Canadian Northern Shield Insurance Co. et al v. 2421593 Canada Inc. et al, 2016 ONSC 6487
CITATION: Canadian Northern Shield Insurance Co. et al v. 2421593 Canada Inc. et al, 2016 ONSC 6487
COURT FILE NO.: CV-14-10503-00CL
DATE: 2016-10-17
SUPERIOR COURT OF JUSTICE – ONTARIO
COMMERCIAL LIST
BETWEEN:
CANADIAN NORTHERN SHIELD INSURANCE COMPANY and ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA
Plaintiffs
- and -
2421593 CANADA INC., THE CO-OPERATORS GROUP LIMITED, FEDERATED AGENCIES LIMITED, VANCOUVER CITY SAVINGS CREDIT UNION and 7081332 CANADA LTD.
Defendants
BEFORE: Newbould J.
COUNSEL: Geoff R. Hall and Jacqueline Cole, for the Vancouver City Savings Credit Union and 2421593 Canada Inc. (formerly Vancity Insurance Services Ltd.) Barry H. Bresner, for the The Co-operators Group Limited, Federated Agencies Limited and 7081332 Canada Inc. J. Anthony Caldwell and Marg A. McKillop, for the plaintiffs
ENDORSEMENT
[1] I have now received cost submissions from the defendants who are entitled to their costs.
[2] Vancity claims costs on a substantial indemnity basis from the date of an offer to settle for $482,450. The action was dismissed. It claims costs on this higher scale “applying the principles of rule 49.10”. I do not think the rule permits substantial indemnity costs. Rule 49.10(2) provides for costs on an offer by a defendant as follows:
(2) Where an offer to settle,
(a) is made by a defendant at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the plaintiff,
and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.
[3] This rule has no application to a situation in which a defendant makes an offer and the action is later dismissed. In that circumstance, it is not open on the basis of the rule to award substantial indemnity costs. Such an award must be based on the general principles for which substantial indemnity costs may be awarded. See S.A. Strasser Ltd. v. Richmond Hill (Town) (1990), 1 O.R. (3d) 243 (C.A.) and Scapillati v. A. Potvin Construction Ltd. (1999), 44 O.R. (3d) 737 (C.A.).
[4] The fees claimed by Vancity on a partial indemnity basis total $214,864. The hourly rates claimed are 60% of the actual rates charged. These are appropriate and normal in the Commercial List and have been used in the Court of Appeal. See Stetson Oil & Gas Ltd. v. Stifel Nicolaus Canada Inc., 2013 ONSC 5213; Inter-Leasing, Inc. v. Ontario (Revenue), 2014 ONCA 683 and Margarita Castillo v. Xela Enterprises Ltd. et al, 2015 ONSC 7978. There is no basis for using $600 per hour for Mr. Hall as contended by the plaintiffs rather than the actual rates charged. Mr. Hall’s actual rate charged is quite normal for senior Toronto counsel.
[5] The plaintiffs say that no time should be allowed to Vancity for preliminary fact gathering and legal analysis as that worked occurred before the claim was issued. I do not agree. There was clearly work done in connection with the claim that was eventually made because of the complaint made by the plaintiffs. The charges include, however, dealings by the lawyers for Vancity and their client which should not be included. As well, the amount claimed for this work of $28,843 seems somewhat high.
[6] The plaintiffs also quarrel with the amount of time charged for document discovery. They compare the time spent by their lawyers for 560 documents to the time spent by Vancity’s lawyers for 852 documents. They say the partial indemnity charge of $75,197 should be reduced to $41,358, although part of this is due to their claim that the hourly rates are too high, which I have not accepted. It is not possible for me to say the time spent was too high just because the lawyers for the plaintiffs spent fewer hours on fewer documents. The plaintiffs say that too much time is claimed by Vancity for answering undertakings. How much time was spent by the plaintiffs on this is not disclosed, nor is the kind of undertakings discussed or how much work would be considered by the plaintiffs to be reasonable. I cannot say on this record whether the amount of work done for Vancity is unreasonable.
[7] The plaintiffs do not disclose the total of the work done by their lawyers, nor do they say that the amount claimed by Vancity is more than what the plaintiffs could reasonably expect to pay.
[8] Taking into account the factors in rule 57.01, including what the plaintiffs could reasonably expect to pay, I fix the fees of Vancity at $200,000 plus HST.
[9] Regarding disbursements, there is a charge of $5,905.72 for “Litigation Data Hosting”. I do not know what that is for. There is a charge of $444.36 for “Litigation Support Vendor Charge” and of $125.80 for “Online Searches”. Without knowing what these first two charge were for and how they were calculated, I cannot allow them and further submissions may be made if still claimed. There is a claim of $1,544 for “Travel-TTI Vision” I do not know what that is for and further submissions are required for that disbursement as well. The remainder of the disbursements claimed plus HST are allowed.
[10] Co-operators claims fees on a partial indemnity basis of $133,573 plus HST. The hourly rates claimed are 60% of the actual rates charged. I accept these rates for the same reason as for Vancity. The actual rates charged were reasonable for the counsel involved.
[11] It is said that only 65 documents were produced by Co-operators and that too much time was spent by a law clerk and by the lawyers. The number of documents produced by Co-operators is hardly the important figure. All of the documents produced in the action had to be considered by the lawyers for Co-operators, particularly as the claim against Co-operators was for inducing a breach of contract by Vancity and for conspiring with Vancity. The actual amount charged for documentary production was $58,978, which was very close to the amount charged by the lawyers for the plaintiff of $55,060. I cannot say that the claim for documentary production is too high.
[12] There is a claim of $4,158 for an e-document data base, being charges by a law clerk and litigation support. The plaintiff says that should not be allowed. I disagree. E-document production and storage is quite common in commercial litigation and useful. It is a cost that usually in the end reduces other personnel costs. It is all part of the litigation process and should be encouraged. It is allowed.
[13] The plaintiff says the time claimed for examinations for discovery by Mr. Bresner is too much and that the claim for the summary judgment motion is too much. The plaintiff has not provided its bill of costs or information regarding the time spent by its lawyers. Such an attack is “an attack in the air”. See Winkler J. (as he then was) in Risorto v. State Farm Mutual Automobile Insurance Company (2003), 64 O.R. (3rd) 135. See also LaForme, J.A. in Frazer v. Haukioja, 2010 ONCA 249.
[14] Without knowing what work was done on behalf of the plaintiffs, it is difficult to say that the hours spent on behalf of the defendants were too much. It is not the court’s function when fixing costs to second guess successful counsel of the amount of time spent unless the time spent was obviously too much. See Fiorillo v. Krispy Kreme Doughnuts Inc. [2009] O.J. No. 3223 and the authorities cited in it. I am in no position to say that the time spent was obviously too much.
[15] Taking into account the factors in rule 57.01, including what the plaintiffs could reasonably expect to pay, I fix the fees of Co-operators at $130,000 plus HST.
[16] Regarding disbursements, the plaintiffs say that the disbursements of $3,448.27 for “photocopying/binding/scanning” and of $3,812.25 for “Laser printing” are too much given that McCarthy’s disbursement for Vancity for “copies” was only $2,565.45. I think these disbursements need better explanation in order to determine whether they are reasonable. The remainder of the disbursements claimed are allowed with HST.
Newbould J.
Date: October 17, 2016