DECISION & ORDER ON COSTS
Date: 2021-07-21 File: 12508/CCEYA
Appeal from a proposal of the Director, Child Care and Early Years Act, 2014, S.O. 2014, Chapter 11, Schedule 1, to refuse to renew a licence.
Between:
Little Start Child Care Inc. Appellant
-and-
Director, Child Care and Early Years Act, 2014 Respondent
Adjudicator: Jennifer Friedland, Member
Appearances: For the Appellant: Jay Naster, Counsel For the Respondent: Eunice Machado, Counsel
DECISION AND ORDER ON COSTS
A. OVERVIEW
1This is a costs application brought by the appellant pursuant to Rule 19.1 of the Common Rules of the Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission (the “LAT Rules”).
2The appellant is a childcare centre. The respondent is the Director under the Child Care and Early Years Act, 2014, S.O. 2014, c. 11, Sched. 1. On December 5, 2019, the Director issued a Notice of Proposal (NOP) to refuse to renew the appellant’s licence, which was appealed. The hearing of the appeal commenced before me in February 2020, continued in the summer of 2020 after delays due to Covid-19, and concluded in September 2020.
3In November 2020, the parties were informed that my decision was that the NOP should not be carried out and that the licence would be ordered to be renewed. I invited submissions on conditions, which were received in writing followed by oral submissions heard on December 8, 2020. On January 13, 2021, prior to my reasons for decision being issued, the respondent renewed the appellant’s licence subject to its previous conditions and took the position that the appeal was moot and that reasons were no longer required. The appellant disagreed. After receiving written submissions from both parties on that issue, I decided that even if the appeal were now moot, it was not moot at the time my decision was communicated to the parties and that reasons should issue. Those reasons were released on March 15, 2021 together with an Order setting out a timeline for costs submissions.
4The basis for the NOP and my reasons for ultimately deciding that it should not be carried out can be found at Little Start Child Care Inc. v. Director, Child Care and Early Years Act, 2014, 2021 CanLII 21001 (ON LAT).
5Those reasons should be read in conjunction with this decision for costs, as some of my findings of fact are relevant to this costs application.
B. The position of the parties
6Submissions were received in writing from both parties.
7The appellant’s position is that the respondent has, at a minimum acted unreasonably, if not in bad faith. It puts forward 10 grounds in support of its position, some of which grounds include conduct that preceded the commencement of the proceedings.
8The appellant seeks costs in the maximum amount allowed under the Rules, that of $1,000 per day of hearing – or $11,000 in this case.
9The respondent submits that its conduct was not unreasonable, frivolous, vexatious, or in bad faith, and therefore does not meet the tests for costs.
C. Result
10For the reasons given below, I find that none of the respondent’s conduct was in bad faith, but that some of it was sufficiently unreasonable to warrant a costs award of $2,750.
D. The Law
11The authority to grant costs following a hearing stems from s. 17.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (SPPA). and Rule 19.1 of the LAT Rules.
12Section 17.1(1) of the SPPA allows a tribunal to order a party to pay all or part of another party’s costs in a proceeding in circumstances set out in that tribunal’s rules.
13Section 17.2(2) of the SPPA provides an exception, however, stating that a tribunal shall not make an order to pay costs unless such rules have been made and unless “the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or a party has acted in bad faith.”
14Under s. 17.2(4), the tribunal may make rules with respect to: a) the ordering of costs; b) the circumstances in which costs may be ordered; and (c) the amount of costs or the manner in which the amount of costs is to be determined.
15Rule 19.1 provides the circumstances for requesting costs at this Tribunal. It echoes the language of the SPPA, stating:
Where a party believes that another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith, that party may make a request to the Tribunal for costs.
16Rule 19.5 provides that the Tribunal may deny or grant the request for costs or award a different amount than requested.
17Rule 19.5 also provides that in deciding whether to grant costs and the amount of costs to be ordered, the Tribunal must consider “all relevant factors” in deciding whether costs should be paid and in what amount. Pursuant to that Rule, relevant factors include:
- the seriousness of the misconduct;
- whether the conduct was in breach of a direction or order issued by the Tribunal;
- whether or not a party’s behaviour interfered with the Tribunal’s ability to carry out a fair, efficient, and effective process;
- prejudice to other parties; and
- the potential impact an order for costs would have on individuals accessing the Tribunal system.
18The appellant relies on the Court of Appeal for Ontario’s decision in CNH Canada Ltd. v. Chesterman Farm Equipment Inc.1 for the proposition that the Tribunal is not limited to considering conduct “within the proceeding itself” but can also consider “conduct relating to the subject matter of the proceeding” that is “sufficiently unreasonable to warrant a cost award.” On this basis, as discussed below, the appellant impugns conduct on the part of the Director that took place prior to the commencement of the proceedings.
