Singh v. PCPO, 2018 ONSC 203

CITATION: Singh v. PCPO, 2018 ONSC 203

DIVISIONAL COURT FILE NO.: 418-17

DATE: 20180118

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

KITELEY, LINHARES DE SOUSA AND PATTILLO JJ.

BETWEEN:

VIKRAM SINGH and VIKRAM SINGH ONTARIO PC NOMINATION CAMPAIGN

Applicants/

Appellants

– and –

PROGRESSIVE CONSERVATIVE PARTY OF ONTARIO, PATRICK BROWN, RICK DYKSTRA, BOB STANLEY and LOGAN BUGEJA

Respondents/

Respondents

Richard Macklin and Arina Joanisse, for the Applicants (Appellants)

Matthew P. Gottlieb, Paul Fruitman and Fahad Siddiqui, for the Respondent Bob Stanley

Mitch Koczerginski, for the remaining Respondents

HEARD: December 12, 2017

L. A. PATTILLO J.

Introduction

Introduction

1Vikram Singh (“Singh”) and the Vikram Singh Ontario PC Nomination Campaign (collectively the “Appellants”) appeal, with leave, from the order of Cavanagh J. (the “Motion Judge”) dated July 6, 2017 (the “Order”) which expunged certain material from the Appellants’ application record in a pending judicial review application (the “Application”) and prevented the Appellants and others from disseminating any of that material to others on the grounds of settlement privilege.

2The Appellants also seek leave to appeal the Motion Judge’s order of August 30, 2017, awarding the Respondent Bob Stanley (“Stanley”) $136,315 in costs for the motions (the “Costs Order”).

3For the reasons that follow, I dismiss both Singh’s appeal from the Order and the application for leave to appeal the Costs Order.

Background

Background

4On May 7, 2017, the Progressive Conservative Party of Ontario (the “PC Party”) held a nomination meeting in the riding of Hamilton West-Ancaster-Dundas (“Hamilton West”) to select a candidate for the PC Party in the next provincial election. The Respondents Rick Dykstra (PC Party President), Stanley (PC Party Executive Director) and Logan Bugeja (a PC Party staff member) were all present at the meeting.

5Singh was one of four candidates who ran for the nomination. Although Singh collected the most votes at seven of the eight ballot tables, Benjamin Levitt (“Levitt”) collected sufficient votes at the eighth table, the credentials table, to enable him to win the nomination by a margin that exceeded all of the other candidates combined.

6On May 10, 2017, Singh delivered a notice of appeal to the PC Party alleging “gross irregularities and voter fraud” on the part of PC Party officials at the nomination meeting. Singh sought an order disqualifying Levitt and declaring himself the nominated candidate.

7On May 19, 2017, Singh sent an email to the candidates and PC Party officials requesting a meeting to “discuss the particulars of the appeal.” He received no response.

a) The Meeting

The Meeting

8On May 23, 2017, one of Singh’s supporters requested by email a meeting with Walied Soliman (“Soliman”), the PC Party campaign chair, to discuss the Hamilton West nomination. The email stated in part, “It’s a very important issue and needs to be dealt with asap.”

9On May 24, 2017, Singh and four of his supporters met with Soliman (the “Meeting”). Singh attended with his lawyer but Soliman asked the lawyer to leave before the Meeting began and Singh agreed. At the outset of the Meeting, it was expressly or impliedly understood by all participants that the discussions would be without prejudice and would be kept confidential. Singh, unbeknownst to any of the other participants, recorded a considerable portion of what was discussed on his phone.

10None of the issues arising out of Singh’s appeal to the PC Party were resolved at the Meeting.

11At a PC Party Executive meeting on June 3, 2017, Singh’s appeal to the PC Party was effectively rendered moot when Patrick Brown, the leader of the PC Party, exercised his “legal responsibility and authority under the Election Act” and declared that he would be signing the nomination papers of all 64 candidates who had been selected, including Levitt. Singh was advised of the decision in a letter to his lawyer from the PC Party’s lawyer on June 6, 2017. The letter concluded as follows:

Accordingly, your client’s appeal is moot. The nomination meeting in question is no longer determinative of the identity of the endorsed PC candidate for HWAD. The exercise of the Leader’s legal authority and discretion is.

b) The Application

The Application

12On June 13, 2017, the Appellants commenced the Application in Hamilton. The Application seeks, among other things, an order in the nature of certiorari, with prohibition in aid, setting aside the decision of the PC Party to declare Levitt the PC Party nominee for the provincial riding of Hamilton West; an order quashing the June 3, 2017 decision of Patrick Brown to terminate Singh’s internal appeal of the nomination proceedings; and an order declaring Singh to be the PC Party nominee for Hamilton West or in the alternative, remitting the matter back to the PC Party to hold a new nomination meeting pursuant to the court’s direction.

