an unsuccessful party as to costs when making a costs order.
[13] Mr. Thapar also submits that the costs thrown away in the amount of $2,500 awarded by Justice Edwards to American on November 26, 2014 have already been paid in respect of this motion. He submits that those earlier costs should therefore be taken into account on any costs that I may award. I wish to make it clear that any costs I award here are over and above any previous order.
[14] I am prepared to find that American is entitled to its costs of preparing the motion for Mr. Maurer’s time of 20 hours at $200 an hour for preparation time. Mr. Maurer has only claimed a counsel fee for one hour in his costs outline, when the motion took at least one half day to argue. Allowing for travel time and the time for discussion between counsel, I am awarding $1,000 for a counsel fee. American shall therefore have its costs of the motion fixed in the amount of $5,000, plus disbursements of $488.55 and all applicable HST, payable by Northfield within 30 days.
EMERY J
Released: October 21, 2015
COURT FILE NO.: CV-13-1106-00
DATE: 2015 10 21
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NORTHFIELD (WATERLOO) DEVELOPMENT INC.
Plaintiff
(Defendant to the Counterclaim)
- and -
NORTH AMERICAN ACQUISITION CORPORATION
Defendant
(Plaintiff by Counterclaim)
COSTS DECISION
EMERY J
Released: October 21, 2015