Citation: Barthe v. National Bank Financial Ltd., 2010 NSSC 220
Date: 20100607
Docket: Hfx No. 208293
Registry: Halifax
Between:
Michael Barthe and Lutz Ristow
Plaintiffs/
Defendants by Counterclaim
- and -
National Bank Financial Ltd.
Defendant/
Plaintiff by Counterclaim
- and -
Daniel Potter, Starr’s Point Capital Incorporated, Fiona Imrie,
Gramm & Company Incorporated, 2532230 Nova Scotia Limited,
3020828 Nova Scotia Limited, Ronald Richter, Donald Snow,
Meg Research.com Limited, 3027748 Nova Scotia Limited,
Calvin Wadden, Raymond Courtney, Bernard Schelew,
Blois Colpitts, Stewart McKelvey Stirling Scales, Bruce Clarke,
2317540 Nova Scotia Limited, Knowledge House Inc.,
Derek Banks and Plastics Maritime Ltd.
Third Parties
And also in:
Hfx. No. 193842 (Mahoney)
Hfx. No. 216543 (Keating)
Hfx. No. 227347 (Banks)
Hfx. No. 275267 (Romanowsky)
COSTS DECISION
(Re Summary Judgment Application)
Judge: The Honourable Justice Suzanne M. Hood
Heard: (Via written submissions only)
Last written submission received April 26, 2010
Written
Decision: June 7, 2010
Counsel: David G. Coles, Q.C. and Joshua J. Santimaw, on behalf of
National Bank Financial Limited
W. Dale Dunlop, on behalf of Lutz Ristow
John F. Rook, Q.C., on behalf of Stewart, McKelvey, Stirling, Scales
James D.G. Douglas on behalf of R. Blois Colpitts
By the Court:
[1] Lutz Ristow made a motion for summary judgment in the Knowledge House Inc. (“KHI”) actions to which he is a party. His motion was unsuccessful. In my decision dismissing his motion I concluded that the successful parties were entitled to their party/party costs payable forthwith. The parties have not been able to agree and have made written submissions.
[2] National Bank Financial Ltd. (“NBFL”) was the party against whom Lutz Ristow sought summary judgment but counsel for Stewart McKelvey Stirling Scales (SMSS) and for R. Blois Colpitts participated in the summary judgment motion. Daniel Potter was in attendance but made no submissions.
ISSUES
1) Costs: Tariff A or Tariff C
2) Costs of Abandoned Application
Civil Procedure Rule 77 - Re Costs
[3] Nova Scotia Civil Procedure Rule 77 addresses costs. The provisions of that Rule relevant to this decision are as follows:
Scope of Rule 77
77.01 (1) The court deals with each of the following kinds of costs:
(a) party and party costs, by which one party compensates another party for part of the compensated party’s expenses of litigation:
...
(c) fees and disbursements counsel charges to a client for representing the client in a proceeding.
General discretion (party and party costs)
77.02 (1) A presiding judge may, at any time, make any order about costs as the judge is satisfied will do justice between the parties.
(2) Nothing in these Rules limits the general discretion of a judge to make any order about costs, except costs that are awarded after acceptance of a formal offer to settle under Rule 10.05, of Rule 10 - Settlement.
...
Assessment of interlocutory costs
77.05 (1) The provisions of Tariff C apply to a motion, unless the judge hearing the motion orders otherwise.
(2) A judge may assess costs, and provide for payment of costs, when a motion is withdrawn or abandoned.
...
Lump sum amount instead of tariff
77.08 A judge may award lump sum costs instead of tariff costs.
...
Disbursements included in award
77.10 (1) An award of party and party costs includes necessary and reasonable disbursements pertaining to the subject of the award.
ANALYSIS
1. Costs: Tariff A or Tariff C
[4] NBFL seeks costs pursuant to Tariff A. Counsel for SMSS adopts NBFL’s submissions and counsel for R. Blois Colpitts adopts the costs submissions of SMSS.
[5] Tariff A is entitled Tariff of Fees for Solicitor’s Services Allowable to a Party Entitled to Costs on a Decision or Order in a Proceeding. The heading for Tariff C is Tariff of Costs payable following an Application heard in Chambers by the Supreme Court of Nova Scotia. That Tariff continues as follows:
For Applications heard in Chambers the following guidelines shall apply:
(1) Based on this Tariff C costs shall be assessed by the Judge presiding in Chambers at the time an order is made following an application heard in Chambers.
