CITATION: Best Theratronics Ltd. v. Canadian Nuclear Laboratories Ltd., 2016 ONSC 1058
COURT FILE NO.: 15-66545
DATE: 2016/03/07
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Best Theratronics Limited, Plaintiff
AND
Canadian Nuclear Laboratories Ltd and Atomic Energy of Canada Limited, Defendant
BEFORE: Mr. Justice Robert J. Smith
COUNSEL: Eli S. Lederman, Ian MacLeod and James S.S. Holtom, for the Plaintiff
Kevin LaRoche and Kirsten Crain, for the Defendants
HEARD: In writing
Costs E N D O R S E M E N T
R. Smith J.
Position of the Parties
[1] Canadian Nuclear Laboratories LTD (“CNL”) seeks costs in the amount of $69,000 on a partial indemnity basis, payable forthwith as a result of successfully responding to a motion for an injunction. CNL states that the amount claimed in costs reflects the extreme importance and complexity of the issues which would have required CNL to deliver additional goods of a value over $3.5 million without further payment. As a result, a significant amount of work was required to be done to respond to the complex, factual and legal issues.
[2] Best Theratronics Limited (“Theratronics”) sought an injunction ordering CNL to process a radioactive Cobalt rod, and then deliver the Cobalt-60 to it in accordance with an existing agreement. CNL submits that the issues involved were complex and lengthy and involved cross-examinations and the matter was urgent as Theratronics was seeking the harvesting of a Cobalt rod in the month of December 2015.
[3] Theratronics submits that as the matter will likely be proceeding to arbitration, costs should be deferred to the arbitration panel. Theratronics further submits that the costs claimed are excessive for responding to a one day motion for an injunction. It submits that $25,000 in costs would be appropriate.
Factors
[4] The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and include in addition to success, the amount claimed and recovered, the complexity and importance of the matter and the principle of proportionality, a party’s denial or refusal to admit anything, any offer to settle, the principle of indemnity, scale of costs, hourly rate claimed in relation to the partial indemnity rate set out in the Information to the Profession effective July 1, 2005, the time spent, and the amount that a losing party would reasonably expect to pay.
Success
[5] CNL was the successful party as the motion for an injunction was denied.
Amount Involved
[6] In this case, Theratronics sought an order compelling CNL to extract a radioactive Cobalt rod from AECL’s nuclear reactor in Chalk River and to process and deliver the processed Cobalt-60 without requiring any further payment from Theratronics. The value of the rod was approximately $3.5 million and the processing cost which CNL would have incurred was approximately $425,000. In addition, CNL was already owed approximately $4 million by Theratronics for past services. As a result, the amount involved was substantial as it involved a further $4 million in goods and services being delivered to Theratronics without payment.
Complexity and Importance
[7] The issues were above average complexity as thye involved the operation of a nuclear reactor at Chalk River, an understanding of how radioactive Cobalt-60 is created in the nuclear reactor and ultimately used for cancer treatment in Theratronics’s machines. The importance was also high as it involved delivery of goods valued at approximately $4 million (when processing was included) and also the use was important as it involved the use of the Cobalt-60 for cancer treatment for patients around the world.
Offers to Settle, Scale of Costs
[8] CNL claims costs on a partial indemnity scale and I find that this is the appropriate scale.
Hourly rates, time spent and proportionality
[9] The real issue to be decided is whether the amount claimed of $69,028.39 a partial indemnity basis, is a reasonable amount that is proportional to the amounts involved, and the complexity, importance and the short timelines involved. CNL counsel’s hourly rates are set out in the costs outline and range from $450.00 an hour on a partial indemnity rate for R. Jaipargas, called in 2000, to the rate of $264 per hour on a partial indemnity rate claimed by Ms. Crain who was called in 2001. The bulk of the time was spent by Ms. Crain, namely 124 hours, as well as a student who was billed at $60 per hour. I find that the hourly rates claimed on a partial indemnity basis by counsel for CNL were reasonable. Theratronics does not challenge the rates claimed but rather submits that the total amount claimed is excessive.
[10] The proportionality of the time spent must be considered in accordance with the urgency of the matter and the complexity and importance of the matter to CNL. I previously held that the matter was technically complex involving in radiating Cobalt-60 rods in the core of a nuclear reactor CNL had to respond to a motion for an injunction requesting it to immediately harvest, process and deliver an asset of over $3.5 million without further payment, when the moving party already owed the responding party over $4 million for past services rendered. As a result, this matter was very complex and very important to CNL.
[11] The parties served two affidavits on short notice. They cross-examined two witnesses and the legal issues addressed were wide ranging and complex including injunctive relief, whether the injunction was a mandatory injunction, the test for rectification of an agreement, breach of contract, and duty of good faith, in such circumstances. Both parties also filed lengthy factums. Given the complexity, I find that the time spent and the hourly rates were reasonable and proportionate to the amount involved, the importance and the complexity of the issues.
Amount the Unsuccessful Party Would Reasonably Expect to Pay
[12] Theratronics has filed its costs outline at my request; however, it was filed following the receipt of my decision in this matter. The rate charged by Mr. Lederman, Theratronics’s the main counsel, was $670 per hour and he stated that his partial indemnity rate was only $225 per hour. I find that this amount is not realistic as it is extremely low.
[13] Theratronics also claims that only $8,320 in fees were incurred for the motion for the injunction. Theratronics submits that it would have claimed a total of of $13,730.96 including taxes and disbursements if it had been successful. Theratronics offers the explanation for claiming such a low amount that they did not include any time that they would have otherwise spent preparing for arbitration dispute.
[14] It is not possible to assess how Theratronics apportioned their time or determine how much time was spent as such their costs estimate is not of assistance. CNL was required to respond on short notice to issues that involved complex, technical and legal issues, I find that Theratronics cost outline is not realistic given the, technical and legal complexity and the amount involved. I further find that the time claimed by CNL is much closer to what the unsuccessful party would reasonably expect to pay considering the lengthy factums and the complexity of the legal arguments involved as well as the technical complexity.
Disposition
[15] Having considered all of the above factors, Theratronics is ordered to pay costs on a partial indemnity basis in the amount of $45,000 including HST plus disbursements of $6,000 inclusive of HST.
Justice Robert J. Smith
Date: March 7, 2016
CITATION: Best Theratronics Ltd. v. Canadian Nuclear Laboratories Ltd., 2016 ONSC 1058
COURT FILE NO.: 15-66545
DATE: 2016/03/07
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Best Theratronics Limited, Plaintiff
AND
Canadian Nuclear Laboratories Ltd and Atomic Energy of Canada Limited, Defendant
BEFORE: Mr. Justice Robert J. Smith
COUNSEL: Eli S. Lederman, Ian MacLeod and James S.S. Holtom, for the Plaintiff
Kevin LaRoche and Kirsten Crain, for the Defendants
COSTS ENDORSEMENT
R. Smith J.
Released: March 7, 2016