Southlake Regional Health Centre v. Beswick Group Properties Inc.

CITATION: Southlake Regional Health Centre v. Beswick Group Properties Inc., 2016 ONSC 592

NEWMARKET COURT FILE NO.: CV-14-117399-00

DATE: 20160122

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Southlake Regional Health Centre, Plaintiff

AND:

Beswick Group Properties Inc., Defendant

BEFORE: J.C. Corkery J.

COUNSEL: Martin Sclisizzi and Alessandra V. Nosko, for the Plaintiff

Kevin L. MacDonald and Jamie M. Sanderson, for the Defendants

HEARD: 2-5 Dec 2014, 10 Feb 2015

Costs ENDORSEMENT

[1] This matter was directed to trial by endorsement of Healy J. to determine the area of the Medical Arts Building that the plaintiff leases from the defendant. The parties have been unable to agree on costs and have made written submissions asking the court to determine costs.

[2] Both sides claim success and seek their costs on a partial indemnity scale, Southlake in the amount of $144,000 and Beswick in the amount of $181,000 plus disbursements and taxes.

[3] Under the terms of their lease, the parties agreed that rent was payable based upon the Gross Rentable Area (“GRA”), a term not defined in the lease or in the BOMA Standard, but which was projected to be 135,000 square feet and which was to be certified by the architect. It was never so certified and rent ended up being paid based on the 135,000 square-foot projected area. At trial, Southlake’s position was that the GRA was 129,535 square feet based upon the experts’ calculation of the Total Rentable Area (as defined in the 1996 BOMA Standard). Beswick argued that the GRA was 171,894 square feet based upon the experts’ calculation of the Gross Rentable Area (as defined in the 1996 BOMA Standard). In the alternative, Southlake had argued that the GRA should be fixed based on the projected 135,000 square feet.

[4] In my decision, I rejected the experts’ calculations based on the BOMA Standard, as the lease did not adopt the Standard or any of its defined terms. Relying on the projected area for the GRA contained in the lease and considering evidence of the areas used by the architect to determine the projected area, I calculated the GRA to be 142,907 square feet.

[5] Southlake submits that although success was technically divided, it was more successful that Beswick, as the court effectively adopted its alternative position, in relying on the projected area as the basis for determining the GRA. Beswick argue that it was the successful party as it not only successfully defended Southlake’s claim to have the GRA reduced to 129,535 square feet or, alternatively, fixed at 135,000 square feet, it was also partially successful in having the GRA determined to be an amount greater than the 135,000 square feet rent was being paid on. Over the remaining 26 years of the lease term, this amount to more than three million dollars in additional rent that Southlake will be obliged to pay.

[6] The parties exchanged offers to settle at the commencement of trial, however, their offers did not differ materially from their positions for the purpose of determining costs.

[7] I agree with Beswick that it was the successful party and, as such, it is entitled to its costs. While I rejected both parties’ positions in my judgment, my determination of the GRA is in Beswick’s favour and, although based on a consideration of the projected GRA, my calculation was significantly higher than the 135,000 square-foot area that Beswick argued in the alternative.

[8] In reply to Beswick’s submissions on costs, Southlake argues that the amounts Beswick claims are excessive. In particular, it argues that the $6,418 in costs claimed for attendance at the trial scheduling court is excessive given that the attendance, in Southlake’s view was unnecessary. Second, Southlake argues that the amount Beswick seeks for the trail and preparation, $99,762, is excessive, being $22,000 more than the amount Southlake sought. This was a short simple trial, Southlake submits, involving only one expert on each side and three other witnesses on a discreet issue. Third, Southlake object to Beswick’s disbursement claim for over $15,000 for photocopies (with no cost per page or total number of copies provided).

[9] I am unable to determine whether the trial scheduling court was necessary or warranted. I agree that the amount claimed is high. It shall be reduced by $4,000.

[10] With respect to the trial, much of the time and expense was incurred preparing for and presenting evidence, including expert opinions, to support a calculation of areas based on the BOMA Standard. I rejected this approach. While I the area measurements and calculations of the experts was necessary and helpful evidence, evidence regarding the BOMA Standard and its application was not helpful and both sides were unsuccessful in this regard. For this reason, I am reducing Beswick’s claim for trial costs by 30% or $30,000.

[11] I am not persuaded, that a disbursement for photocopies in excess of $15,000 was warranted. Given the technology readily available today, such photocopying costs are unacceptable. The use of electronic versions of necessary documents must be considered by counsel and, if necessary, at pre-trial conferences. This amount shall be reduced by $14,000.

[12] Beswick claim for costs shall be reduced by $48,000 or $54,240 inclusive of taxes.

[13] Southlake is ordered to pay Beswick’s costs on a partial indemnity scale fixed in the amount of $247,075 less $54,240 being $192,835.

J.C. Corkery J.

Date: January 22, 2016