CITATION: Walsh Construction/Bondfield Partnership v Chartis Insurance Company of Canada, 2017 ONSC 5757
COURT FILE NO.: CV-15-526601
DATE: September 27, 2017
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Walsh Construction/Bondfield Partnership v Chartis Insurance Company of Canada
BEFORE: Master C. Albert
COUNSEL: S. Vogel and S.Reynal de St. Michel, for defendant Chartis: Fax: 416-367-6749
G. Ackerley and J. Scourgie, for plaintiff Walsh/Bondfield: Fax: 416-365-1876
MASTER C. ALBERT
COSTS ENDORSEMENT
Background
[1] Chartis Insurance Company of Canada (“Chartis”) moved for partial summary judgment, seeking an order dismissing the claim of Walsh Construction/Bondfield Partnership (“WB”) for payment on a performance bond. For reasons released June 28, 2017 the Chartis motion was dismissed.
[2] The parties submitted costs outlines and filed written submissions on costs. Neither party requested an appointment to make oral submissions on costs.
[3] It is appropriate for costs to follow the event. WB was successful in resisting Chartis’ summary judgment motion and asks the court to fix costs on a partial indemnity scale at $62,882.85 made up of $53,540.78 for fees plus HST of $6,960.30 plus $2,381.77 for disbursements.
[4] Chartis does not dispute WEB’s entitlement to costs or the quantification of its disbursement claim but rejects WB’s claim for fees on the basis that it is excessive and exceeds what Chartis reasonably expected to pay if unsuccessful. Chartis also rejects the costs claimed by WB on grounds that the complexity of the motion and importance of the issues raised on the motion do not warrant the amount of costs claimed. Chartis argues that the costs award proposed by WB exceeds what has been awarded in similar cases. Chartis proposes $45,000.00 as a reasonable all inclusive costs award.
Relevant Factors
[5] As a general principle costs are in the absolute discretion of the court[^1]. In fixing costs the court must consider the facts and circumstances of the particular case; it is not a mechanical exercise. The court must be fair and reasonable in exercising its discretion to award costs. As noted by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario[^2]:
In deciding what is fair and reasonable, as suggested above, the expectation of the parties concerning the quantum of a costs award is a relevant factor…The notions of fairness and reasonableness are embedded in the common law. Judges have been applying these notions for centuries to the factual matrix of particular cases.
[6] Rules 57.01(1) and 1.04 describe factors for the court to consider when fixing costs. The list is non-exhaustive and includes the following factors relevant to fixing costs in this case:
a) The outcome;
b) The principle of indemnity, including the experience of the lawyer for the party entitled to costs, the rates charged and the time spent;
c) The complexity and importance of the issues;
d) Proportionality; and
e) The reasonable expectation of the payor;
[7] I have considered each of these factors, which in my view are relevant in exercising discretion and determining an appropriate costs order in this case.
Outcome and Indemnity
[8] The parties accept that as the successful party WB is entitled to costs. WB submitted a costs outline and claims only a portion of the partial indemnity costs reflected therein, recognizing that some of the legal services performed will also apply to trial preparation and trial. WB seeks all of the partial indemnity costs for tasks reflected in its costs outline that pertain solely to defending the summary judgment motion.
[9] Having reviewed the costs outline I am satisfied that the hourly rates claimed are reasonable and ought to have been within Chartis’ reasonable expectation. Chartis places in issue whether it should be liable for WB’s “team approach” to litigation in that the costs outline reflects the work of three lawyers and a law clerk[^3]. Two lawyers participated in the motion hearing.
[10] Chartis relies on Royal Group Inc. v Core Precision Technologies Ltd.[^4] at paragraphs 15 for the proposition that an unsuccessful party should not be required to pay for the successful party’s team approach to litigation. In that case Justice Campbell stated at paragraph 15:
“…with five lawyers working on this case, there was significant overlap in responsibilities and duplication of efforts…While this team approach to litigation was successful in this case, and may offer many professional and strategic benefits, it is an approach which, almost by definition, invariably drives legal fees higher. Such an approach may be entirely appropriate and reasonable as between the law firm and its own client. However, parties who adopt such an approach to litigation cannot reasonably expect that, even when it is successful, the greater costs associated with this approach will always be borne by their unsuccessful adversary.”
[11] While I agree with the principle expressed, I find that it does not apply in the present case. Five lawyers participated in the Royal Group case. In the present case WB’s costs outline reflects a reasonable division of labour as between a senior lawyer (27 years), a very junior lawyer (2 years) and a lawyer of mid-level (9 years) experience. I find that this is consistent with a senior lawyer assigning work to a lawyer or law clerk of appropriate skill and experience. I do not find that in doing so there was any significant duplication of effort.
[12] Having made such an observation, I find that it is appropriate to discount the many hours reflected in WB’s costs outline because (i) some of the services performed will be of value in trial preparation and trial; and (ii) the number of hours reflected for the two more junior lawyers is excessive likely due to their modest experience.
[13] I have taken these factors into account in determining a quantum of costs that is reasonable and appropriate in the circumstances of the summary judgment motion.
