Court File and Parties

COURT FILE NO.: CV-14-512488 DATE: 20181211 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Stephen W. Hale and S. W. H. Management Inc., Plaintiffs AND: Innova Medical Ophthalmics Inc., Defendant

BEFORE: Carole J. Brown, J.

COUNSEL: James C. Morton, for the Plaintiffs Nafisah Chowdhury, Defendant

HEARD: In-Writing

COSTS ENDORSEMENT

[1] The plaintiffs, who were successful in this matter, seek their costs of this action on a substantial indemnity basis.

[2] The plaintiff, Stephen Hale, President of the defendant, Innova Medical Ophthalmics Inc. (“Innova”), brought this action for wrongful dismissal, breach of contract, a declaration that the investment benefits accruing as a result of the defendant’s failure to transfer a policy of insurance to the individual plaintiff unjustly enriched the defendant, a declaration that the defendant held in trust for the individual plaintiff the benefit which accrued to the defendant as a result of the failure to transfer said insurance policy and an accounting of the investment benefits which accrued to the defendant as a result of the wrongful conduct, as well as disgorgement of the investment benefits which accrued to the defendant as a result of the wrongful conduct.

[3] The defendant counterclaimed in the amount of $193,778 for overpayment to the plaintiff related to the said policy of insurance and punitive damages. The defendants also alleged dishonesty and fraud on the part of the plaintiff.

[4] The trial was heard over six days and eight witnesses were called.

[5] The plaintiff was successful in its claim and was awarded reasonable notice in the amount of 18 months, plus benefits for the period of the termination notice and was entitled to have the insurance policy transferred into his name as at the termination of the premium payments, August 31, 2014, with the defendant being required to pay the plaintiff the difference between the value of the policy as at August 31, 2014 and the value of the policy at trial. The defendants’ crossclaim was dismissed in its entirety.

[6] Costs are generally intended to compensate the successful party to the litigation for some of the expenses that party has incurred.

[7] The plaintiff seeks its costs in the total amount of $131,701.95, inclusive of disbursements and HST, plus pre-and post-judgment interest. The defendant is in agreement with the plaintiff as regards the calculation of both pre-judgment and post-judgment interest, as set forth in its costs submissions.

[8] The costs sought by the plaintiff include itemized costs and disbursements from the plaintiff’s previous counsel who was retained from August 28, 2014 to November 2, 2015. New counsel was thereafter retained on November 9, 2015 and represented the plaintiff through trial on August 1, 2017 and thereafter. Costs incurred by the previous counsel, Powell and Weir, amounted to a total of $41,200.25 all-inclusive and costs incurred by counsel for the plaintiff through trial amounted to $90,501.70, for a total of $131,701.95, all-inclusive.

[9] The plaintiff relies on the cases of Bain v UBS Securities Canada Inc., 2017 ONSC 1472 as regards the amount of costs sought. He further relies on the case of Lewis v Cantertrot Investments Limited, 2010 ONSC 5679 at para 76, in which the court observes that “There is ample case law to support the principle that unfounded claims of fraud and other serious conduct justify a cost award on a substantial or full indemnity basis”. In this case, the plaintiff seeks its costs on a substantial indemnity basis given the claims of dishonesty and fraud, which claims this Court rejected.

[10] It is the position of the defendant that the amounts sought are excessive, unreasonable and duplicative. The defendant submits that a reasonable amount for this action would be $50,000 all-inclusive. Counsel for the defendant further submits that, as regards previous counsel’s work over a period of 15 months, the amount should be no greater than $7,500.

[11] I find that the estimates for costs urged by the defendant are, in all of the circumstances of this case, significantly underestimated. While the case was not an overly complex commercial action, it did include complexities involving valuations as regards the insurance policy, had eight witnesses and a crossclaim which was dismissed in its entirety. I am of the view that the amount sought by the plaintiffs would have been within the reasonable expectation of the unsuccessful defendant, which was represented by a downtown Toronto law firm.

[12] I am satisfied that the costs are fair and reasonable, and within the expectations of the parties: Boucher v Public Accountants Counsel for the Province of Ontario, [2004] O.J. No. 2634, 71 O.R.(3d) 291 (Ont. C.A.).

[13] I have taken into consideration the factors set forth in Rule 57.01 of the Rules of Civil Procedure, the submissions of both counsel, the case law relied upon by each counsel and the attachments to their submissions. I exercise my discretion and award the plaintiff its costs in the amount of $131,701.95, all-inclusive.

Carole J. Brown, J. Date: December 11, 2018