Court File and Parties

COURT FILE NO.: CV-18-595693 DATE: 20210429

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Core Insight Strategies Inc. Plaintiff

– and –

Advanced Symbolics (2015) Inc. Defendant

Counsel: Daniel Baril, non-lawyer representative of the Plaintiff Sumir Sennik, for the Defendant

HEARD: January 25, 26, 27 and 28, 2021 (Supplementary written submissions on costs dated March 29 and April 6, 2021)

Kimmel J.

TRIAL costs endorsement

The Court’s Previous Decisions

[1] In reasons for decision dated April 3, 2020 on a motion for summary judgment by the defendant, Advanced Symbolics (2015) Inc. (“ASI”), I ordered a trial of issues to proceed based on directions that I provided pursuant to Rule 20.05 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (see Core Insight Strategies Inc. v. Advanced Symbolics (2015) Inc., 2020 ONSC 2094). After the summary judgment motion, it was agreed by the parties, and accepted by the court in a subsequent endorsement, that the measure and quantum of any damages to Core Insight Strategies Inc. (“CIS”) arising from any of the alleged causes of action would be bifurcated and decided at a later date, if liability was established by CIS. Liability was not established. In reasons for decision dated March 8, 2021, I dismissed the plaintiff’s action, with costs (see Core Insight Strategies Inc. v. Advanced Symbolics (2015) Inc., 2021 ONSC 1717).

[2] In my decision on the summary judgment motion, I concluded that there were credibility issues going to the heart of CIS’s claims for breach of contract, misrepresentation and failure to negotiate or perform agreements in good faith. I determined that I needed to hear the witnesses whose affidavits had been filed testify so that the appropriate credibility assessments could be made about what transpired at the meetings in issue. At the trial, the parties focussed on these particular meetings and events, and contemporaneous emails, but also provided additional evidence that they argued should inform the court’s determination of who to believe.

[3] The plaintiff’s position throughout was that this case should be decided based on who was believed about what transpired at various meetings. That was the primary ground on which the plaintiff resisted the defendant’s summary judgment motion and was the primary ground on which the plaintiff asserted that its position should prevail at trial. After hearing the testimony of the various witnesses at the trial, I found the defendant’s representatives, Ms. Kelly and Dr. White, to be credible and preferred their testimony over the testimony of Mr. Baril, the plaintiff’s representative, where it conflicted.

Prior Decisions/Directions Regarding Costs

[4] In my decision on the summary judgment motion, having considered the submissions of the parties and the factors under Rule 57, I quantified and fixed the partial indemnity costs of that motion to be $40,000.00, inclusive of all fees, disbursements and taxes, and ordered them payable in the cause.

[5] This amount was consistent with the partial indemnity costs that both parties sought in their bills of costs submitted for the summary judgment motion. I indicated in my reasons for decision on the summary judgment motion that I would remain seized of the trial and, through the Rule 20.05 directions provided, the evidence gathered for the summary judgment motion would be preserved for use at trial. For these and other reasons, I decided that it was fair and just that the costs follow the ultimate determination of the issues raised on their merits, so I fixed the costs of the motion but ordered them payable in the cause.

[6] In my reasons for judgment at trial I confirmed that the defendant, as the successful party in the cause, was entitled to the costs already fixed and awarded on the summary judgment motion. The defendant was also found to be entitled to seek additional costs for other steps taken in the action that were not covered by its bill of costs for the summary judgment motion. The parties were not able to reach an agreement on the amount of the additional costs payable by the plaintiff to the defendant for the trial. I have now received and considered the parties’ written cost submissions.

Positions of the Parties Regarding the Costs of the Trial

[7] ASI seeks additional costs for the summary trial on a partial indemnity scale in the amount of $41,565.13 (calculated based on 60% of actual fees indicated for the trial, totalling $55,750.00 plus disbursements and applicable taxes). ASI has been determined to be entitled to costs as the successful party at trial. ASI was successful in having dismissed the many claims asserted, including claims for intentional misconduct such as misrepresentation and breach of the duty of good faith and honesty, and claims for punitive, aggravated and/or exemplary damages, for damages in excess of $2.5 million.

[8] ASI relies on multiple settlement offers it made prior to trial, each of which, if accepted by the plaintiff, would have been a better outcome for the plaintiff than what was achieved at trial. ASI also relies upon its efforts throughout to accommodate the plaintiff and streamline the proceeding, including agreeing to bifurcate damages and to take responsibility for matters, such as the trial record, that would ordinarily be the responsibility of the plaintiff after the plaintiff was no longer represented by counsel.

[9] Although not clearly stated in its cost submissions, the court presumes that CIS is objecting to the costs sought by ASI. In its responding cost submission, CIS raises various complaints about:

a. its former counsel;

b. The outcome of the case, which CIS disagrees with;

c. The court’s decision to award the costs of the summary judgment motion in the cause and to proceed to trial expeditiously based on directions provided under Rule 20.05, which CIS disagrees with;

d. The court’s determinations of credibility favouring the defendant’s representatives, which the plaintiff disagrees with;

e. Offers to settle made by the plaintiff that contemplated significant payments to the plaintiff by the defendant that the defendant did not agree to;

f. The plaintiff’s account of advice received from former counsel and accounts of views purportedly expressed by the pre-trial judge about the summary judgment costs, liability and damages; and

g. The plaintiff’s offer to the defendant not to appeal the trial decision on terms to be negotiated.

