) ) ANGOSS SOFTWARE CORPORATION Appellant (Plaintiff) – v. –, 2013 ONSC 4360

CITATION: Angoss Software Corporation v. Scott, Lattice Engines Inc., 2013 ONSC 4360 DIVISIONAL COURT FILE NO.: 181/12 DATE: 20130624 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT SWINTON, SACHS AND GRACE JJ. BETWEEN: ) ) ANGOSS SOFTWARE CORPORATION Appellant (Plaintiff) – and – IAN SCOTT and LATTICE ENGINES INC. Respondents (Defendants) )))))))))))) Geoffrey D. E.

Adair Q.C., for the Appellant(Plaintiff) Ian Werker, for the Respondent (Defendant),Ian Scott Kristin Taylor, for the Respondent(Defendant), Lattice Engines Inc. ) ) ) HEARD at Toronto: June 24, 2013 SACHS J. (orally) [1] An appeal court should only interfere with a judge’s order of costs if there is an error in principle or if the costs award wasplainly wrong (see Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 , [2004] 1 S.C.R. 303 at para. 27). [2] On this appeal the appellant states that the motion judge made two errors in principle.

One, he erred in awarding any coststo the respondent, Lattice Engines Inc. (“Lattice”). Two, he erred in the quantum of costs that he awarded to the respondent, Ian Scott(“Scott”). [3] The appellant asserts that Lattice “inserted” itself into the motion and that its interests were exactly the same as Scott’sinterests. Further, the appellant was seeking no relief against Lattice on the motion other than an order that they preserve documents.

The motion judge dealt with this argument and found as follows: The plaintiff’s motion sought relief against both defendants, so both were perfectly entitled to defend against the motion (especiallygiven the relationship of employee-employer that exists between the two defendants) and their interests were not identical. Accordingly,both of the defendants are entitled to their costs on a partial indemnity basis. [4] We agree. Scott’s interest was to protect his employment with Lattice.

Lattice’s interest was threefold; to keep its soleCanadian employee, to protect the integrity of its intellectual property and to preserve its customer relations. All of these interests werecrucial to the respective parties and warranted separate representation.

Further, separate representation was justified in order to avoid theproblem that the interests of the parties could diverge, raising the spectre of a conflict of interest. [5] With respect to Scott, the error in principle asserted is that the motion judge awarded Scott an amount equal to approximately72% of his actual costs, which is not consistent with the reasonableness principle. In this regard, the appellant argued that this principle

dictated that partial indemnity costs should not exceed two-thirds of the actual costs incurred. In making this submission the appellant’scounsel acknowledged that the appellant would not have pursued this appeal were it not for its position respecting the Lattice costs. According to the appellant, a reasonable award for the Scott costs would have been $20,000 plus HST and disbursements. [6] First, it is important to recognize that as a matter of public policy this Court is not here to fine-tune costs awards.

Second,there can be no suggestion that the costs awards in this case constitutes an “outlier” award as in Berry v. Scotia Capital Inc., [2010] O.J.No. 5267. Third, the hourly rate awarded by the motion judge was considerably less than the full indemnity rate of $360 an hour andwas a reasonable partial indemnity rate for a lawyer of more than 20 years experience. Fourth, the motion judge was not provided withthe appellant’s Bill of Costs which could have been a measure of reasonable expectations. As the Divisional Court stated in UnitedStates of American v.

Yemec, (ON SCDC), 2007 85 O.R. (3d) 751 at para. 54: The appellants cannot argue strenuously that the motion judge should have discussed in more detail his consideration of the reasonableexpectations of the unsuccessful party as one of the factors to be considered in determining an amount of costs that is fair andreasonable. The appellants did not submit their own bill of costs. Consequently, as pointed out in Risorto v. State Farm MutualAutomobile Insurance Co. (2003), (ON SC), 64 O.R. (3d) 135, [2003] O.J.

No. 990 (S.C.J.), an attack on thequantum of costs based on excess in circumstances where the court does not have before it the bills of all counsel “is no more than anattack in the air”. In such case, the court can rightly make the inference that the appellants devoted as much or more time and money inan attempt to contest the motion (see Andersen v. St. Jude Medical, Inc., supra, at para. 27). [7] For these reasons, the appeal is dismissed. COSTS SWINTON J. [8] I have endorsed the Appeal Book as follows, “This appeal is dismissed for oral reasons delivered in court by Sachs J.

In ourview, a reasonable award of costs would be $5,000 for the motion for leave to appeal and $10,000 for the appeal, given two counsel forthe respondent. [9] Accordingly, the appellant shall pay costs of $15,000 to the respondents, the amount to be divided between them as they seefit.” SACHS J. SWINTON J. GRACE J. Date of Reasons for Judgment: June 24, 2013 Date of Release: June 27, 2013 CITATION: Angoss Software Corporation v. Scott, Lattice Engines Inc., 2013 ONSC 4360 DIVISIONAL COURT FILE NO.: 181/12

DATE: 20130624 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT SWINTON, SACHS AND GRACE JJ. BETWEEN: ANGOSS SOFTWARE CORPORATION Appellant (Plaintiff) – and – IAN SCOTT and LATTICE ENGINES INC. Respondents (Defendants) ORAL REASONS FOR JUDGMENT SACHS J. Date of Reasons for Judgment: June 24, 2013 Date of Release: June 27, 2013