Court File and Parties

COURT FILE NO.: CV-16-561580 DATE: 20171123 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CAMS ATLAS, LLC, Plaintiff – AND – DARREL STANG, in his capacity as trustee of ALIGNED VENTURES INNOVATIVE FUND, GORDON D. PUTNAM, Q.C. in his capacity as trustee of ALIGNED ENTURES INNOVATIVE FUND, PETER PURDON, in his capacity as Trustee of ALIGNED VENTURES INNOVATIVE FUND, WATER EXCHANGE, INC., TECH SONIC INTERNATIONAL (f/k/a, TECH SONIC INTERNATIONAL LTD. and/or TECH SONIC, TECH SONIC SERVICES L.P.) TECH SONIC LIMITED PARTNERSHIP, SHAWN SMITH and ROBERT ORR, Defendants – AND – WATER EXCHANGE, INC. and TECH SONIC INTERNATIONAL, INC., Plaintiffs by Counterclaim – AND – CAMS ATLAS, LLC, Defendant by Counterclaim

BEFORE: Justice E.M. Morgan

COUNSEL: Eliot Kolers and Vlad Calina, for the Plaintiff and Defendant by Counterclaim Sean Foran and Lia Boritz, for the Defendants and Plaintiffs by Counterclaim

HEARD: October 17, 2017

Costs Endorsement

[1] On November 1, 2017 I released my judgment on the Rule 21 motion brought by the Plaintiff/Defendant by Counterclaim, Cams Atlas, LLC (“Cams”).

[2] I granted Cams’ motion dismissing the Counterclaim brought by the Defendant/Plaintiff by Counterclaim, Water Exchange, Inc. (“Water”). That motion was ultimately conceded by Water and so did not consume any time at the hearing. Counsel for Cams points out, however, that Water did not concede the point until after Cams had fully prepared for the motion. This was despite the fact that the result of Cams’ motion to dismiss was a foregone conclusion from the start; Water’s Counterclaim repeated virtually verbatim a claim it had already brought and lost in a New York State court.

[3] The contentious part of the motion was Cams’ attempt to have the Counterclaim brought by the Defendant/Plaintiff by Counterclaim, Tech Sonic International, Inc. (“Tech”) dismissed. I held that Tech’s Counterclaim is closely related to Tech’s defense of Cams’ claim against it, and that both should proceed to trial. I therefore dismissed Cams’ motion as against Tech.

[4] Having been successful on the more contentious and time consuming part of the motion, Tech is entitled to costs. That said, since Water put Cams to the trouble of fully preparing its motion against it before conceding the point, Cams is entitled to some costs as against Waters. While Waters and Tech are separate corporate entities, they are represented by the same counsel. I will therefore allocate costs awarded to Cams against Water as a reduction in the costs awarded to Tech against Cams, and will leave it to counsel for Water and Tech to allocate the amounts as between them.

[5] Tech seeks costs in the all-inclusive amount of $23,839.38. This represents about half of the costs it incurred in the present motion and a security for costs motion heard by Ferguson J. The evidentiary record in the two motions overlapped.

[6] In my view, counsel for Tech is not overreaching in the amount sought here. The motion was relatively complex in terms of legal argument: Rule 57.01(1)(c) of the Rules of Civil Procedure.

[7] It is beyond doubt that the issues were of the utmost importance to Tech, since a dismissal of its Counterclaim would have not only terminated that claim but would have hamstrung Tech’s defense of the main claim against it by Cam. Given the importance of the issues, Cam’s “only reasonable expectation would be that [Tech] would necessarily do everything it could to prepare for and present a case with the highest prospect of success”: Bell Expressvu Limited Partnership v. Piekenhagen, 2013 ONSC 195, at para 24.

[8] Counsel for Cams objects to the allocation of time spent on this matter as between senior and more junior counsel for Tech. I am not inclined to second guess Tech’s counsel on how they staffed the case; suffice it to say that their costs request is not excessive and they staffed it for success. Costs are always discretionary under section 131 of the Courts of Justice Act. I am not engaged in an assessment of costs on an item by item basis, but rather am mandated to fix an amount that is “fair and reasonable” having regard to the parties’ reasonable expectations: Boucher v. Public Accountants Council of Ontario (2004), 71 OR (3d) 291, at para 38 (CA).

[9] Counsel for Cams submits that the motion against Water should count for about 1/3 of the overall costs of the two motions – i.e. the present motion and the security for costs motion. That seems to overstate the proper allocation; I would rather allocate the motion against Water at about 1/3 of the present motion alone. If some of Cam’s time was spent on the security for costs motion as against Water, I will defer to the judge who heard that motion to factor it into the costs award there.

[10] Cams shall pay Tech costs in the total amount of $16,000, inclusive of all fees, disbursements, and HST.

Morgan J. Date: November 23, 2017