19In Chesterman, costs of $376,338.05 were ordered against one of the parties before the Agriculture, Food and Rural Affairs Tribunal (AFRAT)2. The Divisional Court overturned the costs award, in part, on the basis that the tribunal had considered conduct outside of the proceeding. The Divisional Court held that the rules established by the AFRAT contemplated costs only in relation to behaviour within the proceeding and not in relation to the subject matter of the proceeding. The Court of Appeal for Ontario reversed the lower court’s decision, stating at paragraph 86:
The Divisional Court reasoned that the SPPA and the Tribunal Rules contemplate awarding costs only for unreasonable conduct within the proceeding itself, not conduct relating to the subject matter of the proceeding. With respect, there is nothing in the SPPA or the Tribunal Rules mandating this narrow interpretation of the Tribunal’s jurisdiction to award costs.
20The difference here, however, is that the LAT Rules arguably do mandate a narrower interpretation.
21The tribunal rules at issue in Chesterman were the Rules of Procedure for the Agriculture, Food and Rural Affairs Appeal Tribunal (AFRAT Rules). The AFRAT Rule respecting costs states:
28.01 Where a party believes that another party has acted clearly unreasonably, frivolously, vexatiously or in bad faith considering all of the circumstances … [my emphasis]
22The LAT Rules do not include such broad wording. Rather, they state:
Where a party believes that another party in a proceeding has acted unreasonably, frivolously, vexatiously or in bad faith … [my emphasis]
23While the words “in a proceeding” could be read to modify who may seek costs against whom (i.e. a party in a proceeding may seek costs against another party in a proceeding), such phrasing would be redundant in this context as “party” is already defined in Rule 2.16 of the LAT Rules as a “person, association or corporation who has the right to participate in a proceeding and has notified the Tribunal of their intention to participate in the proceeding.”
24Typically, this Tribunal has interpreted “in a proceeding” as modifying the conduct that may be impugned (i.e. conduct that occurred in a proceeding), not who may bring the application.3
25A “proceeding” is defined in Rule 2.17 as, “the entire Tribunal process from the start of an appeal to the time a matter is finally resolved.”
26Given the difference in wording between the AFRAT Rules and this Tribunal’s rules on costs, I cannot agree that Chesterman necessarily broadens the conduct that may be impugned in a costs application before this Tribunal.
27In my view, there is some constraint imposed by the language of this Tribunal’s Rules that distinguishes it from the AFRAT Rules applicable in Chesterman. The Tribunal must regard the conduct of the party “in the proceeding” rather than “in all the circumstances.”
28That said, this does not mean that conduct that occurred prior to the commencement of the proceedings could never be sufficiently connected to the subject matter of the proceedings to be relevant to a consideration of costs. For example, if, prior to a proceeding, a witness were to destroy evidence that may have assisted the opposing party’s position, this might well be a factor that could be considered in an application for costs.
E. Facts & Analysis
29Affidavit evidence was provided by Brooke Tye, a co-owner and one of the directors4 of the appellant. She asserts that the appellant has been treated unfairly and unreasonably by the Director. She attests to having made numerous attempts to settle. She states that the appellant has incurred legal fees in excess of $50,000, though no bill of costs was provided.
30The appellant relies on 10 examples of conduct which it submits are unreasonable and favours a cost award.
i) The Mootness issue
31As noted above, after learning that my decision was that the appellant’s licence should be renewed, but prior to my reasons for that decision being released, the Director issued the appellant’s licence subject to its prior conditions and took the position that the appeal was moot and that reasons were no longer necessary. After receiving written submissions from the parties, I ruled that my reasons for decision would issue.
32In the course of my decision on the issue of mootness, I stated at paragraph 32 that “it would subvert the Tribunal’s process” if the respondent were able to circumvent the release of reasons it knew would be adverse to its position by renewing the licence and declaring the appeal moot. I also found that it would be an abuse of process if the Director could circumvent the appellant’s request for costs by doing so, particularly since the parties had agreed at the end of the hearing that submissions for costs would be heard after the release of my reasons. My conclusions can be found commencing at paragraph 30. The appellant relies on this language in my decision to support its allegation that the Director’s conduct was unreasonable.
33In response, the Respondent refers me to the Tribunal’s decision in AL v. The Guarantee Company of North America5 in which this Tribunal held that:
In my view, an applicant is entitled to withdraw an issue in dispute or an entire application and the consent of the other party is not required in order to do so. Rarely, absent some other evidence of a course of conduct that can be considered unreasonable, frivolous, vexatious or bad faith, will a withdrawal of an application be considered behaviour that warrants a costs award.