(2) Unless otherwise ordered, the costs assessed following an application shall be in the cause and either added to or subtracted from the costs calculated under Tariff A.
(3) In the exercise of discretion to award costs following an application, a Judge presiding in Chambers, notwithstanding this Tariff C, may award costs that are just and appropriate in the circumstances of the application.
[6] Tariff C provides for costs of $2000.00 per full day for any Chambers Application of one day or more. (I note the Tariffs have not been amended since the Nova Scotia Civil Procedure Rules came into effect on January 1, 2009. Accordingly, the word “application” used in the Tariffs has a different meaning under the Nova Scotia Civil Procedure Rules (1972) than in the present Nova Scotia Civil Procedure Rules. However, Tariff C refers to summary judgment “applications.” I conclude that the intent of the new Rules is that Tariff C apply to Motions.
[7] NBFL says that the claim of Lutz Ristow is $1,625,000.00 which was the amount of the investment which he lost. According to NBFL, according to Scale I of Tariff A, it would be entitled to costs of $79,218.78 plus its disbursements.
[8] NBFL says there are several reasons why Tariff A should be used. The reasons include the complexity of the matter; the question about the admissibility of the settlement agreement of Bruce Clarke with the Nova Scotia Securities Commission; the duty of care owed by Bruce Clarke and NBFL to Lutz Ristow; the role of Lutz Ristow as a Director of KHI and his liability as such; and Lutz Ristow’s knowledge.
[9] The matter took two full days in Chambers, but the cross-examination of Lutz Ristow on his Affidavit filed on the motion was completed beforehand pursuant to an earlier Order of this Court. The discovery was lengthy taking two days followed by undertakings and interrogatories.
[10] NBFL’s submissions were made by two senior counsel, James A. Hodgson and David G. Coles, Q.C. assisted by Robert Blair, who was present at the hearing. As noted above, two other parties participated: John F. Rook, Q.C. made submissions on behalf of SMSS and Kara Beitel made submissions on behalf of
R. Blois Colpitts.
[11] NBFL cites Armour Group Ltd. v. Halifax (Regional Municipality) 2008 NSSC 123, a decision of Goodfellow, J. in which he quoted from Smith v. Michelin North America (Canada) Inc., 2008 NSSC 66.
[12] In Armour Group Goodfellow, J. said that the circumstances in Smith v. Michelin have “little in common with the cost issue in the case before me.” (para. 8). He concluded: “There was nothing unusual with respect to this half day Chambers Application.” (para. 26) In coming to that conclusion, Goodfellow, J. said at para. 20:
In my view to go beyond Tariff C in Chambers matters requires special circumstances such as the following or a combination of some of the following: ...
He then listed and explained a series of nine factors and continued in para. 21:
The foregoing is by no means exhaustive and is only indicative of the kinds of situations and factors that are likely to give rise to the possible consideration of an exercise of discretion in the area of chamber’s (sic) party and party costs.
He concluded in paras. 24 and 25:
24. Circumstances of each chamber’s (sic) matter will dictate whether or not there should be consideration of an exercise of discretion beyond the chamber’s Tariff Scale. For example, the complexity of the matter must be of some magnitude because one would reasonably anticipate that there is some level of complexity to a chamber’s application, either in law and, or, fact, otherwise the matter ought to have been one capable of resolution.
25. The mere existence of one or more of the factors noted does not, of itself, warrant departure from the updated Tariff or chamber’s (sic) party and party costs. It is the level of exceptional services required that will result first in whether or not there should be exercise of discretion to depart from the chamber’s Tariff and, secondly, the degree to which any judicial discretion should depart from the chamber’s Tariff.
[13] In my view, of the nine factors to which Justice Goodfellow referred five are of some relevance in this matter. They are complexity, pre-chambers process, questions of law that are unsettled, associate counsel and multi counsel. Ultimately, the decision is a matter of the Judge’s discretion.
[14] I conclude that this matter is not similar to that in Smith v. Michelin. In Smith v. Michelin the matter was begun as an application inter partes under the 1972 Rules and, as was said in that case, the hearing was the final hearing as contemplated by commencing an application inter partes. It disposed of the matter and was intended to dispose of the matter. In that respect, it was like a trial.
