Court File and Parties
COURT FILE NO.: 91128/15 (Oshawa)
MOTION HEARD: 2019-08-13
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: W.S. Nicholls Construction Inc., Plaintiff v. Barton-Malow Canada, Inc., Kenaidan Contracting Ltd., Courtice Power Partners, a joint venture comprised of Kenaidan Contracting Ltd. and Barton-Malow Canada, Inc., The Regional Municipality of Durham, The Regional Municipality of York and Covanta Durham York Renewable Energy Limited Partnership, Defendants
BEFORE: Master R. A. Muir
COUNSEL: Julie K. Parla and Patrick Healy for Covanta Durham York Renewable Energy Limited Partnership Andrew Gurlesky and Darcia Perry for W.S. Nicholls Construction Inc. Robert E. Hutton for Insulcana Contracting Ltd. Anthony Scane and James Round for Courtice Power Partners
SUPPLEMENTARY REASONS FOR DECISION - COSTS
[1] On August 13, 2019 I heard a motion brought by the defendant Covanta Durham York Renewable Energy Limited Partnership (“Covanta”) for an order dismissing this action against Covanta.
[2] I released my reasons for decision on August 30, 2019. I granted the relief requested and made an order dismissing this action against Covanta. I also requested written costs submissions. I have now received and considered those submissions.
[3] Covanta argues that it was completely successful and seeks its partial indemnity costs in the amount of $62,323.43 for legal fees, taxes and disbursements. Covanta also requests “incidental costs” in the amount of $312,887.85 in compensation for what it alleges were costs it incurred for interest on an arbitration award and premiums paid for a bond posted as security for the plaintiff’s lien.
[4] The plaintiff suggests that no costs be awarded. Alternatively, the plaintiff submits that the amounts claimed for legal fees are excessive and that the claim for “incidental costs” is really a claim for damages and is not the proper subject of a costs award for a motion. The plaintiff suggests that a costs order of approximately $23,000.00 to Covanta would be fair and reasonable.
[5] The principles applicable to determining costs are well summarized in the decision of the Court of Appeal in R & G Draper Farms (Keswick) Ltd. v. Nature’s Finest Produce Ltd., 2016 ONCA 626. The Court of Appeal stated as follows at paragraphs 10 to 12:
The relevant principles for the exercise of the court's discretion were canvassed by this court in Davies v. Clarington (Municipality) (2009), 100 O.R. (3d) 66, [2009] O.J. No. 4236, 2009 ONCA 722, at para. 51, per Epstein J.A. The focus is on "the specific facts and circumstances of the case in relation to the factors set out in Rule 57.01(1)": see Andersen v. St. Jude Medical, Inc., 2006 CanLII 85158 (ON SCDC), [2006] O.J. No. 508, 264 D.L.R. (4th) 557 (Div. Ct.), at para. 22, referring to Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.); Moon v. Sher, 2004 CanLII 39005 (ON CA), [2004] O.J. No. 4651, 246 D.L.R. (4th) 440 (C.A.); and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 CanLII 1042 (ON CA), 75 O.R. (3d) 638, [2005] O.J. No. 160 (C.A.).
Epstein J.A. noted, at para. 52 of Davies, that
. . . the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher, this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, at para. 37, where Armstrong J.A. said "[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice".
- A relevant factor is the losing party's reasonable expectation as to the costs payable: Moon v. Sher, at paras. 22, 35. Proportionality always plays a role: rule 1.04(1.1) [of the Rules of Civil Procedure, RRO 1990, Reg. 194].
[6] I have considered and applied these principles in determining the costs issues on this motion. I am governed by the Court of Appeal’s observation that “rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant”.
[7] Covanta was completely successful on this motion and is entitled to costs. However, I have determined that it is not appropriate to award the full amount requested.
[8] First, I am not prepared to award any costs to Covanta for its alleged “incidental costs” as part of a costs award on this motion. I agree with the plaintiff that these claims are really claims for damages and are not a proper claim for the costs of or incidental to this motion. In my view, claims of this nature and significance must be made on a proper evidentiary record and not as part of the summary process for fixing costs mandated by Rule 57.01(7).
[9] Moreover, the overriding principle is reasonableness. The court must fix an amount for costs that is fair and reasonable for the unsuccessful party to pay. Covanta’s alleged “incidental costs” were not specifically requested in its notice of motion. They were not claimed as part of this proceeding. No advance notice was given to the plaintiff. These significant “incidental costs” would certainly not have formed part of the plaintiff’s reasonable expectation as to its potential costs liability if it was unsuccessful on the motion.
[10] Second, I also agree with the plaintiff that the costs in relation to legal fees requested by Covanta are excessive. The partial indemnity costs requested by Covanta are approximately $17,000.00 more than the partial indemnity costs set out in the plaintiff’s costs outline. Both sides devoted a similar amount of time to this motion. However, Covanta’s fees are much higher as a result of much higher hourly rates. Covanta and the plaintiff were both represented by experienced senior counsel. It would certainly be reasonable for the plaintiff to expect a claim for similar or only modestly higher hourly rates at most.
[11] Finally, I agree with the plaintiff that a modest reduction should be made in relation to the withdrawal of the relief related to the substitution and reduction of security.
[12] For these reasons, I have concluded that a costs award to Covanta of approximately two-thirds of the amount requested is fair and reasonable in the circumstances of this motion. The plaintiff shall pay Covanta’s costs of this motion fixed in the amount of $40,000.00, inclusive of taxes and disbursements. These costs shall be paid by November 4, 2019.
Master R. A. Muir
Date: 2019-10-03