COURT FILE NO.: 269/06
DATE: 20070925
ONTARIO SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
RE: HOLLINGER FARMS NO. 1 INC. and ALTONA FARMS INC.
Applicants
- and -
MINISTER OF THE ENVIRONMENT and ONTARIO REALTY CORPORATION
Respondents
BEFORE: Hoilett, Pardu and Ground JJ.
COSTS ENDORSEMENT
Entitlement to Costs: Factors to be Considered
[1] Both Respondents, the Minister of the Environment (the “Minister”) and Ontario Realty Corporation (“ORC”), were entirely successful on the Application and are entitled to their costs. The factors to be considered by the court in exercising its discretion with respect to an award of costs as set out in Rule 57.01(1) and their application to the case at bar are fully detailed in the initial costs submission of the Minister and, in our view, are entirely accurate and are adopted by this court.
[2] The fact that there were two Respondents is, in our view, totally irrelevant to the questions of entitlement to, scale of, and quantum of, costs to be awarded. The Application was brought by the Applicants Hollinger Farms No. Inc. and Altona Farms Inc. (the “Applicants”) challenging both the description and categorization of the undertaking by ORC and the decision of the Minister not to grant bump up requests for a Category D environmental assessment.
[3] We do not accept the submission of the Applicants that there was significant duplication on the part of the Respondents in responding to the Application. The facta and other materials filed, and the oral submissions made by counsel for the Minister and by counsel for ORC addressed substantially different issues and, in our view, the Respondents assiduously made an effort to avoid duplication in both the written materials and in oral submissions. The submissions of ORC concentrated on the process followed in determining the description of the undertaking and the categorization of the undertaking in accordance with the Class EA and the process followed in carrying out the Class C environmental assessment. The submissions of the Minister were focused primarily upon the process followed by the Minister in reviewing the bump up requests and in arriving at her decision to deny the bump up requests.
[4] The Applicants also question the costs sought by the Respondents including costs incurred with respect to the aborted 2005 Application. It is apparent from the Minutes of Settlement dated April 5, 2005 withdrawing such Application that the costs of the 2005 Application and of the two motions to quash were specifically reserved to the court which was to hear the new Judicial Review Application and accordingly, such costs are clearly before this court for determination.
[5] The Applicants have also raised the issue of ORC including in its claim for costs time spent in relation to November 2006 hearing dates of the Sandford Application. It appears, from a review of the accounts of ORC submitted, that the costs relating to the Sandford Application have been deducted and that the Minister has deleted from her bill of costs any court attendance time for the November 2006 hearing dates.
[6] Accordingly, there is, in our view, no basis for a deduction from the costs claimed by the Respondents for duplication, for the costs of the 2005 Application or for the November 2006 hearing of the Sandford Application.
[7] The Applicants also appear to object to the costs claims of the Respondents including the costs of responding to an injunction motion brought by the Applicants to enjoin the Respondents from completing the Land Exchange until this Application had been disposed of. The injunction motion was settled by the entering into of a Standstill Agreement and the imposition of a timetable for this Application by Justice Then. It has been the position of the Respondents throughout that this Application is totally devoid of merit and that the bringing of the injunction motion was, in any event, unnecessary as the closing of the Land Exchange would have in no way impacted upon the positions taken by the Applicants on this Application or upon the Applicants’ lands. The costs incurred by the Respondents in resisting the injunction motion are accordingly, in our view, properly included in the costs now claimed in that it was one step brought in this Application which, as submitted by the Respondents, was brought only to frustrate, disrupt and delay the Land Exchange and the public policy goals of the Province to protect the Oak Ridges Moraine and to establish controlled development of the Seaton Lands.
[8] We do not accept the submissions of the Applicants that the conduct of the Respondents in resisting the injunction motion unnecessarily lengthened the proceeding or significantly increased the costs of the proceeding unnecessarily.
