) ) Philip Johnson Plaintiff – v. –, 2013 ONSC 110

CITATION : Johnson v. Helo Enterprises Inc., 2013 ONSC 110 COURT FILE NO.: 12-54069 DATE: 2013/01/04 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) Philip Johnson Plaintiff – and – Helo Enterprises Inc. Defendant ) ) ) ) ) ) ) ) ) Ronald Caza/Marcia Green, for the Plaintiff Pierre Champagne/Julie Paquette, for the Defendant AND BETWEEN: )) Helo Enterprises Inc.

Plaintiff by Counterclaim (Responding Party) )))) Pierre Champagne/Julie Paquette, for the Plaintiff by Counterclaim (Responding Party) – and – Echotec Sonar Corporation, Philip Johnson, Daniel Ward, Bradley Pinch, David Hallett and Joseph Spagnuolo Defendants by Counterclaim (Moving Party) ))))))))) Ronald Caza/Marcia Green, for the Defendants by Counterclaim (Moving Party) HEARD: By Written Submissions DECISION REGARDING COSTS R. Smith J. Overview [ 1 ] Helo Enterprises Inc. (hereinafter referred to as “MAQ Sonar”) obtained an injunction and an Anton Piller Order on an ex parte basis.

The Defendants by counterclaim (Echotec Sonar Corporation, Philip Johnson, Daniel Ward, Bradley Pinch, David Hallett and Joseph Spagnuolo, hereinafter collectively referred to as “Echotec”) sought to set aside the injunction and Anton Piller Order of April 30, 2012. [ 2 ] MAQ Sonar seeks costs of both obtaining the injunction and the Anton Piller order as well as of the motion to set aside the injunction and the Anton Piller Order. [ 3 ] As a result of the issuing of the Anton Piller Order, the computer forensic experts discovered approximately eight terabytes of information stored on 70 different devices including a significant volume of confidential and proprietary information belonging to MAQ Sonar, which included the two confidential engineering folders which were over 12 gigabytes in size.

[ 4 ] Echotec brought a motion on May 7, 2012 to set aside the injunction and Anton Piller Order. A second urgent motion was brought by Echotec on May 17, 2012 seeking the immediate return of their devices, even though they had not all been cleaned to remove the property of MAQ Sonar by the computer forensic experts. [ 5 ] On May 17, 2012 MAQ Sonar brought a responding motion seeking a second Anton Piller Order to deal with a possible breach of my first Anton Piller Order of April 30, 2012, as there was evidence that both Mr. Johnson and Mr. Pinch had accessed a drop box.

Positions of Parties [ 6 ] MAQ Sonar seeks costs on a partial indemnity basis of $10,380.52 for the initial injunction and Anton Piller Order motion. It also seeks costs on a partial indemnity basis of $18,357.87 for responding to the motion to set aside the injunction, and $6,258.28 for its motion for a second Anton Piller Order to allow entry and search the premises. [ 7 ] Echotec submits that each party should bear their own costs.

In the alternative, it submits that costs should only be awarded for the motion to set aside the injunction heard on May 7, 2012, and that costs associated with the motion to obtain injunctive relief should be reserved to the trial judge. Echotec further submits that MAQ Sonar’s costs for the motion heard on May 7, 2012 should be reduced to take into account the divided success of the parties.

Factors [ 8 ] The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure and include in addition to success, the amount claimed and recovered, the complexity and importance of the matter, unreasonable conduct of any party which unduly lengthened the proceeding, scale of costs and any offer to settle, the principle of indemnity, hourly rate claimed the time spent and the principle of proportionality, and the amount that a losing party would reasonably expect to pay.

Success [ 9 ] MAQ Sonar was successful with respect to obtaining both an injunction and an Anton Piller Order on the ex parte motion heard on April 26, 2012. Echotec was unsuccessful and MAQ Sonar was successful on the motion of May 7, 2012 to set aside the injunction and the Anton Piller Order. [ 10 ] On May 17, 2012 Echotec brought a second urgent motion to have their electronic devices immediately returned to them.

On the same date, MAQ Sonar brought a responding motion extend the time for copying the hard drives and to deal with access to a drop box which it alleged was in violation of the Anton Piller Order previously granted. Most of the issues raised by both parties in their motions of May 17, 2012 were dealt with on consent. The parties agreed that the independent supervising solicitor (“ISS”) could retrieve and examine the computers that had accessed the drop box which Echotec had occurred submitted innocently.

