2010 ONSC 7034, 2010 ONSC 7034

CITATION : Edgecon Construction Inc. v. 746136 Ontario Limited, 2010 ONSC 7034 BARRIE COURT FILE NO.: 09-0582 DATE: 20101217 SUPERIOR COURT OF JUSTICE - ONTARIO RE: EDGECON CONSTRUCTION INC., Plaintiff AND: 746136 ONTARIO LIMITED AND BUSINESS DEVELOPMENT BANK OF CANADA, Defendants BEFORE: DiTOMASO J. COUNSEL: Enzo Mizzi, Principal of Edgecon Construction Inc., for the Plaintiff W.H.

Greenspoon-Soer, Counsel, for the Defendant 746136 Ontario Limited HEARD: By written submissions COSTS ENDORSEMENT THE MOTION [ 1 ] The defendant 746136 Ontario Limited (“746”) was entirely successful on its motion and obtained an order dismissing Edgecon’s action on the grounds that Edgecon’s Claim for Lien had expired. Further, 746 obtained an order discharging and vacating the Edgecon claim for lien and vacating the Certificate of Action. [ 2 ] In addition, it was ordered that Edgecon’s claim be struck and action dismissed for failure to comply with a number of interlocutory orders.

See Reasons for Decision dated November 17, 2010. [ 3 ] The parties agreed that costs would be determined by way of written submissions. While I did receive those submissions from 746, I did not receive them from Edgecon. COSTS [ 4 ] 746 seeks costs on a substantial indemnity scale in the amount of $23,185.21 for the motion and in the amount of $37,438.75 for the action. [ 5 ] I am persuaded that substantial indemnity costs should be awarded to 746. I have taken into account the conduct of Edgecon throughout. I have reviewed those factors itemized in subrule 57.01 of the Rules of Civil Procedure .

A consideration of the facts and finding set out in my Reasons for Decision support an award of costs for 746 on a substantial indemnity scale. [ 6 ] The course of conduct on the part of Edgecon demonstrates a history of non-compliance with court orders intended to progress the prosecution of Edgecon’s own proceedings. [ 7 ] Edgecon failed to obey these orders even though Edgecon benefited time and again from revised timetables but to no avail. The result of Edgecon’s non-compliance was twofold, namely, (1) the passage of time without progress and (2) causing 746 to incur legal fees unnecessarily.

Simply put, the claim was Edgecon’s to prosecute which it failed to do. Edgecon’s inertia ended up costing 746 significant legal expense without any legitimate purpose. [ 8 ] While I find the substantial indemnity scale of costs to be appropriate and applicable in this case, quantum is problematic. In total, 746 claims costs for both the motion and action in the amount of $60,623.96. [ 9 ] While I do not doubt that the time claimed was spent by 746’s counsel at the hourly rates set out, I find that both are excessive even in the face of an overwhelmingly successful result.

Fees are claimed by two lawyers for 70 hours for the motion and 41.6 hours for the action. [ 10 ] Rather, I am guided by the overriding principles of reasonableness, fairness and proportionality. Quantum is not determined merely by applying a mathematical formula of hours spent times rate. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure for the actual costs to the successful litigant. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable.

See rule 57.01(1)(0.b). [ 11 ] A useful discussion of whether a costs award is “fair and reasonable” can be found in the Court of Appeal decision of Davies v. Clarington (Municipality) 2009 ONCA 722 . [ 12 ] In considering the principle of proportionality, I have weighed the amount sought against the nature of the proceeding, factual findings and the ultimate result. Proportionality requires a balancing of factors to place in perspective the nature, effect and result of the

discrete proceedings within the context of the overall litigation. [ 13 ] Having considered the factors set out in subrule 57.01, the overarching principles of reasonableness, fairness and proportionality, I have exercised my discretion in finding costs as follows:

(1) Disbursements re: Motion $1,474.58

(2) Disbursements re: Action $2,408.75

(3) Fees and Taxes re: Motion $16,000.00

(4) Fees and Taxes re: Action $10,000.00 TOTAL $29,883.33 Rounded to the sum of $30,000.00 DISPOSITION [ 14 ] Edgecon shall pay 746 costs fixed in the amount of $30,000 all inclusive within the next thirty days. DiTOMASO J. Date: December 17, 2010