Court File and Parties

Court File No.: CV-12-443718 Date: 2018-12-13 Superior Court of Justice - Ontario

Re: Craig Hurst, Plaintiff And: James Hancock, Darwin Productions Inc. and Tradepoint 360 Inc., Defendants

Before: Cavanagh J.

Counsel: Manjit Singh, for the Plaintiff Katrina Marciniak, for the Defendants James Hancock and Darwin Productions Inc. Tim Gleason, for the Intervenors, Graham Partners LLP, Graham, Wilson & Green and HGR Graham Partners LLP

Heard: By Written Submissions

Costs Endorsement

[1] I granted a motion for summary judgment brought by the defendants James Hancock and Darwin Productions Inc. (the “Hancock Parties”) and dismissed the plaintiff’s action as statute barred. I invited the parties to make written submissions if they were unable to resolve the issue of costs. The Hancock Parties do not seek costs from the intervenors but they seek costs of the action from the plaintiff.

[2] I received fulsome written submissions from the Hancock Parties and from the plaintiff with respect to costs. This is my decision.

[3] The Hancock Parties seek costs of the action from the plaintiff on a substantial indemnity scale in the amount of $62,385.64. In the alternative, the Hancock Parties seek costs of the action on a partial indemnity scale in the amount of $43,330.45.

[4] Rule 57.01(3) of the Rules of Civil Procedure provides that when the court awards costs, it shall fix them in accordance with rule 57.01(1) and the Tariffs. Rule 57.01 (1) provides that in exercising its discretion to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, the factors that are specified.

[5] The fixing of costs is not a mechanical exercise and does not begin and end with a calculation of hours times rates. The introduction of a costs grid was not meant to produce that result, but rather to signal that this is one factor in the assessment process, together with the other factors in rule 57.01 of the Rules of Civil Procedure. In addition to the factors in rule 57.01, the court must consider the amount that would be fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than the amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), 2004 CarswellOnt 2521 (C.A.) at para. 26.

[6] This litigation has gone on for many years. The summary judgment motion for first brought in January 2013. After it was brought, it was adjourned so that the plaintiff could cross-examine the deponent of an affidavit filed by the Hancock Parties. There were other interlocutory motions brought. The action was administratively dismissed on October 6, 2014. The plaintiff moved in April 2016 to set aside the administrative dismissal. The plaintiff sought to have the action continue under case management, but it was removed from case management on August 2, 2016. The parties served affidavits and conducted cross examinations in 2017 and into 2018. There were settlement discussions at the end of 2017.

[7] The plaintiff submits that the Hancock Parties are only entitled to costs of the summary judgment motion, and not the action. The plaintiff submits that the action still continues and, specifically, the Hancock Parties’ counterclaim against the plaintiff is still alive. I disagree with the plaintiff’s submission in this regard. The Hancock Parties’ summary judgment motion was granted and the main action was dismissed against them. The Hancock Parties do not seek costs of the counterclaim. The counterclaim is a separate action from the main action. Costs of the counterclaim will be determined in that action. The Hancock Parties are entitled to costs of the main action.

[8] In his submissions, the plaintiff argued that the costs claimed by the Hancock Parties for the summary judgment motion should be reduced. The plaintiff submitted that seventeen deductions should be made in individual fee amounts ranging from $137.50 (seven of the requested deductions involve amounts of less than $500 and eleven of the requested deductions involve amounts of less than $1,000) to $4,785. The plaintiff’s submissions in respect of these items were founded on grounds such as (i) a continuing cross-examination of the Hancock Parties’ witness was needed only because of conduct by the Hancock Parties’ prior counsel; (ii) work done by the Hancock Parties’ counsel for research and preparation had been done by prior counsel; (iii) time spent on a particular work exceeded what was reasonably necessary; (iv) attendances at scheduling court were caused by decisions taken by the Hancock Parties or were otherwise the fault of the Hancock Parties; (v) travel time claimed of 3.5 hours should be reduced because the trip should have taken 2.3 hours according to Google Maps; (vi) work done to prepare a new factum should be denied because the plaintiff should not have to pay for a second factum that was needed because the Hancock Parties’ counsel decided to cross-examine the plaintiff long after it was served.

[9] The plaintiff also submits that the costs claimed by the Hancock Parties should be reduced by “costs thrown away” that the plaintiff claims should be awarded to him.

[10] I do not intend to conduct an item-by-item assessment of the plaintiff’s Bill of Costs. I take the plaintiff’s submissions with respect to the 17 requested reductions into account when I consider the amount that should be fixed for costs, having regard to the factors in rule 57.01 and the amount that would be fair and reasonable for the plaintiff to pay. I do not agree that the plaintiff is entitled to any “costs thrown away”.

[11] The Hancock Parties request costs on a substantial indemnity scale. In their written submissions, the Hancock Parties recited in considerable detail the history of this litigation and argued that the plaintiff’s conduct was repeatedly unreasonable and had the effect of inflating costs through repeated delays. The Hancock Parties submit that the plaintiff’s conduct is such as to justify an award of costs on a substantial indemnity scale. I disagree.

