Court File and Parties

COURT FILE NO.: 1285/15 DATE: 2019-12-11 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Aluma Systems Inc., Plaintiff AND: Resolute FP Canada Inc, Defendant

BEFORE: Conlan J.

COUNSEL: Catherine Willson, Counsel for the Plaintiff Roderick W. Johansen, Counsel for the Defendant

ENDORSEMENT ON COSTS

I. Introduction

[1] Much of the following is taken directly from the Reasons for Judgment in this action, reported at 2019 ONSC 6293, in order to understand what has led to this point.

[2] The Plaintiff, Aluma Systems Inc. (“Aluma”), is in the business of mobilizing (supplying), erecting (building or constructing), dismantling (taking down), and demobilizing (removing from the work site) scaffold (a temporary structure, often standing quite high from the ground level, used to support work crews and materials).

[3] The Defendant, Resolute FP Canada Inc. (“Resolute”), is a company operating in the forest products manufacturing industry. It has a pulp and paper mill facility located in Thunder Bay, Ontario (the “Project”).

[4] For over 17 years, Aluma provided Resolute and its predecessors with the rental of industrial scaffold, specialized access services, and general carpentry services and related labour to the Project.

[5] In May 2014, Resolute informed Aluma that it was terminating Aluma’s services at the Project. Resolute hired a new supplier for those services, Skyway Canada Limited (“Skyway”).

[6] A dispute arose between Aluma and Resolute. That dispute ended up in Court, and a trial was held in Milton, Ontario over several days in October 2019.

[7] The claim by Aluma was for $471,436.41, inclusive of HST. It was comprised of the following:

(i) $98,911.54 (for demobilization, invoiced by Aluma to Resolute but not paid);

(ii) $27,758.45 (for freight specifically, as part of demobilization, invoiced by Aluma to Resolute but not paid);

(iii) $436.63 (for an outstanding rental equipment invoice issued by Aluma to Resolute);

(iv) $27,201.36 (for the rental of blow tank scaffold from March 2015, when it was taken down by Skyway at the instruction of Resolute, to October 2015, when it was retrieved by Aluma);

(v) $21,579.85 (for blow tank scaffold demobilization, invoiced by Aluma to Resolute but not paid);

(vi) $294,524.35 (for contaminated blow tank scaffold that was ultimately disposed of by Aluma); and

(vii) $1024.23 (for contamination testing of the blow tank scaffold paid for by Aluma).

[8] In the end, Aluma obtained judgment in its favour in the principal amount of $107,091.30.

[9] That was the total of these four amounts:

(i) $436.63 (equipment rental invoice, not disputed); plus

(ii) $27,201.36 (blow tank rental for certain months in 2015); plus

(iii) $78,429.08 (on account of contaminated and scrapped blow tank scaffold equipment); plus

(iv) $1024.23 (contamination testing invoice, not disputed).

Items (ii) and (iii) were disputed by Resolute. Otherwise, the balance of Aluma’s Claim, as amended, was dismissed.

[10] Unable to agree on costs, written submissions have been filed on both sides.

[11] Resolute submits that no costs ought to be awarded to either side, primarily on the basis that success at trial was divided. Aluma seeks costs, on a partial indemnity scale, in the total all-inclusive amount of $158,096.83, which sum is significantly greater than the total principal amount of the Judgment.

II. Decision

[12] With much respect, counsel have made this far more complicated than it is.

[13] At paragraph 170 of the Reasons for Judgment, this Court observed that Resolute was the more successful party after trial. The reasons for that observation are obvious: (i) the issue of demobilization expenses consumed significant energy and time at trial, at least half, and Aluma was unsuccessful on that issue, and (ii) the principal amount of damages ordered in favour of Aluma was well less than one-quarter of its “ask”.

[14] Thus, on the loser-pays principle, Aluma is not entitled to any costs but rather had exposure to paying costs. No sum is requested by Resolute.

[15] Of course, entitlement to costs may also be affected by other things, such as settlement offers. Aluma, however, is not entitled to any costs on that basis either. It made three offers to settle, none of which it met after trial. The first was for $110,000.00, all-in, but only with regard to demobilization expenses (and not damages on account of contaminated equipment). The second was for $200,000.00, plus costs. The third was for $250,000.00, plus costs.

[16] There is no need to address the secondary question of quantum of costs when one does not get past the issue of entitlement.

[17] Each side shall bear its own costs. So ordered.

[18] On pre and post-judgment interest, without objection by Resolute, this Court adopts the position expressed by Aluma at paragraph 1 of the written costs submissions filed by Ms. Willson on its behalf – the Judgment shall include prejudgment interest from March 3, 2015 and post-judgment interest pursuant to the provisions of the Courts of Justice Act, as amended.

Conlan J.

Date: December 11, 2019