Court File and Parties

Court File No.: C-1178-14 Date: 2016-04-08 Superior Court of Justice - Ontario

Re: PIXIU SOLUTIONS INC., Plaintiff And: CANADIAN GENERAL-TOWER LIMITED, CGT SHANGHAI TRADING CO. LTD. and CGT CHNGSHU CO. LTD. Defendants

Before: The Honourable Justice D.A. Broad

Counsel: John D. Campbell, for the Plaintiff Ross F. Earnshaw, for the Defendant CGT Changshu Co. Ltd., properly named Canadian General-Tower (Changshu) Company Limited James H. Bennett, for the Defendant CGT Shanghai Trading Co. Ltd.

Costs Endorsement

[1] The parties have been unable to settle the issue of costs and have now delivered their costs submissions. The following is my disposition on the question of costs.

[2] The plaintiff (“Pixiu”) submits that it was successful on the motion for directions and claims partial indemnity costs in the sum of $10,653 comprised of fees in the sum of $8725, HST thereon in the sum of $1134.25 and disbursements in the sum of $794.22. Pixiu says that the substitution of Mr. Chong for Messrs. Richardson and Campanelli as the individual to be examined pursuant to rule 39.03 did not affect the substance of the motion. Mr. Campbell points out that he initially suggested that Mr. Yu be cross-examined on his affidavits by a videoconference and counsel for Canadian General-Tower (Changshu) Company Limited (“Changshu”) and CGT Shanghai Trading Co. Ltd. (“Shanghai”) took the position by letter dated September 30, 2015 that he should be examined in writing. On the day of the argument of the motion the parties advised the court that they were agreed that Mr. Yu should be examined by videoconference.

[3] Mr. Earnshaw on behalf of Changshu takes the position that it enjoyed success on the motion for directions and seeks costs on a partial indemnity basis in the amount of $15,757.62 comprised of fees in the sum of $13,613.67, HST thereon in the sum of $1769.78 and disbursements, including HST thereon, in the sum of $374.12. He points to an Offer to Settle which he served on January 15, 2016 proposing to produce each of Winston Chong and Adam Peaker to be examined pursuant to Rule 39.03 provided that the cross-examination of Don Yu on his affidavit shall be conducted by written interrogatories in accordance with the procedure for written examinations for discovery set out in rule 35.

[4] Mr. Bennett for Shanghai adopts the costs submissions of Mr. Earnshaw on behalf of Changshu and submits that it was successful on the motion for directions and seeks costs on a substantial indemnity basis in the sum of $5642.07 comprised of fees in the sum of $4939, HST thereon in the sum of $642.07 and disbursements, including HST thereon, in the sum of $61.40. In the alternative, he seeks partial indemnity costs in the sum of $3770.38 comprised of fees in the sum of $3289.37, HST thereon in the sum of $427.61 and disbursements, including HST, in the sum of $61.40.

[5] Neither Mr. Campbell on behalf of Pixiu, nor Messrs. Earnshaw and Bennett on behalf of Changshu and Shanghai respectively, take issue with the time expended, hourly rates or disbursements set forth on the Costs Outline(s) of the other side. The issue is which side was successful on the motion for directions in light of the Offer to Settle dated January 15, 2016 served by Mr. Earnshaw.

[6] To be considered an offer to settle pursuant to rule 49.10 the party serving the offer must obtain an order as favourable as, or more favourable, than the terms of the offer to settle. Subrule 49.10(3) provides that the burden of proving that the order is as favourable as the terms of the offer to settle, or more or less favourable, as the case may be, is on the party who claims the benefit of subrule (1) or (2).

[7] It is to be observed that Changshu’s offer to produce Messrs. Chong and Peaker for examination pursuant to rule 39.03 had a proviso attached to it, namely that the cross-examination of Mr. Yu be conducted in writing on the same basis as an examination for discovery by written interrogatories. Changshu’s offer to produce Messrs. Chong and Peaker to be examined was not capable of acceptance by Pixiu without also agreeing to conduct the examination of Mr. Yu as an examination for discovery in writing rather than as a cross-examination. In my view, the Offer to Settle dated January 15, 2016 did not, by its terms, qualify for consideration under rule 49.10.

[8] In my view Pixiu was the successful party on the motion. In their Facta and in argument counsel for each of Changshu and Shanghai took the position that no examination of any non-party pursuant to rule 39.03 should be permitted. In his submissions, counsel for Pixiu agreed to restrict his target for examination to Mr. Chong. The issue was whether there should be any examination pursuant to rule 39.03, not necessarily which individuals should be subjected to examination. The question of the mode of examination of Mr. Yu did not ultimately need to be argued as Changshu and Shanghai agreed with Pixiu’s early suggestion that it be conducted by videoconference.

[9] Pixiu should therefore be entitled to its costs of the motion for directions on a partial indemnity basis. As indicated, no issue was taken with respect to the quantum of the costs sought by Pixiu on a partial indemnity basis, an amount which would have been within the reasonable contemplation of Changshu and Shanghai in any event, as exemplified by their own Costs Outlines.

[10] It is therefore ordered that Changshu and Shanghai jointly and severally pay the costs of Pixiu fixed on a partial indemnity basis in the sum of $10,653. Payment shall be made within 30 days hereof.

D.A. Broad, J. Date: April 8, 2016