34The respondent’s position is that there is no evidence to suggest that its course of conduct was unreasonable, frivolous, vexatious or in bad faith, and that “zealous advocacy” should not be a basis for costs. The respondent further points to the Director’s authority under the CCEYA to renew a licence at any time, even after a hearing has been requested. The respondent further submits that the renewal was to the appellant’s benefit as the Tribunal may have ordered conditions on the licence, whereas the Director renewed the licence subject only to its prior conditions.
35Conclusion: The respondent’s decision to issue the licence before my reasons for decision were released was not improper or unreasonable in and of itself. The Director did have the discretion and authority to renew the licence. I also cannot conclude that it was unreasonable to then take the position that the appeal was therefore moot and that reasons should not issue. Even if the Director’s intention was to avoid an adverse decision, that is not in and of itself unreasonable conduct sufficient to trigger a cost award.
ii) The issuing of the Notice of Proposal (NOP) on December 5, 2019 despite the appellant being in compliance at that point
36The appellant argues that it was unreasonable for the Director to have issued the NOP on December 5, 2019 given the positive inspection that took place two weeks earlier at which no non-compliances were observed. The appellant refers to my finding at paragraph 40 of the decision that the appellant had by then taken tangible steps to address the issues of concern in this case “such that by November 2019 – prior to the NOP being issued – the appellant was in compliance.”
37The respondent submits the Director’s decision to issue the NOP was conduct that arose prior to the proceedings and cannot form the basis for a cost award.
38Conclusion: Without having to decide whether conduct that proceeded the proceedings can be a subject for a costs award, I find that it was not unreasonable for the Director to have issued its Notice of Proposal even though there was an inspection prior to that date which revealed no non-compliances.
39The appellant benefited from that positive inspection and it was a key factor in my finding that sufficient changes had been made to favour the appellant’s position on the appeal. But just because an adjudicator finds an item of evidence persuasive, it hardly means that the opposing party ought to have anticipated that finding and abandoned its case at some earlier period. Here, this was one inspection that arose because of a complaint. It was not a full inspection. At the inspection before that, the day care centre was in utter disarray as described in my decision commencing at paragraph 154 and again at paragraph 221. Plus, it had been non-compliant in previous inspections; it was in violation of various Public Health requirements; and there had been multiple complaints and multiple serious occurrences at this centre, including where a child had been left unsupervised on a school bus in the parking lot in the middle of winter for almost an hour.
40Given this context, I do not find it unreasonable for the Director to have persisted with its NOP despite the positive inspection that preceded it.
41That said, there is evidence in this case that the Director did not turn her mind to the new information and was intent on proceeding with its NOP regardless of that new information. I review this issue below, under the Disclosure ground of the appellant’s submissions.
iii) The reasons for the NOP versus the outcome
42The appellant submits that the Director proceeded unreasonably given my findings that three of the five grounds were not made out. It submits that the Director proceeded on an unreasonable basis with respect to the two that were proven.
43Specifically with respect to my finding that an administrative penalty had not been paid, the appellant relies on the evidence given by the Director that the penalty is aimed at achieving compliance yet the appellant was already in compliance when this administrative penalty was issued (see paragraphs 140-144 of the decision).
44Conclusion: This is not a basis for a costs award, in my view. There is a process by which the appellant could have disagreed and sought a review of the administrative penalty. It did not do so. I am not prepared to find that the Director’s decision to pursue this penalty was unreasonable in the circumstances. It is also surely not the Director’s fault that the appellant failed to seek a review of that penalty or pay it. The failure to pay an administrative penalty is a ground to refuse to renew a licence. It was not unreasonable for the Director to have relied on this ground as part of its NOP.
45With respect to the other ground that I found proven at the hearing, i.e. that pursuant to s. 23(2)(a) of the CCEYA, the appellant had failed to comply with provisions of the Act and regulations, here the appellant relies on my analysis of one of the respondent’s closing submissions as the basis for claiming costs. The respondent had submitted that once I found that there had been non-compliances, then I could not substitute my opinion for that of the Director in terms of whether the outcome should be a refusal to renew the appellant’s licence. My analysis on that issue can be found at paragraph 265 of my decision. I found that the respondent’s argument lacked merit.
46The appellant relies on my rejection of the respondent’s argument to submit that the Director’s conduct was unreasonable and that it should not have commenced the proceeding relying on a ground that “was based on what by any reasonable standard was a frivolous and vexatious argument.”
