COURT FILE NO.: CV-18-5954

DATE: 2021 04 06

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DAVID MCLEOD, Plaintiff

AND:

ROBERT MCLEOD, STAR SUPPLY INC. operating as Stargas Propane, STAR GAS INC., STARGAS NIAGARA CORPORATION, AL EDWARDS, GEORGE REX BAILEY, RUSSELL BAZYLEWSKI, TIM TOPPING AND NATALIE MCLEOD, Defendants

BEFORE: Coats J.

COUNSEL: Cameron D. Neil, Counsel for the Plaintiff/Moving Party

Alex Don, Counsel for the Robert McLeod, Star Supply Inc., operating as StarGas Propane, StarGas Inc., and Stargas Niagara Corporation, Defendants/Responding Parties

COSTS ENDORSEMENT

[1] In my endorsement of February 18, 2021, I provided for written submission with respect to costs. I have since received and reviewed the following:

i. Costs Submissions of the Moving Party, David McLeod and Bill of Costs;

ii. Costs Submissions of Robert McLeod, Star Supply Inc., operating as StarGas Propane, StarGas Inc., and Stargas Niagara Corporation (the “Responding Parties”); and

iii. Reply Costs Submissions of the Moving Party, David McLeod.

[2] The matter before me was a motion for disclosure from non-parties to the litigation. Ultimately, the Respondent consented to the order made.

Positions of the Parties:

a) Moving Party

[3] The Moving Party, David McLeod requests that the court award him costs. David McLeod submits that costs have a number of purposes, two of which are to indemnify (partly) successful litigants and to correct or sanction the behaviour of the parties (394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, at para. 10). The Responding Parties consented to the relief sought, but only did so after the Moving Party’s filing deadline and after the Moving Party had already incurred the expense of the Motion. The Moving Party submits that when a party is put to needless expense, that party should not have to bear the costs thrown away, and for this reason the Responding Parties should be sanctioned.

[4] The Moving Party refers to the factors in Rule 57.01(1) of the Rules of Civil Procedure. The Moving Party prepared a Motion Record, Supplementary Motion Record, Factum and Book of Authorities. The production sought was of importance to the Moving Party as the Moving Party claims that the Responding Parties’ documentation is unreliable and lacking in key areas.

[5] The Moving Party claims that the Motion would not have been necessary if the Responding Parties had cooperated in obtaining the non-party productions. Authorizations were sought and refused. The Moving Party argues that the Responding Parties had an obligation to obtain relevant records from non-parties, including their bank and accountant, and could and should have done this on their own (Romcan Limited o/a Kingsville Retirement Centre v. AXA Pacific Insurance Company, 2009 87111 (ONSC) at paras. 22 and 37). The Moving Party states that it is not accurate to claim that the Motion was necessary in any event. It is the Moving Party’s position that it was made necessary by the Responding Parties.

[6] Further, it is the Moving Party’s position that even if the Motion was necessary for an order to obtain non-party productions, the Moving Parties could have consented from the outset before the extensive motion materials were prepared. They did not do so. The Motion Record was served January 21, 2021. Additional materials were prepared and filed February 8, 2021. The Responding Parties consented on February 11, 2021. The Moving Party prepared the Motion on the belief that it would be opposed.

[7] The Moving Party argues that the Responding Parties should have simply agreed to authorize the productions sought. This was requested of the Responding Parties in November 2020 and was contemplated by the Moving Party’s Discovery Plan.

[8] The Motion would not have come as a surprise to the Responding Parties as they refused to cooperate. The costs sought should be within their reasonable expectations.

[9] The Moving Party seeks costs on a partial indemnity basis at 65 percent of actual fees of $7,993, plus disbursements, plus taxes, for a total award of $6,394.69, all inclusive. The Moving Party states that partial indemnity costs range from 55 to 66 of actual fees (with reference to Cargojet Airways v. Aveiro et. al., 2016 ONSC 4927, at para. 14; Inter-Leasing, Inc. v. Ontario (Revenue), 2014 ONCA 683, at para. 5; and Ruttan & Cook v. Township of Strong, 2017 ONSC 1157, at para. 14). The Moving Party is claiming costs of 65 percent, the higher end, in order to add a modest punitive or corrective sanction to their award.

[10] Counsel’s rate is $375 per hour. Counsel has 17 years’ experience. A Bill of Costs was filed.

b) Responding Parties

[11] The Responding Parties did not file any materials to oppose the motion and provided their consent to the relief sought one week in advance of the motion. The Responding Parties submit that it was not reasonable for the Moving Party to presume that the motion would be opposed absent confirmation of same from the Responding Parties and in the absence of responding material being filed.