[15] This was a summary judgment motion which is, of course, a chambers motion. Although the facts are complicated, it is the issues at trial which will be complex. The law with respect to summary judgment was applied in this case. It is true there was discovery of Lutz Ristow prior to the chambers motion being heard, but he would otherwise have been cross-examined on his affidavit as part of the chambers motion. Unsettled areas of law were left for trial. Two senior counsel made submissions on behalf of NBFL and that is reflected in the costs award they seek. NBFL filed a three volume affidavit. Although the affidavit material was extensive, it was not subject to cross-examination and was provided as background information with respect to the two step test for summary judgment.
[16] Although there are multiple parties involved in the series of KHI litigation, Lutz Ristow’s motion was brought only against NBFL and the other two parties who participated made relatively brief submissions in comparison to those made by counsel for Lutz Ristow and counsel for NBFL.
[17] Since the summary judgment motion was not granted, it did not dispose of the entire matter, as was the case in Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General) 2008 NSSC 332.
[18] As Justice Goodfellow pointed out in Armour Group, supra, the complexity of the matter, to warrant deviation from the chambers tariff, must be greater than one would anticipate in ordinary chambers matters. Although this matter was lengthier than many summary judgment motions, it was largely due to the complicated factual underpinning of the entire KHI litigation. The legal issues which were raised were left for trial.
[19] I therefore conclude that this is not one of those cases where there are special circumstances which warrant a departure from Tariff C.
Tariff C
[20] According to Tariff C, costs are $2000.00 per full day for a hearing of one day or more. Tariff C also provides that where the chambers motion is “determinative of the entire matter at issue”, that amount may be multiplied by 2, 3 or 4 times depending upon:
(a) the complexity of the matter,
(b) the importance of the matter to the parties,
(c) the amount of effort involved in preparing for and conducting the application.
Substantial effort was involved in preparing for the summary judgment motion, including two days of discovery of Lutz Ristow. As well, substantial effort was involved in arguing the motion over a two day period. I conclude there is good reason to multiply the Tariff C amount by 4, however that would result in costs of only $16,000.00. In my view that is inadequate. NBFL seeks lump sum costs of $30,000.00 in addition to the Tariff C costs of $16,000.00.
[21] In support NBFL cites Cherubini Metal Works, supra. In that case, Coughlan, J. awarded lump sum costs of $40,000.00 on a summary judgment motion. However, he said in para. 25 of the decision:
The summary judgment application was determinative of Cherubini’s claims against the Unions in the Supreme Court. ...
That is not the case here. The summary judgment motion was dismissed and the litigation continues.
[22] However, other factors should be considered in this case. The summary judgment motion would have taken perhaps twice as long had Lutz Ristow not been examined for discovery before the motion was heard.
[23] On the other hand, counsel for Lutz Ristow points out that there was one issue on which NBFL was not successful. That was whether or not Lutz Ristow could bring the motion on his own since he sued jointly with Michael Barthe.
[24] Lutz Ristow’s counsel also points out that, at the time this motion was heard, the new Rules with respect to summary judgment had only been in force for a few months. He submits it was not unreasonable to test the new summary judgment rule.
[25] He also invites me to reconsider my decision that costs be payable forthwith. He cites two cases in which costs were awarded, but to be paid in the cause. The summary judgment motion has been disposed of and I see no reason to reconsider the exercise of my discretion in that decision to award costs payable forthwith.
[26] The issue on which NBFL was not successful was a small issue and should not significantly reduce the costs to which NBFL is entitled. As well, I note that Lutz Ristow intended to bring a summary judgment motion under the 1972 Rules in any event and did not merely decide to bring a summary judgment motion under the new Rules after January 1, 2009 to test the new Rule.
[27] Although court time involved in the summary judgment motion was two days, two days of discovery preceded the court dates. In my view this must be taken into consideration in an award of costs. I therefore conclude in my discretion that NBFL is entitled to its costs, awarded on a lump sum basis, in the amount of $30,000.00.
