Court File and Parties
Court File No.: CV-14-1168 Date: 2016 05 12 Ontario Superior Court of Justice
Between:
JOSEPH NICHOLSON, BRIM HOLDING CORP., BRIM IPCO INC., BRIM SUPPLY INC., and BRIM ROOFING INC. Plaintiffs – and – PAUL JANZA, VLADO ZUPANEC, SEBASTIJAN ZUPANEC, NAHANNI STEEL PRODUCTS INC. (d.b.a. JANCOX STAMPINGS), STEPHEN HORBATIUK, RICHARD MYERS, CORINNE MYERS (a.k.a. CORI PRATT), FACILITATOR XTREME CORP., JASON LAGADIN, ROCH BEAULIEU, BOBBI JO BEAULIEU, R. BEAULIEU ROOFING LTD., RVP ROOFING SYSTEMS INC. Defendant
Counsel: Alan J. Lenczner, Q.C., and Brendan F. Morrison, for the Plaintiffs E.J. Battiston and Harold Rosenberg, for Janza, Zupanec, Nahanni Steel & RVP Roofing Tibor Sarai, for Horbatiuk, Myers Facilitator Extreme, Lagadin, Roch & Bobbi Jo Beaulieu and R. Beaulieu Roofing Sandra L. Secord, for Andrey Pinsky
Heard: In Writing
Before: Emery J.
ENDORSEMENT RE: COSTS
[1] I have now received written submissions on costs for the several matters decided in my endorsement released on April 5, 2016.
[2] The Nicholson Group seeks costs for the motions with the Janza group and the Horbatiuk defendants in the amount of $15,037.41 on a partial indemnity basis. Those costs are made up of $6,491 for the motion for leave to amend the statement of claim (“the leave motion”), and $5,625 for the costs result on the abandoned motions, plus disbursements and all applicable HST. The Janza group and the Horbatiuk defendants oppose that request for costs.
[3] The Janza group and the Horbatiuk defendants seek costs against Mr. Nicholson for the motions on costs arising from the abandonment of the motions and the contempt proceedings in this action (the “motions on costs”), and the discontinuance of the action in court file number 1169 (“action 1169”). Those parties seek their costs for the contest over such motions in the amount of $26,387.16 and $7,000 respectively from Mr. Nicholson.
[4] Counsel for Mr. Pinsky seeks costs of the unsuccessful motion Mr. Nicholson brought for indemnity of any costs that may have been ordered against him under Rule 57.07 (the “indemnity motion”). That motion was dismissed on a finding that such a claim was more appropriately made as part of Mr. Nicholson's counterclaim in an action commenced by Mr. Pinsky in Barrie. Mr. Pinsky seeks his costs of the indemnity motion on a substantial indemnity basis in the amount of $40,994.85.
[5] I have set out many of the applicable principles that govern the discretion of the court over costs under section 131 of the Courts of Justice Act in my decision released on April 5, 2016. With those principles in mind, the following are my rulings on the costs at issue based on what I consider to be fair and reasonable under the principles discussed in Boucher v. Public Accountants Council for the Province of Ontario, and according to applicable factors set out in Rule 57.01(1).
THE MOTION FOR LEAVE TO AMEND
[6] The remaining plaintiffs claim they were successful on the leave motion. The plaintiffs claim success because the order obtained trimmed the number of plaintiffs to BRIM IPCO Inc., and the amendments for which leave was granted significantly streamlined the claims that are now focused on the Horbatiuk defendants. The plaintiffs seek costs because they succeeded on the motion without having to obtain leave to bring a derivative action, thereby prevailing over the position of the opposing parties that it must do so.
[7] The Janza group will cease to be defendants in the action once BRIM IPCO Inc. discontinues the action as against them. In the reconstituted action, that plaintiff will no longer be making any claim against them in any event.
[8] The Janza group opposed the plaintiffs’ motion, disputing the grounds for bringing it. The Janza group argues that the plaintiffs may have succeeded on the motion, but not for any reason argued on the motion. Instead, the court found that Mr. Nicholson, rightly or wrongly, as the sole director exercised the authority to authorize the action to continue in the name of BRIM IPCO Inc.
