SuMO IT Solutions Inc. v. Mario Vivas, Shelby Nelson and River Horse Inc.
COURT FILE NO.: 18-67905 DATE: 2019-06-17
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
SuMO IT Solutions Inc. Plaintiff
- and -
Mario Vivas, Shelby Nelson and River Horse Inc. Defendants
COUNSEL: Matthew G. Moloci, for the Plaintiff David P. Lees and Pooja Lasi, for the Defendants
RULING ON COSTS
P. R. SWEENY J.
1On May 2, 2019, I released my Ruling on the interlocutory injunction with respect to this matter. The parties were unable to agree on costs. I received and reviewed costs submissions from the defendants and the plaintiff.
2The defendants seek their costs on a substantial indemnity basis fixed in the amount of $99,920.93 payable forthwith. The plaintiff asserts the defendants should be awarded costs on a partial indemnity basis fixed in the amount of $15,000.00 plus disbursements fixed in the amount of $4,451.07.
3The award of costs is governed by section 131 of the Courts of Justice Act and Rule 57.07 of the Rules of Civil Procedure. It is an exercise of discretion.
4In general, successful parties are entitled to their costs.
5With respect to the scale of costs, the defendants point to two offers to settle which were served in this matter. The offers to settle were to resolve the motion and the action. This was only an interlocutory motion and the offers to settle were not simply for the motion. In my view, there is no justification to award costs on a substantial indemnity basis on the basis of the offers to settle.
6The defendants are entitled to their costs of the motion on a partial indemnity basis. These cost are to be fixed by me. The defendants seek costs of the action, including the costs of the motion, and the amount of time spent is not broken out for preparing the defence separate from the motion. While it is clear that a great deal of the time was necessarily spent on the motion, there is some time related only to the defence of the action which is not properly awarded at this time.
7The plaintiff has challenged the time spent by the defendants, asserting it is duplicative and overlapping of the time spent on the underlying action and the time spent by the lawyers and articling student. The plaintiff points to the absence of underlying dockets to support the amount claimed. I agree with the observations of Nordheimer J. in Hague v. Liberty Mutual Insurance Co., 2005 13782 (ON SC), [2005] O.J. No. 1660, [2005] O.T.C. 290 (S.C.J.), at para. 16, that “the failure to volunteer that information may undermine the strength of the unsuccessfully party’s criticisms of the successful party’s requested costs”. This is in accordance with the Divisional Court in Andersen v. St. Jude Medical Inc., 2006 85158 (ON SCDC), [2006] O.J. No. 508, 264 D.L.R. (4th) 557 (S.C.J.), at paras. 24-27: “the inference must be that the [unsuccessful] defendants devoted as much or more time and money” as did the successful plaintiffs.
8The fact that two lawyers were used on this matter is not inappropriate. The plaintiff had several lawyers involved in this matter and I have no bill of costs from the plaintiff. The defendants have properly excluded travel time from the costs claimed.
9The defendants’ senior counsel, Mr. Lees, provided a courtesy rate to the clients. The courtesy rate is the actual rate charged to the client. Therefore, it is that rate to be used for the determination of a partial indemnity rate. I would set the partial indemnity at 60 percent of full indemnity for all the lawyers and articling students for the defendants, which gives rise to costs of approximately $56,000.00 as claimed by the defendants.
10The hourly rate charged by Mr. Lees is less than the rate charged by Mr. Moloci for the initial period claimed in the Bill of Costs. However, it is increased for the second period claimed. The amounts claimed for Ms. Lasi at $275.00 per hour is high for a 2018 call. Using the hourly rate of $215.00 per hour for Ms. Lasi; an hourly rate of $395.00 for Mr. Lees which is equal to Mr. Moloci’s; $165.00 per hour for the articling student, generates costs on a partial indemnity basis, based on the hours claimed, of approximately $50,000.00.
11In my view, taking all the factors into consideration and reducing for time spent in defence of the action, a reasonable amount for the plaintiff to pay to the successful defendants on this motion is $35,000.00 plus HST, plus the agreed upon amount of $4,451.07 for disbursements.
12In the result, after rounding the number, the plaintiff shall pay to the defendants the costs of $44,000.00 all-inclusive forthwith.
Sweeny J.
Released: June 17, 2019
COURT FILE NO.: 18-67905 DATE: 2019-06-17
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
SuMO IT Solutions Inc. Plaintiff
- and -
Mario Vivas, Shelby Nelson, and River Horse Inc. Defendants
RULING ON COSTS
PRS:co
Released: June 17, 2019