47I reject this basis for costs as well. The Director’s argument was put forward only on closing. The premise actually relied on during the hearing was that there were multiple non-compliances of a repeated and concerning nature such that the licence should not be renewed. The fact that I found no merit in one particular argument does not make the conduct of the Director unreasonable in pursuing this ground in its NOP. The respondent’s argument was untenable because it fettered the Tribunal’s discretion. This does not undermine the reasonableness of the Director relying on the multiple non-compliances as a ground for its NOP.
iv) The Director’s attempt to exclude the positive Nov 2019 report
48The appellant argues that the Director’s conduct was unreasonable in seeking to exclude the positive November 2019 inspection report from evidence. This argument is outlined in my decision at paragraph 45.
49The respondent argues that attempting to exclude that evidence was not unreasonable, frivolous or vexatious conduct – if for no other reasons than that those same documents were in the appellant’s possession and easily could have been proffered by the appellant itself.
50Conclusion: In my view, the Director’s position was unreasonable insofar as it betrayed an interest in only putting evidence before me that went against the appellant and not evidence that may have favoured the appellant. However, in this particular instance, given that the item was in possession of both parties, I do not think it is conduct that in and of itself merits a cost award.
v) Disclosure Requests
51I find there is merit to this ground for a costs award.
52As described in my decision at paragraph 46, the appellant had made a number of disclosure requests prior to and during the hearing, including in writing. On each occasion, the Director advised that everything had been disclosed. At the tail end of the hearing – after all of the respondent’s witnesses had been called – further disclosure was discovered, almost by fluke, when the Director shared a screen of the Ministry’s portal and it was clear that there were links to further documents within that system. That disclosure was produced. Some of that disclosure was highly relevant. For example:
i.) The late disclosure contained notes summarizing a discussion between the regional manager for licencing (Colleen Watts) and the CAS which reflected positively on the new director of the appellant childcare centre – Brooke Tye. A snippet of the CAS’s view found its way into an email sent from Ms. Watts to the Director and the latter was cross-examined on why the Director did not seek further information about the basis for the CAS’ conclusions. It turns out there was ample information available to the Director within its own system – which is where the notes of the regional manager’s discussion with the CAS were stored. I find the appellant was prejudiced in not having the notes of that conversation produced prior to the hearing.
ii.) The late disclosure also contained relevant emails between the Director, Ms. Watts, and the Program Advisor, Ms. Braun, surrounding the very positive visit in November 2019, two weeks before the NOP was issued. The full text of those emails is quoted in the decision commencing at paragraph 182. On their face, the emails contradicted some of the evidence provided by the Ministry witnesses in terms of whether the Director knew about the positive nature of that visit and whether that information was passed on. While I declined to make a credibility finding at the hearing as a result of these contradictions (see paragraph 188) as the witnesses did not have the opportunity to respond to the allegations given the timing of when this disclosure was finally made, I do find this late disclosure relevant to whether costs should be ordered.
53Conclusion: If Chesterman applies and conduct prior to the proceedings can be impugned, then I would find the conduct reflected in the November emails frivolous and unreasonable, if not also in bad faith. I find that the email from the Director reflects an element of tunnel vision. The Director initiated the exchange, writing to two subordinates, describing having heard a radio ad for the appellant day care. There is no content other than to point out that the appellant is “2x spending money on ads!” On its face, the email is mocking of the appellant for spending money on ads in the face of a pending NOP.6
54In response to the Director’s email, the Program Advisor provided information about the positive nature of the last inspection. The Director did not pursue the positive information and at the hearing said she did not know about it and had not seen the report prior to issuing the NOP. She testified that even if she had known about it, it would not have changed her mind as she was “not willing to put the children at risk any longer.” Yet the late disclosure and the whole of the evidence shows the centre had made significant changes by the November inspection as set out in my decision paragraph 218 and elsewhere. This reflects an attitude of tunnel vision, in my view, that was unfair to the appellant.
55I have already concluded above that it was not unreasonable for the Director to have pursued the NOP notwithstanding that the appellant was in compliance by the time of its last inspection. However, I do find it unreasonable for the Director to have had access to positive information about the appellant and its progress and not pursued it. Even if Chesterman does not apply, the late disclosure of these items is itself unreasonable conduct that favours a cost award.
56The respondent argues that the late disclosure may have been “regrettable” but was not unreasonable, frivolous, vexatious or made in bad faith. The respondent submits that “unlike in a civil context, the parties are not required to disclose everything that may be connected to the matter.” The respondent further takes the position that the appellant could have brought a motion under Rule 9.3 compelling the Respondent to disclose any document or thing the Tribunal considers relevant to the dispute.