[9] The Horbatiuk defendants more or less relied upon the position advanced by the Janza group to oppose the leave motion.
[10] It is customary that costs follow the event. On the leave motion, the plaintiffs were successful in achieving the desired result, regardless of the reason. They are entitled to the costs of the motion.
[11] Upon applying the relevant factors under rule 57.01(1), I am of the view that the costs requested by the plaintiffs are reasonable. Although the opposing parties have made submissions that the hours claimed by Mr. Lenczner and Mr. Morrison to prepare for, and to argue this motion overlap, I have been given no particulars to discern any duplication of time or services. Therefore, I consider the costs of $6,491 claimed by counsel for fees to prepare for the leave motion to be fair and reasonable.
[12] I have compared the time claimed by counsel for each opposing party to prepare for the motion for leave, and I find that those parties could reasonably expect to pay this amount in relation to that motion. This satisfies the consideration of that factor under sub rule (0.b), as well as using it as a measure of what is a fair and reasonable amount for costs under Boucher.
[13] I have also taken into account the complexity of the motion and the importance of the issues on the motion when making my decision on costs. Those factors also support my decision with respect to awarding costs to the plaintiffs for the leave motion, as well as the amount of the costs awarded.
[14] The plaintiffs are therefore awarded their costs on the partial indemnity rate claimed fixed in the amount of $6,491, plus disbursements in the amount of $1,220.16 and HST. There was no distinction made in the plaintiffs’ submissions between the defendants against whom those costs are sought. I therefore award costs for the leave motion to the plaintiffs, fixed in the amount of $7,711 plus HST. I further consider those costs to be one set payable between the Janza Group and the Horbatiuk defendants equally.
FOR COSTS ARISING FROM PREVIOUS MOTIONS AND ACTION 1169
[15] The moving parties on the motions for costs, the Janza group and the Horbatiuk defendants, seek their costs as the successful parties on their respective motions and for costs of the discontinuance of action 1169. As the successful parties, they take the position they are entitled to the costs of those motions.
[16] The plaintiffs have never disputed that the moving parties were entitled to those costs. The plaintiffs only disputed the amount of the costs claimed.
[17] The Janza group seeks their costs on a substantial indemnity basis as they argue that the plaintiffs’ conduct was egregious and deserving of a sanction. The Court of Appeal has made it clear on more than one occasion that costs at an elevated level beyond a partial indemnity basis will only be awarded, absent a relevant offer to settle under rule 49.10, where the court finds reprehensible and egregious conduct on the part of the party against whom costs are claimed.
[18] It must be remembered that the costs the Janza group seeks here would be for the motion to seek costs of the abandoned motions, and not for revisiting the conduct behind the abandoned motions all over again. There was nothing egregious about the conduct of the plaintiffs to oppose the amount the Janza group was seeking for costs of the abandoned motions under rule 37.09, or for the discontinuance of the action 1169 under rule 23.05.
[19] The same must be said for the costs claimed by the Horbatiuk defendants. This would include any consideration for the costs ordered on the contempt motions in their favour.
[20] The plaintiffs state that they made offers to settle the claims of the costs for which those motions were brought, and that the success of those motions must be measured by the proportionate success on the amounts in dispute, and not the amounts claimed or awarded on the motions for costs. I disagree.
[21] The position of the plaintiffs on costs set out in paragraph 88 of my endorsement cannot be considered an offer to settle because it was disclosed to me in the course of the hearing. Those amounts did not meet the requirements of either the spirit or the letter of Rule 49. I understood the costs position set out in the plaintiffs motion materials to be what the plaintiffs considered would be fair and reasonable for the court to award to each of the moving parties. Similarly, I took what each moving party was claiming for their costs as the position of what that party considered to be a fair and reasonable amount to receive for costs. In all other respects, the amounts to award were at issue.
[22] I can only conclude from the result that the Janza group was awarded $127,750 in costs from the $208,000 claimed, and that the Horbatiuk defendants were awarded $53,750 in costs from $115,000 claimed that each group succeeded on their motion for costs. As the successful party, each of those groups is entitled to the costs of those motions.
