2017 ONSC 910, 2017 ONSC 910

CITATION : Trillys v. Pittman, 2017 ONSC 910 COURT FILE NO.: 15-63591 DATE: 2017/02/07 SUPERIOR COURT OF JUSTICE - ONTARIO RE: Trillys Systems Inc., Plaintiff AND Steven Pittman and Raymond Chabot Grant-Thornton, Defendants BEFORE: Aitken J. COUNSEL: Edward C. Conway, for the Plaintiff Heather J. Williams, for the Defendants HEARD: Written Submissions ENDORSEMENT RE COSTS [ 1 ] On November 24, 2015, the Plaintiff brought a motion seeking various orders to ensure the confidentiality of a document central to this litigation.

On December 13, 2016, I released my endorsement to the effect that: • the document would be sealed, thereby prohibiting public access to it; • the Defendant corporation would be denied access to the document, but counsel for the Defendant corporation would be allowed access to it; • the Defendant Pittman and his counsel would be allowed access to the document; and • production of the document would be covered by the deemed undertaking rule set out in r. 30.1.01(3) of the Rules of Civil Procedure [1] as well as by the implied undertaking of confidentiality at common law. [ 2 ] The Defendants now seek their costs on the motion in the amount of $13,474.35 which are the actual costs incurred by the Defendants, as reflected in the Bill of Costs provided to the Plaintiff’s counsel immediately following the motion on November 25, 2016.

The Plaintiff’s counsel did not provide the Defendants’ counsel or the court with the Plaintiff’s Bill of Costs at the time. [ 3 ] It is now apparent from the Costs Submissions filed on behalf of the Plaintiff, that its actual costs relating to the motion were $18,957.18 ($16,125.18 relating to the sealing order/restricted production motion and $2,832.22 relating a motion to strike an affidavit filed on the motion). [ 4 ] Based on the limited information provided to me by counsel in regard to the period prior to July 11, 2016, I am not left with any clear sense as to what cost arrangements would be the most appropriate for that period.

It appears that the sealing/production motion was filed on April 5, 2016. The responding motion record was filed on July 21, 2016. [ 5 ] Throughout this litigation, the Defendants signalled that they would not object to a sealing order being granted in regard to the document as part of a resolution of the confidentiality issue. In fact, the Defendants’ counsel advised the court of that as early as February 2016. That being said, the Defendants were not prepared to formalize the sealing order without a complete resolution of the production issues.

The Plaintiff took the same “all or nothing” approach, refusing to consider anything less than the order sought in the motion record. Since the Defendants’ counsel could not agree to that, settlement discussions were stymied. [ 6 ] On July 11, 2016, the Defendants’ counsel advised the Plaintiff’s counsel that the Defendant corporation might consent to an order that it not have access to the document, but the Defendant Pittman would not so consent. The Defendants’ counsel asked the Plaintiff’s counsel to discuss this proposal with his client and advise whether it might be acceptable to the Plaintiff.

If it was, the Defendants’ counsel would get instructions from the Defendant corporation. But the Defendants’ counsel warned the Plaintiff’s counsel that, in the absence of a resolution on the production issues, the Defendants would not consent to a sealing order. The Plaintiff’s counsel did not respond to this correspondence – a reaction which I do not consider reasonable.

Not hearing from the Plaintiff’s counsel, the Defendants’ counsel proceeded to prepare responding materials. [ 7 ] On July 19, 2016, after the Defendants had served their responding motion record, and fifteen days prior to the original return date of the motion on August 4, 2016, the Defendants’ counsel sent a formal offer to settle the motion on the basis of an order issuing: (1) to seal the document so that it would not become part of the public record, and (2) to deny the Defendant corporation access to the document. The Defendant Pittman would have access to the document.

The offer also included the suggestion that costs of the motion be referred to the

summary judgment motion or trial judge. This offer was not accepted. The order I made on December 13, 2016 mirrored this offer.

[ 8 ] I see no reason why the Defendants should not have their costs on a partial indemnity basis from July 11, 2016 forward, subject to a slight reduction because the motion originally scheduled for August 4, 2016 had to be adjourned at the last moment due to an illness on the part of the Defendants’ counsel. There can be no doubt that the Defendants are entitled to their costs from July 19, 2016 forward, due to the formal offer that was made, identical to the order eventually made.

But, had the Plaintiff been acting reasonably, the Plaintiff would have considered the informal proposal in the July 11, 2016 letter from the Defendants’ counsel. Had the proposed arrangement been accepted at that time, the Defendants would not have had to go to the expense of preparing any materials on the sealing/production motion. [ 9 ] The time and hourly rates included in the Defendants’ Bill of Costs are reasonable – especially in comparison to those in the Plaintiff’s Bill of Costs. [ 10 ] No monetary amounts were involved on this motion.

The proceeding was not complex, though it did raise an unusual legal issue in the context of civil litigation in the Superior Court of Justice. [ 11 ] In my view, the position taken by the Plaintiff in regard to not allowing the Defendant Pittman to see the document in question was totally unreasonable and untenable and resulted in the unnecessary continuation of these interim proceedings. I do not consider the position taken by the Defendants’ counsel regarding the cross-examination of the Defendants to be unreasonable.

The Defendants’ counsel warned the Plaintiff’s counsel that she would not produce the Defendants for cross-examination on their affidavits on the motion for

summary judgment until the Plaintiff had produced all affidavits on which it sought to rely on the motion. That position was consistent with r. 39.02(1) of the Rules of Civil Procedure . [ 12 ] I am not allowing the Plaintiff costs relating to the motion to strike because, had the Plaintiff reasonably considered the offer made by the Defendants, this motion would have proved unnecessary. [ 13 ] I note that neither counsel provided me with dockets indicating when different steps were taken in these proceedings.

Consequently, I can only do my best in estimating what an appropriate amount would be for the Defendants’ costs on a partial indemnity basis from July 11, 2016 forward. I estimate that to be $5,000.00. [ 14 ] The Plaintiff shall pay the Defendants’ costs fixed in the amount of $5,000.00 inclusive of disbursements and HST. Aitken J. Date: February 7, 2017 CITATION : Trillys v. Pittman, 2017 ONSC 910 COURT FILE NO.: 15-63591 DATE: 2017/02/07

ONTARIO SUPERIOR COURT OF JUSTICE RE: TRILLYS SYSTEMS INC., Plaintiff AND STEVEN PITTMAN AND RAYMOND CHABOT GRANT THORNTON, Defendants BEFORE: Aitken J. COUNSEL: Edward C. Conway, Counsel, for the Plaintiff Heather J. Williams, Counsel, for the Defendants ENDORSEMENT RE COSTS Aitken J. Released: February 7, 2017