13The Application is supported, in part, by an affidavit filed by Singh setting out from his perspective the events that transpired leading up to and during the nomination meeting as well as after. The affidavit also contained, under the heading “Post-Nomination Meeting Events”, details of the Meeting on May 24, 2017 with Soliman (paragraphs 32 to 35). Singh noted that “the purpose of the meeting was to address the injustice that [his] campaign asserted took place at the nomination meeting.” As part of the details of the Meeting, Singh also attached as Exhibit I to his affidavit a transcript of the audio recording “of a considerable portion” of the meeting which he had recorded (the “Transcript”).

c) Stanley’s Motion

Stanley’s Motion

14On June 14, 2017, Stanley commenced a motion, returnable in Toronto on the same day, for an order striking paragraphs 32 to 35 in Singh’s affidavit, expunging the Transcript from the Application Record and prohibiting the Appellants and anyone who had a copy of the Transcript or knowledge of its contents from disclosing or disseminating the information of the Meeting to any other person (the “Motion”). Stanley submitted that what took place at the Meeting was privileged and confidential and therefore could not be disclosed. The Motion was supported by Stanley’s affidavit and affidavits from others who attended the Meeting.

15The Motion came on before the Motion Judge on an urgent basis on the afternoon of June 14, 2017. Although the Appellants’ lawyer was eventually contacted and advised about the Motion, he was not able to attend before 5:00 p.m. Accordingly, the Motion proceeded on an ex parte basis.

d) The Interim Order

The Interim Order

16Based on the evidence provided by Stanley, the Motion Judge issued an interim order in the form of the relief requested to preserve the status quo and protect the interests of the Respondents from having the information from the Meeting disclosed until the claims of privilege and confidentiality could be determined (the “Interim Order”). The Interim Order was effective for ten days and was subsequently extended to enable the Appellants to respond to the Motion.

17Although counsel for the Appellants did subsequently appear before the Motion Judge in the early evening of June 14, 2017 and make submissions against the Interim Order, the Motion Judge declined to alter the Interim Order without prejudice to the Appellants subsequently moving to set it aside.

18Stanley’s return motion for a permanent order expunging the Transcript and striking out paragraphs 32 to 35 in Singh’s affidavit, together with related relief, was heard by the Motion Judge on June 27 and 28, 2017. At the same time, Singh brought a motion to set aside the Interim Order, with prejudice (collectively the “Motions”).

e) The Motion Judge’s Decision

The Motion Judge’s Decision

19In detailed reasons released July 6, 2017 (2017 ONSC 4168) (the “Reasons”), the Motion Judge dismissed Singh’s motion, granted Stanley’s return motion and made a permanent Order expunging the Transcript, deleting paragraphs 32 to 35 of Singh’s affidavit and prohibiting the Appellants, any person associated with them who was in possession of the Transcript or who had knowledge of the communications at the Meeting or any person who obtained a copy of the Transcript or knowledge of the communications at the Meeting from disclosing or disseminating the Transcript or communications that took place at the Meeting.

20In granting the relief requested, the Motion Judge concluded, based on the evidence before him, that the communications at the Meeting were subject to settlement privilege and that Singh had not established that any of the generally accepted exceptions to settlement privilege, including the public interest exception, applied.

f) The Costs Order

The Costs Order

21Subsequently, on August 30, 2017, following submissions in writing, the Motion Judge issued a six-page endorsement (the “Costs Endorsement”) awarding Stanley partial indemnity costs of the Motions in the total amount of $136,315 (fees of $109,682.50 and disbursements of $12,373.77).

The Issues

The Issues

22On September 15, 2017, this court granted leave to appeal the Order on the following questions:

1. Is it an essential element of settlement privilege that the discussion between the parties contain “a hint of compromise”; and

2. If there is a finding of settlement privilege in this case, does the public interest or “justice of the case” exception apply?

23The Appellants also seek leave before this court to appeal the Costs Order of August 30, 2017.

Standard of Review

Standard of Review

24The Supreme Court of Canada addressed the standard of review on an appeal from the decision of a judge in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. In summary, the standard of review on an appeal from a judge is as follows:

1. The standard of review on a question of law is correctness.

2. The standard of review for findings of fact is “palpable and overriding error”.

3. The standard of review for findings of mixed law and fact is “palpable and overriding error”, unless there is an extricable legal principle, in which case the standard of review is correctness.

25Singh submits that the standard of review in respect of the issues on which leave to appeal has been granted is correctness.

