CITATION: Taggart (Gardiners) Corporation v. Qubit Systems Inc., 2017 ONSC 6562
COURT FILE NO.: CV-13-632-00
DATE: 2017 Nov 6
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Taggart (Gardiners) Corporation
Plaintiff/
Defendant by Counterclaim
– and –
Qubit Systems Inc.
Defendant/
Plaintiff by Counterclaim
Todd D. Storms, for the Plaintiff/Defendant by Counterclaim
John F. Black, for the Defendant/Plaintiff by Counterclaim
HEARD: submissions in writing
MacLeod-Beliveau J.
COSTS DECISION
[1] In my Reasons for Decision released August 24, 2017, reported at Taggart (Gardiners) Corporation v. Qubit Systems Inc., 2017 ONSC 5011, on the motion for summary judgment, the issue of costs was reserved for written submissions to be filed by October 27, 2017. Both parties have filed their submissions which I have now read and considered.
[2] Taggart claims costs in the amount of $65,804.39 inclusive of disbursements and HST on a substantial indemnity basis for costs of the action and the motion for summary judgment. Fees claimed inclusive of HST are $62,181.19 plus disbursements inclusive of HST of $3,623.20. Qubit’s position is that the costs claimed are unreasonable and disproportionate to the result achieved.
[3] The plaintiff landlord (Taggart) had a written commercial lease with the defendant tenant (Qubit) for the rental of certain commercial premises of approximately 5,306 square feet. Taggart brought an action for damages and a motion for summary judgment for early termination of the lease by Qubit and the triggering of the option to terminate clause of the lease for a total of $184,829.58 in damages for non-payment of rent owing by Qubit.
[4] Qubit brought a counterclaim for damages for breach of the lease, intentional and unlawful interference with economic relations including breach of contract, irreparable harm to business and profits, loss of business, loss of business opportunity, and punitive damages for a total of $1,100,000.00.
[5] I granted the motion for summary judgment in favour of Taggart for the net amount of $138,622.20 which determined the issues in the action. I dismissed Qubit’s counterclaim.
[6] The parties exchanged offers to settle. Taggart’s offer to settle dated November 6, 2014 was for $84,375.06, plus disbursements and costs thereafter until date of acceptance at specified rates of indemnity. A replacement offer was made by Taggart on March 9, 2016 for $104,500.00 plus disbursements and costs thereafter until date of acceptance at specified rates of indemnity. Qubit’s offer to settle dated July 18, 2016 was for $40,000.00, plus disbursements and costs thereafter until date of acceptance at specified rates of indemnity.
[7] On January 16, 2017, Qubit served a notice of Acceptance of Offer, purporting to accept Taggart’s offer to settle dated November 6, 2014. This acceptance was properly rejected by Taggart, as Taggart’s offer of that date had been replaced by its offer to settle dated March 9, 2016. The parties were unable to resolve the matter.
[8] Taggart achieved a greater degree of success that its offer to settle. I find, however, that it is the terms of the lease that govern the scale of costs to be awarded to Taggart, subject to the court’s review as to the reasonableness of the amounts claimed and the proportionality to the results obtained. I find that Taggart is entitled to both costs of the action and the motion for summary judgment which was determinative of all issues between the parties.
[9] Lease Article 9.05 Indemnification of the Landlord provides that the tenant shall indemnify the landlord for all costs, expenses and solicitors’ and counsel fees on a solicitor and client basis incurred or paid in connection to litigation commenced by or against the tenant.
[10] Taggart’s actual solicitor and client costs total $81,401.10. Taggart has asked for costs of $65,804.39 assessed at the substantial indemnity rate, which I find to be the appropriate rate. Rule 1.04 (5) provides that where a document refers to solicitor and client costs, the reference is to be to substantial indemnity costs.
[11] In addition to the indemnity terms of the lease, I have considered the general principles in awarding and assessing costs as set out in Rule 57.01. Taggart was successful in the litigation which took over three years. This matter was important, complex and required examinations for discovery and cross-examinations, legal research, a detailed factum, a brief of authorities and extensive oral argument.
[12] I have considered Rule 1.04 (1.1) that court orders are to be proportionate to the importance and complexity of the issues, and to the amount involved in the proceeding. I have considered that the awarding of costs is discretionary.
[13] In reviewing the Bill of Costs by Taggart, I do not question that the amount of time claimed was actually spent. I find the hourly rates claimed to be reasonable. I do find, however, that the total amount of fees claimed for the summary judgment motion preparation and legal research portion of the Bill of Costs of $16,275.30 to be slightly high and disproportionate. The total substantial indemnity rate fees claimed of $55,027.60 plus HST of $7,153.59 for a total of $62,181.19 is assessed and allowed at $50,000.00 at the substantial indemnity rate plus HST at 13% of $6,500.00 for a total of $56,500.00 in fees.
[14] Disbursements are allowed as claimed with the exception of “Meals” of $240.57 plus HST of $31.27 for a total of $271.84 which was insufficiently explained and therefore disallowed. The total for disbursements allowed is therefore the claimed amount of $3,623.20 less $271.84 for a net amount allowed for disbursements of $3,351.36. The total fees and disbursements allowed is therefore $59,851.36.
[15] In the result, I order that the defendant (Qubit) shall pay to the plaintiff (Taggart) its fixed costs of this matter assessed at the substantial indemnity rate, in the amount of $59,851.36 payable on or before November 30, 2017.
The Honourable Madam Justice Helen MacLeod-Beliveau
Released: November 6, 2017
CITATION: Taggart (Gardiners) Corporation v. Qubit Systems Inc., 2017 ONSC 6562
COURT FILE NO.: CV-13-632-00
DATE: 2017 Nov 6
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Taggart (Gardiners) Corporation
Plaintiff/
Defendant by Counterclaim
– and –
Qubit Systems Inc.
Defendant/
Plaintiff by Counterclaim
Costs DECISION
MacLeod-Beliveau J.
Released: November 6, 2017