COURT FILE NO.: 467/05
DATE: 20090203
SUPERIOR COURT OF JUSTICE - ONTARIO
(DIVISIONAL COURT)
RE: JASMINE RAGOONANAN and PHILIP RAGOONANAN by their estate representative DAVINA RAGOONANAN and RANUKA BABOOLAL by her estate representative VASHTI BABOOLAL Plaintiffs (Appellants)
- and -
IMPERIAL TOBACCO CANADA LIMITED Defendant (Respondent)
- and -
DAVINA RAGOONANAN and RONALD BALKARRAN Third Parties
BEFORE: JUSTICES JENNINGS, PITT and KITELEY
COUNSEL: Joel P. Rochon and Andrew J. Roman for the Plaintiffs (Appellants) Deborah A. Glendining for the Defendant (Respondent)
ENDORSEMENT AS TO COSTS
KITELEY J.:
[1] In reasons for decision released April 30, 2008, we dismissed the plaintiffs’ appeal from the decision of Cullity J. refusing certification. We also refused the cross-appeal by the defendant seeking leave to appeal the decision of Cullity J. in which he declined to award costs to the successful defendant on the certification motion. We directed counsel to make written submissions on costs of the appeal.
[2] Counsel for the plaintiffs takes alternative positions with respect to costs. Counsel submits that there should be no costs awarded on the certification appeal. In the alternative, costs of the appeal in the Divisional Court should be deferred and be determined by the Court of Appeal.
[3] Counsel for the defendant seeks costs of the certification appeal. She has provided a bill of costs on a partial indemnity basis in the amount of $94,354.36. Counsel also asks for costs of the certification motion before Cullity J. That bill of costs on a partial indemnity basis is in the amount of $372,908.56. In the alternative, counsel for the defendant seeks costs on a partial indemnity basis in the amount of $94,354.36 together with an award of its disbursements for expert witnesses for the certification motion in the amount of $29,285.27. In the further alternative, counsel for the defendant takes the position that at minimum, partial indemnity costs of the certification appeal ought to be awarded. Lastly, counsel has suggested that the costs of the appeal be set off against the costs in favour of the plaintiff on the summary judgment motion.
[4] Counsel for the plaintiffs argue that there should be no costs of the cross-appeal.
statutory and regulatory framework
[5] Section 131(1) of the Courts of Justice Act provides that costs are in the discretion of the court. Section 31(1) of the Class Proceedings Act directs that the court consider whether the class proceeding was a test case, raised a novel point of law or involved a matter of public interest.
[6] Rule 57 enumerates facts relevant to costs including the importance of the issues.
issues
[7] The issue is whether costs ought to follow the event or whether the public interest in this action leads to a different result.
analysis
[8] In February 2005, the defendant brought a motion for summary judgment that was dismissed by Cullity J. In September 2005, Cullity J. dismissed the plaintiff’s motion for certification. In the subsequent costs endorsement, Cullity J. dealt with costs of both motions. He awarded the plaintiffs their costs for the summary judgment motion on a partial indemnity basis in the amount of $323,862.61. He refused to award costs to the defendant for the certification motion on the basis that the action involved the public interest.
[9] Counsel for the plaintiffs relies on 8 decisions that resulted in no costs of failed certification motions.[^1] They argue that those decisions and the decision of Cullity J. in this case demonstrate that where the class action sufficiently engages the public interest, costs should not be awarded to a successful defendant. They take the position that the same reasoning ought to apply to the appeal of a certification motion.
[10] Counsel for the defendant points out that all of those cases pre-date Kerr v. Danier Leather[^2] in which the Supreme Court of Canada commented on the cost consequences that should follow an unsuccessful appeal from the dismissal of a certification motion. Counsel for the defendant argues that at the appellate level, costs ought to follow the event. She argues that it is not appropriate to shield the plaintiffs from the costs of appealing the dismissal of their certification motion. Futher, it is not in the public interest to enable plaintiffs to repeatedly pursue a class proceeding where there is little or, in reality, no chance of certification and yet not be at risk for costs.
[11] We do not propose to review the many authorities on which the parties rely. There is one factor that distinguishes this case from all others. In June 2005 Health Canada passed the Cigarette Ignition Propensity Regulations[^3] requiring all cigarettes manufactured in or imported into Canada to meet a reduced ignition propensity standard as of October 1, 2005.
[12] This is not a case that can be characterized as the plaintiffs repeatedly pursuing a hopeless cause. Cabinet saw fit to promulgate regulations dealing with substantive issue that is at the core of this law suit. The issue is what liability, if any, arises prior to October 1, 2005 and whether liability can be established in a class proceeding or otherwise. Given the uniqueness of this case, we agree with counsel for the plaintiffs that it is reasonable to apply the public interest criterion in s. 31(1) and the importance of the issues criterion in rule 57 as the basis upon which the defendant ought to be denied costs of the plaintiffs’ unsuccessful appeal to the Divisional Court.
[13] Costs of the unsuccessful appeal by the defendant gives rise to additional considerations. We declined to grant leave to appeal from the refusal to grant costs of the plaintiffs’ unsuccessful certification motion. Yet counsel for the defendant now seeks to recover the same costs that Cullity J. denied it. Such a request ought not to be countenanced.
[14] Counsel for the plaintiffs argues that there was no public interest in the defendant’s cross-appeal on the issue of costs. We need not make a finding on that assertion. We agree with the overall position taken by counsel for the plaintiffs that the most equitable result is that each side bear its own costs of the defendant’s unsuccessful cross-appeal.
conclusion
[15] There shall be no costs of the appeal or of the cross-appeal.
______________________________ JENNINGS J.
______________________________ PITT J.
KITELEY J.
RELEASED: February 3, 2009
[^1]: Caputo v. Imperial Tobacco Ltd. (2005), 2005 63806 (ON SC), 74 O.R. (3d) 728 (S.C.J.; Joanisse v. Barker (2003), 46 C.P.C. (5th) 348 (S.C.J.); M.C.C.C. v. Canada (Attorney General), [2002] O.J. No. 687 (S.C.J.); Williams v. Mutual Life Assurance Co. of Canada (1999), 2001 62796 (ON SC), 6 C.P.C. (5th) 194 (S.C.J.); McNaughton Automotive Ltd. v. Co-operators Insurance Company (2000), 2000 22409 (ON SC), 50 O.R. (3d) 300 (S.C.J.); Mahar v. Rogers Cablesystems Ltd. (1995), 1995 7129 (ON SC), 25 O.R. (3d) 690; Elliott et al v. Canadian Broadcasting Corp., 1995 244 (ON CA), [1995] O.J. No. 1710 (C.A.); Ciano v. York University, [2000] O.J. No. 3482 (C.A.)
[^2]: [2007] S.C.C. 44
[^3]: S.O.R./2005-178 under the Tobacco Act (1997), c. 13