Supreme Court

Supreme Court of Nova Scotia

Citation: Unisys Canada Inc. v. Pineau-Pandya, 2021 NSSC 348

Date: 20210312

Docket: Hfx. No. 47312

Registry: Halifax

Between:

Unisys Canada Inc.

 

Plaintiff

v.

 

Andrea Pineau-Pandya, Matthew Watts, Karen Caldwell, Shiliang Lu,

Fang Gao, Quishi Li, Natasha Squires and Meraki It Consulting Incorporated

 

 

Defendants

 

Cost Decision

Judge:	The Honourable Justice Patrick J. Murray
Submissions:	November 19, 2020, in Halifax, Nova Scotia
Decision:	October 20, 2021
Subject:	Costs, Civil Procedure Rule 77, Civil Procedure Rule 18.14;
Summary:	The Plaintiff and Defendants each making production motions, re: undertaking requests.
Issues:	Appropriate Costs.  Tariff C.
Result:	Although success was divided, lump sum costs awarded due to the Defendants based on the principle of substantial but incomplete indemnity. Civil Procedure Rules 77.05, 77.06; and 77.08 applied.
Caselaw Considered:	Nova Credit Union Ltd. v. Geomac Inc., 2020 NSSC 405; Industrial Refrigeration Systems Inc. v. Quality Meat Packers Limited, 2015 ONSC 5334; Body Shop Canada Ltd. v. Dawn Carson Enterprises Ltd., 2010 NSSC 25; Walji v. Boudreau, 2009 NSSC 349; Tri-Mac Holdings Inc. v. Ostrom, 2019 NSSC 44; Southwest Construction Management Ltd v. Halifax (Regional Municipality), 2018 NSJ No. 427 (SC); Homburg v. Stichting Autoriteit Financiele Markten, 2017 NSSC 52.

 

SUPREME COURT OF Nova Scotia

Citation: Unisys Canada Inc. v. Pineau-Pandya, 2021 NSSC 348

Date: 20211012

Docket: Hfx. No. 473125

Registry: Halifax

Between:

Unisys Canada Inc.

 

Plaintiff

v.

 

Andrea Pineau-Pandya, Matthew Watts, Karen Caldwell, Shiliang Lu,

Fang Gao,Quishi Li, Natasha Squires and Meraki It Consulting Incorporated

 

Defendants

 

Decision on Costs

 

 

Judge:	The Honourable Justice Patrick J. Murray
Submissions:	June 15, 2021
Written Decision:	October 12, 2021
Counsel:	Mark Tector and Andrew Hill for the Plaintiff Colin Bryson, Q.C., and Bhreagh MacDonald for the Defendants

 

By the Court:

Introduction

[1]             This is my decision on costs with respect to two motions for production filed by (each) of the Plaintiff, Unisys Canada Inc. (Unisys) and the Defendants, Andrea Pineau-Pandya, Matthew Watts, Karen Caldwell, Shiliang Lu, Fang Gao,Quishi Li, Natasha Squires and Meraki It Consulting Incorporated, (Pineau-Pandya et al).

[2]             In the Motion made by Unisys the Court ordered production of the following:

In conclusion, the Court has ordered that the following production be made by the Defendants, within 30 calendar days of March 12, 2021:

1.                 Meraki’s annual financial statements for 2017 and 2018.  (para 81)

2.                 Personal tax returns of Ms. Pineau-Pandya and Mr. Lu for 2017 and 2018 (para 81)

3.                 Meraki’s shareholder register, directors’ register, and certificate of incorporation. (para 83)

[3]             In the Motion made by Meraki, Pineau – Panda et al, the Court order production of: 

In conclusion, the Court has ordered that the following production be made by the Plaintiff within 30 calendar days of March 12, 2021:

1.                 Client contracts for Amanda Services for the 18 month period preceding Ms. Pineau-Pandya’s termination, (para 61)

2.                 Gross billings/invoices for the 18 month period preceding Ms. Pineau-Pandya’s termination. (para 62)

3.                 That reasonable efforts be made to provide emails about CSDC doing business with Meraki and Ms. Pineau-Pandya for a one year period following Meraki’s incorporation date. (para 85)

Position of the Parties on Costs

Unisys

[4]             Unisys submits that there was shared or mixed success.  Each were successful to a degree on the respective motions.  In these circumstances, Unisys says it makes sense that each party would bear their own costs.