The motion seeking the immediate return of computers to Echotec was largely resolved by consent between counsel. The parties ultimately agreed to extend the time for copying and imaging the information on the devices with the timeline to be agreed on by counsel. Costs for the appearance on May 17, 2012 will remain in the cause as matters were resolved largely on a reasonable and consensual basis. Complexity and Importance and Proportionality [ 11 ] Matters were complex as the granting of the injunction as well as Anton Piller Orders are complicated matters.

The issues were also important to the parties as they concerned intellectual property which was very important to MAQ Sonar and also to Echotec which was in the process of starting a competing business in the same area as their previous employer. Scale of Costs and Offers to Settle [ 12 ] Neither party made an Offer to Settle and as a result, costs will not be ordered on a substantial indemnity basis. Hourly Rates, Time Spent and Proportionality [ 13 ] MAQ Sonar seeks costs on a partial indemnity basis of $10,380.52, which is 60 percent of its total actual costs.

MAQ Sonar also seeks costs at $18,357.87 for successfully responding to Echotec’s motion to set aside the injunction and Anton Piller Order, inclusive of HST. [ 14 ] MAQ Sonar claims an hourly rate of $225.00 per hour for Pierre Champagne, called to the Bar in 1995, a rate of $195.00 per hour for Rodrigue Escayola, called to the Bar in 2001, and $108.00 for Julie Paquette, called to the Bar in 2010. Echotec does not argue that the rates are unreasonable and I find the rates are reasonable.

Amount the Unsuccessful Party Would Reasonably Expect to Pay [ 15 ] Echotec submits that the amount of time spent was excessive and further submits that they exceed what the unsuccessful party

would reasonably expect to pay. [ 16 ] Echotec did not file their Costs Outline nor did they include a Bill of Costs in their materials, and therefore I am unable to compare the amounts of time spent by both parties. However, Echotec was represented by experienced counsel and extensive materials were filed by both parties for the May 3, 2012 motion as well as by the applicants for the ex parte injunction and Anton Piller motion on April 26, 2012. MAQ Sonar filed a lengthy factum of 85 paragraphs and a Book of Authorities with nine decisions.

Echotec also filed extensive materials in their motion to set aside the injunction and Anton Piller Orders. I find that the amounts claimed for costs by MAQ Sonar were within the reasonable expectations of Echotec. Disposition Costs for Ex parte Injunction and Anton Piller Order of April 26, 2012 [ 17 ] With respect to the April 26, 2012 ex parte motion for an injunction and an Anton Piller Order, MAQ Sonar claims $10,380.00 for costs on a partial indemnity basis.

Considering all of the above factors, its success on the interlocutory injunction, and the complexity of the matter, I order the defendants by counterclaim to pay costs of $7,500.00, inclusive of HST and disbursements to Helo Enterprises Inc. Motion of May 3, 2012 [ 18 ] With respect to the motion brought by the defendants by counterclaim to set aside the injunction and the Anton Piller Order and, alternatively, to vary the terms of the Anton Piller Order, MAQ Sonar claims costs on a partial indemnity basis of $18,357.87.

Considering all of the above factors, the complexity of the issues involved, that there was some success by Echotec in obtaining a variation of the terms of the Anton Pillar Order, however the injunction and the Anton Piller Order were maintained, I order the defendants by counterclaim to pay costs in the amount of $12,000.00 plus HST as well as disbursements of $1,000.00, inclusive of HST, to Helo Enterprises Inc. Motion of May 17, 2012 [ 19 ] Costs are left in the cause on this matter as success was divided and both parties consented to reasonable steps. R. Smith J.

Released: January 4, 2013 CITATION : Johnson v. Helo Enterprises Inc., 2013 ONSC 110 COURT FILE NO.: 12-54069 DATE: 2013/01/04

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Philip Johnson Plaintiff – and – Helo Enterprises Inc. Defendant AND BETWEEN: Helo Enterprises Inc. Plaintiff by Counterclaim (Responding Party) – and – Echotec Sonar Corporation, Philip Johnson, Daniel Ward, Bradley Pinch, David Hallett and Joseph Spagnuolo Defendants by Counterclaim (Moving Party) DECISION REGARDING COSTS R. Smith J. Released: January 4, 2013