CITATION: Seaworld Parks & Entertainment LLC v. Marineland of Canada Inc., 2011 ONSC 5231 COURT FILE NO.

: 52783/11 (St. Catharines) DATE: 2011/09/08

2011 ONSC 5231 (CanLII)

SUPERIOR COURT OF JUSTICE ONTARIO RE: Seaworld Parks & Entertainment LLC (Applicant) v. Marineland of Canada Inc. (Respondent) The Honourable Mr. Justice R.A. Lococo

BEFORE:

COUNSEL: Peter R. Jervis, P. John Landry and Rebecca Gosevitz, for the Applicant John A. Keefe and Julie Rosenthal, for the Respondent HEARD: By written submissions

[1] Seaworld Parks & Entertainment LLC was successful in its application for possession of a captive killer whale following the termination by Seaworld of a breeding loan agreement with Marineland of Canada Inc. Marineland was unsuccessful in its motion to have the application converted to an action and proceed to trial.1 [2] In their written submissions, it was common ground between the parties that Seaworld, as the successful party on the application, should be awarded its costs. The parties disagree, however, on the scale and quantum of costs. [3] Seaworld argued that costs should be payable on a substantial indemnity basis given Marinelands unreasonable conduct in responding to the application. According to Seaworld, Marinelands strategic choice to introduce extensive parol evidence turned what should have been a straight forward matter of contract interpretation into a lengthy protracted proceeding requiring extensive affidavit materials, expert evidence, cross examinations and detailed legal argument. Seaworld filed a costs outline claiming fees on a substantial indemnity basis of $292,245 plus disbursements of $95,329 (in each case inclusive of tax), for a total of $387,574. According to the costs outline, if costs were awarded on a partial indemnity basis, the total cost award would be $292,159. [4] Marinelands position was that its conduct in responding to the application does not justify departure from the general rule that the successful party should be awarded costs on a partial indemnity basis. Marineland also argued that, in any case, the amount claimed by Seaworld was excessive having regard to the amount that it would be reasonable for the losing party to pay in the circumstances. Marineland submitted that a partial indemnity cost award in
1

Seaworld Parks & Entertainment LLC v Marineland of Canada Inc, 2011 ONSC 4084 (SC).

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the range of $50,000 to $75,000, inclusive of disbursements and tax, was fair and reasonable in the circumstances.
2011 ONSC 5231 (CanLII)

[5] I agree with Marineland that the cost award against it should be on a partial indemnity basis. As noted by Justice Archibald in Empire Life Insurance Co v Krystal Holdings Inc:2 Substantial indemnity costs are an exceptional award, saved for extenuating circumstances, such as situations where there has been egregious conduct, ... or where a motion has been brought unreasonably. [6] In this case, the legal position taken by Marineland in responding to the application was based on a difficult area of contract law as to the circumstances in which parol evidence may be taken into account when interpreting a contract. While I ultimately found against Marineland on this issue, I do not consider Marineland to have acted unreasonably in taking the position it did. In my view, nothing in Marinelands conduct came anywhere close to justifying the exceptional award of substantial indemnity costs against it. [7] That being said, it is undoubtedly correct that the consequences of Marinelands response to the application, however reasonable it may have been, was to substantially increase the costs to both parties of the application. It would not be fair to expect Seaworld to bear the cost consequences of Marinelands unsuccessful response to an unreasonable extent. In my view, a partial indemnity cost award of $50,000 to $75,000 in Seaworlds favour would not come close to being fair and reasonable in the circumstances. [8] In its costs submission, Marineland raised a number of specific objections to the justification for the costs claimed by Seaworld, including the hourly rates charged by the lawyers, the number of lawyers involved, the number of hours charged, certain travel disbursements, disbursements for an expert who ultimately did not provide a report or affidavit, and costs for an interim motion by Seaworld that was settled on consent. However, having reviewed the extensive material filed on the application and after hearing two full days of argument at the hearing. I find myself in substantial agreement with Seaworlds justification for the quantum of a partial indemnity cost award that it sought on an alternative basis. In my view, generally speaking, the number of lawyers working on the matter, the hours spent and the rates charged were reasonable, as were the disbursements charged for travel and experts given the location of the parties and the matters in issue. As well, I agree with Seaworld that it was justified in claiming costs for the motion for interim relief since it was necessary to bring that motion in order to obtain information that Marineland was required to provide under the breeding loan agreement. [9] Seaworld did concede, however, that additional time was spent by a second senior partner in preparing for the application hearing because the lead senior partner was called for a trial in another matter, and I agree with Marineland that it would not be reasonable to expect Marineland to bear the additional cost. I also agree with Marineland that, in any case, the fixing of costs is
2

[2009] OJ No 1095 (SC) at para 19.

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not simply a mathematical exercise whereby hours spent are multiplied by the applicable hourly rates, and that it is incumbent on the court to consider what it would be reasonable for the losing party to pay in the circumstances.3 [10] Taking these and other relevant factors into account, an order will issue requiring Marineland to pay Seaworlds costs on a partial indemnity basis, fixed at $240,000 inclusive of disbursements and tax.
2011 ONSC 5231 (CanLII)

_________________________________ The Honourable Mr. Justice R.A. Lococo

Released:

September 8, 2011

See Ravelston Corp (Re), [2007] OJ No 1387 (SC) at para 5 and Boucher v Public Accountants Council for the Province of Ontario, [2003] OJ No 24 (CA) at para 24.

CITATION: Seaworld Parks & Entertainment LLC v. Marineland of Canada Inc., 2011 ONSC 5231 COURT FILE NO.: 52783/11 (St. Catharines) DATE: 2011/09/08
2011 ONSC 5231 (CanLII)

SUPERIOR COURT OF JUSTICE - ONTARIO BETWEEN: Seaworld Parks & Entertainment LLC Applicant - and Marineland of Canada Inc. Respondent

BEFORE:

The Honourable Mr. Justice R.A. Lococo

COUNSEL: Peter R. Jervis, P. John Landry and Rebecca Gosevitz, for the Applicant John A. Keefe and Julie Rosenthal, for the Respondent

COSTS ENDORSEMENT

Lococo J.

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Released:

September 8, 2011

2011 ONSC 5231 (CanLII)