[5]             In the alternative, Unisys submits that an award of costs should be “in the cause”, and fixed at the end of the proceeding, once the result of the litigation is determined.

Pineau-Pandya et al

[6]             These motions did produce mixed results for both parties but the Defendants submit their result was relatively better when the nature and extent of the disclosure sought is considered. This should be reflected in the costs award say the Defendants.

Analysis

[7]             This Court must balance its approach in arriving at a cost order that will do justice between the parties, and one that will provide a substantial but incomplete indemnity of the parties’ legal expenses.  These motions are interlocutory proceedings and were not determinative of the entire matter at issue. 

[8]             As the motions were heard “in Chambers”, Tariff C would presumptively be the appropriate tariff.  There are however, certain rules which are still applicable.  For example, Rule 77.07 permits a judge to add an amount to, or subtract an amount from, tariff costs.  There are factors that may reduce or increase the tariff amount.

[9]             In addition, under Rule 77.08 a judge may award lump sum costs instead of Tariff costs.

[10]         The starting point is that the provisions of Tariff C apply to a motion, unless the judge hearing the motion orders otherwise.

[11]         The motions were heard over 1.5 days.  This included both evidence and submissions.  The preparation for the motions was significant.  The documentation, affidavits and briefs were extensive.

[12]         The motions were very important to both parties given the nature of the pleadings, and the cause of action, which includes a counterclaim filed by the Defendants.

Applying Tariff C

[13]         A key issue is whether there was in fact divided success in the motions.

[14]         Another issue is the amount of time spent of each motion.

[15]         A third is whether an award under Tariff C will satisfy the principle of substantial but incomplete indemnity, in these circumstances.

[16]         Unisys says given divided success and based on the length of time to hear the motions (3/4 day each), each party is entitled to costs of $1,500. pursuant to Tariff C.  Each side should therefore, bear their own costs.

[17]         Unisys submits that this support for this approach in the caselaw set out as follows:

[18]         In Nova Credit Union Ltd. v. Geomac Inc., 2020 NSSC 405, the court ruled there were  “no clear winners or losers”, and decided that every party should bear their own costs. 

[19]         In Industrial Refrigeration Systems Inc. v. Quality Meat Packers Limited, 2015 ONSC 5334 citation, the Court held, in accepting that “both parties could justify an award of costs”, that with ‘set off’, the slate would be “wiped clean”. 

[20]         In the Nova Scotia decisions, Body Shop Canada Ltd. v. Dawn Carson Enterprises Ltd., 2010 NSSC 25, Justice Bourgeois, as she then was, and  Walji v. Boudreau, 2009 NSSC 349, Justice Wright, held that because of the divided success each party was to bear its own costs.  Body Shop involved motions for summary judgment by third parties. Walji the involved motions related to a motor vehicle action.

[21]         Rule 77.05 and Tariff C are silent, with respect to additional criteria, that may be considered in respect of interlocutory costs. There are underlying assumptions “built into” the Tariff that ensure the amounts are adequate in many cases.

[22]         Rule 77.03(3) states, “Costs of a proceeding follow the result, unless a judge orders or a Rule provides otherwise.”

[23]         I accept that time spent was about the same on each motion, more than half but less than a full day. I find however that the degree of success varied , particularly on the Unisys motion.

[24]         I also accept this may be a case where tariff does not satisfy the principle of substantial but incomplete indemnity.  

[25]         In Tri-Mac Holdings Inc. v. Ostrom, 2019 NSSC 44, citation, Justice Ann Smith, stated at paragraph 6:

[6]  Courts will depart form Tariff C amounts when the basic award of costs under the Tariff would not adequately serve the principle of substantial but not complete indemnity for legal fees of the successful party.  The Tariff C costs in this case would amount to $12,000, for effectively six days at $2000 for each day.  The Defendants have indicated that actual legal fees incurred in responding to the motion were in excess of $75,000.  A payment of $12,000 does not amount to substantial yet incomplete indemnity.

