Court File and Parties

COURT FILE NO.: CV-20-00643662-00CL

DATE: 20201229

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MOHAMMAD GHORBANKARIMI, Plaintiff

AND:

SÉBASTIEN BERGERON, PHILLIPPE THIBAULT, MATTHEW BELBIN, and FOLKS VFX ULC, Defendants

BEFORE: Mr. Justice Cavanagh

COUNSEL: Ian Matthews and Teagan Markin, for Folks VFX ULC, Moving Party Matthew Diskin and Meredith Bacal, for the Plaintiff, Responding Party

HEARD: IN WRITING

COSTS ENDORSEMENT

[1] On November 11, 2020, I released my decision on a motion by the defendant Folks VFX ULC for an order (i) striking out a statement claim as against it, without leave to amend, on the ground that it discloses no reasonable cause of action; and (ii) dismissing or permanently staying the oppression remedy claims made against it on the ground that this Court lacks subject matter jurisdiction.

[2] The moving party’s motion to strike out the statement of claim as against it was granted. Leave to amend the statement of claim was granted to the plaintiff. The oppression remedy claims made against the moving party were dismissed.

[3] This is my endorsement with respect to costs.

[4] The moving party seeks costs of this motion on a partial indemnity scale up to and including September 21, 2020, the date of its offer to settle, and costs on a substantial indemnity scale thereafter. The total amount claimed, inclusive of fees, disbursements and applicable HST, is $43,297.70.

[5] The plaintiff seeks costs of the motion even though it was “partially unsuccessful” on the ground that the parties entered into a procedural agreement to adjudicate their dispute before this Court which provided for the prompt exchange of pleadings, exchange of productions, and a speedy resolution to the action by a two day trial with affidavit evidence. The plaintiff submits that the claims that were struck out with leave to amend should have been addressed, at least in the first instance, by all a request for particulars which would have avoided this motion and permitted the parties to litigate the merits of the case promptly, in the spirit of the procedural agreement. The plaintiff seeks costs in the amount of $10,000.

[6] Alternatively, the plaintiff submits that there should not be any award of costs because the only issue the moving party was successful on was a novel issue and its conduct was inconsistent with the spirit of the procedural agreement. In the further alternative, the plaintiff submits that any award for costs should not exceed $10,000. The plaintiff relies on its submission that there was mixed success on the motion (the principal claim was struck with leave to amend), and the claim struck without leave to amend flowed from the moving party resiling from the procedural agreement.

Is the plaintiff entitled to costs or should there be no costs?

[7] At the hearing of this motion on its merits, the plaintiff relied upon what he described as a procedural agreement in relation to the conduct of this action, in opposition to the moving party’s motion. In my Endorsement, I found, at para. 9:

The parties agreed that, subject to the court’s discretion, this action would proceed on the Commercial List, and they agreed on a timetable for the exchange of pleadings. They did not agree that no motions would be brought.

[8] I concluded that the moving party is not precluded from bringing this motion.

[9] In his costs submissions, the plaintiff again relies on correspondence from his counsel to the lawyer then representing the moving party in which he raised the fact that there may be multiple jurisdictions implicated by the plaintiff’s claims, and that the CBCA and other provincial equivalent statutes are potentially implicated. The parties agreed to have the action heard on the Commercial List and they agreed to a timetable for pleadings and other procedural steps.

[10] This correspondence was before me when I heard the motion. Through the exchange of this correspondence, the parties did not agree that no motions would be brought.

[11] I do not accept the plaintiff’s submission that he should be awarded costs because the moving party failed to honour the procedural agreement or because the moving party failed to request particulars before bringing its motion. The plaintiff is not entitled to costs.

[12] I also do not accept that the moving party should be denied costs on grounds relating to the procedural agreement or because the issues in relation to the CBCA and the British Columbia Business Corporations Act are novel.

[13] The moving party was successful on its motion and costs should be awarded to it.

Is the moving party entitled to costs on a substantial indemnity scale after the date of its Offer to Settle?

[14] The moving party relies on its Offer to Settle dated September 21, 2020 in which it offered to settle the motion on the terms that (i) the plaintiff and the moving party consent to an order striking all claims advanced by the plaintiff against the moving party in the statement of claim, and staying the claim in the statement of claim against the moving party based on the oppression remedy, and (ii) the plaintiff shall pay the moving party costs on the motion on a partial indemnity basis as agreed by the parties or, if agreement is not possible, as fixed by the Court.

