Court File and Parties

COURT FILE NOs.: CV-19-620301-CL; CV-19-620285; CV-19-620326; CV-19-620288 DATE: 2022-10-14

SUPERIOR COURT OF JUSTICE – ONTARIO COMMERCIAL LIST

COURT FILE NO.: CV-19-620301-CL

BETWEEN AssessNet Inc., Plaintiff AND: Taylor Leibow Inc., in its capacity as Trustee of the Bankrupt Estate of Lucio Anthony Ferro and Julie Savage, Defendants

COURT FILE NO.: CV-19-620285-CL

BETWEEN AssessNet Inc., Plaintiff AND: Jane Poproski, Jane Poproski Professional Corporation, Andrew Rudder, Ellen Helden and 1312788 Ontario Limited c.o.b. under the tradenames Lawyers’ Support Services, Future Health Institute and DVD Productions, Defendants

COURT FILE NO.: CV-19-620326-CL

BETWEEN AssessNet Inc., Plaintiff AND: Robert Hooper, Bayview Personal Injury Lawyers, Jane Poproski, Jane Poproski Professional Corporation, Andrew Rudder, Ellen Helden and 1312788 Ontario Limited c.o.b. under the tradenames Lawyers’ Support Services, Future Health Institute and DVD Productions, Defendants

COURT FILE NO.: CV-19-620288-CL

BETWEEN AssessNet Inc., Plaintiff AND: Jane Poproski, Jane Poproski Professional Corporation, Bayview Personal Injury Lawyers, Ellen Helden and 1312788 Ontario Limited c.o.b. under the tradenames Lawyers’ Support Services, Future Health Institute and DVD Productions, Defendants

BEFORE: Kimmel J.

COUNSEL: Peter Waldmann, for the Plaintiff, AssessNet Inc. Doug Smith, for the Defendants, Taylor Leibow Inc. (in its capacity as Trustee of the Bankrupt Estate of Lucio Anthony Ferro) and Julie Savage Michael Kestenberg, for the Defendants, Jane Poproski, Jane Poproski Professional Corporation, Bayview Personal Injury Lawyers and Andrew Rudder Marek Tufman, for the Defendants, Ellen Helden and 1312788 Ontario Limited c.o.b. under the tradenames Lawyers’ Support Services, Future Health Institute and DVD Productions

HEARD: April 21, 2022 and June 1, 2022 (Written Cost Submissions dated September 16, and 26, 2022)

COSTS ENDORSEMENT (defendants’ motions for summary judgment)

Background

[1] This costs endorsement relates to four separate actions brought by the plaintiff, AssessNet. The actions arose out of the bankruptcy and subsequent death of Lucio Anthony Ferro. The defendants named in those actions brought motions for summary judgment seeking to dismiss them. The defendants argued that there was no genuine issue for trial because each asserted cause of action is statute barred by its applicable limitation period.

[2] The court’s decision on those motions (the “summary judgment decision”) was released on August 19, 2022 (see AssessNet Inc. v. Taylor Leibow Inc., 2022 ONSC 4780). Capitalized terms used herein and not otherwise defined shall have the same meaning as ascribed to them in the summary judgment decision.

[3] Summary judgment was granted in two of the Actions: the Bankruptcy Trustee Action and the Client Assigned Claims Action (except for the Tesone assigned claim that leave was granted for it to be pursued in small claims court). Accordingly, these two Actions were dismissed.

[4] The court did not grant summary judgment dismissing the s. 38 BIA Action or the Copyright Action.

Costs

[5] After hearing the summary judgment motions, I directed the parties to exchange costs outlines. The parties undertook to try to resolve costs after receiving the summary judgment decision.

[6] Some parties resolved costs as follows:

a. The plaintiff agreed to pay $93,000 in all-inclusive costs to the successful defendant Trustee, Taylor Leibow, in the Bankruptcy Trustee Action that was dismissed.

b. The plaintiff also reached an agreement with the Lawyer Defendants as to costs payable in respect of the summary judgment motions in the other three actions (the s. 38 BIA Action, the Copyright Action and the Client Assigned Claims Action).

[7] However, no costs agreement has been reached between the plaintiff and Helden and her company, 131 Ontario for the part they played in the summary judgment motions that were dismissed in the s. 38 BIA Action and the Copyright Action.

