Court File and Parties

COURT FILE NO.: 3094/14 DATE: 2017/03/21 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Larry Fraser, Applicant AND: New Concept Quality Doors Ltd., Dong Fu, Dennis Clemens Kupferschmidt, Huan Huan Shui, Ghohua Zang, Tibi Berla, Xiaozhou Jiang aka Adam Jiang, Yinan Zhang, Respondents

BEFORE: Justice A. K. Mitchell

COUNSEL: D. MacKeigan, for the Applicant S. MacKay, for the Respondents, Dong Fu, Huan Huan Shui, Ghohua Zang, Tibi Berla, Xiaozhou Jiang aka Adam Jiang and Yinan Zhang L. Fong, for the Respondent, New Concept Quality Doors Ltd.

HEARD: In writing.

Costs Endorsement

Overview

[1] This costs endorsement relates to two motions brought by the Applicant, Larry Fraser (“Larry”):

(i) A motion to compel answers to undertakings/refusals given by the respondent, Adam Jiang (“Adam”) personally and on behalf of the respondent, New Concept Quality Doors Ltd. (“NCQD”), at his examination for discovery conducted March 3, 2016; and

(ii) A motion to remove Lawrence Wong as solicitor of record for NCQD.

[2] Pursuant to my endorsement released March 1, 2017, I ordered that answers be provided to a portion of the refusals given by the respondent and provided my advice and direction with respect to certain answers to undertakings deemed unsatisfactory by the applicant. I declined to order the production of documents by DCC, a non-party, and the production of documents relating to the Ontario Immigration Nominee Program.

[3] I further ordered that Mr. Wong be removed as solicitor for NCQD in this litigation.

[4] In the absence of an agreement, I invited the parties to provide written submissions on the issue of costs of the motions. I received the applicant’s submissions on March 8, 2017 and the respondents’ (except NCQD) submissions and the submissions of NCQD on March 15, 2017. The applicant’s reply submissions followed on March 20, 2017.

[5] The applicant claims his costs of the motions in the all-inclusive amount of $7,500 reduced to reflect a reasonable sum that demonstrates a compromise. His partial indemnity costs of the motions total $10,300.65 inclusive of HST and disbursements. Applicant’s counsel, having 17 years’ experience, claims a partial indemnity hourly rate of $235. His law clerk has a partial indemnity hourly rate of $110. A total of 54.2 hours were spent by applicant’s counsel and his law clerk on the motions. Applicant’s counsel argues his client enjoyed 75% success on the undertakings/refusals motion.

[6] Counsel for the respondents (other than NCQD) submits there was divided success on the undertakings/refusals motion, with the respondents enjoying 75% success, such that no costs order should be awarded to the applicant. Alternatively, any costs order should be payable in the cause and significantly reduced given the divided success and the extensive amount of time spent by the applicant’s solicitor on the undertakings for which no success was obtained. The respondents (other than NCQD) suggest $2500 inclusive of HST and disbursements would be an appropriate amount in the circumstances. These respondents say only NCQD should be responsible for payment of any cost order.

[7] In his submissions, Mr. Wong takes great umbrage with the manner in which he has been treated by applicant’s counsel throughout these proceedings alleging personal attacks on his character and integrity during the applicant’s submissions on the motions. Mr. Wong also alleges applicant’s counsel engaged in intimidation tactics at examinations for discovery. Applicant’s counsel denies any such personal attack in his reply submissions. This evidence is not properly before the court and has no bearing on my costs decision.

[8] On behalf of NCQD, Mr. Wong submits that, despite the applicant’s success on the removal motion, the applicant is not entitled to costs against NCQD with respect to the removal motion because he delayed more than three years in bringing the motion which resulted in prejudice to the corporation.

Analysis

Law and Governing Principles

[9] The court has a very broad discretion to award the costs of and incidental to a proceeding. The basic provision is in s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c.C-43:

Subject to the provisions of an act or Rules of Court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[10] To guide its discretion, the court must look primarily to the factors set out in r. 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Rule 57.01(1) provides that, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, the court may consider:

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed in the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(g) improper, vexatious or unnecessary, or

(h) taken through negligence, mistake or excessive caution;

(i) a party’s denial of or refusal to admit anything that should have been admitted;

(j) whether is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding,

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(k) any other matter relevant to the question of costs.

[11] The primary guiding principle is whether the costs are fair and reasonable in the circumstances: see Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A).

[12] There are no offers to settle to consider. Any discussions between the parties with a view to resolving some or all of the issues have no bearing. Evidence of those discussions is not before the court.

[13] The applicant obtained some success on the undertakings/refusals motion. The applicant was unsuccessful in two significant areas – production of DCC documents and production of documents and information relating to the immigration nominee program. With respect to the financial documentation and the minutes books of NCQD, the respondents had already produced what they had available to them. My order merely provided direction with respect to preparation and production of financial and corporate documentation going forward. So too with respect to obtaining production from TD. I find the parties were equally successful. However, success of any kind on a motion such as this should be rewarded albeit on a reduced basis because the motion was necessary. I find that the applicant is entitled to his costs of the undertakings/refusals motion in the all-inclusive amount of $4,000. The reduction from the amount claimed is arrived at based on my assessment of success and not the lack of comparative bills of costs.

[14] Adam was examined for discovery in both his personal and representative capacity. The undertakings and refusals were given by Adam in both such capacities. Therefore, Adam, personally, and NCQD are both liable for payment of the costs order on the undertakings/refusals motion.

[15] The applicant was entirely successful on the motion to remove Mr. Wong as solicitor of record for NCQD by virtue of his conflict of interest as a potential witness. Notwithstanding the unfounded suggestions of applicant’s counsel during argument, I find that at no time during this litigation has Mr. Wong acted in bad faith or in any manner contrary to his ethical and professional obligations. The basis upon which his removal is required relates to his initial retainer as counsel to the newly formed corporation and his involvement in incorporating NCQD and developing its share and corporate structure. I permitted Mr. Wong to remain as corporate solicitor for NCQD. Delay in bringing the motion does not bear on my decision. There is no evidence of any prejudice to NCQD.

[16] The applicant is entitled to his costs of the removal motion in the all-inclusive amount of $1,500. Only NCQD is responsible for payment of the costs order with respect to the removal motion.

Disposition

[17] I find that the applicant is entitled to his costs of the motions fixed in the amount of $5,500.00, inclusive of disbursements and HST, payable by Adam and NCQD as forth above.

“Justice A. K. Mitchell”

Justice A. K. Mitchell

Date: March 21, 2017