Court File and Parties

COURT FILE NO.: CV-15-00531555 MOTION HEARD: 20190201 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MChE Trading Handels-GmbH, Plaintiff AND: Bellwyck Packaging Inc. and Ikaria, Inc. f/k/a Ikaria Holdings, Inc., Defendants

BEFORE: Master B. McAfee

COUNSEL: Erin D. Farrell, Counsel for the Moving Party, the Defendant Ikaria Inc. f/k/a Ikaria Holdings, Inc. Lindsay Moffatt, Counsel for the Responding Party, the Plaintiff

HEARD: February 1, 2019

REASONS FOR DECISION

[1] This is a motion brought by the defendant Ikaria Inc. f/k/a Ikaria Holdings, Inc. (Ikaria) for an order that the plaintiff MChE Trading Handels-GmbH (the plaintiff) post security for costs. The plaintiff agrees to post security for Ikaria’s costs. The only issue is the quantum of the security.

[2] Ikaria seeks security for costs on a partial indemnity basis up to and including mediation in the all-inclusive amount of $244,636.81.

[3] The plaintiff submits that the all-inclusive amount of $40,000.00 is more reasonable amount to be posted as security for Ikaria’s costs.

[4] Ikaria no longer has an issue with respect to posting the security in tranches.

[5] The plaintiff did not take issue with the lawyer arguing the motion on behalf of Ikaria also being the affiant of the affidavit relied on by Ikaria.

[6] No responding material was filed. Plaintiff’s counsel provided Ikaria’s counsel and the court with one decision at the return of the motion. While security for the costs of the co-defendant Bellwyck Packaging Inc. (Bellwyck) had been the subject matter of a consent order, the order was not before me. No cross-examination on the affidavit of E. Farrell took place. No bill of costs was filed from the plaintiff with respect to their own costs of the action. The pleading of the co-defendant Bellwyck was not before me.

[7] This action arises as a result of alleged improper destruction of certain clinical compounds by the defendants while the compounds were stored at the facilities of the defendant Bellwyck. The plaintiff claims against the defendants on a joint and several basis in the amount of $2,384,912 USD for negligence, conversion, interference with property and/or breach of contract. Aggravated damages in the amount of $100,000.00 are also claimed.

[8] Having regard to all of the circumstances of this matter, I am not satisfied that the amount sought by Ikaria is reasonable and proportionate. I agree with the plaintiff that the amount sought by Ikaria is too high.

[9] Ikaria seeks $23,859.90 representing 73.3 hours for 10 professionals for preparation and attendance on past motions. There is no evidence before me concerning the costs disposition for any past motions. I am not satisfied that Ikaria is entitled to security for costs for past motions.

[10] Ikaria also seeks $38,805.00 representing 105 hours for 3professionals dealing with experts. In addition, a disbursement of $60,000.00 is claimed for expert fees. The evidence specifically dealing with the reasonableness of these amounts is summarized at paragraph 11 of the affidavit of E. Farrell sworn December 3, 2018:

Based on the nature of these claims and the nature of the alleged destroyed compounds, as well as the documentary discovery required, I believe that the issues in this action are not simple, that discovery will be extensive, and that it is very likely that all parties involved will require expert witnesses. As a result, I verily believe that the Estimated Bill of Costs attached hereto and marked as Exhibit D is an accurate representation of the estimated costs of the Defendant, Ikaria up until the mediation of this matter.

[11] There is no indication of how many experts Ikaria is likely to retain. The total amount of $98,805.00 exclusive of applicable tax is a high amount for experts based on the limited evidence.

[12] With respect to examinations for discovery, I am not satisfied that it is reasonable to require security for costs for two senior counsel to be in attendance (see Aviaco International Leasing Inc. v. Boeing Canada Inc., 2000 CarswellOnt 3088 at para. 31). I would reduce the amount sought in this regard.

[13] With respect to disbursements, there is no indication of which disbursements have actually been incurred to date. It is unclear how the charge or estimated charge of $5,000.00 for legal research is determined.

[14] Having regard to all of the circumstances of this matter, in my view a fair, reasonable and proportionate amount that the plaintiff shall post as security for costs on a partial indemnity basis up to and including mediation is the all-inclusive amount of $100,000.00, payable as follows:

(a) $25,000.00 within 60 days of today’s date;

(b) $50,000.00 within 60 days of examinations for discovery;

(c) $25,000.00 within 60 days of mediation.

[15] With respect to costs of the motion, if successful, Ikaria sought costs of the motion in the all-inclusive sum of $8,490.94. The plaintiff submitted that if the amount of security ordered was less than the amount sought by Ikaria, there should be no costs of the motion. The amount sought by Ikaria is high for a 30 minute motion where the affidavit in support of the motion is 3 ½ pages in length and no responding material filed. In my view there should be no costs of the motion. The amount of security ordered was over twice the amount that the plaintiff submitted to be fair and reasonable and less than half the amount that Ikaria sought. There shall be no costs of the motion.

Master B. McAfee

Date: February 4, 2019