The Ontario Securities Commission has ordered a firm to pay $20,000 towards the cost of an investigation and hearing, rather than the $32,332 the commission staff requested, saying that OSC staff didn’t provide enough detail of its actual costs.

The OSC released on Thursday its reasons for a decision to award costs in the matter of First Federal Capital (Canada) Corp. and Monte Morris Friesner. Staff had requested that First Federal and Friesner pay costs of its investigation and hearing in the amount of $32,332.60 (almost $27,500 in litigation and $4,600 in investigation costs).

OSC staff argued that the bill of costs represents an appropriate balancing of the interests of the capital markets and fairness to Friesner. They said the costs allocated to Friesner have been significantly discounted.

Friesner’s counsel argued that the bills submitted by staff do not provide full information about the specific activities they performed; and, that Friesner deserves a limited form of discovery to get more detail, including being allowed to cross-examine OSC staff about their activities. He cited a court decision that found, “An order for costs is simply a fine by another name, unless it is a true reflection of the actual and reasonable costs…”

The commission partly agreed with Friesner’s counsel. While it denied the option of cross-examination, and it accepted OSC staff’s statement that the costs it sought does not reflect the full cost of the investigation and hearing, it also said, “However, we disagree with staff’s submission that a lower bill of costs requires less detail in support of it.

Every determination of the quantum of costs is a question of fact for the panel, and must be supported by appropriately detailed evidence and documents. In this case, we find the docket entries to be insufficiently detailed to be given full weight.”

“We have concerns with the paucity of detail provided in staff’s dockets. Accordingly, we are not satisfied that the full value of the costs reflected in the bill of costs has been justified in this case,” it said. “We believe that a substantial discount is warranted. For the above reasons, we fix the quantum of costs in this matter at $20,000.00.”