Court File and Parties
COURT FILE NO.: CV-14-10572-00CL DATE: 20170104 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Tibbett & Britten Group Canada Inc., Applicant AND: Sobeys Inc., Respondent
BEFORE: H.J. Wilton-Siegel J.
COUNSEL: P. Griffin and D. Varah, for the Applicant J. McAleer, for the Respondent
HEARD: In Writing
Endorsement
1The applicant, Tibbett & Britten Group Canada Inc. (“Tibbett”), was successful on this application. It seeks the costs of its counsel in this application on a full indemnity basis, the costs of another law firm related to submissions to FSCO, and the costs of a third firm pertaining to document collection and certain other matters. In this endorsement, capitalized terms that are not defined herein have the meanings ascribed thereto in the Court’s endorsement dated March 1, 2016 in this matter (the “Endorsement”).
Appropriate Scale of Costs of Counsel in this Application
2The applicant’s claim of full indemnity costs is based on the operation of section 6.1 of the WTA. However, after a review of the available documentation in chronological order, the Court concluded at paragraph 129 of the Endorsement that the obligations of the parties in respect of the termination arrangements under the WTA were performed and that the agreement was spent. The Court concluded that the parties reached a new agreement under which Sobeys assumed direct responsibility for the Wind-Up, including funding the Plan deficit.
3Given the absence of any finding that the parties agreed to a mutual indemnification arrangement similar to section 6.1 of the WTA in the new agreement, there is no basis for a claim of full indemnity costs. The applicant’s claim proceeded, in effect, by way of a simple claim for breach of contract. Accordingly, Tibbett is entitled to its costs on a partial indemnity basis.
Costs of Counsel Relating to the FSCO Investigation
4Tibbett also seeks costs of its legal counsel, apparently on a full indemnity basis, in connection with FSCO’s investigation of the circumstances pertaining to the Plan deficit, as well as its on-going monitoring of the Plan since that time.
5I do not think that these costs are properly characterized as costs of this proceeding. Instead, Tibbett’s claim for these costs would appear to be more properly characterized as a claim for damages arising as a result of Sobey’s breach of the agreement between the parties described above. Accordingly, Tibbett’s claim for these expenses as costs of the application is denied.
6I note that Sobeys argues that Tibbett should not be responsible for these costs on the grounds that Tibbett remained the “employer” and the “administrator” of the Plan for the purposes of the PBA and therefore continued to be subject to the statutory obligations thereunder in such capacities, including, in particular, in respect of any Plan deficit that arose as a result of the Wind-up. This is, essentially, an argument of a lack of causation, that is, that these costs result from Tibbett’s failure to discharge its obligations under the PBA rather than from Sobeys failure to perform its obligations under the agreement between the parties.
7In denying Tibbett’s claim for these costs, I am not making any determination as to whether Tibbett is entitled to such costs as damages for breach of the agreement reached between Tibbett and Sobeys, much less whether such costs are recoverable in this proceeding.
Quantum of Costs
8Tibbett’s costs on a partial indemnity basis total $98,733.85. Sobeys does not dispute the reasonableness of this amount as Tibbett’s costs on a partial indemnity basis.
9However, Sobeys raises two issues that were first asserted in Tibbett’s costs outline on a full indemnity basis.
10First, the disbursements claimed by Tibbett in its costs outline prepared on a full indemnity basis include an amount of $14,347.89 charged to Tibbett by Oslers.
11It appears that much of this time pertains to a review of Oslers’ files for relevant documentation, initially as a result of the FSCO investigation. I do not think this time is properly chargeable as legal costs or disbursements to the extent that Tibbett is seeking such costs if the applicable scale is partial indemnity costs. Tibbett could not seek costs for the time spent by its personnel in reviewing its own files. The fact that certain of the documents may have been located in the files of the law firm that acted for Tibbett on the termination arrangements should not convert such expenses of investigation into recoverable disbursements.
12In addition, the Osler disbursement includes time of a particular lawyer at Oslers whose affidavit was tendered as evidence. However, this affidavit was of no utility in the Court’s determination. There is also some time charged in respect of legal research on limitation periods that appears to have been undertaken for reasons other than in response to the submission of Sobeys in this application.
13Based on the foregoing understanding of this disbursement charged by Oslers, I conclude that it should not be recoverable.
14Second, Sobeys says that the costs submissions were unnecessary, given that it had agreed to pay Tibbett’s costs on a partial indemnity basis by email dated April 26, 2016. It seeks a costs award of $1,500 in its favour representing the costs of having to proceed with its written submissions. It refers to the decision of Myers J. in 1465152 Ontario Limited v. Amexon Developments Limited, 2014 ONSC 4384.
15I decline to grant such an award in this case for the reason that there were legitimate issues regarding the significance of section 9.1 of the WTA for the scale of costs as well as the proper approach to the FSCO-related costs of Tibbett.
Conclusion
16Based on the foregoing, I find that Tibbett’s fair and reasonable costs are $98,733.85, payable by Sobeys forthwith.
Wilton-Siegel J.
Date: January 4, 2017