Court File and Parties

Court File No.: 14-60545 Date: 2018/11/28 Superior Court of Justice - Ontario

Re: Mississippi River Power Corporation, Plaintiff And WSP Canada Inc., Genivar Inc., William R. Walker Engineering Inc., Wm. R. Walker Engineering Inc., Douglas Leask, M. Sullivan & Son Limited, Michael Dent, Dent Engineering, 1009044 Ontario Ltd., Harrington Plumbing & Heating Limited operating as Harrington Mechanical, Defendants

Before: Justice R. Ryan Bell

Counsel: Helmut R. Brodmann, for the Plaintiff David A. Tompkins, for the Defendant M. Sullivan & Son Limited Matthew Taft, for the Defendants Michael Dent, Dent Engineering Ltd. and 1009044 Ontario Ltd.

Heard: In writing

Costs Endorsement

[1] On October 15, 2018, I granted partial summary judgment in favour of WSP Canada Inc., Genivar Inc., William R. Walker Engineering Inc., Wm. R. Walker Engineering, and Douglas Leask (collectively, “Walker”) and ordered that the potential liability of Walker to Mississippi River Power Corporation (“MRPC”) be limited to $2,000,000. Walker and MRPC have settled the issue of costs of Walker’s motion.

[2] The remaining defendants brought motions for consequential relief, seeking orders extending to them, the benefit of the contractual limitation of liability in the professional services contract between Walker and MRPC. They sought a declaration that MRPC is barred from seeking any damages attributable to Walker, in excess of $2,000,000, from the remaining defendants. I granted the relief sought by the remaining defendants. Harrington Plumbing & Heating Limited and MRPC have settled the issue of costs of Harrington’s motion.

[3] M. Sullivan & Son Limited and MRPC have been unable to agree on costs. Sullivan seeks partial indemnity costs of $18,142.66, inclusive of disbursements and HST.

[4] Michael Dent, Dent Engineering Ltd. and 1009044 Ontario Ltd. (collectively, “Dent Engineering”) have not agreed with MRPC as to costs. Dent Engineering seeks partial indemnity costs of $8,500, inclusive of disbursements and HST.

[5] The general principles regarding costs are not in dispute. MRPC’s position is that, based on the principles of reasonableness and proportionality, any award of costs to Sullivan and Dent Engineering should not exceed the amount agreed to by Walker, characterized by MRPC as the “lead defendant.” MRPC submits that a fair and reasonable award to Sullivan would be $4,000 and a fair and reasonable award to Dent Engineering would be $3,000.

[6] I do not agree with MRPC that the costs of Sullivan and Dent Engineering should effectively be “capped” by the amount agreed to by Walker, that amount being $5,000. Nor do I agree that the amount agreed to by Harrington – $2,000 – is of particular relevance in determining the appropriate amount of costs to be awarded to Sullivan and Dent Engineering.

[7] While the motions brought by Sullivan and Dent Engineering (as well as Harrington) sought consequential relief in the event Walker succeeded on its motion to have MRPC’s claim contractually limited to $2,000,000, they were distinct from Walker’s motion and required the determination of a different issue: whether the defendants other than Walker are entitled to the benefit of the insurance covenant in the contract between MRPC and Walker. Applying the two-part test in Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., [1999] 3 S.C.R. 108, I found that MRPC and Walker intended to extend the benefit of the insurance covenant to the remaining defendants and that the remaining defendants were involved in the activities contemplated by the professional services agreement.

[8] The factual matrix involved in the motions brought by Sullivan and Dent Engineering was more complex than that associated with Walker’s motion for partial summary judgment. Walker’s motion focused on the applicability and interpretation of the insurance covenant. Sullivan provided detailed affidavit evidence in support of its motion. Dent Engineering and Harrington relied on the evidence provided by Sullivan. Sullivan and Dent Engineering each filed a comprehensive factum. By contrast, in its factum, Harrington adopted Sullivan’s position.

[9] In short, while the time actually spent by counsel for Walker (14.5 hours) and counsel for Harrington (32 hours) may inform the reasonableness of the time incurred by counsel for Sullivan and counsel for Dent Engineering – bearing in mind the less complex factual matrix in the case of Walker and the reliance on Sullivan’s evidence and factum in the case of Harrington – the amounts ultimately agreed to by Walker and Harrington are of little assistance in assessing the costs that should be paid to Sullivan and to Dent Engineering.

[10] MRPC incurred actual costs of $12,763.07 based on counsel’s time of 32 hours. Although MRPC was required to respond to four motions, I do not agree that MRPC “had the larger burden by some measure.” The issues were important to all parties. Each of Sullivan and Dent Engineering were moving parties. Each filed a factum and each made oral submissions at the hearing. I do not agree with MRPC that the efforts of the defendants, including Walker, were duplicative.

[11] 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 (Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634).

[12] The costs outline provided by Sullivan discloses that two counsel spent 75 hours in relation to the motion. Sullivan was successful in limiting the amount of its potential liability. I note that almost 25 per cent of the total time spent by counsel was in relation to the preparation of detailed affidavit material, not only relied upon by Sullivan, but also relied upon by Dent Engineering and Harrington. Based on Sullivan’s costs outline, I infer some modest overlap in the work done by counsel.

[13] Dent Engineering claims its costs based on counsel’s time of 39 hours, approximately one-half the time spent by Sullivan’s counsel. In my view, this amount of time is somewhat high, taking into account that Dent Engineering did not file any affidavit material in support of its motion, and chose to rely on the evidence prepared and filed by Sullivan.

[14] Having regard to all of the above, the factors listed in Rule 57.01 of the Rules of Civil Procedure and, in particular, the amount of costs that MRPC, as the unsuccessful party could reasonably expect to pay in relation to Sullivan’s motion and Dent Engineering’s motion, I fix Sullivan’s costs at $15,000 and Dent Engineering’s costs at $6,000. Both amounts are inclusive of disbursements and HST. The costs are to be paid by MRPC within 30 days.

Justice R. Ryan Bell Date: November 28, 2018