Decision

[26]         Overall, compared to what was sought, the Defendants had more success in the motions, by any fair assessment.  However, it must be stated that in terms of the production actually ordered, the success might be considered marginal or measured.  Both parties had reason to file their motions.  That said, I can understand the Defendant’s position that it “felt like a win”.

[27]         Divided success in my view, does not only mean an exact 50-50 result.  Indeed such a finding would be onerous and quite difficult for a judge to assess.

[28]         Unisys submits that in the present case the Court awarded production of three (3) requests on each motion, and as a result costs should be awarded accordingly, as the results are a “wash”.  In other words, costs should be borne equally.

[29]         Such a finding may lend itself to costs being shared equally, however, even if there was an equal result or equal success, that alone may not determine that the award will do justice between the parties.

[30]         On disclosure, and in other motions, there are other variables that play a part and are factored into the overall assessment.  For example, the extent of the disclosure sought, in relation to the amount achieved.  Much work goes to responding to the production sought.  In the Unisys motion, the amount of disclosure sought was significant.  My decision said as much.  It must also be kept in mind, there are numerous Defendants, and perhaps the need for more requests.

[31]         In the case of Meraki motion, while the number of requests made was not as many, the nature of the disclosure sought was considerable.  For example, the first three requests of the Defendants were:

2.  To provide copies of client contracts for AMANDA services in place at time of Ms. Pineau-Pandya’s termination and preceding three years.

3.  To provide copies of contracts for AMANDA services in place of any additional clients beyond list of companies provided for 2014 to 2018 inclusive.

7.  To provide the gross billings to each of the various customers of Unisys for AMANDA services from 2014 to 2017.

[32]         In total, the Plaintiff requested completion of 52 undertakings given.  To its credit, Unisys summarized these requests into seven groups (a to g)  (Footnote see [1]).  The Defendants motion lists a total of twelve (12) requests.    

[33]         The numbers themselves do not necessarily “tell the story”, but I accept the Defendants’ submission that it had considerably more success on the Unisys motion than did Unisys.

[34]         With respect to the Meraki motion, the Defendants were successful, but there is more of an argument that both sides were successful in respect of that motion.

[35]         I find the amount spent on the motions was about the same (3/4 of a day each).

[36]         In Southwest Construction Management Ltd v. EllisDon Corp, 2018 NSSC 270, the Court referred to an observation made by Justice Wood (as he then was) in Homburg v. Stichting Autoriteit Financiele Markten, 2017 NSSC 52, at paragraph 29:

[29]  Justice Wood made much the same observation in Homburg v. Stichting Autoriteit Financiele Markten, 2017 NSSC 52 where, at para. 9 he stated:

It is important to recognize that the substantial contribution principle underlies the tariffs but does not supersede them. Most cost matters should be disposed of based upon an application of the tariffs with the built in discretion to adjust amounts for the factors identified in Rule 77. The mere fact that the party's actual legal account is significantly more than the tariff does not automatically justify a departure. To suggest otherwise would turn the court into a taxing master whose function is to first assess the reasonable solicitor client account and then apply some percentage recovery between 50% and 100%.  [Emphasis added]

[37]         The Defendants’ overall claim for costs amounts to $10,000. ($8,500. + $1,500.) which is approximately 40% of their legal fees, with respect to the motions themselves. Given the Defendants’ success, I find this is not an unreasonable amount.

[38]         While the Court does not have the Defendants’ actual legal accounts for review, I do not question that these are the amounts and I expect Plaintiff’s counsel would not disagree, based on its own legal fees, which I expect are also substantial.

[39]         In the end, I am going to order that the Defendants are entitled to costs in the amount of $8,000. There was some shared success but I would not say it was divided or equal.

[40]         To be clear, I am satisfied that the amount permissible under Tariff C, in these circumstances, would not serve the principle of a substantial, but in complete indemnity of the Defendants’ legal expenses.

[41]         Rule 77.08 allows the Court to order a lump sum instead of tariff costs.

[42]         This concludes my cost decision.

 

 

Murray, J.