26Stanley submits that the first issue on which leave was granted, whether it is an essential element of settlement privilege that the discussion contain a hint of compromise, involves two separate inquiries by the court. First the court must initially determine if the test for settlement privilege requires that settlement discussions show a “hint of compromise”, which is an extricable question of law which must be decided on a correctness standard. In the event the court answers that question in the affirmative, it must decide whether the discussion at the Meeting evinced a “hint of compromise”. That is a question of mixed fact and law upon which the Motion Judge’s findings are entitled to deference and which should be reviewed on a palpable and overriding error basis.

27With respect to the second issue on which the court granted leave, whether the public interest or “justice of the case” exception to settlement privilege applies, Stanley submits that the standard of review is palpable and overriding error because the decision involves the application of a principle not in dispute.

28The remaining Respondents filed no factum and adopted Stanley’s submissions both in respect of standard of review and otherwise.

29I agree that the Motion Judge’s decision that a “hint of compromise” is not an essential element of the test for settlement privilege is a question of law resulting in the standard of review being one of correctness. Because the Motion Judge did not determine whether there was a hint of compromise, however, the palpable and overriding error standard is not engaged.

30With respect to the second issue, for the reasons advanced by Stanley, I agree that the standard of review is palpable and overriding error and deference is owed to the Motion Judge’s decision. There is no issue that the Motion Judge applied the correct principle in determining whether the public interest exception applied to the facts of the Motion. Accordingly, the Motion Judge’s decision that the public interest exception did not apply is one of mixed fact and law and there is no extricable legal principle involved.

Settlement Privilege

Settlement Privilege

31Settlement privilege is an important pillar of the justice system which has long been protected by the courts. It operates to protect communications made during the course of settlement negotiations so that parties can reach a resolution of their dispute knowing what is communicated cannot be used against them and is inadmissible in any court proceedings. It is based on the overriding public interest in favouring settlements. See Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, [2013] 2 S.C.R. 623 and Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35, [2014] 1 S.C.R. 800, at para. 31.

32In determining whether the privilege applies such that the communications in issue should be protected from disclosure, the following well-established three-part test confirmed by the Court of Appeal in Re Hollinger Inc., 2011 ONCA 579, 107 O.R. (3d) 1, at para. 16 must be met:

1. there is a litigious dispute;

2. the communications were made with the express or implied intention that they would not be disclosed; and

3. the purpose of the communications is to attempt to effect a settlement.

33In Bellatrix Exploration Ltd. v. Penn West Petroleum Ltd., 2013 ABCA 10, 542 A.R. 83, the Alberta Court of Appeal considered the scope and purpose of settlement privilege at paras. 21 to 28. Specifically at paras. 26 to 28, the court stated the following:

26 As settlement privilege operates to preclude admission of evidence that might otherwise be relevant, it competes with the court's truth-seeking function. For that reason, courts must ensure the communications come within the tripartite test before applying the privilege. However, once that test is met, the privilege must be given broad scope and attach not only to communications involving offers of settlement but also to communications that are reasonably connected to the parties' negotiations. The privilege belongs to both parties and cannot be unilaterally waived or overridden by either of them.

27 It is to be remembered that the rationale for the privilege is not limited to the notion that it would be unfair to subsequently prejudice one of the parties by admitting any admissions made during settlement negotiations. The rule is also intended to allow parties to freely and openly discuss the potential for a settlement, and while doing so, the parties should not have to carefully monitor the content of their discussions. As noted by Lord Walker in Unilever plc v. The Procter & Gamble Co. (1999), [2001] 1 All ER 783 at para 35, [2000] 1 WLR 2436 (CA):

The protection of admissions against interest is the most important practical effect of the rule. But to dissect out identifiable admissions and withhold protection from the rest of without prejudice communications (except for a special reason) would not only create huge practical difficulties but would be contrary to the underlying objective of giving protection to the parties.

28 In other words, the rule's protection is not meant to be limited to the prejudice that an admission may have at trial specifically, but on the potential impairment on settlement discussions as an important element of the litigation process generally. Accordingly, for the rule to operate properly, not only must the ambit of the settlement privilege be broad, but the exceptions to the exclusionary rule must be narrowly construed and only be given effect where another policy objective can be shown to outweigh any impact that may arise to the settlement objective. [Citations omitted.]

34As noted, settlement privilege is not an absolute privilege. While there is a prima facie presumption of inadmissibility, there are exceptions which can override the privilege. At para. 12 in Sable Offshore, Abella J. referred to exceptions to the privilege “when the justice of the case requires it.” She further stated the following at para. 19:

19 There are, inevitably, exceptions to the privilege. To come within those exceptions, a defendant must show that, on balance, “a competing public interest outweighs the public interest in encouraging settlement” (Dos Santos Estate v. Sun Life Assurance Co. of Canada, 2005 BCCA 4, 207 B.C.A.C. 54, at para. 20). These countervailing interests have been found to include allegations of misrepresentation, fraud or undue influence (Unilever plc v. Procter & Gamble Co., [2001] 1 All E.R. 783 (C.A.), Underwood v. Cox (1912), 1912 582 (ON SCDC), 26 O.L.R. 303), and preventing a plaintiff from being overcompensated (Dos Santos).

