COURT FILE NO.: CV-17-588594
DATE: 2019/02/14
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
AgriMarine Holdings Inc. and AgriMarine Industries Inc.
Applicants
– and –
akvatech as
Respondent
COUNSEL:
Holly Sherlock for the Applicants
Jason W.J. Woycheshyn and Joseph Blinick for the Respondent
HEARD: In writing
REASONS FOR DECISION - COSTS
PERELL, J.
[1] The Applicants, AgriMarine Holdings Inc. and AgriMarine Industries Inc. (collectively “AgriMarine”), brought an application for a declaration that the Respondent, Akvatech A.S., breached a Letter Agreement dated November 22, 2012 and, therefore, Akvatech has no license to market and sell AgriMarine’s fish-rearing technology.
[2] Akvatech resisted the application. It submitted is that it lawfully acquired an irrevocable license for AgriMarine’s fish-rearing technology, and, therefore, AgriMarine’s application for a declaration should be dismissed on its merits. In the alternative, Akvatech submitted that AgriMarine’s application should be dismissed because it was statute-barred or was barred because of the doctrines of laches or several types of estoppel. In the further alternative, Akvatech submitted that the relief requested by Akvatech went beyond the relief that could be granted on an application for a declaration.
[3] I dismissed AgriMarine’s application. I did so on the merits that: (a) Akvatech did not breach the Letter Agreement and was entitled to the license; (b) Akvatech’s Default Notice and the Exercise Notice were valid exercises of its contract rights; and (c) the license was certain and is enforceable.[^1]
[4] The successful Akvatech seeks costs of $97,696.78, all inclusive, on a partial indemnity basis (fee $80,763, HST $10,499.27, disbursements $6,434.51).
[5] Akvatech submits that its costs are fair and reasonable given: (a) the general principle of indemnity; (b) the critical importance of the issues to the parties, upon which Akvatech’s business depended; (c) the overall complexity of the proceeding; and (d) the reasonable expectations of AgriMarine as the unsuccessful parties as reflected in its Bill of Costs, which sought $64,033.98, all inclusive (fee $53,354.75, HST $6,936.12, disbursements $3,743.11). Akvatech seeks costs for 236 hours spent on the application. By comparison, AgriMarine’s Bill of Costs reflects 248.2 hours being spent on the application.
[6] AgriMarine, however, submits that Akvatech’s costs are excessive and unreasonable because they greatly exceed any reasonable expectation for an application of this nature and complexity. It submits that the appropriate costs award should be $65,000, all inclusive.
[7] AgriMarine submits that hourly rates that have been charged are too high based on the experience of lawyers involved and that the rates are above the maximum rates in “Information for the Profession” published by the Costs Subcommittee of the Civil Rules Committee (the “Information for the Profession”). It submits that the 217.6 hours of lawyer time is extraordinary, unsubstantiated, and well beyond any reasonable amount of time required to prepare for and argue the application.
[8] By comparison, AgriMarine submits that its lawyers spent only 152.2 hours of lawyer time on the same matter. Thus, while the parties spent a comparable number of total hours on this application, AgriMarine submits that Akvatech’s claim includes more lawyer time, as opposed to student and law clerk time, resulting in a substantially higher costs claim.
[9] Further, AgriMarine submits that given that a number of issues were moot, a portion of the hours billed was unnecessary and, therefore, it should not have to bear the cost of these issues, the hours for which have not been broken out in Akvatech’s Bill of Costs.
[10] Finally, AgriMarine submits that the photocopying charge is excessive having regard to the considerably less disbursement charge it had.
[11] I disagree with AgriMarine’s submission that there should be no recovery for the various factual and legal issues that turned out to be moot. It was not necessary to break out the hours for this work; it is only with hindsight that it turned out that I did not decide these matters, and it could not be predicted that these defences would be unnecessary. This was not wasted work. The application was a critical matter for Akvatech and AgriMarine should have reasonably expected that these issues would be developed for argument. The issues became moot only after-the-fact of the argument of the motion.
[12] In my opinion, the critical discretionary factor in the immediate case guiding the court’s discretion as to costs is that the costs on a partial indemnity scale should be fair and reasonable. Having considered the submissions of the parties and reviewed the Bills of Costs, in my opinion, the appropriate award for costs is $80,000, all inclusive.
[13] Order accordingly.
Perell, J.
Released: February 14, 2019
COURT FILE NO.: CV-17-588594
DATE: 2019/02/14
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
AgriMarine Holdings Inc. and AgriMarine Industries Inc.
Applicants
– and –
AKVATECH AS
Respondent
REASONS FOR DECISION
PERELL J.
Released: February 14, 2019
[^1]: AgriMarine Holdings Inc. v. Akvatech AS, 2018 ONSC 7768.