Importance of the issues and complexity
[14] From WB’s perspective, the Chartis motion for summary judgment threatened WB’s claim with the ultimate consequence: dismissal of its action, akin to capital punishment. Justice Tausendfreund, J. expressed this concept in Steeves v Doyle Salewski Inc.[^5] at paragraph 11:
“A summary judgment motion to dismiss the entire action is the civil equivalent of capital punishment. It is draconian in nature and calls for a response that leaves nothing in reserve.”
[15] This motion was of the highest importance to WB: if WB had been unsuccessful in resisting the motion its claim against Chartis on the $3,833,364.54 performance bond would have been dismissed.
[16] WB asserts that the motion was factually complex. As a summary judgment motion launched at an early stage, WB was required to prepare and file a responding motion record prior to preparing the affidavit of documents in the action and prior to conducting discoveries. WB argues that this timing increased the complexity of the motion requiring WB to review its entire project file for relevant documents to respond to the motion. WB points out in its costs submissions that Chartis filed a motion record that contained a single four page affidavit and 12 exhibits, whereas WB responded with a motion record that included two lengthy affidavits and 148 exhibits.
[17] Chartis takes a different view on the issues of complexity and the importance of the issues raised on the motion, relying on cases where costs awards have been less than that sought by WB in this case. Chartis urges the court to apply Andersen v St. Jude Medical Inc.[^6] where the court stated what I find to be obvious: “the court should seek to avoid inconsistency with comparable awards in other cases”. It is always desirable for judicial decisions to be consistent to the extent possible. The difficulty in applying the proposition expressed in Anderson is determining whether a case offered as a comparable is indeed comparable.
[18] The summary judgment motion in this case was brought in one of multiple cases that have been linked together by judgment of reference for a trial or trials to be conducted together or consecutively as a reference trial. One of the reasons the motion for summary judgment failed to succeed is that a party to one of the related cases who is not also a party to the present case was not before the court on the motion, and that party’s rights could have been affected by findings of fact that the court would have been required to make to determine the Chartis motion. None of the other cases offered by Chartis as comparable for the purpose of costs raise similar issues of complexity, multiple actions and parties not before the court whose rights may be affected.
[19] While other cases offer some guidance as to quantum, each case must be considered based on its own facts and circumstances.
Proportionality
[20] The principle of proportionality is expressed in Rule 1.04:
“In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.”
[21] Chartis chose to initiate this motion for summary judgment at an early stage of the litigation. WB had no choice but to resist the motion with all of its might, which it did successfully. In my view WB did not “over resource” its response to the motion. Taking into account the serious consequences had Chartis been successful, I find that no reduction in costs claimed is warranted on the basis of proportionality.
Reasonable expectation of the unsuccessful party
[22] Access to justice requires that a costs award must be in the reasonable expectation of the unsuccessful party. Consequently reasonable expectation of the unsuccessful party is a relevant factor in exercising discretion when fixing costs. The key concept is reasonableness.
[23] Chartis submitted a costs outline that reflects partial indemnity costs of $41,632.42. Chartis argues that it is unreasonable for WB’s costs outline to reflect partial indemnity costs of more than double this amount, even though WB is not claiming all of the costs reflected in its costs outline on the basis that some of the work reflected in preparing to respond to the motion will be applied to trial preparation and trial.
[24] I agree with Chartis that some reduction is warranted to reflect Chartis’ reasonable expectation as to costs. However, that finding is balanced against the extensive responding motion record that WB was required to prepare because a substantial portion of the narrative required for the court to fully appreciate the summary judgment issue had been omitted from the moving party’s motion record.
CONCLUSION
[25] In all the circumstances it is my view that costs ought to be fixed at $45,000.00 for fees plus HST of $5,850.00 on fees plus disbursements of $2,381.77 inclusive of HST, for a total costs award in favour of WB payable by Chartis of $53,231.77. I regard this amount as fair and reasonable in the circumstances and what Chartis ought reasonably have expected to pay if unsuccessful.
[26] This court orders that Chartis Insurance Company of Canada pay costs fixed at $53,231.77 to Walsh Construction/Bondfield Partnership within 30 days.
Master C. Albert .
Released: September 27, 2017
CITATION: Walsh Construction/Bondfield Partnership v Chartis Insurance Company of Canada, 2017 ONSC 5757
COURT FILE NO.: CV-15-526601
DATE: September 27, 2017
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Walsh Construction/Bondfield Partnership
Plaintiff
- and -
Chartis Insurance Company of Canada
Defendant
COSTS OF
SUMMARY JUDGMENT MOTION
Master C. Albert
Released: September 27, 2017
[^1]: Courts of Justice Act, R.S.O. 1990, c.C.43, s.131; Construction Lien Act, R.S.O. 1990, c.C.30, s.86
[^2]: 2004 14579 (ON CA), 71 O.R. (3d) 291; [2004] O.J. No. 2634; 2004 14579 (Ontario Court of Appeal) per Armstrong, J.A. at paras. 24 and 26, cited by D.G.Price, J. in Blankers.v.Stewart 2010 ONSC 3978 per at paras 39 and 40
[^3]: The single hour reflected in respect of a second law clerk is insignificant for the purpose of fixing costs.
[^4]: 2011 ONSC 5818, 2011 ONSC5818
[^5]: 2016 ONSC 6655
[^6]: 2006 85158 (ON SCDC), 2006 CarswellOnt 710, [2006] O.J. No. 508