The Plaintiff, Dow Chemical Canada ULC (“Dow Chemical”) applied for full indemnity Costs as follows: $81,209,968.31 for solicitor-and-own-client costs; $5,878,623.84 for experts and other disbursements; and $64,784,451.89 for experts outside of Canada. The Defendant, NOVA Chemicals Corporation (“NOVA”) argued that Costs should be submitted to an Assessment Officer for a reasonableness determination.

This litigation was extremely complex and costly, and included a Trial spanning seven months. The Court of King’s Bench found that NOVA deliberately breached its contractual duties, engaged in conversion, and committed gross negligence and wilful misconduct. On Appeal, NOVA’s breaches and liability were affirmed, but the case was remanded to Trial to recalculate damages. Ultimately, Dow was awarded damages in the amount of $3.5 billion dollars.

Following Rules 10.29 and 10.31, Justice Romaine held that Dow was entitled to Costs for its successful claims and that a manipulation of column 5 of Schedule C of the Rules would not be appropriate in the circumstances. Instead, Romaine J. held that a lump sum Costs award was appropriate.

Further, the Court held that a reasonableness assessment was not required given Rule 1.2 but, regardless, Dow’s costs were reasonable. Justice Romaine agreed with NOVA that since the liability for Costs was contractually based, the factors under Rule 10.33 did not apply to solicitor-and-own-client Costs. However, Rule 10.33 applies to the reasonableness rest. After applying factors (f) through (j) of Rule 10.33, the Court held that NOVA’s pattern of litigation conduct created unnecessary cost and delay that should factor into a Costs decision.

Dow provided the Court with a breakdown of its legal fees in a format that mirrored the one accepted by the Federal Court and the Federal Court of Appeal. NOVA objected, because the amounts claimed were unsubstantiated and did not include the details of what work was completed, or at what rate. Romaine J. held that the form of disclosure provided was appropriate and sufficient for litigation between sophisticated parties. The Court also held that Dow is entitled to its disbursements, costs associated with discovery, costs of online research, and costs of out of country counsel. Further, Justice Romaine held that travel expenses for out-of-town experts was recoverable. Romaine J. also held that costs incurred between the conclusion of the Trial and the date of the Decision were recoverable given the magnitude of the case and the likelihood of further hearings. The Court emphasized that the total Costs claimed were less than 4% of the total damages awarded and that Dow did not claim for recovery of legal services for in-house counsel.