Court File and Parties

Court File No.: CV-20-00634647-0000 Date: 2022-12-15 Ontario Superior Court of Justice

Re: 2730453 Ontario Inc., Plaintiff And: 2380673 Ontario Inc., Defendant

Before: Robert Centa J.

Counsel: Mark Veneziano, Sean Blakeley, Jonathan D. Langley, and Madeleine Andrew-Gee (student at law), for the plaintiff Joseph W. Irving, for the defendant

Heard: December 15, 2022 (in writing)

Costs Endorsement

[1] On November 28, 2022, I released my judgment in this action following a five-day trial: 2730453 Ontario Inc. v. 2380673 Ontario Inc., 2022 ONSC 6660. I awarded the plaintiff specific performance of an oral agreement for the sale of land. I invited the parties to provide costs submissions, which I have now reviewed.

[2] The plaintiff seeks its costs of the action on a partial indemnity basis in the all-inclusive amount of $164,698.14. The defendant submits that I should award the plaintiff an all-inclusive amount of $70,000.

General principles

[3] Fixing costs is a discretionary decision under section 131 of the Courts of Justice Act, R.S.O. 1990, c C.43. In exercising my discretion, I may consider the factors listed in rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg 194. These factors include the result achieved, the amounts claimed and recovered, the complexity of and importance of the issues in the proceeding, the principle of indemnity, the reasonable expectations of the unsuccessful party, as well as any other matter relevant to costs.

[4] In Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, at paras. 59 to 66, the Court of Appeal for Ontario recently restated the general principles to be applied in the court’s exercise of its discretion to award costs. A proper costs assessment requires the court to undertake a critical examination of the relevant factors as applied to the costs claimed and then “step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable”: Apotex, at para. 60, Restoule v. Canada (Attorney General), 2021 ONCA 779, 466 D.L.R. (4th) 2, at para. 356, citing Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 24. The overarching objective is to fix an amount of costs that is objectively reasonable, fair, and proportionate for the unsuccessful party to pay in the circumstances of the case, rather than to fix an amount based on the actual costs incurred by the successful litigant: Apotex, at para. 61; Boucher, at para. 26.

[5] While the reasonable expectation of the parties concerning the amount of a costs award is a relevant factor that informs the determination of what is fair and reasonable, it is not the only, determinative factor and cannot be allowed to overwhelm the analysis of what is objectively reasonable in the circumstances of the case. To hold otherwise would result in the means of the parties artificially inflating costs with the concomitant chilling effect on access to justice for less wealthy parties: Apotex, at para. 62.

[6] Costs that are reasonable, fair, and proportionate for a party to pay in the circumstances of the case should reflect what is reasonably predictable and warranted for the type of activity undertaken in the circumstances of the case, rather than the amount of time that a party’s lawyer is willing or permitted to expend: Apotex, at para. 65. The party required to pay the successful party’s costs “must not be faced with an award that does not reasonably reflect the amount of time and effort that was warranted by the proceedings”: Gratton-Masuy Environmental Technologies Inc. v. Building Materials Evaluation Commission (2003), 2003 8279 (ON SCDC), 170 O.A.C. 388 (Div. Ct.), at para. 17.

[7] The party seeking costs bears the burden of proving them to be reasonable, fair, and proportionate. The material provided for the assessment must allow the court to come to a conclusion as to the amount of time reasonably required by the party seeking costs to deal with all aspects of the proceedings for which costs are claimed, including whether there was over-lawyering or unnecessary duplication of legal work: Apotex, at para. 66; Restoule, at para. 355.

Position of the parties

[8] The parties agree that the plaintiff was entirely successful at trial and is entitled to an award of costs in its favour on a partial indemnity scale.

[9] The plaintiff submits that the issues raised in the claim were of critical importance to the plaintiff and its future development plans. The plaintiff submits that a costs order of this size was in the reasonable contemplation of the defendant when it refused to close a $4.3 million land transaction. The plaintiff also points to Mr. Segal’s unwillingness to admit certain facts act trial.

[10] The defendant submits that the costs claimed by the plaintiff are excessive in the extreme due to the duplication of effort on a legal team involving multiple lawyers and a law student. The defendant submits that neither the complexity nor the length of trial called for a team of this size. The defendant points out that the plaintiff has claimed for approximately 3.5 times the number of hours spent on the trial for “what should roughly amount to the same amount of work.”

[11] In my view the costs claimed by the plaintiff are reasonable and reflect the seriousness of the action, the number of issues in dispute, and the intensity of the trial. I agree that there should be some adjustment to the amounts claimed.

[12] While I do not want to discourage the participation of more recent calls in trials, I think the plaintiff should not pay costs for two recent calls to attend the entire trial. I will, therefore, reduce the amount claimed for legal fees by $9,639.00, to $109,001.22.

[13] I take a different view on the participation of Ms. Andrew-Gee, the articling student at the plaintiff’s law firm. The trial proceeded virtually at the request of the defendant. However, each and every time the defendant wished to show a document to a witness, it fell to Ms. Andrew-Gee to locate the document on CaseLines and to share it with the witness. Her efforts were essential to permit the trial to proceed efficiently. I do not discount the time in respect of Ms. Andrew-Gee’s attendance at trial.

[14] I recognize that counsel for the plaintiff, overall, docketed many more hours to the proceeding than did counsel for the defendant. There are many different ways to provide high quality legal services to clients. I commend counsel for the defendant on his efficiency. The efforts of counsel for the plaintiff, however, produced tangible work product throughout the trial, including an extremely helpful 27-page closing submission that closely and thoroughly the evidence and the applicable case law.

[15] Stepping back and assessing the amount of time reasonably required by the plaintiff to deal with all aspects of the proceeding, including whether there was over-lawyering or unnecessary duplication of legal work, I will reduce the legal fees claimed to $100,000 on a partial indemnity basis. In my view, this amount is objectively reasonable, fair, and proportionate for the defendant to pay in the circumstances of the case

[16] I would allow all of the claimed disbursements, except for the expert fee for D. Bottero & Associates Limited. That expert report was not tendered at trial. It may be that the report would have been used at the damages reference, but I will disallow that expense.

[17] In conclusion, I fix costs as follows: $100,000 + HST for legal fees; $19,120.98 + HST for disbursements and order the defendant to pay those amounts to the plaintiff within 30 days of this order.

Robert Centa J.

Date: December 15, 2022