35In considering whether an exception to the settlement privilege applies, the court must determine whether the reason for the disclosure outweighs the policy in favour of settlement: Sable Offshore, at para. 30.

Issue 1: Is it an Essential Element of Settlement Privilege that the Discussion Between the Parties Contain a “Hint of Compromise”?

Issue 1: Is it an Essential Element of Settlement Privilege that the Discussion Between the Parties Contain a “Hint of Compromise”?

36In dealing with the issue of settlement privilege, the Motion Judge canvassed both the origin of the privilege and the purpose behind it as discussed in Sable and in Re Hollinger.

37Further, in determining whether settlement privilege applied to what was discussed at the Meeting, the Motion Judge applied the three-part test set out in Re Hollinger. In that regard there is no dispute with respect to the Motion Judge’s findings that there was a litigious dispute (Singh’s appeal to the PC Party) and that it was expressly or impliedly agreed by all the parties who attended the Meeting that communications at the Meeting would be kept confidential and not disclosed.

38In addressing the third requirement of the test, whether the purpose of the communication was to attempt to effect a settlement, the Motion Judge rejected the Appellants’ submission that a “hint of compromise” was an essential element of the requirement. The Motion Judge held, relying on both Unilever and Bellatrix, that where the communications took place in a meeting and the first two requirements of the settlement privilege test were established, in order to decide whether the third requirement had been met, a court must determine whether the purpose of the meeting was to attempt to effect a settlement of the litigious dispute.

39In support of their submission that a “hint of compromise” was an essential component of the third requirement of the test, the Appellants relied on Bellatrix; Boogaard v. Canada (Attorney General), 2014 FC 1113, rev’d 2015 FCA 150; and East Guardian v. Mazur, 2014 ONSC 6403, 19 C.B.R. (6th) 317. The Motion Judge considered each of these cases and distinguished them on the grounds that the purpose and nature of the communications in issue in those cases was different in material respects from the purpose and nature of the communications in the Meeting. He noted that, with the exception of the meeting in Bellatrix (which was privileged), the communications in those three cases “were not made in circumstances where the parties had accepted or understood that they were made for the purpose of attempting to resolve the dispute.”

40After reviewing the evidence in detail, the Motion Judge concluded at para. 100 of the Reasons that the Meeting was held for the purpose of attempting to settle the dispute arising from the nomination meeting and Singh’s subsequent appeal and that therefore the third component of the settlement privilege test had also been met.

41The Appellants submit that the Motion Judge erred in concluding that a “hint of compromise” was not an essential element of settlement privilege because of the following reasons:

i. He drew an improper distinction between oral and written communications; and

ii. He failed to analyze the substance of the communication.

42After distinguishing the Appellants’ above-noted three cases on the basis that the communications, whether written or oral, were not made in circumstances where the parties had accepted or understood that they were made for the purpose of resolving a dispute, the Motion Judge stated the following at para. 79 of the Reasons:

79 In my view, where the communications in question are made in a meeting the purpose of which is to attempt to resolve a dispute, as opposed to through a written communication that may or may not be marked “without prejudice”, different considerations apply to the third requirement for settlement privilege. This is because a participant at such a meeting cannot be expected to calibrate the words chosen in each sentence spoken during an open, free-flowing and unscripted conversation to ensure that each sentence meets the three requirements for settlement privilege.

43In considering whether a “hint of compromise” is an essential element of the third requirement of the settlement privilege test, in my view, the distinction the Motion Judge drew between written and oral communication was correct. As noted, the third requirement involves a determination of the purpose of the communications. That determination can only be made having regard to the entire context of the communications. Written communications are by their nature very different from oral communications. Unsolicited letters marked “without prejudice” are very different than communications in an unscripted meeting which the parties agreed would be “without prejudice”.

44Before us, the Appellants again relied on Bellatrix, Boogaard and East Guardian to support their submission that a “hint of compromise” was an essential element of the third requirement. All three cases refer to a “hint of compromise” as one of the factors that the court either referred to or took into consideration in determining whether the purpose of the communication was to attempt settlement. None of those decisions, however, suggest that a “hint of compromise” is anything other than an indicia of the third requirement of the test.

45On appeal, Singh also relies on the decision of this court in McCain v. Melanson, 2017 ONSC 375 (Div. Ct.) which was a decision dismissing a motion for leave to appeal a decision which, in part, struck seven letters from the motion record on the ground that their contents were protected by settlement privilege. While the court notes that the third element of the test is concerned with an element of compromise, it was in circumstances where the motion judge had reviewed the letters and found that they were written in the context of exploring settlement and thus were privileged.

