Citation: FCA US LLC v. ZF Chassis Modules (Windsor) Inc., 2026 ONSC 2201

COURT FILE NO.: CL-26-00000113-0000

DATE: 20260414

ONTARIO SUPERIOR COURT OF JUSTICE

RE: FCA US LLC, Applicant

-and-

ZF CHASSIS MODULES (WINDSOR) INC., Respondent

BEFORE: FL Myers J

COUNSEL: John Leslie and David Z. Seifer, for the Applicant W. Brad Hanna and Reuben Rothstein, for the Respondent

READ: April 13, 2026

COSTS ENDORSEMENT

[1] By decision dated March 23, 2026, reported at 2026 ONSC 1811, the court vacated an ex parte order requiring the Respondent to continue to supply parts to the Applicant’s Windsor plant pending the hearing of a motion for an interlocutory injunction on notice to the Respondent.

[2] The court accepted the Respondent’s submission that the parties had agreed to bring all lawsuits concerning their parts supply contracts exclusively in the state or federal court in and for Oakland County, Michigan, USA. The Applicant’s proposed proceeding was therefore barred.

[3] The Respondent seeks its costs of the motion.

[4] Costs presumptively follow the event in the ordinary course on a partial indemnity basis.

[5] I do not accept that this is a case warranting a higher degree of indemnity for the Respondent’s costs. As noted in the prior embossment, this court had jurisdiction simpliciter to embark upon this proceeding. It was possible that the Respondent would not try to enforce the exclusive jurisdiction clause in the parties’ agreement. The clause was inserted into the terms of purchase by the Applicant so that all litigation would be in its home jurisdiction. If the Respondent had chosen not to enforce the exclusive jurisdiction clause, the proceeding could have continued here.

[6] There was nothing reprehensible in the Applicant bringing this proceeding here as required for enhanced costs. I do not accept that its material lacked significant disclosure of material matters. See: Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239, at para. 43.

[7] I do not agree with the Applicant that the Respondent should not be entitled to reimbursement for costs of the entire proceeding. The issue of the strength of the parties’ respective cases on their merits was squarely before the court on the motion. Delivering full material answering the Applicant’s evidence on the merits was reasonable in the circumstances. If that same material is reused by the Respondent in subsequent US proceedings, then the issue of whether the Respondent ought to be entitled to costs for that work will be for the US court that hears that proceeding.

[8] The Respondent seeks recovery for US counsel fees equivalent to $24,278.39 on a partial indemnity basis. US counsel performed the initial drafting of the Respondent’s affidavits.

[9] The motion was brought on an urgent basis over the weekend. It was efficient for the Respondent to use its US counsel to prepare draft materials given its familiarity with the case and the Respondent’s business.

[10] However, US counsel cannot charge legal fees in Ontario for Canadian legal work performed for a Canadian proceeding. It is not licensed to practise law here. Sometimes, foreign counsel fees are charged as a disbursement; such as when local counsel needs an opinion on foreign law for a proceeding here. In that case, foreign counsel is billed as an expert witness in effect. I say nothing about the entitlement of foreign counsel to be paid by its client under their foreign retainer agreement. I will not assess the reasonableness of fees charged by a lawyer who is not called to the bar of Ontario.

[11] But I am not assessing the propriety of fees charged by a lawyer to its client under the Solicitor’s Act, RSO 1990 c. S.15. In Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ONCA), at para. 26, the Court of Appeal discussed the purpose of a costs award as between litigants (previously referred to as a “party and party” assessment):

Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.

[12] Admittedly, courts often fix party and party costs based simply on the reasonableness of counsel’s dockets after applying a discount of 10% or 40% depending on the scale of costs awarded. But it cannot be lost that the goal of the exercise is not to fix lawful fees charged by the successful lawyer to its client but to decide a fair, reasonable, and proportional amount that the unsuccessful party should pay to the successful in respect of the proceeding.

[13] If I ignore the time of US counsel, the Respondents will not be indemnified for the cost of preparing affidavits. That would be a windfall to the Applicant. A reasonable litigant in the Applicant’s position would expect that the other side would have to incur legal fees to have its affidavits prepared.

[14] Given the very short time available to the Respondent to deliver its material, a reasonable Applicant ought to expect the time for preparation to be higher than normal. Extra lawyer bodies will likely be needed to do all the required work in a compressed time frame. Had local counsel been required to prepare first drafts it would likely have taken even longer as they would have had to be briefed by the client and/or its US counsel.

[15] I have reviewed the Costs Outline of the Respondent’s Ontario counsel. The Ontario rates charged are within market norms. The Ontario time charged is reasonable especially considering the urgent turnaround required. I also allow $20,000 as a reasonable partial indemnity value for the initial collection of evidence and drafting of the very full affidavits delivered by the Respondent.

[16] There is no access to justice issue as between these litigants.

[17] I therefore fix the costs payable by the Applicant to the Respondent on this motion on a partial indemnity basis at $80,000 all inclusive.

FL Myers J

Date: April 14, 2026