[23] I have reviewed the costs submissions of the Janza group for the motion, and the submissions on costs of the Horbatiuk defendants on the success they achieved on costs in respect of the abandoned motions and the contempt motion with the factors set out under rule 57.01(1) in mind. Having regard to the importance of the issues and the amounts involved, as well as giving due regard to the plaintiffs’ estimate of costs for those motions discussed for purpose of opposing the motions of the moving parties, I consider it fair and reasonable to award $6,250 all-inclusive to the Janza group, and $6,250 all-inclusive to the Horbatiuk defendants for the costs of the motions on costs. The plaintiffs must recognize that although they may have one set of costs to respond to the motions of each group of defendants, those defendants each have a set of costs they are entitled to seek from the plaintiffs.
THE MOTION AGAINST MR. PINSKY
[24] I was at first inclined to order no costs as between Mr. Nicholson and Mr. Pinsky for the plaintiffs’ motion to seek indemnity from Mr. Pinsky under rule 57.07 for any costs awarded to the adverse parties in the litigation. I also considered deferring the decision on the costs of this motion by directing that each of those parties treat the costs for the motions for costs to be damages in the action or on the counterclaim in the Barrie action. However, I now consider that doing either of those things would not be the right thing to do, or correct in law.
[25] Mr. Nicholson was not successful on the motion he brought against Mr. Pinsky. Mr. Pinsky was successful in opposing the motion and should be awarded costs. However, it would be inappropriate for Mr. Pinsky to recover those costs on a substantial indemnity basis.
[26] The plaintiffs do not seek costs against Mr. Pinsky on these motions. The plaintiffs also submit in response to Mr. Pinsky’s claim for costs that no costs should be ordered as against them. The plaintiffs argue that just as the court declined to adjudicate the indemnity motion under rule 57.07 and instead deferred the issue to be determined in the Barrie action, the court should not exercise its discretion to award costs for the motion but rather defer those costs to the Barrie litigation as well. The plaintiffs submit that the costs of the indemnity motion should be dealt with in a manner consistent with the main decision.
[27] The issues were of great importance to each Mr. Nicholson and Mr. Pinsky on the indemnity motion. There is no question that counsel for Mr. Nicholson and Mr. Pinsky incurred considerable expense with respect to the motion, even though counsel for Mr. Nicholson suggests that no costs order should be made at all. The reality is that any costs found by this court to be payable by the plaintiffs to the Janza group or to the Horbatiuk defendants on the motions for costs could have and should be added to Mr. Nicholson’s claim against Mr. Pinsky in the Barrie litigation. The motion was therefore unnecessary.
[28] Under all the circumstances, I consider costs on a partial indemnity scale in the amount of $12,500 for fees to be fair and reasonable. I have made this decision on the amount to award Mr. Pinsky for costs because of the difficulty I have encountered to break out the time spent on various tasks described in the bill of costs for Ms. Secord, Mr. Falco, and the two law clerks, Lee Menzies and Carol Sturges. The authorities are clear that the court is not required to analyze a bill of costs on a line by line basis.
[29] Where determining what time was spent on what legal task is found to be difficult, the court must use its discretion to determine what is fair and reasonable. I also remind the parties that even though Ms. Secord attended on both days of the collective motions, the motion for indemnity was only argued on the second day, and took but half that day at that.
[30] In addition to $12,500 for fees, I award disbursements limited to $1,500 plus all applicable HST to Mr. Pinsky for costs.
SUMMARY
[31] On the motion for leave to amend, costs are awarded to the plaintiffs in the amount of $7,711 plus applicable HST, payable by the Janza group and the Horbatiuk defendants equally.
[32] On the motion for costs, the Janza group and the Horbatiuk defendants are each awarded $6,250 all-inclusive, payable by the plaintiffs.
[33] On the plaintiffs’ motion for indemnity under rule 57.07, Mr. Pinsky is awarded his costs in the amount of $12,500 plus $1,500 for disbursements and applicable HST, payable by the plaintiffs.
[34] All costs ordered herein are payable by October 31, 2016.
Emery J.
Released: May 12, 2016