46There is no question, particularly with unsolicited written communications, that an element of compromise can be an important indicator that the communications were made in an attempt to effect a settlement. It can also be an important consideration in determining the purpose of a meeting in circumstances where the evidence is not otherwise clear what the purpose was. But it is a factor that can be used in the appropriate case, not an essential requirement that must be met in every case.

47As mentioned, determination of the third requirement of the test depends on the context of the communications and particularly how they arose. The question for determination, based on all the evidence, is whether the purpose of the communication was to attempt to effect a settlement. Where, as in this case, that question can be answered on the evidence prior to considering the communications in issue, consideration of whether a “hint of compromise” was present in the communications is not required to answer the question.

48Accordingly, the Motion Judge was correct in concluding that a “hint of compromise” is not an essential element of the third part of the settlement privilege test nor, based on his findings, was it necessary to consider it in this case.

49Singh’s second submission is that the Motion Judge erred in failing to analyze the substance of what was said at the Meeting in coming to the determination that settlement privilege applied to what was said at the Meeting. For the reasons just stated, I disagree.

50As noted, the Motion Judge concluded on the evidence that there was a litigious dispute between the parties and that prior to the Meeting starting, it was expressly or impliedly understood by all participants that the Meeting was being held on a without-prejudice and confidential basis. The Motion Judge further concluded, based on his review of the evidence of the participants as to what took place both before and at the start of the Meeting as well as text messages exchanged between Singh and other attendees at the Meeting afterwards, that the Meeting was held for the purpose of attempting to settle Singh’s appeal to the PC Party. As a result of that determination, it was not necessary for the Motion Judge to consider the substance of what was said at the Meeting.

51I would therefore not give effect to this ground of appeal.

Issue 2: Does the Public Interest or “Justice of the Case” Exception Apply to Override the Privilege?

Issue 2: Does the Public Interest or “Justice of the Case” Exception Apply to Override the Privilege?

52Before the Motion Judge, Singh submitted that an exception applied to the privilege because of the need to protect the integrity of the judicial process and the court’s truth-seeking function. He submitted that the public importance of the matters in issue combined with the need to ensure the correct adjudication of the dispute warranted an exception to the protection of the privilege.

53The Motion Judge, relying on the principles in The Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2013 ONSC 6297, 46 C.P.C. (7th) 88 did not accept Singh’s submissions and held that Singh had not established there was a competing public interest that outweighed the public interest in encouraging settlement.

54Singh has made certain allegations against the Respondents in the Application concerning his failed nomination and the subsequent decision by Patrick Brown to declare a candidate for Hamilton West, thereby rendering his appeal to the PC Party moot. The Motion Judge concluded that Singh sought to rely on what was said at the Meeting to assist in establishing his allegations in the Application. He agreed with the statements of Perell J. in SNC Lavalin, at paras. 84 to 87, that the fact that the communications in issue may contain the best evidence or evidence of matters difficult or impossible to otherwise prove does not create a public policy reason that abrogates settlement privilege in the interests of justice.

55Having reviewed the Transcript of what was discussed at the Meeting, there is no indication of conduct that involved any misrepresentation or fraud concerning the litigation. There is no question Soliman made frank statements at the Meeting as to what occurred in respect of Singh’s nomination. But, as found by the Motion Judge, those statements were made in the context of an attempt to resolve Singh’s appeal and with the understanding that they were confidential and would not be disclosed.

56Put at its highest, Singh submits that Soliman’s statements “appear to suggest” that Patrick Brown had a significant involvement in the irregularities surrounding the nomination meeting. I do not agree that the impugned statements go that far. However, even accepting Singh’s characterization of them, they are not direct evidence that Patrick Brown was involved in the alleged improper conduct. At best they would give rise to an inference to that effect. More importantly, however, they go to the merits of the Application. That, in my view, is not sufficient to override the settlement objective given the purpose of the Meeting as found by the Motion Judge and the agreement of the parties to the Meeting that what was said would be without prejudice and confidential.

57As noted above at para. 28 of Bellatrix, exceptions to the privilege must be narrowly construed and only be given effect where another policy objective can be shown to outweigh any impact to the settlement objective. An important aspect of settlement discussions is that both parties are free to speak frankly and openly about their positions. Soliman did. Although Singh wanted to use what was said at the Meeting to support the Application, it has long been recognized that this does not constitute a “competing public interest” that overrides the public interest in fostering settlement.

