Court File and Parties

COURT FILE NO.: 18-64213 DATE: December 11, 2018

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Deloitte Forensic Inc. and Deloitte LLP Applicants

Wade Morris, for Applicants

• and -

Daniel Sherk and Verge Insurance Brokers Limited Respondents

George Limberis, for the respondent Daniel Sherk; Stephen Gleave and Ian Dick for Plaintiffs

HEARD: in writing

Endorsement on Costs

[1] Deloitte has provided forensic expert advice and reports to the parties in this extensive and long running litigation.

[2] They ceased any active involvement in the litigation some time ago.

[3] Deloitte’s retainer was at the request of Daniel Sherk as per the order of Quinn, J. dated March 19, 2015.

[4] A motion was brought before Turnbull, J. who ordered that a portion of the work completed by Deloitte was to be paid by the defendant Verge. This was eventually done by Verge.

[5] Daniel Sherk has refused to pay the balance of the account, and demanded that such payment should be made by Verge. No agreement could be reached, and the issue finally came before me, and my decision was released on September 6, 2018 where I ruled that the balance of the Deloitte account was the responsibility of Sherk.

[6] Deloitte brought its motion for judgment on its outstanding account at the same time. On the morning of the hearing, the defendant Daniel Sherk agreed to the motion brought by Deloitte as to the amount owed and that judgment would issue for that amount.

[7] Deloitte now wants $27,546.00 in costs from Sherk on a substantial indemnity basis for having to bring this motion which it argues should never have been necessary, and indeed the actions of Sherk in forcing this motion, is worthy of sanctions as per Davies v. The Corporation of Municipality of Clarington et al., 2009 ONCA 722, as paras. 30 – 31.

[8] The defendant Sherk does not disagree that Deloitte is entitled to some costs but not on a substantial indemnity basis. As well Sherk argues that he should not be responsible for all of those costs but only the part he was responsible for.

[9] It is noted that Sherk made an offer to Deloitte which was not identical to the ultimate resolution, as it contained an indeterminate deferment of enforcement of the ultimate settlement sometime before the hearing.

[10] Deloitte however did not respond to this offer or make a counter offer.

[11] It is also noted that some of Deloitte’s costs appear to have been incurred in response to issues raised by Verge, although Verge argues, as does Deloitte, that those issues were initially raised by Sherk. I agree.

[12] I further note that Sherk’s bill of costs for responding to Deloitte’s motion was $11,900.00 on a partial indemnity basis.

[13] Verge submits that all actions by it regarding the motion by Deloitte was reasonable. I agree. It should be noted that Verge paid relatively promptly, what it considered its share of Deloitte’s account. I agreed with that amount in my decision of September 6, 2018, finding that the balance of Deloitte’s invoices were the responsibility of Sherk.

Conclusion

[14] I do not find that Sherk, in opposing the motion of Deloitte, acted in “a reprehensible, scandalous, or outrageous” way such that he should be sanctioned by this court as per Davies; supra; Man-Shield (NIWO) Construction Inc. v. MacDonald, 2017 ONSC 684 at para. 31.

[15] Deloitte is entitled to its costs on this motion. It certainly should have responded to the offer of Sherk as the only condition at issue in the offer was when the judgment could be enforced. Ultimately they agreed not to enforce it until after my decision was released on September 6, 2018.

[16] I also find the amount of costs requested is excessive given that this was an extremely simple matter of obtaining judgment on their account when there was no issue that the work was done and no issue has come before me that the work was deficient, nor has anyone appeared to have taken issue with the quantum.

[17] I have reflected on and considered Rule 57.01 as well as s. 131 of the Courts of Justice Act. Proportionality must also come into play in these circumstances. R. 1.04(1), (1.1).

[18] The Court of Appeal has stated that the overriding principle for a court in exercising its discretion when awarding costs is reasonableness. Davies v. Clarington (Municipality) 2009 ONCA 722, [2009] 100 O.R. (3rd) 66 (OCA) at paras. 51 and 52.

[19] As noted by Armstrong J.A. in Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3rd) 291(OCA) the fixing of costs involves more than merely a calculation using the hours docketed and the cost grid. He further stated in para. 24, “In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.”

[20] I conclude that fair and reasonable costs on a partial indemnity basis should be paid solely by Sherk to Deloitte for this motion and that amount is fixed at $17,500.00 all-inclusive. These costs are payable within 30 days and will be considered a disbursement of Sherk without prejudice to him arguing before the trial judge that these disbursements should be recoverable from Verge, depending no doubt on the outcome of the litigation.

Arrell, J. Released: December 11, 2018