Court File and Parties

COURT FILE NO.: CV-17-00585019-0000 DATE: 20190325 SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

WCL CAPITAL GROUP INC. Plaintiff

AND:

GOOGLE LLC Defendant

AND:

AMEX ® BANK OF CANADA Non-Party

BEFORE: Spies J.

COUNSEL: Jonathan Burshtein, for the Plaintiff James Bunting and Chenyang Li, for the Defendant, Google LLC Joshua J. Siegel, for the Non-Party, Amex ® Bank of Canada

HEARD: In Writing

COSTS ENDORSEMENT

[1] By a Decision dated February 11, 2019 reported at 2019 ONSC 947, I dismissed WCL Capital Group Inc.’s (“WCL'”) cross-motion for leave to amend its statement of claim to add Amex ® Bank of Canada (“Amex ® ”); granted Google LLC's (“Google”) motion for an order permanently staying WCL's action. I granted WCL's cross-motion for leave to amend its Statement of Claim against Google but found that it is moot in light of my order permanently staying WCL's action against Google. I ordered that WCL shall pay costs of these motions to both Google and Amex ® on a partial indemnity basis. I have received Cost Outlines and written submissions from all parties.

[2] In assessing costs, rule 57.01(1) sets out the factors a court may consider. These motions raised some complex issues and were of importance to the parties and the outcome would determine where and how the dispute would be determined.

[3] In addition, the principles that I must apply have been settled by our Court of Appeal and the Divisional Court. The fixing of costs is not a mechanical exercise of calculating hours times hourly rates. The quantum should reflect an amount the court considers to be fair and reasonable for the unsuccessful party to pay in the particular proceeding rather than any exact measure of the actual costs to the successful litigant. The overall objective is to fix an amount that is fair and reasonable. In doing so, I must stand back from the fee produced by the raw calculation of hours spent times hourly rates and assess the reasonableness of the counsel fee from the perspective of the reasonable expectations of the losing party; see Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (Ont. C.A.) at p. 302, Coldmatic Refrigeration of Canada Ltd. v. Leveltek, [2005] 75 O.R. (3d) 638 (Ont. C.A.) at para. 8, Andersen v. St. Jude Medical, Inc. (2006), 264 D.L.R. (4th) 557 (Ont. Div. Ct.), aff'g (2004) 28 C.P.C. (6th) 199 (Ont. S.C.) at para. 22, Greenhalgh v. Douro-Dummer (Township), 2011 ONSC 2064, [2011] O.J. No. 1657 (Ont. C.A.) at para. 7.

[4] On the hearing of the motions WCL filed a Costs Outline seeking partial indemnity costs in the amount of $18,993 all-inclusive. Before the parties were advised of my Decision, WCL filed a revised Costs Outline seeking $17,794 all-inclusive in costs on the same scale although this seems to be in error as the claim for substantial indemnity costs increased by $1,356. The Costs Outline filed by Amex ® was comparable; a claim for $18,822 in costs all-inclusive on a partial indemnity scale. Google’s Costs Outline is more than three times higher than the other parties. The total amount claimed by Google on an all-inclusive basis is $63,643.

[5] I have considered the hourly rates and time spent as claimed by counsel for the parties. Counsel for WCL, Mr. Burshtein, is a 2010 year of call and he has claimed a partial indemnity rate of $200 per hour. He spent a total of 76 hours in dealing with all of the motions, which includes seven hours for preparing the Costs Outline.

[6] Counsel for Amex ® , Mr. Siegel, is a 1988 call and he has claimed a partial indemnity rate of $275. He spent a total of 86 hours on the file and was assisted by a lawyer called in 2002 whose rate is claimed at $275, who spent seven hours on the file for a total of 93 hours. Their time does not include time spent on preparing the costs’ submission.

[7] Google was represented by two counsel on the motions; Mr. Bunting, a 2003 call claiming a partial indemnity rate of $516 per hour and Ms. Li, a 2017 call claiming a partial indemnity rate of $267. Mr. Bunting spent 70 hours, which includes 23 hours for the preparation and attendance on the motion. Ms. Li spent 62 hours, which included 10 hours for the preparation and attendance on the motion. In addition, the Costs Outline includes 26.8 hours of time spent by Ms. Lombardi, a 2017 year of call whose time is claimed at the partial indemnity rate of $258 per hour. This brings the total hours claimed 150.8 hours; about double the hours claimed by counsel for WCL. The reason the Costs Outline for Google is three times that of WCL’s is because of the hourly rates claimed.

