Court File and Parties

Court File No.: CV-11-440637 Date: 2019-10-15 Superior Court of Justice - Ontario

Re: myNEXT CORPORATION, Plaintiff And: PACIFIC MORTGAGE GROUP INC., PACIFIC NA FINANCIAL GROUP INC., myNEXT LENDING CORPORATION, MORTGAGE ARCHITECTS INC., myNEXT MORTGAGE COMPANY LIMITED and RADIUS FINANCIAL INC., Defendants

and Re: PACIFIC MORTGAGE GROUP INC., Plaintiff by Counterclaim And: myNEXT CORPORATION, JOHN VOGEL, NEWSHORE FINANCIAL SERVICES INC., BORIS KOGUT, GARY WEE and ROBERT ORD, Defendants by Counterclaim

And: MICHEL TRUDEAU, ROD WILMER, MACDONALD-CARTIER INVESTMENTS INC., SVEN HOLDINGS INC., WILLIAM K. LUBY, KENNTH O’BRIEN, RODERIC L. PRAT, LANCE UGGLA, MIDDLEMARCH PARTNERS LIMITED, MORESAND TRADING LIMITED, THE PRIESTLEY PITBLADO TRUST, Third Parties by Counterclaim

Before: Darla A. Wilson J.

Counsel: Zach Rosen and Matthew B. Lerner, Counsel for the Plaintiff and Defendant to the Counterclaim, myNEXT Corporation and the Defendant to the Counterclaim, John Vogel Bryan McLeese, Counsel for the Defendants by Counterclaim, Newshore Financial Services Inc., Boris Kogut and Gary Wee; and agent for the Third Parties by Counterclaim, Michel Trudeau, Rod Wilmer, MacDonald-Cartier Investments Inc., Sven Holdings Inc., William K. Luby and Lance Uggla Christopher Stanek, Counsel for Defendants and Plaintiff by Counterclaim

Heard: In Writing

Endorsement

[1] I have been case managing this action since the time of the initial pretrial in October 2018. It is currently fixed for trial to commence November 25, 2019.

[2] The Defendant/Plaintiff by Counterclaim Pacific Mortgage Group Inc. (“Pacific”) brought a motion for leave to serve and rely on an expert report from Duff and Phelps. This motion was opposed by the Plaintiff and the Third Parties and the various Defendants to the counterclaim.

[3] In a written endorsement released July 18, 2019, I made a ruling on the expert report delivered by the Defendant Pacific. Counsel have not been able to agree on the costs of that hearing, and therefore, I received written submissions which I have reviewed and considered.

[4] The Plaintiff submits that it was successful on the motion, Pacific was not granted leave to rely on its expert report. Costs on a substantial indemnity basis in the sum of $20,643.93 are sought. Alternatively, costs of $14,225.30 are requested on a partial indemnity scale.

[5] The Defendant Pacific does not dispute that the responding parties are entitled to costs, but submits that the motion was an hour, it was not complicated and the costs should be fixed on a partial indemnity basis at $2,500.

Analysis

[6] In the motion, Pacific took the position that my earlier ruling precluding the use of the draft report of Duff and Phelps at trial was specific to the trial date scheduled for January 28, 2019. When the trial was adjourned, the report was finalized and served well in advance of the new trial date and as a result, Pacific argued that leave should be granted to permit the Defendant to call the expert evidence at the trial set for November 2019.

[7] In my view, that was an arguable position, although I did not accept it at the end of the day, for reasons articulated in my decision. Mr. Stanek became counsel of record only after the January 2019 trial date was adjourned; he had nothing to do with the fact that there had been no expert report served up to the time of the first pretrial.

[8] I do not view the conduct of Pacific as an intentional breach of my earlier order; nor do I accept that the conduct forms the basis for a costs order on a punitive scale. I see no basis for an award of costs on a substantial indemnity basis, which is reserved for circumstances where there has been conduct that is deserving of sanction. An award of substantial indemnity costs is a departure from the usual rule that costs follow the event on a partial indemnity scale.

[9] The successful party is entitled to reasonable costs on a partial indemnity scale. This was not a complex motion; the argument took an hour and it involved one issue. I have made several costs orders in this action including costs of a pretrial and costs thrown away due to the adjournment of the first trial date. I am dealing now only with the costs of the motion dealing with the Duff and Phelps report. I agree with Mr. Stanek’s submission that costs incurred since the trial was adjourned ought not to form part of the costs of this motion, as they will be dealt with as costs of the action.

[10] Mr. Lerner, who argued the motion for the Plaintiff, claims 6.4 hours of time, which is reasonable. Mr. Rosen has 38.8 hours of time for work on the motion. I do not agree that Mr. Rosen’s time is not recoverable since he did not argue the motion; he obviously drafted the materials and put together the submissions.

[11] In dealing with costs, I am trying to fix an amount that is fair and reasonable in the circumstances: Boucher v. Public Accountant Counsel for the Province of Ontario, 2004 CanLII 14579 (ON CA), 71 O.R.(3rd) 291 (C.A.).

[12] In my view, the sum of $10,000 plus HST is appropriate, given the factors set out in Rule 57 and taking into account what was involved in the motion dealing with the expert report. I fix the costs of the motion in that amount, payable by Pacific to the Plaintiff within 30 days.

D. A. Wilson J.

Date: October 15, 2019