Court File and Parties

Court File No.: CV-18-00601549-00CL Date: 2024-06-04 Superior Court of Justice - Ontario

Re: DOMODAR ARAPAKOTA and THE ARAPAKOTA 2006 FAMILY TRUST, Applicants And: IMEX SYSTEMS INC., KRISHNASAMY PARTHIBAN, ANDREW LINDZON, ISSA NAKHLEH and ROBERT SALTSMAN, Respondents

Before: Cavanagh J.

Appearances: Scott Kugler and T. Luke Sabourin for the Respondents Krishnasamy Parthiban, Andrew Lindzon and Issa Nakhleh Robert B. MacDonald and Alexander Evangelista, for the Respondent Robert Saltsman Damodar Arapakota in person

Heard: IN WRITING

Costs Endorsement

[1] On March 6, 2024 I released a decision on two motions by separately represented respondents for an order dismissing this application for delay. I granted the motions and made an order dismissing the application for delay.

[2] This is my endorsement with respect to costs.

[3] The respondent Robert Saltsman seeks costs of the motion and the application in the amount of $38,696.62 inclusive of fees, disbursements and HST on a partial indemnity scale.

[4] The respondents Krishnasamy Parthiban, Andrew Lindzon and Issa Nakhleh (the “Director Respondents”) seek costs of the motion and the application on a partial indemnity scale in the amounts of $27,692.68 and $82,433.60, respectively, inclusive of fees and disbursements. The Director Respondents provided a Costs Outline for their claim for costs of the motion and a Bill of Costs in support of their claim for costs of the application.

[5] Mr. Arapakota made responding submissions on his own behalf and on behalf of The Arapakota 2006 Family Trust.

[6] Mr. Arapakota submits that the costs sought by the respondents on a partial indemnity scale are excessive and out of proportion to the normal costs incurred for similar motions, especially given that the application was dormant for almost five years.

[7] In particular, Mr. Arapakota submits: a. The hourly rates claimed are exorbitant and unjustifiable. b. The claims for costs of the application are excessive, given that there was no substantive response to the application on its merits, and the motions to dismiss for delay were brought after the application had been dormant, with no activity, for several years. c. Mr. Arapakota requested detailed dockets which the respondents declined to provide. I did not order dockets to be delivered. d. Costs should be limited to the dismissal motions, with only a very small amount attributable to the review of the initial application materials. e. With respect to the costs claimed by the Director Respondents, their claim is almost three times higher than the claim for costs of Mr. Saltsman, even though their legal counsel was only retained in 2019. Mr. Arapakota submits that the claim for costs of the Director Respondents is particularly excessive.

Mr. Saltsman’s claim for costs

[8] In Mr. Saltsman’s Amended Bill of Costs, he shows the lawyers and law clerks who provided services. He shows that partial indemnity hourly rates for these persons (60% of actual rates). Mr. Saltsman shows that time spent at stages of the application including (i) preliminary stage (pleadings/hearings; July 2018 to October 2021); (ii) Motion materials for motion to dismiss for delay (August 2023 to date of Amended Bill of Costs); (iii) cross-examinations (August-October 2023); (iv) preparation for motion (November 2023); and (v) attendance at motion.

[9] In Mr. Saltsman’s Amended Bill of Costs, the fees claimed for the application for July 2018 to October 2021 on a partial indemnity scale (based on 60% of actual rates) are $17,169.45. Fees claimed for the motion to dismiss on a partial indemnity scale are $17,051.85.

[10] The partial indemnity hourly rates claimed by Mr. Saltsman are 60% of the actual hourly rates charged by his counsel. This is not unreasonable.

[11] The hours expended which costs are claimed are set out in Mr. Saltsman’s Bill of Costs. I am satisfied that the hours for which costs are claimed are reasonable and proportionate, given the issues raised by the motion. I do not accept Mr. Arapakota’s submission that the rates are unreasonable or that the time spent was unreasonable.

[12] I fix Mr. Saltsman’s costs of the application, including costs of the motion to dismiss, on a partial indemnity scale, in the amount of $38,696.62 inclusive of fees, disbursements and HST. These costs are to be paid by the Applicants, jointly and severally.

The Director Respondents’ claim for costs

[13] In their Costs Outline for the motion, the Director Respondents break down the time spent into categories for (i) preparation for motion to dismiss for delay, (ii) preparation for cross-examination; (iii) attendance at cross-examination, and (iv) attendance at motion to dismiss for delay. They claim partial indemnity fees of $24,050 (excluding HST).

[14] The hourly rates claimed are 60% of actual rates. The rates claimed are reasonable. The time spent as described in the Costs Outline of these Respondents is reasonable and proportionate. I allow costs of the motion as claimed, fixed in the amount of $27,177.12.

[15] In their Bill of Costs for the application, the Director Respondents break down the time spent into categories for (i) preparation for the application, (ii) motion to transfer application to Hamilton, (iii) preparation for and attendance at case conference before Conway J. in 2023, and (iv) preparation and review of costs materials.

[16] The Director Respondents claim fees for the application in the amount of $56,493.15 (excluding HST). The largest component of this fee claim for the application is for fees for preparation for the application. The claim is for fees for time spent in the years 2019 to 2023. The partial indemnity fees claimed for this component are $49,975.20. One counsel, a 2019 call, spent 156 hours. The activities are described as being “related to the Director Respondents’ preparation and response to the within application including review of the Notice of Application; review of documents and information; legal research; communications and correspondence with the court, clients and opposing parties”.

[17] In their written submissions, the Director Respondents state that their legal counsel spent a significant amount of time searching for and organizing relevant Imex documents to respond to the application. They state that, as further detailed in the affidavit of Mr. Parthiban in his affidavit filed in support of the motion, the Director Respondents eventually located a hard drive containing Imex documents which, they say, was a costly and time-consuming process. Legal counsel also responded to the motion to transfer the application to Hamilton and prepared various opinions to the Director Respondents.

[18] The statement that time was spent searching for and organizing relevant documents is not sufficient to justify a claim for costs of this magnitude. In the absence of more detailed information about what services were provided to justify the hours claimed under this description, I am not satisfied that the Director Respondents have shown that the amount claimed is reasonable or proportionate. A substantial reduction is justified.

[19] I have considered the factors in rule 57.01. I fix the Director Respondents’ costs of the application (in addition to costs of the motion to dismiss) in the amount of $46,846.39 based on fees of $25,000, HST on fees of $3,250, and disbursements (including HST) of $18,596.39.

[20] The total amount to be paid by the Applicants to the Director Respondents for the motion to dismiss and the application, together, is $74,023.51.

Cavanagh J. Date: June 04, 2024