COURT FILE NO.: 19-80545
DATE: 20210723
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
AOD CORPORATION
Applicant
– and –
MIRAMARE INVESTMENT INCORPORATED and ALAIN MERCIER
Respondents
Jeffrey Langevin, for the Applicant
Pierre Champagne, for the Respondent, Miramare Investment Incorporated
Alain Mercier, self-represented
HEARD: In writing
endorsement on costs
Roger J.
Background
[1] What should be the costs of this Application, and how should they be ordered payable?
[2] The Applicant challenged the validity of a patent agreement with the Respondent, Miramare Investment Incorporated (“Miramare”). The Applicant argued that the patent agreement was unenforceable because its president at the time, the Respondent, Mr. Alain Mercier (“Mercier”), did not have authority to bind the Applicant. Mercier, despite being a respondent and the one who signed the patent agreement on behalf of the Applicant, filed evidence and made oral submissions supporting the Applicant’s arguments.
[3] The Applicant and Mercier were unsuccessful.
[4] Miramare was entirely successful. The Application was dismissed, and Miramare’s Counter Application was granted. I concluded that the patent agreement is valid and allowed Miramare to instruct counsel to ensure the proper maintenance of the patent and to proceed with the sale of the patent.
[5] AOD filed one affidavit in support of its Application, and Mercier filed three brief affidavits. Miramare filed three affidavits. AOD and Miramare filed factums.
[6] Miramare seeks costs exceeding $63,000. It argues that it should receive its costs on a partial indemnity basis up to March 16, 2021 (when this Application was adjourned) and thereafter on a substantial indemnity basis because of the conduct of the Applicant and Mercier.
Issue
[7] How should the court exercise its discretion over the costs of this Application?
Analysis
[8] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C43 provides that the costs of and incidental to a proceeding are in the discretion of the court. Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides factors that the court may consider when awarding costs.
[9] In assessing relevant factors, I note that the Respondent, Miramare, was entirely successful. In its written submissions, AOD agrees that Miramare was successful and that costs should flow to them, but they argue that Miramare’s costs are excessive, that two lawyers were not required, and that AOD should not be responsible for the costs of the adjournment on March 16, 2021. The Respondent, Mercier, did not file any written submissions with regards to costs.
[10] I also note that I was not provided information about any written offer, and therefore assume that none is relevant. As well, I note that:
• This was not a complicated Application – the facts and law were simple;
• The Application was important to the parties;
• The Applicant and Mercier made bare allegations in their affidavits, but they were credibly contradicted by Miramare and ultimately had no convincing evidence in support of their arguments;
• The Applicant did not proceed expeditiously with its Application;
• The Applicant made a complaint to the Law Society, alleging that the lawyers for Miramare were in conflict. The complaint added to Miramare’s costs and was dismissed by the Law Society;
• Mercier failed to attend some of the case management conferences and disregarded some of the procedural orders relating to the timeline by which his evidence was to be filed – this caused the Application to be adjourned and increased the costs of Miramare.
[11] I also find that Miramare’s actual fees, at over $92,000, are not within the reasonable expectations of the unsuccessful party because, as indicated above, this was not a complicated Application. A more reasonable, proportionate, and expected amount of actual fees would be in the range of about $65,000 (inclusive of taxes).
[12] I do not find the conduct of the Applicant, or of Mr. Mercier, sufficient to warrant costs being ordered on a higher scale than on a partial indemnity basis.
[13] With regard to the costs thrown away of $3500, previously ordered for the March 16, 2021 adjournment, I find that $1000 thereof should be deducted from the costs ordered against AOD because this adjournment allowed Miramare to serve its Counter Application.
[14] Consequently, when I consider all the circumstances of this matter, I fix the fee portion of the costs of this Application, on a partial indemnity basis, at $39,000. Disbursements are reasonable and are allowed at $2970.
[15] Miramare seeks costs jointly and severally against the Applicant and the Respondent, Mercier. However, Mercier is a named Respondent, not an Applicant, and I do not see why, in the circumstances, costs should be ordered joint and several. Miramare provided no authority in support of this argument and did not outline why ordering costs to be joint and several would be reasonable.
[16] Mercier’s affidavits and oral arguments supported the Applicant, and he was clearly aligned with AOD and adverse to the interests of Miramare. His affidavits were filed late and required this Application to be adjourned twice, and for Miramare to deliver additional affidavits. As well, responding to his affidavits and arguments increased the costs of Miramare. Overall, I find that he was adverse to Miramare and that his participation increased the fee portion of the costs of Miramare, to respond to his affidavits and in costs thrown away because of the adjournments that he occasioned, including the adjournment of March 16, 2021, by $9000 and that he is responsible for $100 of the disbursement, for copies.
[17] I decline to order costs on a joint and several basis. While I do find that Mercier’s actions increased Miramare’s costs, I also find the increased costs brought on by Mercier’s actions are distinguishable from the costs brought on by the Applicant’s actions. Given that the costs are discrete, and that Mercier is a respondent, it would not be just to order joint and several costs.
[18] Consequently, the following is ordered:
a) The Respondent, Alain Mercier, shall pay to the Respondent, Miramare Investment Incorporated, $9100 for the costs of this Application.
b) The Applicant, AOD Corporation, shall pay to the Respondent, Miramare Investment Incorporated, $31,870 for the costs of this Application.
Mr. Justice P.E. Roger
Released: July 23, 2021
COURT FILE NO.: 19-80545
DATE: 20210723
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
AOD CORPORATION
Applicant
-and-
MIRAMARE INVESTMENT INCORPORATED and ALAIN MERCIER
Respondents
Endorsement on costs
Roger J.
Released: July 23, 2021