Court File and Parties

COURT FILE NO.: 10-49174 DATE: 2016/08/09 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Maxrelco Inc, Plaintiff AND JIM PATTISON INDUSTRIED LTD. c.o.b. as PATTISON SIGN GROUP and LUMIPRO INC. carrying on business as LUMIPRO SIGNS AND LIGHTING SERVICES, Defendants

BEFORE: Mr. Justice Robert J. Smith

COUNSEL: Brian C. Elkin, for the Plaintiff Martin A. Smith, for the Defendant

HEARD: In Writing

Costs Endorsement

Positions

[1] Maxrelco seeks an order for costs on a substantial indemnity basis in the amount of $31,214 plus HST plus $1,191.07 in disbursements for successfully opposing the summary judgment motion and for its motion to amend the plaintiff’s name. Lumipro made a motion for a summary judgment and Maxrelco made a cross-motion to amend the plaintiff’s name to correct a misnomer. Lumipro submits that the amount claimed for legal costs is excessive.

[2] Lumipro submits that the summary motion was reasonably brought because it raised a valid question of whether a shareholder could claim damages on behalf of its corporation in the circumstances of this case. Lumipro submits that no costs should be awarded on the plaintiffs’ cross-motion to amend its name after the limitation period had expired and costs should only be ordered in the cause for the summary judgment motion or, at a minimum only on a partial indemnity basis. Lumipro further submits that the hourly rate claimed and the hours spent are not reasonable in the circumstances (35 hours for Senior counsel and 50 hours for Junior counsel).

[3] 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, the conduct of any party which unduly lengthened the proceeding, whether any step was improper, vexatious or unnecessary, or taken through negligence mistake or excessive caution, 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

[4] In this case the bulk of the argument was spent on Maxrelco’s cross-motion to correct the misnomer of the plaintiff’s name. Maxrelco was successful in obtaining an order allowing it to correct the misnomer; however, the motion was required in order to correct the error in using the incorrect name of the plaintiff in the first place.

[5] The summary judgment motion brought by Lumipro was largely based on their argument that a shareholder could not sue for damages suffered by the corporation. Once the amendment was granted, the motion for a summary judgment then stood a very small chance of success. However, the law on whether the amendment of the claim was to correct a misnomer or was it a motion to add a new party outside of the time limit, was complex and was an arguable issue.

Complexity and Importance and Proportionality

[6] The issue was of some complexity given that the claim was initially brought by a shareholder of a corporation and was surpassed largely by the cross-motion to amend the name.

Conduct of Any Party

[7] In this case, Lumipro did not bring its motion for a summary judgment or raise the issue of the plaintiff being misnamed for over four years, and as such, there was quite a substantial delay in bringing the summary judgment motion. However, its motion was brought on a reasonable basis because the shareholder of the corporation that had suffered the damages was named as the plaintiff.

Scale of Costs

[8] I find that costs on a substantial indemnity basis are not warranted given that the summary motion was reasonably brought and it raised an arguable issue. The motion to amend the name of the plaintiff largely determined the motion for summary judgment. The need to amend the name of the plaintiff outside of the time limits was caused by the plaintiff inadvertently naming the wrong plaintiff in the first plea and I agree with the submission of Lumipro that costs should not be awarded to the plaintiff for their cross-motion.

[9] Cost will therefore be fixed on a partial indemnity basis for the motion for summary judgment.

Hourly Rates and Time Spent and Proportionality

[10] Lumipro argues the time spent by Maxrelco for the summary judgment motion was excessive because they spent 84.5 hours while the plaintiff spent 105.1 hours. I do not find the difference in time spent to be significant. Lumipro also objects to the hourly rate sought by the plaintiffs. I find when costs are awarded at 60% of the actual rates, that the hourly rates become reasonable and given Senior counsel’s years of experience. The issues were very important to the parties as the case would have been dismissed and the claim involved approximately $1 million.

Amount the Unsuccessful Party Would Reasonably Expect to Pay

[11] It is difficult to assess its expectation; however, the issues were factually and legally complex. Both parties spent a similar number of hours and the amount of costs incurred by the moving party, on a partial indemnity basis, was $14,128.

Disposition

[12] Having considered all of the above factors, Lumipro is ordered to pay costs on a partial indemnity rate for the motion for summary judgment which are fixed in the amount of $12,000 plus HST plus disbursements of $1,191.07 inclusive of HST.

R. Smith J. Date: August 09, 2016