COURT FILE NO.: 543/07

DATE: 20080711

SUPERIOR COURT OF JUSTICE - ONTARIO

DIVISIONAL COURT

RE: Herbert Bruce Heron v. Guidant Corporation, Guidant Sales Corporation, Guidant Canada Corporation, and Cardiac Pacemakers

BEFORE: Kiteley J.

COUNSEL: John A. Campion and Paul J. Martin, solicitors for the Defendants/Appellants Won J. Kim and Victoria Paris, solicitors for the Plaintiff/Respondent

E N D O R S E M E N T AS TO COSTS

[1] In an endorsement dated January 10, 2008, I dismissed the defendants’ motion for leave to appeal. In the costs outline dated January 30, 2008, counsel for the plaintiff asked for $22,858.21 in fees and disbursements. In written submissions dated February 13, 2008, counsel for the defendants took the position that the costs of the motion for leave to appeal should be in the cause, at least pending the outcome of the certification hearing. In the alternative, counsel for the defendants argued that the amount of costs sought was excessive and that the award ought not to exceed $2500.00.

[2] The amount claimed in the proceeding is in excess of $500,000,000. Counsel for the plaintiff asserted that the decision to dismiss the motion for leave will have a significant impact on the amount recovered by the members of the class, due to both the tolling of the limitation period and the greater potential pre-judgment interest. Arguably, the combined financial impact of the decision could be in the millions of dollars.

[3] I agree with counsel for the defendants that the motion for leave dealt with a relatively narrow issue of the representative plaintiff. The issues of limitation period and pre-judgment interest are sufficiently remote from the motion for leave that the amount claimed and the potential amount recovered in the proceeding is not relevant to the disposition of costs of the motion for leave.

[4] Counsel for the plaintiff asserted that this was a highly complex proceeding on behalf of a large class, and carried a great deal of risk for the plaintiff and their counsel. I agree that the proceeding is complex. But the motion for leave to appeal was not.

[5] Counsel for the plaintiffs sought to divide the Defibrillator and Pacemaker claims into two separate proceedings for reasons of judicial economy and better efficiency. They argued that while the motion for leave was procedural in nature, the issues raised on the motion were important for the class.

[6] As the reasons of Cullity J. noted and as my reasons observed, in 2005, 3 actions were commenced under the Class Proceedings Act in which the plaintiffs claimed damages resulting from defects in the defibrillators. In this action commenced by Heron (referred to as the Pacemaker action) claims were made in respect of pacemakers and defibrillators. Heron had been implanted with a defibrillator. In the original motion before Cullity J. counsel for the plaintiff were successful in the substitution of Heron in the Pacemaker action. At the heart of the motion for substitution is a carriage war among class counsel. As counsel for the defendants pointed out, the defibrillator class action was taken forward by separate counsel for the convenience of settling a carriage dispute among class counsel. That lead to the need for substitution. I agree with counsel for the defendants that the fact that a motion (and this leave action) derived from those circumstances, unrelated to any conduct of the defendants is a matter relevant to the question of costs. It promotes a modest recovery.

[7] In arguing that the defendants had brought the motion for leave to appeal “solely to gain an economic advantage by avoiding the payment of two years of pre-judgment interest for over 10,000 class members”, counsel for the plaintiff asserted that the motion for leave involved “established principles of law regarding the substitution of plaintiffs in a class action” and that Cullity J. had “made reference to all of the relevant case and fully disposed of the issues”. Yet earlier in the submissions, counsel for the plaintiff had urged complexity. Eight timekeepers (including a student at law and a summer student) spent almost 120 hours responding to the motion for leave based on “established principles of law”. I agree with counsel for the defendants that that is excessive. Furthermore, if as a result of a carriage war, counsel for the defendants had an opportunity to resist an important motion and then launch a motion for leave, that can hardly be considered to be conduct that tended to lengthen unnecessarily the duration of the proceeding.

[8] According to the Court of Appeal in Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291, the court must determine what is fair and reasonable in fixing costs and in doing so must consider the reasonable expectations of the parties as a relevant factor.

[9] This was a procedural motion that was not successful. Costs should follow. However, the costs recovered by the plaintiff ought to be modest to reflect the circumstances referred to above and the reasonable expectations with respect to a one hour motion arising from a lengthier motion where virtually all the same legal and factual circumstances had been covered.

[10] The defendants shall pay to the plaintiff costs of the motion for leave to appeal fixed at $2500.00. The payment shall be made by August 15, 2008.

Kiteley J.

DATE: July , 2008