Oz Merchandising Inc. v Canadian Professional Soccer League Inc., 2016 ONSC 4272

Court File and Parties

Court File No.: 04-CV-026293 Date: 2016/06/29 Superior Court of Justice - Ontario

Re: Oz Merchandising Inc., Ottawa Wizards, Oz Dome Soccer Club and Omur Sezerman, Plaintiffs And Canadian Professional Soccer League Inc., Eastern Ontario District Soccer Association, The Ontario Soccer Association, Canadian Soccer Association, Canadian Soccer League Inc., Ira Greenspoon, Vincent Ursini, Cary Kaplan and Stan Adamson, Defendants

Before: Justice Charles T. Hackland

Counsel: Haiyan Zhang and James Mockler, for the Plaintiffs Rocco Ruso and Colin Holland, for the Defendants Canadian Professional Soccer League Inc., Canadian Soccer League Inc., Ira Greenspoon, Vincent Ursini, Cary Kaplan and Stan Adamson

Heard: In writing

Costs Endorsement

[1]

Background

This court made an order dated January 14, 2016, reasons reported at 2016 ONSC 352, allowing the cross relief sought by the defendants Canadian Professional Soccer League Inc. (“CPSL”), Canadian Soccer League Inc. (“CSL”) and certain individual defendants. These defendants sought to set aside the pleadings noted closed against CPSL so as to allow them to defend the action on its merits (the defendant CSL having admitted responsibility for the actions of its forerunner, CPSL).

2The foregoing relief was granted on the condition that the plaintiffs be paid their ‘cost thrown away’ in respect of their efforts to have CSL accept that they are the successor corporation to CPSL and therefore responsible for any liability of CPSL to the plaintiffs in this action. I understand that CPSL is a non-active company without assets and therefore the successor responsibility of CSL is a crucial matter in the litigation.

3The plaintiffs’ noted pleadings closed against the defendant CPSL in November of 2011. For a period of approximately seven years, from February 2008 through May 2015, the defendant CSL maintained the position that it had no responsibility for the actions of CPSL and they rebuffed suggestions to the contrary advanced by the plaintiffs and they ignored this action which, initially, was pleaded against CPSL only. Even when the plaintiffs obtained an order (on consent) joining CSL and the individual defendants as party defendants in the action, CSL continued to deny that they were a successor corporation to CPSL and took no steps to set aside the noting of pleadings closed against CPSL. By order dated December 3, 2013, McLean J. ordered a five day trial of an issue to determine the question of whether CSL was a successor corporation to the defendant CPSL and therefore responsible for any liability it (CSL) may have to the plaintiffs.

4Finally, in May of 2015, the defendant, CSL admitted, in response to a request to admit, that CSL was a successor company to the defendant CPSL so as to be responsible for any liabilities CPSL may have in this action. As noted, CSL then sought, in the present motion, to set aside the noting of pleadings closed against CPSL so that all of the defendants could defend the plaintiffs’ claims on the merits, which relief was granted by this court.

[5]

Analysis

My task is to fix the ‘costs thrown away’ in respect of the plaintiffs’ wasted and unnecessary time in pursuing the successor company issue against CPSL and CSL, up to the point when CSL finally formally admitted their successor status and their resultant responsibility for the actions of CPSL which are sought to be impugned in this action. The term ‘costs thrown away’ normally connotes complete indemnification although, the court has a residual discretion to order otherwise. The complete indemnification does not flow from any misconduct on the defendants’ part as both parties seem to suggest in their written submission, rather it simply means cost unnecessarily and uselessly incurred by the defendants’ actions ie. costs that were thrown away. The plaintiffs are entitled to be reimbursed for such expenditures on a full indemnity basis.

6A difficult challenge in this case is to segregate the plaintiffs’ costs attributable to pursuing the successor company issue from the costs referable to pursuing the merits of its claims against CPSL and subsequently against all of the defendants. I cannot readily make this distinction from the plaintiffs’ costs claims as presented to me. They are claiming by way of full indemnity the sum of $96,167.77. The defendants, for their part, submit the ‘cost thrown away’ should be fixed at $5,000 and should relate only to “filing requisition to note in default, correspondence with opposing counsel related to the default and correspondence and consultation with their lawyers.”

7The plaintiffs brought several motions to date, which were related to the successor company issue. The defendants say that the costs of these motions cannot be considered ‘cost thrown away’. I disagree. In my view, any costs which up to the time of the present motion can be considered accruing costs in the cause (including costs reserved to the hearing judge), should, if related to the successor company issue, be considered ‘costs thrown away’. I proceed on that basis.

8The plaintiffs brought in total three motions specifically related to default proceedings: the motion to strike the Statement of Defence of CPSL, the motion before McLean J. to add CSL Inc. and the individual defendants to the action, and the motion to strike the majority of the Statement of Defence of CSL and the individual defendants.

9I have carefully reviewed the billing information and dockets furnished by the plaintiffs. I think the reality of the matter is that prior to the present motion (on which I ordered that there be no costs), a roughly equal amount of time was expended on the merits of the plaintiffs’ claims (which have yet to be adjudicated), on the one hand, and the plaintiffs’ efforts to pursue the successor company issue against CSL.

10Furthermore, I am mindful of the well-established case law reflected in Rule 57 that I am not bound to render a costs award that simply reflects the arithmetical results of hours docketed multiplied by hourly rates. Of at least equal importance is that the award reflect an amount that would be within the reasonable expectations of the unsuccessful party who is required to pay the costs awarded.

11The plaintiffs argue that there is now another corporate successor issue in that CSL’s business is now being carried on in whole or in part by CSL Association Inc. I consider this allegation to be irrelevant in fixing the plaintiffs ‘costs thrown away’. Similarly, the plaintiffs argue that their joining of the individual defendants to the action and the pleading of an oppression remedy was done solely as a means of pursuing CSL, which is a matter on which I am unable to adjudicate on this record.

[12]

Disposition

I exercise the court’s discretion to fix the ‘cost thrown away’ in this matter in the sum of $30,000 inclusive of disbursements and H.S.T. which sum is payable by the defendants on a joint and several basis to the plaintiffs within 30 days of the release of this endorsement.