[12] Costs on a substantial indemnity scale are reserved for rare and exceptional cases where the conduct of a party against whom costs is ordered is reprehensible or where there are other special circumstances that justify an award of costs on the higher scale. I do not agree that the plaintiff’s conduct qualifies as reprehensible conduct that would warrant an award of costs on a substantial indemnity scale.

[13] The Hancock Parties also rely upon three settlement offers that were made during the course of the litigation on November 23, 2017, April 6, 2018 and August 10, 2018. The Hancock Parties submit that had the plaintiff accepted any of these offers, he would have been in a better position than he was by having the action dismissed. The Hancock Parties rely upon rule 49.13 that provides that the court, in exercising its discretion with respect to costs, make take into account any offer to settle made in writing, the date the offer was made and the terms of the offer. The November 23, 2017 settlement proposal was valid for 14 days. The April 6, 2018 letter indicated that formal rule 49 offers to settle would be served in the event that counsel for the Hancock Parties did not receive executed minutes of settlement by April 20, 2018. The August 10, 2018 offer was made after the motion for summary judgment was heard and, by that time, the costs of the motion had already been incurred. The plaintiff submits that the first two offers were made in this action and a companion action and would have required acceptance by all plaintiffs in both actions. The Hancock Parties submit that the plaintiff could have accepted the offers in this action alone.

[14] I do not agree that non-acceptance by the plaintiff of these offers should elevate the scale of costs from a partial indemnity scale to a substantial indemnity scale, or otherwise affect the amount to be fixed for costs.

[15] The Hancock Parties are entitled to costs on a partial indemnity scale.

[16] The plaintiff submits that I should reduce the Hancock Parties’ costs because of the conduct of their counsel during the course of this action which, the plaintiff submits, resulted in delays and additional legal expenses for the parties. I have considered the plaintiff’s submissions (consisting of 40 separate points). I am not satisfied that the Hancock Parties’ counsel’s conduct increased the costs of this motion and caused the delays that were encountered. I decline to reduce the Hancock Parties’ costs based upon the plaintiff’s submissions in this regard.

[17] The Hancock Parties claim costs of the summary judgment motion on a partial indemnity scale based upon fees of $20,617.50 together with disbursements and applicable HST. The Hancock Parties also seek costs on a partial indemnity scale for other steps taken in the action based upon fees of $13,108.50 plus disbursements and applicable HST.

[18] With respect to the motion for summary judgment, the Hancock Parties claim fees based upon time spent by their prior counsel (31 hours) at a partial indemnity hourly rate of $210 (60% of $350) and for time spent by their current counsel (85.5 hours) at a partial indemnity hourly rate of $165 (60% of $275). With respect to the other steps in the action, the Hancock Parties claim fees based upon time spent by their prior counsel (41.6 hours) and for time spent by their current counsel (56.5 hours) at the same partial indemnity hourly rates.

[19] In this action, the plaintiff sought substantial damages and other relief against the Hancock Parties. I accept the Hancock Parties’ submission that the motion was very important to them. The Hancock Parties were entirely successful in that the plaintiff’s action against them was dismissed. The partial indemnity hourly rates claimed are reasonable and appropriate for this case.

[20] The Hancock Parties claim disbursements for the summary judgment motion of $2,192 and disbursements for other steps in the action of $2,458.70. The plaintiff objects to the charge by the Hancock Parties’ prior counsel for mileage from Barrie to Toronto and parking ($225.42) because it was the Hancock Parties’ decision to choose counsel from Barrie instead of from Toronto that caused these costs to be incurred. The plaintiff also objects to disbursements for charges for process server and courier services ($351.01) and submits that these disbursements should be reduced by one half on the basis that the change in counsel required new materials to be filed prior to the hearing of the motion that would not have otherwise been necessary. The plaintiff objects to disbursements for photocopies ($261.50) and asks that they be reduced by one half for the same reasons. On the material before me, I am unable to conclude that these disbursements were not proper and should be disallowed or reduced, as the plaintiff requests, and I decline to do so.

[21] The plaintiff did not provide a costs outline and, as a result, I do not know the amount of costs that the plaintiff would have sought from the Hancock Parties if the motion for summary judgment had been dismissed. Given the volume of materials that were filed on the motion and the number and nature of the issues that were raised, I am confident that the amount of costs sought by the Hancock Parties is within the range of costs that the plaintiff would have reasonably expected to pay if he was unsuccessful on the summary judgment motion and the main action was dismissed.

[22] I have considered the submissions made by the parties in the context of the factors in r. 57.01 and the principle in Boucher that in fixing costs the court should consider the amount that would be fair and reasonable for the unsuccessful party to pay in the particular proceeding. I fix costs of the main action to be paid by the plaintiff to the Hancock Parties in the amount of $40,000 inclusive of fees, disbursements and HST.

Cavanagh J.

Date: December 13, 2018