Court File and Parties

CITATION: Conterra Restoration Ltd. v. Irving Moishe Kirsch, 2017 ONSC 5114

COURT FILE NO.: CV-14-517321A1

DATE: 2017-08-28

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Conterra Restoration Ltd., Plaintiff

AND:

Irving Moishe Kirsch, Defendant

BEFORE: Cavanagh J.

COUNSEL: Jeffrey A.L. Kriwetz, Counsel, for the Plaintiff David Taub, Counsel, for the Defendant

HEARD: In Writing

COSTS ENDORSEMENT

[1] The plaintiff Conterra Restoration Ltd. (“Conterra”) was successful in this action and obtained judgment against the defendant Irving Moishe Kirsch (“Mr. Kirsch”) for the full amount claimed, $109,451.35 plus prejudgment interest. The third party claim against Pancon Engineering Ltd. (“Pancon”) was dismissed.

[2] Mr. Kirsch and Pancon have agreed that Mr. Kirsch will pay Pancon the all-inclusive amount of $26,729.47 in costs.

[3] Conterra made an offer to settle to Mr. Kirsch dated April 25, 2017 by which Conterra offered to settle the action on the basis of a payment by Mr. Kirsch of $100,000 inclusive of prejudgment interest, plus costs up to the date of acceptance, on a partial indemnity scale. This offer was not accepted.

[4] Conterra seeks costs of this action from Mr. Kirsch on a partial indemnity scale to the date of its offer to settle and on a substantial indemnity scale from April 26, 2017 pursuant to rule 49.10(1) of the Rules of Civil Procedure. Conterra seeks costs in the amount of $74,331.58, inclusive of fees, disbursements and HST. I agree that pursuant to rule 49.10(1), Conterra is entitled to partial indemnity costs to April 25, 2017 and to substantial indemnity costs from that date.

[5] Mr. Kirsch submits that the amount claimed by Conterra for costs is excessive, unreasonable and not proportionate given the issues in this action and the amount in dispute. Mr. Kirsch submits that materials submitted by Conterra in support of its claim for costs disclose a degree of over-preparation and a failure to allocate costs efficiently. Mr. Kirsch submits that of the total of 154.2 hours of time claimed, senior counsel for Conterra accounted for 146 of those hours and his junior associate accounted for the balance. Mr. Kerr submits that, taking into account the principle of proportionality, the nature of this case, the agreed-upon amount of costs to be paid to the third party and other relevant factors, a costs award in the amount of $35,000 would be fair and reasonable.

[6] The fixing of costs is not a mechanical exercise and, in addition to the factors in rule 57.01 of the Rules of Civil Procedure, the court must consider the amount that would be fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), 2004 CarswellOnt 2521 (C.A.), at para. 26.

[7] The trial of this action took place after an order was made dismissing summary judgment motions brought by each of Conterra, Mr. Kirsch and Pancon. In respect of the motions for summary judgment, Mr. Kirsch submitted a bill of costs on a partial indemnity scale that included an amount for fees of $33,781. Conterra’s bill of costs for the summary judgment motion included an amount for fees of $40,020. The number of hours expended by the lawyers for the respective parties at this stage of the action was not dissimilar, although Conterra claimed costs at a higher hourly rate for its senior counsel (1991 year of call), who was somewhat more experienced than counsel for Mr. Kirsch (2001 year of call).

[8] Although this action involved a claim of $109,451.35, the facts were somewhat detailed and there were a number of procedural steps required. The action was vigorously defended. The motions for summary judgment were not successful, but the work that was undertaken for these motions was used for the short trial. I regard the hourly rate charged for senior counsel for Conterra to be too high given the nature of this claim, and I reduce the fees claimed to reflect more suitable partial indemnity rates for this case, 250/hour for senior counsel and $175/hour for junior counsel. I allow the substantial indemnity rate of $500/hour.

[9] I do not regard the amount of time expended for this case to be excessive. The amount of time expended by counsel for Mr. Kirsch up until the motions for summary judgment was not significantly different than the amount of time claimed by Conterra for its counsel. In my view, Mr. Kirsch would have expected that, if he were to be unsuccessful, costs based upon time expended in the range of the time claimed by Conterra would be sought.

[10] I fix costs for (i) fees on a partial indemnity scale to April 25, 2017 in the amount of $33,285; (ii) counsel fee on a partial indemnity scale for appearance on the summary judgment motions of $1,000, (iii) fees from April 26, 2017 on the substantial indemnity scale of $9,300, and (iv) counsel fee at trial (1½ days) on substantial indemnity scale of $5,250, a total of $48,835. I fix disbursements at $4,520.18. HST on fees is $6,348.55. HST on disbursements is $587.62. I therefore fix costs to be paid by Mr. Kirsch to Conterra at $60,291.35 inclusive of fees, disbursements and HST.

Cavanagh J.

Date: August 28, 2017