[10] The bill of costs presented by the plaintiff outlines fees, calculated at an hourly rate of $225.00 for the plaintiff’s non-lawyer representative, that the plaintiff intended to claim for the trial, if successful, totalling $58,000.00 (before disbursements or applicable taxes). The plaintiff’s cost submissions make reference to having been billed in excess of $170,000.00 by its lawyer at the time that the lawyer withdrew (after the summary judgment motion and in advance of the trial).

Costs Analysis and Award

[11] The defendant has already been found to be entitled to costs of the summary judgment motion fixed in the all-inclusive amount of $40,000.00, and to be entitled to some additional costs of the trial.

[12] Costs are within the discretion of the court to award under s. 131 of the Court of Justice Act, R.S.O. 1990, c. C43. The factors to consider in the exercise of that discretion are set out in Rule 57.01:

a. The principle of indemnity under 57.01(0.a), including the experience of the lawyer for the party entitled to costs as well as the rates charged and the hours spent by that lawyer;

b. Under Rule 57.01(0.b), the amount of costs that the unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

c. The amount at issue in the proceeding (Rule 57.01(a));

d. The complexity of the proceeding (Rule 57.01(c));

e. The importance of the issues (Rule 57.01(d));

f. The conduct of a party that unduly lengthened or complicated a proceeding (Rule 57.01(e), (f) and (g);

g. Any other matter relevant to the question of costs (Rule 57.01(i)).

[13] It is commonly understood, as this court reiterated in Tesla Motors Canada ULC v. Ontario (Ministry of Transportation), 2018 ONSC 5062, 144 O.R. (3d) 701, at para. 67, that:

Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), at paras. 26, 37.

[14] This engages both the principle of indemnity for the successful party (57.01(1)(0.a)) and the expectations of the unsuccessful party (57.01(1)(0.b)).

[15] The defendant seeks partial indemnity costs of the trial. The amount claimed is objectively fair and reasonable, in that it achieves some level of compensation for the costs of the successful party (ASI) and ought to have been within the expectations of the unsuccessful party (CIS) considering that:

a. the time and effort to complete the trial would be expected to be roughly equal to (if not greater than) the time and effort for the summary judgment motion, and the amount sought by ASI is approximately the same ($41,565.13 inclusive of all fees, disbursements and taxes);

b. The plaintiff’s actual fees claimed in its bill of costs for the trial of $58,000.00 at an hourly rate of $225.00 are slightly higher than the actual fees for trial of defendant’s counsel, indicated to be $55,750.00 at an hourly rate of $250.00; and

c. The plaintiff has indicated that it was billed in excess of $170,000.00 by its counsel up to a point that was after the summary judgment motion and before trial.

[16] The court has a broad discretion when determining the issue of costs. Rule 57.01 sets a non-exclusive list of factors that may be considered in the exercise of that discretion. I have considered the factors applicable in this case, including: the outcome of the trial, the principle of indemnity (taking into account the experience and rates of the lawyers involved), the large amount at issue ($2.5 million claimed) and the complexity and importance of the issues (predicated on allegations of intentional misconduct and the plaintiff’s position throughout that the case had to be decided on the basis of the credibility of the key participants).

[17] I have considered the relevant factors identified by ASI, such as:

a. CIS claimed millions of dollars against ASI, and was awarded nothing;

b. CIS was unable to prove even partial liability on any of the many issues pleaded in its statement of claim, or those issues raised for the first time at trial.

c. ASI acted reasonably and in a manner respectful of the principle of proportionality throughout this action so that justice could be effectively and quickly achieved. Particularly, ASI agreed to bifurcate damages and chose to oppose none of: CIS's former counsel's removal from the record; Mr. Baril's subsequent request to be appointed as a non-lawyer representative; or Mr. Baril's request for an emergency adjournment at the end of November, one week before the originally-scheduled trial date.

d. ASI was put to additional expense in dealing with CIS’s representative after its counsel got off the record, because of his unfamiliarity with certain administrative aspects of preparing a case for trial.

[18] I have considered the complaints identified by CIS in its costs submission (outlined above), although they do not fall within the recognized Rule 57 factors.

[19] In the exercise of my discretion under Rule 57 and s. 131 of the Courts of Justice Act, I am fixing the defendant’s costs of the trial in the amount of $41,565.13 (inclusive of all fees, disbursements and costs) and ordering these costs payable by the plaintiff to the defendant, together with the $40,000.00 in partial indemnity costs fixed and awarded payable in the cause for the summary judgment motion. An overall award of just over $80,000.00 in partial indemnity costs in favour of a defendant who succeeded at trial in defending claims asserted against it in excess of $2.5 million is proportionate, fair and reasonable in the circumstances. These costs are payable within thirty (30) days of this endorsement.

[20] Notwithstanding Rule 59.05, this costs award is effective from the date it is made and is enforceable without any need for entry and filing.

Kimmel J.

Released: April 29, 2021