Court File and Parties

COURT FILE NO.: 1910-13 DATE: 20220119 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Albert Bloom Limited AND: London Transit Commission, 1571177 Ontario Limited, 1111846 Ontario Limited and Ramsden Industries Limited, Eaton Industries (Canada) Company and the Corporation of The City of London

BEFORE: Justice A. K. Mitchell

COUNSEL: T. Brook and L. Fuerst, for Eaton Industries (Canada) Company G. Belch and G. Smith, for the City of London T. Curry and C. Humphrey, for Albert Bloom Limited

HEARD: In writing.

Costs Endorsement

Background

[1] This endorsement relates to successful motions brought by the defendants, Eaton Industries (Canada) Company (“Eaton”) and The City of London (the “City”), seeking summary judgment dismissing the claims of the plaintiff, Albert Bloom Limited (“ABL”) as being statute-barred.

[2] In this action, ABL alleged Eaton’s predecessors and the City caused environmental contamination to property formerly owned by them and now owned by the London Transit Commission (“LTC”) which contamination was alleged to have migrated and to continue to migrate onto neighbouring properties, including ABL’s property.

[3] The motions were brought subsequent to a motion for summary judgment brought by Eaton against LTC in the third party action (the “third party motion”). On the third party motion, Eaton sought identical relief as the relief sought on these motions claiming LTC’s third party claim was statute-barred. Eaton was successful on the motion and the third party action was dismissed. Eaton was awarded its costs of the third party motion and the third party action in the amount of $147,933 ($110,000 for fees) inclusive of disbursements and HST. [1]

[4] The motions were heard on July 6, 2021 and my decision was released on October 29, 2021. Pursuant to my endorsement, I granted summary judgment and dismissed ABL’s claims against Eaton and the City. I invited the parties to file written submissions with respect to the issue of costs. Submissions of Eaton and the City and responding submissions of ABL were received. Eaton filed reply submissions.

Positions of the Parties

[5] Eaton seeks its costs of the motion and the main action on a partial indemnity basis in the amount of $108,129.30 inclusive of disbursements and HST. The City seeks its costs of the motion and the action on a partial indemnity basis in the amount of $36,169.75 inclusive of disbursements and HST.

[6] ABL acknowledges that Eaton and the City were successful on their motions and are entitled to their reasonable costs of the motion and the action. However, ABL submits the amounts claimed are duplicative and/or excessive and, therefore, unreasonable, and should be significantly reduced.

Analysis

[7] Section 131(1) of the Courts of Justice Act grants the court very broad discretion to award the costs of and incidental to a proceeding. To guide its discretion, the court must look primarily to the factors set out in r. 57.01(1) of the Rules of Civil Procedure.

[8] However, the primary guiding principle is that a costs award should be fair and reasonable in all of the circumstances. [2]

[9] Eaton and the City were entirely successful on the motions and are, therefore, presumptively entitled to their fair and reasonable costs. As already noted, entitlement is not in dispute, only quantum.

[10] There are no offers to settle to consider.

[11] The issue then is: what are the moving parties’ fair and reasonable partial indemnity costs of the action and the motion?

[12] ABL raises the following issues with respect to the reasonableness of the costs claimed by each of Eaton and the City:

(a) with respect to Eaton, ABL submits the claim for costs is excessive and unreasonable for the following reasons: (i) the number of timekeepers involved is excessive. Eaton has claimed time on the motion from seven different timekeepers including two senior partners and two environmental counsel. Since Eaton was named as a defendant in the action in 2018, it has had five different counsel with years of experience ranging from 38 to 6 years; (ii) the time spent to prepare pleadings was excessive having regard to the length and complexity of the statement of defence and counterclaim; (iii) the time spent on document discovery including preparation of Eaton’s affidavit of documents is excessive and Eaton has been previously compensated for these same productions in the third party motion cost award; (iv) the time spent preparing for the motion including preparation of materials, totaling 162 hours, was excessive having regard to the significant overlap in the legal issues on the third party motion (for which Eaton has already been indemnified) and this motion; (v) the time spent preparing expert reports was excessive having regard to their length and complexity and Eaton was indemnified for their preparation by the cost award on the third party motion; (vi) the time spent preparing for and attending cross examinations was excessive; and (vii) the time spent by counsel attending on the motion (35 hours) and preparation of cost submissions was excessive.

