1207717 Ontario Inc. v. Leggett & Platt Canada Co., 2020 ONSC 4918

COURT FILE NO.: CV-12-443569

DATE: 2020/08/17

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

1207717 ONTARIO INC.

Plaintiff

• and -

LEGGETT & PLATT CANADA CO. and GARLOCK OF CANADA LTD.

Defendants

COUNSEL:

Ryan Atkinson for the Plaintiff.

Rosalind H. Cooper for the Defendant Leggett & Platt Canada Co.

Irfan Kara for the Defendant Garlock of Canada Ltd.

HEARD: In writing

REASONS FOR DECISION - COSTS

PERELL, J.

1The Plaintiff, 1207717 Ontario Inc. (“1207717 Ontario”), and the Defendants, Leggett & Platt Canada Co. (“Leggett”) and Garlock of Canada Ltd. (“Garlock”), entered into a Settlement Agreement. Leggett brought a motion to enforce the settlement. It sought a declaration that the Remedial Action Plan, as defined in the Settlement Agreement is deemed to be complete as of February 8, 2019. It sought a mandatory Order that 1207717 Ontario take out an Order dismissing the action and the crossclaim. The Defendant Garlock supported Leggett’s motion.

2In a cross-motion, 1207717 Ontario sought an Order compelling Leggett to undertake further groundwater quality testing, or in the alternative, it sought an Order granting 1207717 Ontario access to conduct further groundwater testing. Neither party sought to set aside the Settlement Agreement and to resume the litigation.

3I granted Leggett’s motion, and I dismissed the cross-motion. I dismissed 1207717 Ontario’s action and Garlock of Canada Ltd.’s crossclaim without costs.¹

4Garlock did not file any materials with respect to the motions to enforce the settlement, but its counsel reviewed the evidentiary record and attended on the return of the motions. Garlock seeks $2,000.00 in costs for the preparation to attend on the motion and $3,000 in costs for the attendance on the motion for a $5,000 claim, all inclusive.

5Leggett seeks on a partial indemnity basis costs of $50,223.46, all inclusive. These costs also include costs for the preparation of the costs submissions on the basis that 1207717 Ontario did not respond to an offer to settle the costs.

61207717 Ontario submits that Leggett’s claim for costs is excessive and unreasonable, and it submits that a fair and reasonable costs award in the circumstances of this case would be no more than $27,000.00, all inclusive. Its own draft Bill of Costs was $10,831.05, all inclusive, on a partial indemnity basis. 1207717 Ontario submits that the appropriate award to Garlock is $3,000, all inclusive.

7Before I address the merits of the parties’ submissions about costs, there is a preliminary issue. The motions were originally scheduled to be heard on February 12, 2020, but I adjourned the motions on terms. With respect to costs, my endorsement stated: “Costs of this adjournment fixed at $1,500 are payable to each defendant in any event of the cause.” 1207717 Ontario submits that the endorsement means that each defendant is to receive $750. This is incorrect, Leggett is to receive $1,500; Garlock is to receive $1,500.

8Moving on to the merits of the costs submissions, 1207717 Ontario submits that it was acting in good faith in how it responded to Leggett’s motion and in bringing its cross-motion in circumstances where there was a dispute about the interpretation and application of the Settlement Agreement. It says that resolving the dispute between the parties was of great importance to 1207717 Ontario because the dispute was interfering with its ability to refinance its property. 1207717 Ontario submits that Leggett’s counsel overworked the file and wasted time on arguing extraneous issues and that Ms. Cooper’s hourly rate is $975.00 which exceeds the reasonable expectation of 1207717 Ontario. Further, 1207717 Ontario submits that a $50,223.46, all inclusive award is far beyond with it reasonably expected to pay. It submits that since the cross-motion raised the same issues as the main motion, it expected that if it lost it would be responsible for the costs of one motion. It argues that the legal issues were not complicated and that the complicated aspects of the matter were actually addressed by the reports from the experts.

9With respect to disbursements, 1207717 Ontario submits that Leggett’s expert’s fees of $11,083.04 is unreasonable on the basis that in comparison, its expert not only prepared a letter report but also conducted groundwater sampling and laboratory testing for $9,975.00, while XCG prepared only a responding report and did not conduct any further laboratory sampling.

10The court’s discretion in awarding costs arises under the authority of s. 31(1) of the Courts of Justice Act,² and is to be exercised by a consideration of the factors in rule 57.01(1) of the Rules of Civil Procedure.³ These factors include the principle of indemnification, the reasonable expectations of the parties, the complexity of the proceeding, the importance of the proceeding, and the conduct of the parties in litigation.

11The traditional discretionary principles developed for costs awards are codified in rule 57.01(1), which states:

Factors in Discretion

57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(iii) any other matter relevant to the question of costs.