[8] A timetable was ordered for the exchange of written cost submissions between parties who did not agree on costs. Initial submissions were due September 16, 2022. Responding submissions were due September 26, 2022 and reply submissions were due September 30, 2022.

[9] AssessNet sought costs against Helden and 131 Ontario for the dismissed summary judgment motions in the s. 38 BIA Action and the Copyright Action. Helden and 131 Ontario delivered a responding cost submission. AssessNet did not file a reply submission.

a) Plaintiff’s Request for Costs

[10] For the dismissed summary judgment motion in the s. 38 BIA Action, AssessNet seeks costs from Helden and 131 Ontario on a substantial indemnity scale of $56,611.16 or, alternatively, on a partial indemnity scale of $38,175.14 from Helden and 131 Ontario. For the dismissed summary judgment motion in the Copyright Action, AssessNet seeks costs on a substantial indemnity scale of $56,611.16 or, alternatively, on a partial indemnity scale of $38,175.14. The amounts are the same for both actions.[^1]

[11] These are the total amounts outlined in the plaintiff’s Bill of Costs in each of the s. 38 BIA Action and the Copyright Action. It appears that the plaintiff may be suggesting that 50% of the costs claimed in each of the s. 38 BIA Action and the Copyright Action be ascribed to Helden and 131 Ontario, with the other 50% ascribed to the Lawyer Defendants, with whom an agreement of an undisclosed amount was reached regarding costs.

b) Response to Requested Costs

[12] Helden and 131 Ontario argue they should not have to pay any costs to the plaintiff for the failed summary judgment motions, or, at most, they should pay only nominal or “symbolic” costs. They say that to require them to pay all, or even half, of the plaintiff’s costs for these motions is neither reasonable nor proportionate. They joined the motions more than a year after the Lawyer Defendants had served their motions, did not file any additional evidence (relying on what the other moving parties had filed) or participate in the cross-examinations on the summary judgment motions. Further, they made only limited oral submissions beyond those made on behalf of the Lawyer Defendants.

c) Costs Analysis

i) Entitlement and Scale of Costs

[13] The plaintiff successfully defended two summary judgment motions brought by Helden and 131 Ontario. Therefore, the plaintiff is presumptively entitled to some costs from Helden and 131 Ontario.

[14] Unsuccessful summary judgment motions can carry elevated cost consequences in some circumstances: see CME Telematrix Inc. v. Neurosoft Inc., 2002 CarswellOnt 911 (ONSC), at para. 7. The plaintiff asks for that here. However, this is not a situation where I would find that Helden and 131 Ontario acted unreasonably by joining the motions already brought by other defendants that were proceeding on essentially the same grounds irrespective of their involvement.

[15] Nor do I consider Helden and 131 Ontario to have acted in bad faith by trying to delay the proceedings by other means. The incidents of bad faith or bad conduct that the plaintiff points to—such as not providing a proper affidavit of documents at first instance—may be relevant when it comes time to argue the costs of the actions, but I am not persuaded that this alleged misconduct unduly added time or expense to the summary judgment motions.

[16] As a result, the substantial indemnity cost consequences under r. 20.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg 194 (“the Rules”) are not engaged.

[17] I find the plaintiff is entitled to some costs from Helden and her company 131 Ontario for the unsuccessful summary judgment motion in the s. 38 BIA Action which directly implicated them and their conduct. Their Notice of Motion for summary judgment focused on this action in particular.

[18] On the other hand, I do not consider an award of costs against Helden and 131 Ontario for their limited involvement in summary judgment motion in the Copyright Action to be proportionate or reasonable. These defendants did bring a motion in this action but they said little else about it. Further, the landscape changed after the plaintiff clarified its position in the course of the motion about the impugned timeframe that was at issue which impacted the court’s analysis on the motion.

ii) Quantum of Costs

[19] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c C.43 provides that costs are in the discretion of the court such that the court may decide by whom and to what extent costs shall be paid. Rule 57.01 lists the factors courts are to consider when awarding costs.

[20] The overall objective is to fix an amount that is fair and reasonable having regard to the broad range of factors in r. 57.01, and what the parties objectively expected the unsuccessful party to pay. Cost awards are not simply an amount tied to the actual costs incurred by the successful party: see Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 ONCA 14579, 71 O.R. (3d) 291 (C.A.).