(b) with respect to the City, ABL submits its claim for costs is excessive and unreasonable in light of its limited role in the litigation and on the motion. ABL points out that the City filed one affidavit in support of its motion, no cross-examination on the affidavit was conducted, its factum was not lengthy, the City largely relied on Eaton’s motion materials in support of its position and counsel for the City made relatively short submissions on the motion.

[13] ABL submits a partial indemnity fee award of $55,000 (Eaton) and $20,000 (the City) as compared to the $88,482 and $31,400 claimed by Eaton and the City, respectively, is appropriate.

[14] In its reply submissions, Eaton points out:

(a) ABL did not disclose its own costs of the motion and the action for comparison purposes and, therefore, little weight should be given to ABL’s criticism of the time spent by Eaton; (b) the jurisprudence relied upon by ABL in support of its position is distinguishable; (c) the number of counsel/timekeepers is consistent with the number of counsel/timekeepers involved on behalf of ABL in this matter; (d) the time claimed for pleadings included reviewing 10 prior pleadings by various parties to the main action is not excessive; (e) the time claimed for document discovery included the review of thousands of pages produced by ABL and excluded costs claimed and awarded on the third party motion; (f) the time claimed for preparation of motion materials including supplementary submissions requested by the court, was significantly reduced to avoid any duplication of costs claimed in relation to the third party motion for which reimbursement has already been received; (g) the time spent providing expert evidence to the court was not excessive in light of the success on the motion and the court’s reliance on Eaton’s expert evidence; and (h) the time spent on cross examinations was reasonable given the success of the Eaton on the motion.

[15] The City submits that the costs claimed are reasonable having regard to its success on the motion, the volume of material required to be reviewed as the City was not a party to the third party motion, and the proportionality of the costs claimed having regard to the costs that would have been incurred had the action proceeded to trial.

[16] ABL did not provide a bill of costs or other evidence of the time its own counsel spent on the motion and the action. In the absence of such disclosure, the inference I must draw is that ABL “devoted as much or more time and money in an attempt to defeat the motion” as Eaton did in bringing the motion. [3] Where such disclosure is lacking, an attack on the reasonableness of costs claimed, “is no more than an attack in the air”. [4]

[17] With respect to the factors in rule 57.01, I note:

(a) in this action ABL claimed $500,000 in damages against Eaton and the City for (a) nuisance, negligence and strict liability and trespass or, in the alternative, $500,000 for loss and damage pursuant to the Environmental Protection Act; (b) an unquantified amount for diminution or loss of value of property due to the existence of contamination; (c) a mandatory injunction requiring Eaton and the City to stop contaminants from migrating onto ABL’s property together with interest and costs. The unquantified amount for loss of value of property and the potential costs required to comply with any mandatory injunction granted to ABL would very likely have exceeded the quantified damages amount. I find this was a significant piece of litigation for both Eaton and the City and both faced significant financial exposure had the action continued to trial; (b) in its submissions, Eaton candidly addressed the issue of duplication of costs and represented to the court that it had reduced its bill of costs for time spent for which it had received indemnification pursuant to the cost award in connection with the third party motion; and (c) in the main action, Eaton faced additional claims arising from continuing torts and statutory liability which it did not face in the third party action and were not legal issues before the court on the third party motion; and (d) with respect to the City, it was not a party to the third party motion and duplication of costs is not an issue with respect to the costs claimed by the City.

[18] Assessing a party’s reasonable costs is not a number-crunching exercise. A more holistic approach is called for. The motions resulted in a final order dismissing the entirety of ABL’s claims against the moving parties. The parties were required to present to the court their “best case”. This was not a procedural or interlocutory motion and a meaningful cost award is therefore justified.

[19] I am not persuaded that, on balance, the amounts claimed by either Eaton or the City are unreasonable. In particular, I find that Eaton has not claimed for costs previously indemnified by the cost order made with respect to the third party motion. Accordingly, the moving parties shall have their costs of the motion and the action, as claimed.

Disposition

[20] ABL shall pay:

(a) to Eaton its partial indemnity costs of the motion and the action in the amount of $108,129.30 inclusive of HST and disbursements; and (b) to the City its partial indemnity costs of the motion and the action in the amount of $36,169. inclusive of HST and disbursements.

“Justice A. K. Mitchell” Justice A. K. Mitchell Date: January 19, 2022