Court File and Parties

COURT FILE NO.: CV-16-544206 DATE: 20190322 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

RINC CONSULTING INC. c.o.b. ROUSTAN CAPITAL, and WALTER GRAEME ROUSTAN in his personal capacity as trustee of the WALTER GRAEME ROUSTAN TRUST Plaintiffs – and – GRANT THORNTON LLP Defendant

COUNSEL: M. Philip Tunley and Alexi Wood, for the Plaintiffs Peter A. Downard and Rachel Laurion, for the Defendant

HEARD: WRITTEN SUBMISSIONS

COSTS ENDORSEMENT

DIAMOND J.:

[1] In my Reasons for Decision and Endorsement released on January 14, 2019 and February 4, 2019 respectively, I set a timetable for the exchange and delivery of written submissions in the event the parties were unable to resolve the issue of the costs of this proceeding. I have now received and reviewed the costs submissions filed on behalf of both parties.

Is this Action Dismissed?

[2] The plaintiffs submit that based upon my disposition of Issues #2 and #3 in my Reasons, their claim for breach of contract was allowed even though I found that the plaintiffs were not entitled to any damages. The plaintiffs thus seek a Judgment allowing their claim for breach of contract, and rely upon the following excerpt from the Court of Appeal for Ontario’s recent decision in Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239:

“In any event, the respondent’s action was in breach of contract. The motion judge found that the appellants were in breach of their agreements. He granted a declaration to that effect. Unlike in tort, damages are not an essential element of a cause of action for breach of contract. The plaintiff need only establish the existence of a contract with the defendant and its breach: Angela Swan and Jakub Adamski, Canadian Contract Law, 3rd ed. (Markham: LexisNexis Canada Inc., 2012), at §2.16.1.”

[3] I believe that Mars Canada is distinguishable from the case before me. In Mars Canada, the plaintiff sought a declaration that its contract with the defendant was breached. In this proceeding, the plaintiff advances several causes of action but the relief sought for each one was damages. No declaratory relief was sought by the plaintiffs. In a case where damages are sought, the proof of those damages is still a fundamental element of the cause of action. As held by the Court of Appeal for Ontario in Persaud v. Telus Corporation, 2017 ONCA 479, “the requirement for a causal link between the breach of contract and the damages suffered by the plaintiff is an essential element of a breach of contract claim.”

[4] In my disposition of Issue #4, I explicitly found no causal link between GT’s breach of contract and the damages the plaintiffs claimed to have suffered. The cause of action for breach of contract (as pleaded by the plaintiffs) was therefore not met, and as a result the plaintiffs’ action for breach of contract is dismissed.

Offers to Settle

[5] The terms of GT’s Offer to Settle permitted the dismissal of the proceeding on a without costs basis, but that Offer was not kept open until the commencement of trial and in fact was withdrawn two business days before the trial commenced. As such, GT’s Offer does not meet the requirements of Rule 49.10(2)(b) of the Rules of Civil Procedure and no costs consequences flow from the plaintiffs’ failure to accept GT’s Offer.

Who is the Successful Party?

[6] There was undoubtedly some mixed success in the proceeding. While the plaintiffs’ action was dismissed, I rejected GT’s claims that it was not liable for breach of contract, and that even if it was it could rely upon the agreement’s limitation clause. On the other hand, no remedy flowed from any of my findings, even a request for nominal damages. As well, the plaintiffs’ claims for breach of fiduciary duty and defamation were dismissed outright, and their post-trial Rule 59.06 motion was rejected.

[7] In my view, while there was indeed mixed success I find that GT was the more successful party and ought to be awarded a portion of its costs on a partial indemnity basis to reflect this result.

Quantum

[8] This leaves the issue of quantum. As per the Court of Appeal for Ontario’s decision in Boucher v. Public Accountants Council (Ontario), 71 O.R. (3d) 291 (C.A.), I am mandated to consider what is “fair and reasonable” in fixing costs with a view to balancing compensation of the successful party with the goal of fostering access to justice.

[9] In terms of the traditional Rule 57.01 factors, I find that the issues in this proceeding were numerous and of moderate complexity. I agree with GT that a comprehensive defence to a $10,000,000.00 claim was warranted and within the plaintiffs’ reasonable expectations.

[10] I have no difficulty with GT using a 60% rate of their legal expenses for the calculation of partial indemnity costs.

[11] I decline to award GT its disbursements relating to the opinion evidence of PWC as such evidence did not play any substantive role in the disposition of the issues, and was essentially rejected as being irrelevant and inadmissible in any event.

[12] The hours charged by GT’s counsel are slightly excessive in some areas. For example, there were nearly 60 hours claimed for the discovery process and all charged out at a rate of $450.00 to $540.00 per hour. In addition, some hours were claimed for time “contemplating” a summary judgment motion which, to my understanding, never occurred but likely formed part of the affidavit evidence used at the quasi-summary trial before me.

[13] Taking all of the relevant Rule 57.01 factors into account, and mindful of the fact that GT was the slightly more successful party, in the circumstances I award GT its costs of this proceeding on a partial indemnity basis in the all-inclusive amount of $175,000.00 payable forthwith.

[14] I have signed the revised Judgment prepared by counsel for GT and inserted the costs figure therein.

Diamond J. Released: March 22, 2019