[8] Turning first of all to the costs claimed by Amex ® , WCL conceded that the time spent appears reasonable. However, WCL submits that Amex ® ’s employees failed to provide the results of their first investigation when completed and to complete their second investigation in a timely manner and argues that this contributed to the complexity of the motion and the adjournment of the first motion date. As such, WCL submits that a reasonable reduction from the amount sought would be appropriate. In response, Amex ® submits that whether or not it properly investigated the disputed charges by Google should not have any bearing on costs as this was a pleadings motion and Amex ® did not respond to these allegations, which in any event have not been proven. I agree with Amex ® ’s position. However, I must consider the fact that Amex ® only had to address the one motion brought by WCL to add it as a party whereas WCL and Google effectively had to deal with two motions. In my view all inclusive costs for Amex ® in the amount of $18,000 is reasonable.

[9] Turning to the costs claimed by Google, in its Costs Outline, WCL submits proportionality is a consideration. In this respect, WCL's claim was for $193,340.32 and WCL submits that the costs claimed by Google are excessive and disproportionate given the value of the claim. Furthermore WCL submits that the costs sought by Google are simply not fair and reasonable when considering the reasonable expectations of WCL.

[10] Google denies that its counsel spent too much time and argues that any additional time spent by Google's counsel in this proceeding was a direct result of the way in which WCL chose to litigate this motion. The original motion date was April 3, 2018. However, one week before the motion, WCL informed Google of its late-breaking plan to add Amex ® as a party to the action. Critically, Google submits that WCL sought an adjournment of the original motion date for this purpose. As a result, the motion was put over to November 22, 2018. Any lost time spent by Google's counsel preparing for the April 3, 2018 motion date was the direct consequence of WCL's own choices. Google also argues that in my decision I affirmed the two principal arguments advanced by Google: (i) that WCL should not be permitted to add Amex ® as a defendant and (ii) that the action should be stayed.

[11] In addition Google submits that WCL added Amex ® for "purely tactical reasons", "waited until one week before the original motion date" to seek an adjournment and that this "last minute adjournment caused Google's counsel to expend time and money to prepare for the original motion, which was wasted due to the adjournment". As WCL submits however, I did not make a finding that the attempt to add Amex ® was tactical. I found that WCL did not have full knowledge of Amex ® 's investigation when it issued its original claim.

[12] With respect to time lost because the original motion was adjourned, I have reviewed the endorsement and no order was made with respect to costs of the adjournment.

[13] Google also submits that WCL's attempted addition of Amex ® to this proceeding introduced novel legal issues and that as a result any additional time spent by Google's counsel addressing these issues were of WCL's own creation. I agree that there was some complexity to the motions given the issues raised but of course that does not give a carte blanche to counsel to spend unlimited hours on a motion.

[14] In my view there are two fundamental problems with Google’s Costs Outline. First of all the hourly rates claimed by counsel are unreasonable. The fact counsel may be able to charge a client like Google a high hourly rate does not mean that a reasonable partial indemnity rate is simply two thirds of that amount. Mr. Bunting’s partial indemnity rate of $516 per hour as a 2003 call is excessive. Mr. Siegel, counsel for Amex ® who is a 1988 call has claimed in my view a reasonable partial indemnity rate of $275. This illustrates as well that the partial indemnity hourly rate claimed by Ms. Lombardi of $258 per hour and Ms. Li, of $267, both 2017 year of call is also excessive.

[15] I also find that the hours claimed by Google are excessive. First of all, Amex ® was present on the motion to address the motion by WCL to add Amex ® as a party. To the extent that Google also made submissions on that motion there was some unnecessary duplication. The sheer hours spent on preparation for the motion seems hugely out of proportion to counsel for WCL. I agree with WCL that the time spent is out of proportion to the amount in issue even though I appreciate that the motion determined that WCL’s claim against Google must proceed in California.

[16] Finally, although I would encourage senior lawyers to bring their junior lawyers to court so they can gain some litigation experience, even if just by watching the argument, in my view expecting the losing party to pay for two lawyers on the hearing of the motions is not reasonable in this case.

[17] WCL submits that it should only have to pay costs to Google in the amount of $20,000.00 but in my view that is too low. Taking my concerns into account if I adjust the hours spent and more importantly the hourly rates claimed by Google, and considering the overarching goal of determining what is fair and reasonable in the circumstances, in my view a reasonable amount for Google’s costs is $30,000 all-inclusive.

[18] Accordingly I order that WCL pay Amex ® costs in the amount of $18,000 and Google’s costs in the amount of $30,000, both all-inclusive of fees, disbursements and HST.

SPIES J. Date: March 25, 2019