Superior Court of Justice - Ontario

CITATION: Lavender v. Miller Bernstein, 2017 ONSC 4739

COURT FILE NO.: 05-CV-300430-CP

DATE: 20170818

RE: Barry Lavender Plaintiff / Moving Party

AND:

Miller Bernstein LLP, Defendant / Responding Party

BEFORE: Justice Edward P. Belobaba

COUNSEL: Daniel Bach, Paul Bates and Serge Kalloghlian for the Plaintiff

Robert Staley, Gavin Finlayson and Nathan Shaheen for the Defendant

HEARD: June 27 and 29, 2017

Proceeding under the Class Proceedings Act, 1992

COSTS ON SUMMARY JUDGMENT MOTION

[1] In a decision released on July 12, 2017, I granted the plaintiff’s motion for summary judgment and found in favour of the plaintiff on four of the five certified common issues.[^1] I concluded as follows:

The common issues, with the exception of damages, are answered in favour of the plaintiff. Buckingham Securities was required to segregate the class members’ cash and securities and failed to do. The defendant owed a duty of care to the class members when it audited and filed the Form 9s and breached this duty of care. This breach of duty was a cause of the losses that were sustained herein. However, the class members’ losses cannot be determined on the record before the court, whether on an individual or class-wide basis … The plaintiff has indicated that he may bring a follow-up motion based on the “corrected spreadsheet” so that these losses may be determined - but this remains to be seen.[^2]

[2] The plaintiff asks for an “elevated” partial indemnity award in the amount of $1,077,901 for fees and $209,395 for disbursements for a total award of $1,287,296, including taxes. The plaintiff says this “elevated” or “enhanced” partial indemnity costs award is justified because the defendant delayed the litigation, refused to make required admissions, and caused needless expense.

[3] The defendant says that costs should be awarded on a partial indemnity basis and, given the divided success, should be no more than $500,000 all-inclusive, payable within 60 days.

Analysis

[4] I begin by noting that the appropriate scale is partial indemnity. There is no “elevated partial indemnity” scale[^3] and substantial indemnity is not justified because there is no evidence of any reprehensible or outrageous conduct on the part of the defendant.[^4]

[5] I also note that two of the five proposed issues were not contested by the defendant, save for the 1998 audits. The plaintiff prevailed on the 1998 audits point and on two of the contested issues. The defendant prevailed on the damages issue. In my view, based on the written submissions and the oral hearing, the division of success is roughly three to one in favour of the plaintiff. In other words, the final costs award should be reduced by one quarter to reflect this allocation.

[6] I must first ensure that the plaintiff’s costs outline complies with the hourly rates as set out in the Grid. As I explained in Mask v. Silvercorp Metals[^5] there are good reasons to continue to use the recommended Grid rates: $225 for a ten year call, $300 for a twenty year call and $350 for those with more than twenty years at the bar - with appropriate tweaks for the in-between years. For example, Mr. Cho, a three-year call should be pegged at $155 (not $225) and Mr. Bach, an eleven-year call, at $265 (not $300).

[7] Applying the Grid rates and making the required adjustments the total fees claim is $788,311 excluding taxes. The total claim for disbursements, excluding the $8256 in legal research charges,[^6] is $177,108. The overall costs claim, taxes excluded, is therefore $965,419.

[8] I acknowledge the defendant’s submission that the plaintiff is claiming for time spent by his legal team before the summary judgment motion was even in contemplation. The plaintiff’s response is that all of this time was devoted to the merits of the common issues and was thus directly related to this motion for summary judgment. I have no reason to reject the plaintiff’s explanation. However, the defendant was right to raise this concern.

[9] As I have already noted, the fees portion of $788,311 must be reduced by one-quarter to $591,233. Adding the $177,108 in disbursements, the total award is therefore $768,341 excluding taxes. Standing back and considering again the factors set out in Rule 57.01(1) and the need to ensure that the costs award is fair and reasonable to the losing party, I fix the costs at $775,000 all-inclusive.

[10] The defendant asks that the costs be payable in 60 days (rather than 30 days) but offers no compelling reason for this requested delay. The costs award shall be paid by the defendant to the plaintiff within 30 days.

[11] Order to go accordingly.

Justice Edward P. Belobaba

Date: August 18, 2017

[^1]: Lavender v. Miller Bernstein, 2017 ONSC 3958.

[^2]: Ibid., at paras. 49-50.

[^3]: Vanek v. The Great Atlantic & Pacific Co. of Canada Ltd., 1999 CanLII 2863 (ON CA), [1999] O.J. No. 4599 (C.A.) at para. 74; Martin v. Listowel Memorial Hospital, 2000 CanLII 16947 (ON CA), [2000] O.J. No. 4015 (C.A.) at para. 86.

[^4]: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 at para. 26.

[^5]: Mask v. Silvercorp Metals Inc., 2015 ONSC 7780 at para. 7.

[^6]: I would not allow computer research charges any more than I would allow a law firm’s subscription charges to hard-copy law reports.