[21] Rule 57.01 sets out various factors that the court may consider in the exercise of its discretion under s. 131 of the Courts of Justice Act in making an award of costs. Relevant considerations in this case, in addition to the principles of indemnity (r. 57.01(0.a)) and the reasonable expectations of the parties (r. 57.01.(0.b)), include:

a. Apportionment of liability and any other matter relevant to the question of costs (r. 57.01(1)(a)(i));

b. The complexity of the proceeding (r. 57.01(1)(c));

c. The importance of the issues (r. 57.01(1)(d)); and

d. The conduct of a party tending to lengthen a proceeding unnecessarily (r. 57.01(1)(e)).

[22] The issues on the summary judgment motion in the s. 38 BIA Action were complex and important, but they were raised and would have been addressed in the context of the motions first brought by the Lawyer Defendants irrespective of the involvement of Helden and 131 Ontario. Helden and 131 Ontario were not the primary proponents of the motion. They filed a notice of motion but no material and they were not active participants. For the most part, they tagged along with the Lawyer Defendants. That said, it is reasonable to infer that the involvement of Helden and 131 Ontario would have added some incremental work for the plaintiff.

[23] The plaintiff also appears to suggest that there be an equal (50%) allocation of the costs as between the moving defendant groups. I disagree. My knowledge of the evidence, issues and arguments suggests otherwise. While the issues were equally complex, Helden and 131 Ontario did not add to the complexity because they elected not to file any evidence, nor did they raise different issues. It is not reasonable to attribute an equal share of the plaintiff’s costs to them, nor is it reasonable to infer that their involvement incrementally increased the plaintiff’s costs by 50%.

[24] However, taking a back seat on pending motions in which a party has a common interest and could expect a common outcome to that of the party or parties doing the heavy lifting does not give the passive participant a complete pass when it comes time to address the issue of costs. That said, the role they played and the extent to which they contributed to the complexity and length of the argument and hearing is a relevant consideration. In the circumstances of this case, it warrants a lower proportionate allocation than 50%. In the exercise of my discretion, I consider the appropriate proportion of the plaintiff’s costs of the unsuccessful summary judgment motion in the s. 38 BIA Action to be 25%, allocated to Helden and 131 Ontario.

[25] The starting point for evaluating the amounts claimed by the plaintiff appears to be that the plaintiff’s overall fees (lawyer hours and rates) and disbursements were allocated on a roughly equal basis between the motions in the three Actions involving the Lawyer Defendants and Helden and 131 Ontario, with some minor action-specific adjustments.

[26] While this may be somewhat arbitrary, based on my knowledge of the evidence, issues and arguments raised on all the motions, I would expect that the plaintiff would have devoted at least as much time to the defence of the summary judgment motions in the s. 38 BIA Action as in the other two actions involving the Lawyer Defendants and Helden and 131 Ontario. Thus, using this (albeit arbitrary) roughly equal allocation of fees between the different actions as a starting point for the plaintiff’s costs in defending the summary judgment motion in the s. 38 BIA Action is reasonable.

[27] The plaintiff’s Bill of Costs indicates all-inclusive partial indemnity costs of $38,175.14 for the s. 38 BIA Action. One-quarter of that is roughly $9,500. Helden and 131 Ontario indicated their total all-inclusive partial indemnity costs to be $25,333 in the Costs Outline they filed. It is not beyond the realm of objectively reasonable expectations that they might be ordered to pay roughly one-third of that amount to the plaintiff if they were ultimately unsuccessful on one of the three summary judgment motions that they pursued.

[28] I find Helden and 131 Ontario to be jointly and severally liable for the payment of the all-inclusive partial indemnity costs of $9,500 to the plaintiff in respect of the dismissed summary judgment motion in the s. 38 BIA Action, and order those costs payable forthwith.

[29] This endorsement and the orders and directions contained in it shall have immediate effect as a court order without the necessity of the formal issuance and entry of an order. Any party may take out a formal order, if so advised, by following the procedure under r. 59.

Kimmel J.

Date: October 14, 2022

[^1]: Presumably, this is because the plaintiff apportioned its fees and disbursements for the motions in these actions (and the Assigned Client Claims Action) roughly equally, having not separately tracked them.