Court File and Parties
COURT FILE NO.: CV-19-619344 DATE: 2020/02/28 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
First Condo Group Ltd. Applicant
- and - LLOYD’S UNDERWRITERS Respondent
COUNSEL: John De Vellis for the Applicant Gerry Gill and Lauren Furukawa for the Respondent
HEARD: In writing
PERELL, J.
Reasons for Decision - Costs
[1] The Applicant, First Condo Group Ltd., is the insured under an Insurance Policy with the Respondent, Lloyd’s Underwriters. Relying on an an exemption clause in the Policy, Lloyd’s denied coverage with respect to a professional negligence claim brought against First Condo. First Condo brought an Application for an order that Lloyd’s provide coverage. I dismissed the Application. First Condo Group Ltd. v. Lloyd’s Underwriters, 2020 ONSC 146.
[2] Lloyd’s claims costs on a partial indemnity basis of $31,548.48. The costs claim is comprised of $24,453 for counsel fee, $3,178.89 for HST, and $3,916.59 for disbursements.
[3] First Condo Group submits that Lloyd’s fees are unreasonable and that the costs awarded should be no more than $7,500, inclusive of HST and disbursements.
[4] First Condo’s Bill of Costs, prepared before the hearing, reveals that its counsel engaged 27.40 billable hours in contrast to the 138.10 billable hours expended by Lloyd’s counsel. First Condo’s partial indemnity costs, including disbursements and HST, as of November 21, 2019, were $6,593.06. It acknowledges that additional time would have been required for the second attendance on December 17, 2019. Based on its own Bill of Costs, First Condo therefore submits that $7,500 is the appropriate costs award for this Application.
[5] First Condo submits that the 60 hours of billable hours incurred by a junior lawyer engaged for Lloyds’ on legal research and to draft the responding factum is unreasonable. First Condo, in contrast, would only have claimed 15.2 billable hours for preparing its factum and supplementary application record of which 9.6 hours were incurred by junior lawyers.
[6] Moreover, First Condo submits that Lloyd’s counsel’s expenditure of time was excessive. First Condo submits that the 138.1 hours docketed for preparation and attending a two-hour application hearing exceeds normal expectations, given the limited scope of the application.
[7] First Condo grudgingly concedes that it is possible that the issue in dispute may have affected the interpretation of several of Lloyd’s contracts of insurance with other insureds, and that this may explain the amount of time spent on the case. However, First Condo submits that it should be asked to pay only what it would reasonably expect to pay given the limited scope of this proceeding. Further, it submits that the reasonable expectation of an applicant is that the respondent would spend equal or less time responding to the Application because moving parties typically bear the brunt of the legal work.
[8] I see no merit in First Condo’s submissions. Without regard to the precedential importance of the interpretative dispute in the immediate case to other Lloyd’s insurance policies with other insureds, this Application was a serious matter exposing Lloyd’s to a $2 million liability. The legal research was necessary, and the research was helpful. The proof of the value of the legal services is in the pudding or the result; Lloyd’s was the successful party and there does not appear to be any wasted effort cooking the pudding. The normal costs principles apply. Lloyd’s claim for costs is reasonable and the adverse costs award should have been in the reasonable expectations of First Condo.
[9] I grant Lloyd’s costs of $31,548.48 as requested.
Perell, J.
Released: February 28, 2020
COURT FILE NO.: CV-19-619344 DATE: 2020/02/28 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: First Condo Group Ltd. Applicant - and - LLOYD’S UNDERWRITERS Respondent
REASONS FOR DECISION – COSTS
PERELL J.