[15] The moving party is correct that the Offer to Settle is “silent as to leave to amend”. This means that if the Offer to Settle had been accepted, there would not have been an agreement that the plaintiff would have leave to amend the statement of claim.

[16] At the hearing of the motion, the moving party sought an order striking out the statement of claim as against it without leave to amend. I did not accept the moving party’s submissions in this regard, and leave to amend the statement of claim was granted. If the plaintiff had accepted the terms of the moving party’s Offer to Settle, he would not have an opportunity to amend the statement of claim. The terms of the Offer to Settle were less favourable to the plaintiff than the outcome of the motion.

[17] I decline to exercise my discretion to award costs to the moving party on a substantial indemnity scale for the period of time after the Offer to Settle was served. Costs should be awarded to the moving party on a partial indemnity scale.

The amount to be awarded on a partial indemnity scale

[18] The motion under rule 21.01(1)(b) to strike out the statement of claim as against the moving party on the ground that it disclosed no reasonable cause of action was argued based on the statement of claim. The motion under rule 21.01(3)(a) to dismiss or permanently stay the statutory oppression remedy claims was argued on the basis of the statement of claim and simple affidavit evidence showing that the moving party was continued into British Columbia and appending a Federal Corporation Information Form showing that the company was discontinued on March 27, 2020 and that the importing jurisdiction is British Columbia. There were no cross-examinations. Factums and relevant authorities were delivered.

[19] The amount claimed against the moving party ($5 million) is significant and the issues raised on the motion were important to the parties. I accept that the parties to this motion would expect their counsel, lawyers at large downtown law firms, to commit the resources needed for this motion.

[20] The moving party’s Costs Outline shows that the amount claimed on a partial indemnity scale is comprised of fees, including counsel fee at the hearing, of $27,015.30, HST on fees of $3,511.99, and disbursements (including HST) of $1,369.22, a total of $31,869.51. This is based partial indemnity hourly rates of $375 for senior counsel and $282 for second counsel calculated based on 60% of their respective actual hourly rates.

[21] The moving party’s Costs Outline shows that senior counsel spent 35.4 hours (14.2 before September 22, 2020) and second counsel spent 42.4 hours (1.9 before September 22, 2020). The services for the motion are described in the Costs Outline and include “researching legal issues; preparing motion record, supplementary motion record and factum; reviewing the responding party’s motion record and factum; preparing for motion hearing”.

[22] The plaintiff submits that the hourly rates and time reflected in the moving party’s Costs Outline are unreasonable. The plaintiff provided his Costs Outline showing costs on a partial indemnity scale of $13,782.61. Plaintiff’s counsel states that the plaintiff anticipated seeking an award of costs of $10,000, the amount he seeks for this motion. The hourly rates in the plaintiff’s Costs Outline on a partial indemnity scale are $429 for senior counsel and $294 for second counsel, based on 60% of their respective actual rates. The plaintiff submits that the fees claimed should be reduced because the services were performed were “grouped together” in the moving party’s Costs Outline.

[23] Although the motion was important to the parties, there were no facts in dispute. The motion raised legal issues, and the applicable principles of law were not overly complex or contentious. The test for a motion to strike out a statement of claim as disclosing no reasonable cause of action was not disputed. The moving party accepts that there is no uncertainty in the operative language of the CBCA upon which it relied for the part of its motion addressing subject matter jurisdiction.

[24] I remind myself that the fixing of costs is not meant to be a mechanical exercise and does not begin and end with a calculation of hours time rates. This is one factor in the assessment process, together with the other factors in rule 57.01 of the Rules of Civil Procedure. In addition to the factors in rule 57.01, the court must consider the amount that would be fair and reasonable for the unsuccessful party to pay in the particular proceeding. In this regard, see Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), 2004 CarswellOnt 2521 (C.A.), at para. 26.

[25] Having regard to these factors, the amount claimed by the moving parties for fees is significantly outside of the range of fees that I would view as fair and reasonable for the unsuccessful party to pay for this motion on a partial indemnity scale.

[26] I fix costs to be paid by the plaintiff to the moving party in the total amount of $23,969.22 comprised of fees of $20,000, HST on fees of $2,600, and disbursements (including HST) of $1,369.22.

Cavanagh J.

Date: December 29, 2020