Court File and Parties

COURT FILE NO.: 17-73282

DATE: 2018/06/18

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nicola Urbisci, Applicant

AND

2388095 Ontario Ltd. o/a Kanata Lasers Hockey Club, Cory Greer, and John Hill, Respondents

BEFORE: The Honourable Madam Justice R. Ryan Bell

COUNSEL: Ken Dunham, Counsel for the Applicant Christopher Morris, Counsel for the Respondents 2388095 Ontario Ltd. and Cory Greer

HEARD: In writing

ENDORSEMENT on Costs

[1] On April 27, 2018, I dismissed Mr. Urbisci’s application for the appointment of an inspector to investigate the affairs of 2388095 Ontario Ltd. and other relief. I determined that as the successful parties on the application, 238 Ontario and Mr. Greer are entitled to their costs.

[2] The parties have been unable to agree as to the quantum of costs of the application and have provided me with their written submissions.

[3] 238 Ontario and Mr. Greer seek their costs of the application on a substantial indemnity basis in the amount of $42,505.20. In support of their position, 238 Ontario and Mr. Greer point to “unfounded allegations regarding the shareholdings”, Mr. Urbisci’s decision to wait until one week before the hearing to limit the relief he was seeking, and their offer to produce audited financial statements on substantially the same terms as ultimately ordered.

[4] Mr. Urbisci’s position is that 238 Ontario and Mr. Greer should be entitled to “nominal” costs only. He alleges an increase in complexity as a result of the corporation’s failure to maintain proper corporate records, last-minute filing of responding affidavit material, including “backdated” records, and the refusal by 238 Ontario and Mr. Greer to admit that Mr. Urbisci was entitled to audited financial statements until shortly before the hearing.

[5] Mr. Urbisci’s position regarding an award of nominal costs is contrary to the determination I have already made – that 238 Ontario and Mr. Greer are entitled their costs in responding to the application. In my view, Mr. Urbisci is seeking to relitigate issues argued on the application. I note the following: I made no finding that documents were backdated; I determined that whatever shortfalls existed in the past with respect to 238 Ontario’s books and records, they do not constitute a prima facie case of oppression; I determined that 238 Ontario is prepared to comply with its obligation to produce audited financial statements; and I was not prepared to draw an adverse inference against Mr. Greer and 238 Ontario from Mr. Hill’s failure to respond to the application.

[6] As the Court of Appeal stated in Boucher v. Public Accountants Council for the Province of Ontario, in fixing costs, the objective is to fix an amount that is fair and reasonable, having regard to the range of factors in Rule 57.01 of the Rules of Civil Procedure, for the unsuccessful party to pay, rather than an amount fixed by the successful party’s actual costs ([2004] O.J. No. 2634).

Scale of Costs

[7] I consider first the scale of costs to which 238 Ontario and Mr. Greer are entitled. 238 Ontario and Mr. Greer were prepared to consent to an order requiring 238 Ontario to produce audited financial statements on substantially the same terms I ordered, and dismissing the balance of the relief sought in the application. The offer was made on February 27, 2018, apparently in response to the receipt of Mr. Urbisci’s factum. However, there was nothing to prevent 238 Ontario and Mr. Greer from making an offer at an earlier date.

[8] The application was originally returnable on February 1, 2018. It was not heard that day because counsel for Mr. Urbisci requested an adjournment in order to cross-examine Mr. Greer on his affidavit. The affidavit, together with exhibits, was close to 300 pages in length. In my view, the request for an adjournment for the purpose of cross-examination is not conduct that tended to “lengthen unnecessarily the duration of the proceeding.” It certainly is not conduct that would support an award of costs on a substantial indemnity basis.

[9] Through the factum filed on his behalf, Mr. Urbisci sought to limit the relief he was seeking, with the balance of the relief set out in his notice of application to be adjourned. In the result, I ordered 238 Ontario to produce audited financial statements, dismissed Mr. Urbisci’s application to appoint an inspector and dismissed the balance of Mr. Urbisci’s application, on a without prejudice basis. 238 Ontario and Mr. Greer were required to prepare responding materials, including a factum, on the assumption that the entire application would be heard on March 8, 2018. While this is a factor that I have considered in determining the quantum of costs, it is not conduct that supports an award of costs on a substantial indemnity basis.

[10] I am satisfied that in the circumstances of this case, 238 Ontario and Mr. Greer are entitled to their costs on a partial indemnity basis from the commencement of the application to February 27, 2018 and on a substantial indemnity basis thereafter.

Quantum of Costs

[11] The costs outline on behalf of 238 Ontario and Mr. Greer discloses that their lawyers spent almost 120 hours responding to the application. While I find that the lawyers’ partial indemnity rates and substantial indemnity rates are within the range for lawyers of their experience, in my view, the total amount of time claimed by 238 Ontario and Mr. Greer is excessive. Particularly where a large amount is being claimed, the party seeking costs has an obligation to provide sufficient information. As there was no breakdown provided of the specific tasks performed by the lawyers, I am left to infer that there was considerable overlap in the work done by senior and more junior counsel. I have also considered that Mr. Urbisci’s lawyers spent approximately 66 hours in relation to the application, not including attendance in court.

[12] In this case, I have determined that costs on a substantial indemnity basis are appropriate after February 27, 2018. However, based on the costs outline provided, it is impossible to determine how many hours were spent by counsel before and after February 27, 2018 responding to the application. The onus is on the party seeking costs to clearly explain the legitimacy and reasonableness of the claim. As 238 Ontario and Mr. Greer have failed to do so, I have assumed only 15 per cent of the time was incurred after February 27, 2018, plus four hours for attending on the hearing of the application.

[13] The disbursements incurred appear reasonable. I note that the higher amount for disbursements on Mr. Urbisci’s costs outline is attributable to the costs associated with the cross-examination.

Disposition

[14] Having regard to the factors in Rule 57.01 and the principles in Boucher, I have determined that it is fair and reasonable to fix the costs payable by Mr. Urbisci to 238 Ontario and Mr. Greer as follows:

• partial indemnity costs up to February 27, 2018 in the amount of $17,000, inclusive of HST;

• substantial indemnity costs from February 27, 2018 in the amount of $3,200, inclusive of HST; and

• disbursements of $1,327.00, inclusive of HST.

[15] The costs are to be paid by Mr. Urbisci within 30 days.

Madam Justice R. Ryan Bell

Date: June 18, 2018

COURT FILE NO.: 17-73282

DATE: 2018/06/18

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: Nicola Urbisci, Applicant

AND

2388095 Ontario Ltd. o/a Kanata Lasers Hockey Club, Cory Greer, and John Hill, Respondents

BEFORE: The Honourable Madam Justice R. Ryan Bell

COUNSEL: Ken Dunham, Counsel for the Applicant Christopher Morris, Counsel for the Respondents 2388095 Ontario Ltd. and Cory Greer

ENDORSEMENT on costs

RYAN BELL J.

Released: June 18, 2018