12The most general rule about costs, not to be departed from without good reason, is that costs at a partial indemnity scale follow the event, which is to say that normally costs are ordered to be paid by the unsuccessful party to the successful party on a partial indemnity scale.⁴

13A critical controlling principle for the awarding of costs is that the sum awarded reflect the fair and reasonable expectations of the unsuccessful litigant.⁵ The overriding principle in awarding costs is reasonableness.⁶

14The assessment of reasonableness is discretionary and very much dependent upon the circumstances of each case. In some cases, it may be reasonable for the successful party to make exhaustive efforts and to commit enormous legal resources, and in those cases, it might be said that the unsuccessful party could reasonably expect to pay those costs. In other cases, however, the successful party may have been well served by giving his or her lawyer instructions to make exhaustive efforts, but it might be disproportionate and unreasonable to expect the unsuccessful party to pay those costs, even if he or she would have expected or anticipated that his or her foe would have marshalled those legal resources.⁷

15In Davies v. Clarington (Municipality)⁸ at para. 52, Justice Epstein stated that the overriding principle in awarding costs is reasonableness. She stated:

52. As can be seen, 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 [Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)], 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."

16The same approach is applied to the recovery of fees paid to an expert witness. In Pearson v. Inco Ltd.,⁹ at para. 20, Justice Nordheimer stated:

[T]he approach to the recovery of fees paid to expert witnesses ought to be exactly the same as the approach to the fees to be recovered by counsel. The court should consider what is fair in terms of hours and rates as well as the overall amount and should then fix an amount which it is reasonable for the losing party to pay. In so doing, the court is not bound by what the client may have actually had to pay the expert.

17Although I view Leggett’s claim for costs as modestly beyond the reasonable expectations of 1207717 Ontario, I disagree with all of 1207717 Ontario’s submissions. The competing motions can be treated as one motion, but taken together or taken separately, the motions, as acknowledged by both parties, were very important to the respective parties. It was to be expected that Leggett would commit the efforts and the expertise of its lawyers and its environmental consultants to bring to an end a litigation for which it had already paid a handsome sum to settle. That 1207717 Ontario expended only $10,831.05 for the motions, just reflects that it must have realized how weak was its position and it decided to go lean and not throw good money after bad. Leggett was successful on the motions, and 1207717 Ontario’s submissions that Leggett’s lawyers and consultants went about the task of bringing the litigation to an end unreasonably or inefficiently are just not borne out.

18Exercising my discretion with respect to costs in accordance with the normative principles, I order 1207717 Ontario within 30 days of the release of these Reasons for Decision: (a) to pay Leggett $45,000.00, all inclusive; and (b) Garlock $3,500, all inclusive.

19In the circumstances of the Covid-19 emergency, these Reasons for Decision are deemed to be an Order of the court that is operative and enforceable without any need for a signed or entered, formal, typed order.

20The parties may submit formal orders for signing and entry once the court re-opens; however, these Reasons for Decision are an effective and binding Order from the time of release.

Perell, J.

Released: August 17, 2020

COURT FILE NO.: CV-12-443569

DATE: 2020/08/17

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

1207717 ONTARIO INC.

Plaintiff

• and -

LEGGETT & PLATT CANADA CO. and GARLOCK OF CANADA LTD.

Defendants

REASONS FOR DECISION

PERELL J.

Footnotes

1. 11207717 Ontario Inc. v. Leggett & Platt Canada Co., 2020 ONSC 4012.
2. 2R.S.O. 1990, c. C-43.
3. 3R.R.O. 1990, Reg. 194.
4. 4McCracken v. Canadian National Railway, 2012 ONSC 6838; Hague v. Liberty Mutual Insurance Co., 2005 13782 (ON SC), [2005] O.J. No. 1660 (S.C.J.); Pike's Tent and Awning Ltd. v. Cormdale Genetics Inc. (1998), 27 C.P.C. (4th) 352 (Ont. Gen. Div.); Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.).
5. 5Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 at para. 24 (C.A.); Stellarbridge Management Inc. v. Magna International (Canada) Inc., 2004 9852 (ON CA), [2004] O.J. No. 2102 at para. 97 (C.A.); Zesta Engineering Ltd. v. Cloutier (2002), 2002 25577 (ON CA), 21 C.C.E.L. (3d) 161 at para. 4 (Ont. C.A.); McGee v. London Life Insurance Co., [2008] O.J. No. 5312 at paras. 5-8 (S.C.J.); Caputo v. Imperial Tobacco Ltd. (2005), 2005 63806 (ON SC), 74 O.R. (3d) 728 at paras. 23-25 (S.C.J.). Lee v. General Motors Co. of Canada, [2004] O.J. No. 2245 (S.C.J.).
6. 6Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 at para. 52 (C.A.).
7. 7Das v. George Weston Limited, 2017 ONSC 5583 at para. 65, var’d 2018 ONCA 1053.
8. 8(2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.).
9. 9[2002] O.J. No. 3532 (S.C.J.).