CITATION: Cosolo v. Geo. A. Kelson Limited, 2017 ONSC 4928
COURT FILE NO.: CV-16-561889
DATE: 20170817
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LOUIE COSOLO
Plaintiff
– and –
GEO. A. KELSON LIMITED
Defendant
Patrick J. Monaghan and Mei Li (Michelle) Fan for the Plaintiff
Geoff R. Hall and Patrick Pengelly for the Defendant
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] The Plaintiff, Louie Cosolo, is an engineer, and between 2005 and 2015, he was employed by the Defendant engineering firm Geo. A. Kelson Limited (“Kelson”). During his employment, he acquired and sold 43,000 Class E common shares of Kelson for $891,820, for which he was to receive ten installment payments of $89,182 plus interest on the outstanding balance. He received the first installment before his employment ended, but in 2016, after he was no longer an employee and had become the CEO of a rival engineering firm, the installments stopped. Kelson refused to make further payments, and it alleged that Mr. Cosolo had breached his fiduciary duties. Mr. Cosolo sued Kelson for $802,638 plus interest for breach of contract, and Kelson defended and asserted by way of defence an overtopping right of setoff for damages from the breach of fiduciary duty. Mr. Cosolo successfully moved for a summary judgment and received a judgment of $750,000. See Cosolo v. Geo. A. Kelson Limited, 2017 ONSC 4150.
[2] Mr. Cosolo seeks costs of $96,013.32, all inclusive, of which $75,592 is the claim for counsel fee, the balance being for disbursements and HST.
[3] Kelson submits, however, that the appropriate award is $68,362, all inclusive, because a comparison of the hours of lawyers’ time reveals that the time expended by Mr. Cosolo’s lawyers was excessive and the partial indemnity rates exceed the norm of 60% of actual fees.
[4] The hours expended by Kelson’s lawyers total 187.4 (33 senior, 154.4 junior and clerk, 1:5) while the hours expended by Mr. Cosolo’s lawyers was 273.2 (141.6 senior, 131.6 junior and clerk, 1:1). Kelson submits that the 85.8 hour difference is inexplicable and the differing allocation of delegated work demonstrates that Mr. Cosolo’s lawyers managed the file inefficiently.
[5] I disagree with this purely quantitative approach to costs that ignores the more important qualitative aspects of counsel fees. This purely quantitative approach is flawed because it undervalues the factors that: (a) Mr. Cosolo was not just a plaintiff but he essentially was a defendant by counterclaim who was confronted with an overtopping substantial claim for setoff; (b) the setoff claim attacked his integrity and alleged a breach of fiduciary duty; and (c) Mr. Cosolo was the successful party as both plaintiff and as a notional defendant.
[6] I grant Mr. Cosolo his costs as requested.
Perell, J.
Released: August 17, 2017
CITATION: Cosolo v. Geo. A. Kelson Limited, 2017 ONSC 4928
COURT FILE NO.: CV-16-561889
DATE: 20170817
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LOUIE COSOLO
Plaintiff
– and –
GEO. A. KELSON LIMITED
Defendant
REASONS FOR DECISION - COSTS
PERELL J.
Released: August 17, 2017