58Singh submits that the circumstances here are analogous to those in R. v. Delchev, 2015 ONCA 381, 126 O.R. (3d) 267, where the court held that a settlement offer by the Crown containing evidence of prosecutorial misconduct constituted a “competing public interest” which overrode settlement privilege such that the offer was admissible. At para. 34 of the decision, the court stated as follows:

34 An allegation of prosecutorial misconduct is analogous to the examples provided by the Supreme Court in Sable Offshore of misrepresentation, fraud and undue influence. These examples all suggest that one party has engaged in wrongdoing that may have led to an unjust settlement or that may have tainted the conduct of the litigation itself. It is in the interests of justice for a person who has been wronged to be able to present evidence of the alleged wrongdoing before the court.

59In Delchev, the Crown offered to recommend a conditional sentence if the accused provided a statement indicating that he had given false evidence in pre-trial proceedings with his counsel’s knowledge. The Crown claimed the discussion was privileged. The issue was whether the contents of the discussion were admissible to prove the Crown’s abuse of process. The Court of Appeal found that the Crown’s conduct had potentially interfered with the lawyer-client relationship and “may have led to an unjust settlement or … may have tainted the conduct of the litigation itself”. The court noted that the alleged abuse of process was “unrelated to the merits of the Crown’s case”. That is different from the present case where the impugned statements do not taint the litigation itself or undermine the court’s process. Rather, they are sought to bolster Singh’s allegations in the Application.

60As the Motion Judge rightly recognized, piercing settlement privilege in this case would undermine the goal of encouraging parties to speak frankly and openly with each other to explore the possibility of resolving disputes.

61For the above reasons, therefore, I do not consider the Motion Judge to have committed an error, let alone a palpable and overriding one, in concluding that Singh had not established there was a competing public interest that outweighed the public interest in encouraging settlement in this case. I would therefore also not give effect to this ground of appeal.

Leave to Appeal the Costs Order

Leave to Appeal the Costs Order

62The awarding of costs is a discretionary matter. As such, an award of costs should be set aside on appeal only if the judge has made an error in principle or if the costs award is plainly wrong: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

63Leave to appeal costs will only be granted in obvious cases where the party seeking leave convinces the court there are strong grounds upon which the appeal court can find that the judge erred in exercising his or her discretion: House v. Baird, 2017 ONCA 885 (C.A.), at para. 86.

64As set out in the Costs Endorsement, in awarding Stanley costs of the Motions, the Motion Judge considered the submissions raised by both Singh and Stanley. In that regard, he rejected Singh’s submission that he should receive a “public interest” costs reduction in the form of either no costs (other than disbursements) or an all-inclusive order of $30,000, on the ground that the issues on the Motions did not involve matters of public importance. He considered and rejected Stanley’s claim for substantial indemnity costs based on Singh’s conduct.

65The Motion Judge further considered both the factors set out in r. 57.01 of the Rules of Civil Procedure and the principles set out in Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) and specifically noted that the Motions involved issues that were important to the parties and required Stanley’s counsel “to provide sophisticated legal services urgently and intensively over a short period of time.” Notwithstanding, the Motion Judge reduced the partial indemnity rates claimed by Stanley’s counsel which he found “somewhat high for this case.” In the result, the Motion Judge reduced the partial indemnity costs claimed by Stanley from $166,291.88 to the amount awarded.

66Singh submits that the Motion Judge erred in failing to award costs in the cause, in holding that he was not a “partisan in a matter of public importance” and thereby not granting him a greatly reduced costs award and by applying a mechanical calculation of costs rather than determining what would be fair and reasonable.

67The Motions arose as a result of Singh’s attempt to rely on what was said at the without-prejudice Meeting in support of the Application. The issue of the use of that evidence was discrete and entirely separate from the issues raised by Singh in the Application. In addition, given that the issue concerned confidentiality, it had to be resolved quickly and in advance of the Application. As a result, I do not consider that the Motion Judge made an error in principle or was clearly wrong in awarding costs of the Motions to Stanley as opposed to awarding them to the successful party in the Application.

68Further, and as the Motion Judge pointed out, while the Application might be considered a matter of public importance, depending on its outcome, the Motions involving settlement privilege were not. Nor do I consider that the Motion Judge failed to consider what was fair and reasonable in coming to his costs decision. His review of the r. 57.01 factors along with his reduction of the claimed hourly rates was exactly such an exercise.

69Given the issues on the Motions and the reasoning of the Motion Judge in coming to the conclusions he did in respect of the costs of the Motions, I cannot say that he erred in principle in awarding the amount he did. Nor do I consider in all the circumstances that the Costs Order is plainly wrong. Accordingly, I would not grant leave to appeal the Costs Order.

Conclusion

Conclusion

70For the above reasons, I dismiss both Singh’s appeal from the Order and his motion for leave to appeal the Costs Order.

71Having succeeded on the appeal, Stanley is entitled to his costs on a partial indemnity basis. He is also entitled to his costs of the leave to appeal motion.