Scale of Costs
[9] This court has found that the Applicants had no interest in the environmental assessment of the Seaton Lands and that their sole motive for bringing the Application was to frustrate, disrupt and delay the Land Exchange as a further step in their ongoing war with the Province and their attempts to harass and intimidate the Province into permitting development of their lands adjoining the Seaton Lands. This court has found that the bringing of the Application was based on an improper motive, was brought in bad faith and was an abuse of the process of this court. The Applicants submit that their true motive was disclosed in the affidavit of Ken Rovinelli originally submitted in support of this Application but struck from the record as being inadmissible. We note that there was no disclosure of the Applicants true motive in any of the other initial affidavits filed in support of this Application and that the Rovinelli affidavit was only filed after one of the other affiants, Flowers, was forced to admit on cross examination the true motives of the Applicants in bringing this Application. This court has found in paragraph 101 of its Reasons that the motives of the Applicants in bringing this Application would justify the dismissal of the Application on the grounds of abuse of process even if the Application was not being dismissed on other grounds. In our view, the bringing of the Application was vexatious and an egregious example of abuse of the process of this court in that the Applicants clearly intended to mislead this court as to their motives in bringing the Application. It is interesting to note that there was no support for this Application from the other parties who originally submitted bump up requests to the Minister. In our view, the conduct of the Applicants in bringing this lengthy, complex and expensive Application before this court as a tactic in the ongoing war between the Applicants and the Province and in misleading the court as to their true motives in bringing the Application falls well within the “reprehensible, scandalous or outrageous conduct” described by McLachlin J. in Young v. Young (1993) 1993 34 (SCC), Carswell B.C. 264 at paragraph 66 referred to by the Applicants in their costs submissions and, accordingly, entitles the Respondents to costs on a substantial indemnity scale.
Quantum of Costs
[10] The Minister seeks costs, on a substantial indemnity scale, in the amount of approximately $302,000 for fees together with disbursements of approximately $12,000. ORC seeks costs on a substantial indemnity scale of approximately $761,000 for fees together with disbursements of approximately $34,000.
[11] In our view, applying the principles outlined in Boucher v. Public Accountants Council for the Province of Ontario (2004) 2004 14579 (ON CA), O.J. No. 2634, the Applicants must have been aware that they were risking substantial indemnity costs being awarded against them in that they had initiated a proceeding which would result in complex, lengthy, hard fought and expensive litigation. The Applicants are sophisticated commercial enterprises represented by sophisticated commercial litigators and would be well aware of the extent of costs that could be incurred in a proceeding of this nature. In awarding costs, the courts should take into account costs awards in proceedings of similar length and complexity. In our view, the most analogous case cited by counsel was the costs award by this court in 407 ETR Concession Co. v. Ontario (Registrar of Motor Vehicles) [2006] O.J. No. 868 where this court awarded costs on a partial indemnity basis in the amount of $306,501, inclusive of disbursements and GST. The court noted that applying the hourly rates, which the court found to be reasonable, to the number of hours billed would have resulted in costs of $565,317.25, inclusive of disbursements and GST, the fees component being approximately $519,000. In our view, the claim of the Minister for fees in the amount of $302,000 in the case at bar is, by comparison, eminently reasonable on a substantial indemnity scale. We do not propose to second-guess the allocation of work among counsel at various levels within the Ministry or to minutely dissect the claim for disbursements as submitted by the Minister.
[12] With respect to the costs claimed by ORC, we note that the hourly charging rates, particularly at the senior level, are substantially higher than those charged by the Minister, reflecting the reality of hourly rates applied by major law firms being substantially higher than those applied by government ministries. We do, however, have some difficulty with the total hours charged by each Respondent. The total hours reflected in the costs outline of the Minister appears to be 992.6 hours as opposed to 2,006.4 hours in the costs outline of ORC. Such discrepancy is not, in our view, justified from the perspective of the issues addressed and the materials prepared by each Respondent. In our view, the number of hours docketed should have been approximately equal. Again, we do not propose to second-guess the division of labour among counsel at various levels within Fraser Milner Casgrain, counsel to ORC, or to minutely dissect the disbursements claimed.
[13] Accordingly, costs are awarded to the Minister in the amount of $302,000 for fees, together with disbursements as submitted and applicable GST, and to ORC in the amount of $400,000 for fees, together with disbursements as submitted and applicable GST.
Costs against DeGasperis Personally
[14] Although this court has found that Mr. DeGasperis was the principal and directing mind of at least one of the Applicants, there is, in our view, no evidence to satisfy this court that the criteria as set out in Noel v. Callahan (2004) 2004 ONCJ 46, O.J. No. 2068 to justify an award of costs against a non-party. Although Mr. DeGasperis would have been able to bring a bump up request personally in that requests can be made by “any person”, he did not do so and accordingly, in our view, would not have status to bring the within Application. There is also no evidence that the Applicants are not the true Applicants or are “men of straw” put forward by the true Applicants to insulate them from liability for costs. The evidence is that the Applicants are owners of adjacent lands of substantial value and, as stated above, have brought the Application as a tactic in their continuing war with the Province to obtain legislative or administrative action to permit the development of their lands. Accordingly, there will no award of costs against Mr. DeGasperis personally.
Ground J.
Hoilett J.
Pardu J.
Released: September 25, 2007