Court File and Parties

COURT FILE NO.: CV-16-561427

DATE: 2019 08 29

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BENJAMIN HEMMING, Plaintiff

- and -

ORIOLE MEDIA CORP. and JUICE DMS ADVERTISING LIMITED, Defendants

BEFORE: Master Todd Robinson

COUNSEL: A. Lee, for the plaintiff C.J. Cosgriffe, for the defendant, Juice DMS Advertising Limited

COSTS ENDORSEMENT

[1] On May 28, 2019, I heard the plaintiff’s motion to compel answers to undertakings given and questions refused on a re-examination of a representative of the defendant, Juice DMS Advertising Limited (“JDAL”). For reasons released on July 15, 2019, I ordered that certain undertakings and refusals be answered and determined that certain other questions were properly refused and need not be answered. I invited the parties to make written submissions as to costs if they could not reach agreement. I have now received and considered each party’s costs submissions.

[2] The plaintiff seeks costs of $5,379.80 on a partial indemnity scale, inclusive of HST and disbursements, arguing that JDAL’s position necessitated this motion, but that the motion should not have been necessary. The plaintiff notes that no answers to undertakings were provided until plaintiff’s counsel confirmed this motion was being brought. The plaintiff also relies heavily on JDAL’s behaviour in forcing the plaintiff to bring two undertakings and refusals motions to obtain answers (one previously before Master McAfee and the other being the motion before me) and, on this motion, in relying on an assertion that JDAL’s books and records were inaccessible to it as a basis for not answering undertakings or refusing to answer questions, which JDAL must have known was untrue.

[3] The plaintiff specifically argues that the statement in JDAL’s responding affidavit evidence that JDAL “no longer has possession of or access to any records that have not already been produced through the course of this action, as they were sold as part of the asset sale of [JDAL] on December 31, 2018” was proven false by the language of the agreement of purchase and sale for JDAL’s assets, which the plaintiff only learned about as a direct result of this motion. I accepted the plaintiff’s arguments that Article 5.1(1) of that agreement of purchase and sale did provide JDAL with a right of access to its books and records. The plaintiff submits that the court should not condone JDAL’s reliance on an assertion that it must have known was untrue, and that the plaintiff is entitled to his partial indemnity costs given JDAL’s attempt to “wash its hands” of its obligations to preserve and produce relevant documents. The plaintiff characterizes JDAL’s behaviour as “bleed[ing] Mr. Hemming for costs.”

[4] In response, JDAL submits that the plaintiff moved on a total of 27 undertakings and refusals, but only obtained orders that 10 of them be answered. JDAL argues that it was thereby the more successful party on the motion. JDAL submits no costs should be ordered. JDAL points specifically to the plaintiff having only succeeded in obtaining orders that JDAL answer 3 of the 11 refusals and 7 of the 9 undertakings argued, after 4 refusals and 3 undertakings were withdrawn at the hearing. JDAL submits that the majority of argument on the motion was focused on the refusals, in respect of which JDAL was more successful than the plaintiff. That answers were ordered to only 3 of the 11 refusals argued is characterized as “clear success” in favour of JDAL.

[5] JDAL further submits that the amount sought by the plaintiff is excessive. It is said to be more than double what was previously considered reasonable in a refusals and undertakings motion in this proceeding. JDAL points to Master McAfee’s prior costs award of $2,500 on the last refusals and undertakings motion. JDAL submits that the plaintiff has been less successful on this motion than he was on the prior motion before Master McAfee. Accordingly, if any costs are awarded to the plaintiff, JDAL submits an appropriate quantum is $1,000. JDAL’s primary position nevertheless remains that no costs should be awarded.

[6] I agree with JDAL that the plaintiff’s costs submissions overstate the extent of his success on this motion. There was divided success. JDAL has correctly stated that orders were made to answer only 10 of the 27 undertakings and refusals on which the plaintiff moved. (I include the 7 undertakings and refusals withdrawn by the plaintiff because they were not withdrawn until the motion hearing, so while no time was spent on them in oral argument, they still formed part of the materials filed and, accordingly, are properly considered in costs of this motion.) In my view, though, it is the substance of the undertakings and refusals ordered, not the number, that is relevant in assessing success and if costs should be awarded.

[7] The evidence supports that answers to undertakings from the re-examination were not provided until after plaintiff’s counsel confirmed this motion was being brought. Answers to the majority of undertakings argued were ordered, so I am satisfied that this motion was necessary to compel JDAL’s compliance with undertakings. I am also mindful that many undertakings were not answered and refusals maintained because of JDAL’s alleged lack of access to its books and records. My finding that JDAL’s position was contradicted by the terms of Article 5.1(1) of the agreement of purchase and sale, and that JDAL continues to have a means of accessing its books and records was significant in my determinations on many of the undertakings and refusals for which answers were ordered. Had the plaintiff not cross-examined Ms. Cooper on her affidavit, the existence of Article 5.1(1) may not have come to light and JDAL’s evidence before the court would have been an affidavit that misrepresented the circumstances with an unequivocal yet untrue statement.

[8] JDAL was successful in supporting the propriety of most of the argued refusals. However, in my view, that success does not override the significant success of the plaintiff in obtaining orders on undertakings, in satisfying the court that JDAL had actual continued access to its books and records despite the contrary position taken by JDAL on the motion, and in satisfying the court that JDAL should be ordered to make efforts to access those records. As stated by Justice Edwards in Pullano v. Hinder, 2017 ONSC 5734 at para. 4: “To the extent that the court is required to become involved and deal with outstanding undertakings and refusals, the party who has improperly failed to answer and undertaking and/or alternatively, has taken an improper position with respect to a refusal, can anticipate a costs award going against them.”

[9] Accordingly, while I agree that the plaintiff is not entitled to partial indemnity costs equivalent to having been entirely successful on the motion, as is sought, the plaintiff is entitled to some costs. The motion was clearly necessary, so the plaintiff should be entitled to recovery of his disbursements, and I find that, for reasons outlined above, the plaintiff is further entitled to partial compensation for legal costs. Taking into account the principles outlined in Rule 57.01 of the Rules of Civil Procedure, RRO 1990, Reg 194, and the decision in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 OR (3d) 291 (CA), I find that the fair and reasonable amount of costs payable by JDAL to the plaintiff in respect of the motion is $2,000.00, inclusive of HST and disbursements.

[10] Accordingly, I order that JDAL shall pay to the plaintiff costs of the motion fixed in the amount $2,000.00, inclusive of HST and disbursements, within 30 days.

MASTER TODD ROBINSON

DATE: August 29, 2019