Abandoned Motion
[28] Lutz Ristow originally made an application for summary judgment under the 1972 Rules and filed an Affidavit therefor. In response, a two volume affidavit was filed by NBFL. After the summary judgment application was withdrawn and a motion brought under the Nova Scotia Civil Procedure Rules, which took effect on January 1, 2009, Lutz Ristow filed a new affidavit and in response a three volume affidavit was filed by NBFL. At Exhibit 74 of the later affidavit (filed by NBFL on March 23, 2009), there is a concordance between the earlier and later Ristow affidavits. His affidavit filed in 2008 contained 44 paragraphs and the new affidavit contained 70 paragraphs. In addition, there were changes to various paragraphs including some changes to references to various parties and to the knowledge of and actions by Lutz Ristow. This in turn necessitated the filing of a more extensive affidavit by NBFL and the attendant time and cost involved.
[29] Nova Scotia Civil Procedure Rule 77.05 (2) allows costs to be awarded for abandoned motions and NBFL seeks $2,000.00 therefor. NBFL claims this amount pursuant to Tariff C for a full day in Chambers. I do not agree that the additional time and effort in preparing for a summary judgment application which was abandoned should be equated to a full day in Chambers. However, it is clear that there were costs thrown away and additional work required. In all the circumstances, I conclude that $2,000.00 is a reasonable amount to be awarded to NBFL for the abandoned motion.
Costs Award for Stewart McKelvey Stirling Scales and R. Blois Colpitts
[30] Counsel for Lutz Ristow submits that because NBFL discontinued against SMSS and R. Blois Colpitts, after the summary judgment motion was heard but before the decision was released, that they are not entitled to costs. He says there is no authority supporting their entitlement entitled to costs.
[31] However, they were parties at the time the summary judgment motion was argued and had both prepared for it and made submissions on the motion. In my view, although there may be no authority to say that costs can be awarded to them, it is equally true that there is nothing to say that they should be deprived of their costs because subsequent to the date they did the work they ceased to be parties to the litigation.
[32] It is a matter of timing of the release of the decision which, according to Mr. Dunlop’s argument, affects their right to costs. The motion was heard on April 6 and 7, 2009, but the decision was not released until October, 2009. The parties had no control over the date of release of the decision and, in my view, it would be unjust to deprive them of their costs as a result. According to the argument of counsel for Lutz Ristow, had the decision been released on May 31 they would be entitled to costs, but because it was not released until after the Order discontinuing against them was filed on June 1, 2009, they should be disentitled from receiving a costs award.
[33] I conclude it would not be just to deprive these parties of their costs.
[34] As I have mentioned above, both these parties adopt directly or indirectly the position taken by NBFL with respect to costs. Counsel for Stewart McKelvey Stirling Scales seeks costs in the amount of $49,985.74 inclusive of disbursements and counsel for R. Blois Colpitts seeks costs of $25,745.87 inclusive of disbursements. Each has provided a bill of costs entitled Total Amount Requested on a Partial Indemnity Scale, Payable Forthwith.
[35] I have decided above that Tariff A costs should not be awarded and that the costs should be awarded pursuant to the Chambers Tariff, Tariff C. In his written submissions, John F. Rook, Q.C. says:
At all material times SMSS supported NBFL who had primarily responsibility for opposing Dr. Ristow’s motion for summary judgment. NBFL and SMSS worked together to avoid duplicating efforts and to reduce costs.
He continues: “Given its supporting role SMSS seeks a lesser amount of costs than does NBFL.”
[36] In his submissions, D.G. Douglas says:
Like SMSS, Mr. Colpitts played a supporting role on Dr. Ristow’s motion, whereas NBFL had primary responsibility for opposing the motion.
[37] Because of their admission that they played a supporting role to that of NBFL, I agree that their costs award should be less. I note, for example, that no affidavit evidence was filed on behalf of these parties.
[38] In all of the circumstances of this case, I conclude, in my discretion, that SMSS should have its costs in the amount of $14,000.00 plus disbursements and R. Blois Colpitts costs in the amount of $8,000.00 plus disbursements.
Disbursements
[39] Each party is also entitled to its disbursements and no issue was taken with the amount of these in the submissions on behalf of Lutz Ristow. I have reviewed the disbursements carefully and conclude they are reasonable and necessary. Therefore, NBFL is entitled to its disbursements in the amount of $3,533.31, SMSS is entitled to its disbursements in the amount of $4,235.66 and R. Blois Colpitts to his disbursements in the amount of $5,286.62.
Hood, J.