72The endorsement of the leave panel fixed the costs of the leave motion at $5,000, all inclusive, and provided that the disposition of the costs was reserved to the panel hearing the Application. At the conclusion of argument on the Appeal, counsel agreed that we should deal with the disposition of the leave costs.

73In respect of the appeal, Stanley has filed a Costs Outline claiming a total of $56,749.32 inclusive of HST in partial indemnity costs ($56,031.62 in fees and $717.70 in disbursements). The Appellants have submitted a Costs Outline claiming a total of $39,693.05, excluding HST ($30,657.60 in fees and $4,235.45 in disbursements).

74As they did before the Motion Judge, the Appellants’ submit that the Court should award a public interest discount in respect of costs and in that regard, $10,000 is a reasonable amount for costs, for either side. They take issue with the amount of Stanley’s costs which they submit are far too high. Finally the Appellants submit that the costs should be in the cause and reserved to the panel hearing the Application.

75Similar to the Motion Judge’s reasons, I do not consider that a “public interest discount” is appropriate here. The issues were separate from the Application and arose from Singh’s own making. There was no issue of “public interest” before us on the appeal. It was a matter of admissibility of evidence. Nor do I consider, given the issues and the time spent by counsel on both sides, that an award of $10,000 costs would be fair and reasonable. Finally, because as I’ve said the Motions and the Appeal dealt with issues distinct from the Application, I also do not consider that the costs should be in the cause.

76Having said that, I am also of the view that the costs sought by Stanley are too high. The Motion Judge referred to the high hourly rates of Stanley’s counsel in reducing the costs claimed before him. I agree with those comments. Further, much of what was argued before us was argued before the Motion Judge. Nor was there the urgent aspect to marshal the material on the Appeal that existed on the Motions.

77In my view, having regard to the issues and the argument before us, I am of the view that $40,000, inclusive of disbursements and taxes is fair and reasonable. Based on the Appellants Costs Outline, it is also an amount that would have been within the reasonable contemplation of the Appellants.

78Stanley is also entitled to $5,000 in respect of the leave motion.

79In total therefore, Stanley is awarded $45,000 in costs.

80Given the Order confirming settlement privilege, the Motion Judge sealed the material on the Motions dealing with the Meeting and its contents. Having upheld the Order, it follows that we should do the same. Rather than try and sever parts of the Appeal Record it is more appropriate to seal the entire Appeal Record and I so order.

L. A. Pattillo J.

I agree Linhares De Sousa J.

Kiteley J. (Dissenting)

Kiteley J. (Dissenting)

81I agree with the decision of the majority that the Motion Judge was correct in concluding that a “hint of compromise” was not an essential part of the test for settlement privilege. Accordingly, the Motion Judge did not make a palpable and overriding error in finding that the communications at the Meeting were subject to settlement privilege.

82I respectfully disagree with the decision of the majority that the Motion Judge did not err in his conclusion that the public interest exception does not apply.

83I start by referring to the circumstances in which this judicial review application originated.

84Singh was approved for nomination to become the PC Party candidate for the Hamilton West-Ancaster-Dundas (“HWAD”) riding. The nomination meeting took place on Sunday, May 7, 2017. There was a total of eight ballot boxes, one of which was placed at a “credentials table” for voters whose identity required additional scrutiny due to, for example, lack of appropriate identification. None of the candidates were permitted to have representatives observe the counting at the credentials table. When voting had been concluded and the votes at the seven regular ballot boxes, had been counted, Singh was the winner of the aggregate vote. At the credentials table Benjamin Levitt received 202 of the 345 votes cast. Levitt was announced as the successful candidate.

85Pursuant to s. 21.1 of the PC Ontario Rules Governing Candidate Nominations 2016-2018 (“the PC Rules”) Singh delivered a notice of appeal dated May 10, 2017 in which he alleged “gross irregularities and voter fraud . . . including at, but not limited to, the credentials desk resulting in fraudulent ballot stuffing by Party officials.”

86On May 24, 2017, the meeting that is described in the decision of the Motion Judge was held.

87On June 6, 2017, Singh’s lawyer received a letter on behalf of the PC Party Executive which indicated as follows:

As I believe your client is already aware, the matter was considered along with the issue of appeals of other nomination meetings. The outcome of that meeting was that the Partly Leader has exercised his legal responsibility and authority under the Election Act by declaring that he will be signing the nomination papers of all 64 candidates who have been selected to date. In HWAD, that means that the leader is appointing Ben Levitt to be the endorsed PC Party candidate on the ballot in the next election. The law does not require the Leader to sign endorsement papers for any person, and he will not under any circumstances be signing endorsement papers for Vikram Singh.