[12] The Moving Party previously brought a motion for production of a further and better affidavit of documents from the Respondent Parties. That motion was heard by Master (now Justice) Mills on August 23, 2020. The extent to which productions are required to be delivered by the Responding Parties has already been addressed by the Court and has been complied with. While it may be important to the Moving Party to obtain productions from non-parties, the Responding Parties should not have to bear those costs.

[13] The motion was necessary for reasons wholly unrelated to the Responding Parties. First, due to the passing of Al Edwards, a party to this action and the passing of the corporate defendants’ accountant, John Corfield, it was difficult to obtain relevant documentation. To this day it is unclear who has possession of John Corfield’s records. Second, the Responding Parties submit that they have no control over the documents and records under the control of non-parties, and that the Moving Parties would have been obligated to bring this motion in any event. The Responding Parties did not file responding material and consented to the form and content of the order. The Responding Parties submit that the Moving Party’s position that the motion was necessitated by the Responding Parties’ actions is inaccurate and misleading.

[14] The Responding Parties submit that the time spent on the motion by counsel (18.7 hours) and his law clerk (5.3 hours) was excessive given the complexity of a Rule 30.10 Motion. This is particularly so given that the Responding Parties did not file responding material in opposition. The Responding Parties state that a Factum and Book of Authorities was unnecessary.

[15] The Responding Parties also claim that there was considerable overlap between this motion and the motion heard on August 23, 2020. This should have reduced the time necessary to prepare this motion.

[16] The Responding Parties submit that no consideration should be given on this motion to previous motions brought by the Moving Party. The costs of the previous motion have already been dealt with.

[17] The Responding Parties submit that there should be no costs payable. Alternatively, it is submitted that the costs payable should be no more than $1,500, all inclusive.

c) Moving Party Reply

[18] The Moving Party submits that counsel for the Responding Parties was specifically asked for confirmation that there would be cooperation regarding non-party productions, and that confirmation was not provided until after the motion was served. The Responding Parties were expressly asked if they would cooperate and were silent.

[19] The Responding Parties only consented after the Moving Party’s deadline for filing had passed. The Moving Party could not take a wait-and-see approach.

[20] All the Responding Parties had to do was ask the non-parties for the productions. The records are from their bank and accountants. At law they were required to ask (Romcan, as above).

Analysis

[21] Paragraphs 22 and 37 of Romcan provide as follows:

[22] Additionally, a party is required to conduct a diligent search of his records and make appropriate enquiries of others to inform him in order to make the affidavit of documents. This is the mandatory language of the form of affidavit of documents. In other words, every party has an onus to inquire and obtain from others and make production of all documents that have a semblance of relevance to the issues even if those documents were formerly in the party’s possession but are no longer. For example, a party is required to inquire of his accountant and obtain financial documents; inquire of his lawyer and obtain legal documents whether or not privilege is claimed, etc. It is insufficient to disclose and produce only those documents that are in his actual possession.

[37] Romcan has failed in its obligations to serve a proper affidavit of documents. In particular, the affidavit fails to set out in Schedule “C” all relevant documents that were formerly in its possession, control or power but are no longer in its possession, control or power and to state when and how it lost possession or control of or power over them and their present location. Given Mr. Leferman’s evidence regarding the missing documents, Romcan had an obligation to conduct a diligent search of its records including making enquiries of third parties for relevant documents before delivering its affidavit of documents and prior to examinations for discovery. Given the serious allegations made against Axa including a bad faith claim, the significant damage claim made by Romcan and the peculiar circumstances of the missing documents, at a minimum, Romcan should have made attempts to obtain as many of the missing documents as possible by making enquiries of, for example, his bank, his accountants, Laura Leferman, the contractors and suppliers to the project.

[22] In my view, this motion was necessitated by the Responding Parties’ lack of action. The Responding Parties had an onus to inquire and obtain productions from others of relevant documents. The Responding Parties have not claimed that the documents are not relevant. Nor have they denied that they were asked if they would cooperate and remained silent.

[23] I have no information that the non-parties required an order to grant the productions and that a written authorization from the Responding Parties would not have been sufficient. The motion therefore appears to have been necessitated by the inaction of the Responding Parties.

[24] The Responding Parties waited until after all material was filed to signal their consent. In the circumstances, it was reasonable for the Moving Party to prepare a Factum and Book of Authorities.

[25] As set out in Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), at paras. 24 and 37, in awarding costs, the court will seek to arrive at an outcome that is fair and reasonable in the circumstances.

[26] The Motion was of medium complexity. It was important to the Moving Party. Counsel’s hourly rate is reasonable.

[27] The Responding Parties shall pay to the Moving Party costs fixed in the sum of $5,000, all inclusive.

Conclusion

[28] The Responding Parties shall pay to the Moving Party costs fixed in the sum of $5,000, all inclusive.

Coats J.

Date: April 6, 2021