Accordingly, your client’s appeal is moot. The nomination meeting in question is no longer determinative of the identity of the endorsed PC candidate for HWAD. The exercise of the Leader’s legal authority and discretion is.

88On June 13, 2017, Singh issued the Notice of Application¹ in which he asked for orders including the following:

(a) leave under s. 6(2) of the Judicial Review Procedure Act to hear this application at the Ontario Superior Court of Justice on an urgent basis;

(b) an order in the nature of certiorari, with prohibition in aid, setting aside the decision of the Progressive Conservative Party of Ontario to declare Benjamin Levitt the PC Party nominee for Member of Provincial Parliament for the riding of HWAD;

(c) an interim, interlocutory and permanent injunction restraining the respondents from taking steps in furtherance of Levitt’s nomination or endorsement pending further order of the court;

(d) an order quashing the June 3, 2017 decision of Patrick Brown, leader of the PC Party, to terminate the Applicant’s internal appeal of the nomination proceedings;

(e) a declaration that the actions of the respondents have been taken in bad faith, in breach of the PC Party Rules Governing Candidate Nominations 2016-2018, and in breach of the principles of natural justice and procedural fairness; and

(f) an order declaring Singh to be the PC Party Nominee for Hamilton West, or, alternatively, that the matter is remitted to the PC Party to hold a new nomination meeting in accordance with the Court’s reasons and other relief.

89The respondents Dykstra, Stanley and Bugeja are senior members of the PC Party and were stationed at the credentials desk during the nomination meeting. Brown is the Party Leader.

90The decision of the Motion Judge dated July 6, 2017 describes the circumstances under which the ex parte motion was brought as a result of which he made the interim injunction order dated June 14, 2017 to preserve the status quo pending the hearing of the motion.

91On June 27 and 28, 2017 the Motion Judge heard Stanley’s motion pursuant to Rules of Civil Procedure 37, 25.11 and 40.01 to expunge the transcript and strike paragraphs 32-35 of Singh’s affidavit and related orders. He also heard Singh’s motion for an order setting aside the June 14, 2017 order. In his decision released July 6, 2017, the Motion Judge granted Stanley’s motion and dismissed Singh’s motion.

92The motion ought not to have been brought in Toronto because the application for judicial review had been filed in Hamilton and was returnable in Hamilton. Furthermore, it ought to have been brought before a judge designated by the Chief Justice of the Superior Court pursuant to s. 21 of the Courts of Justice Act² to hear a motion within a Divisional Court application. It appears that this issue was not raised on June 14 or June 27 or 28.

93I raise this not to challenge the decision on jurisdictional issues but to observe that this case has had an unusual path. Had the motion initially been brought in the Divisional Court in Hamilton, then the issue of concern to me would likely not have arisen.

94As indicated at paragraph 22 of the majority reasons for decision, the second issue on which leave was granted was whether the public interest or “justice of the case” exception applies. As developed in paragraphs 52-61, the issue is whether the Motion Judge made a palpable and overriding error in concluding that Singh had not established there was a competing public interest that outweighed the public interest in encouraging settlement in the case.

95At paragraph 56, the majority summarized the purpose for which Singh seeks to have the evidence before the judge or judges hearing the judicial review application as follows:

Put at its highest, Singh submits that Soliman’s statements “appear to suggest” that Patrick Brown had a significant involvement in the irregularities surrounding the nomination meeting. I do not agree that the impugned statements go that far. However, even accepting Singh’s characterization of them, they are not direct evidence that Patrick Brown was involved in the alleged improper conduct. At best they would give rise to an inference to that effect. More importantly, however, they go to the merits of the Application. That in my view, is not sufficient to override the settlement objective given the purpose of the Meeting as found by the Motion Judge and the agreement of the parties to the Meeting that what was said would be without prejudice and confidential.

96In my view, the public interest in ensuring that nomination rules and procedures are followed when political parties nominate persons to represent the party in an election overrides the public interest in encouraging settlement. The panel hearing the judicial review application should be afforded the opportunity to assess and consider those competing public interests in the context of the case. The appeal should be allowed because the Motion Judge made a palpable and overriding error in making that finding instead of deferring to the panel hearing the judicial review application.³

97For those reasons, I would adjourn the appeal to be heard by the judge or judges hearing the judicial review application.

Kiteley J.

Footnotes

1. 1The jurisdiction of the Divisional Court was not addressed in this appeal. I assume that the Applicant will assert that the Divisional Court has jurisdiction consistent with the decision by Nordheimer J. in Graff v. New Democratic Party 2017 ONSC 3578 at para 16-18.
2. 2R.S.O. 1990, Chap.C.43
3. 3At paragraphs 46-59, as a preliminary matter, the Motion Judge dealt with the issue of adjourning to the appeal panel. He did not deal with it in the context of the “justice of the case” exception to settlement privilege.