57I do not agree with the respondent’s argument.
58In this case, the late disclosure ultimately produced had been requested in writing. It was requested on January 23, 2020, during the proceedings, before the hearing had commenced. Appellant’s counsel Mr. Naster asked for disclosure of “all of the Director’s notes, correspondence, emails, letters (hard copy or electronic) related to the Director’s exercise of discretion” to issue the NOP. Respondent’s Counsel replied on February 13, 2020, “there are no further documents.”
59In my view, the appellant ought to be able to rely on the respondent’s counsel’s statement that there are no further documents and I am not inclined to shift blame to the appellant for failing to bring a motion to disclose items that it had no reason to believe would exist.
60The respondent is correct to note that parties before the Tribunal do not have disclosure obligations as in a civil case where the existence of any items relevant to the litigation must be disclosed. Nor is there an obligation on the part of any of the regulators who come before the Tribunal to make disclosure as in a criminal case, notwithstanding that they are all Crown agents. In my view, as a matter of fairness, a crown agency ought to disclose materials helpful to an appellant and this obligation to do so ought not rise or fall on whether an appellant has counsel or knows on their own to make such a request. But whether there is or ought to be a positive obligation to disclose items favourable to the appellant is not the basis for my awarding costs against the Director in this case. In this case, the disclosure had been requested.
61While I do not impute bad faith against the Director for the oversight, as I concluded in my decision at paragraph 48, it is certainly “odd” that the Director would not know the depth of its own internal system. The late disclosure was plainly available simply by following links in that system.
62The late disclosure was highly relevant and was relied on in my decision. Had it not been disclosed the appellant may well have been prejudiced by its absence.
63Early disclosure of this material may also have encouraged more fruitful settlement discussions.
vi) Destruction of Notes
64As described in the decision, numerous inspections took place at the appellant childcare centre. The Program Advisors who conducted those inspections acknowledged taking notes during the inspections but did not keep those notes. Both PAs testified that they would have shredded their notes due to privacy concerns. They were cross-examined on this conduct and questioned on their failure to have complied with their own Ministry Directive7 which states that “all documentation collected for the case, and any handwritten notes made, must be kept in accordance with the Records Information Management Directive.” The Records Information Management Directive was requested but not produced.
65In this case, according to the Director’s evidence, an NOP against the appellant was not contemplated until the October 2019 inspection. But it is clear from the evidence that the Director and the PAs knew such an outcome was possible. In fact, a second PA was approved to attend with Ms. Braun at that inspection “as a witness to what is happening and for record keeping purposes.”
66The non-compliances found on that day resulted almost exclusively from interviews with staff at the daycare. Some were immediately referred to enforcement. Yet both PAs destroyed their notes.
67Conclusion: I find that the PAs shredding their notes – particularly when it was clear that the appellant was being referred to enforcement – is conduct that is sufficiently tied to the proceedings that it favours a cost award even if Chesterman does not apply in the context of this Tribunal. The conduct may have occurred prior to the proceedings, but the purpose of keeping notes is precisely because proceedings may commence as a result of a referral to enforcement.
68It strikes me as particularly important to keep notes of who was interviewed and what was said when the basis for the non-compliances is hearsay evidence, as was the case with virtually all of the non-compliances alleged at the October 2019 inspection that led to the NOP being issued.
69In ordering costs, I do not suggest that the PAs acted nefariously or for an improper purpose when they destroyed their notes. Nonetheless, the Directive specifies that such notes should be kept, and not having them is prejudicial to an appellant who may request them, as the appellant did in this case.
vii) False and Misleading Statements
70One of the grounds for the Director’s NOP was under s. 23(2)(b)(ii) – that the appellant childcare centre was not being or would not be operated in accordance with the law and with honesty and integrity. In support of this ground, the Director relied on instances where the appellant had been cited under s. 77 of the Act for making a false or misleading statement. The particulars are reviewed in the decision starting at paragraph 245. I found that this ground was not made out as there was no evidence that the acts were done knowingly and there was no basis to conclude that either Ms. Peyton or Ms. Brooke knew about them.
71The appellant complains that it was highly prejudicial, unfair and unreasonable for the Director to make such a serious allegation against the appellant without evidence to prove that the false statements were intentional or “knowingly provided.”
72The appellant was also referred to enforcement following one of the s. 77 non-compliances and a compliance order was issued in relation to it. Yet, as explained in my decision at paragraph 129 and elaborated on at paragraph 247, allegations that a person has made a false or misleading statement are not subject to the enforcement provisions of the Act. Rather, they are offences under the Act with penalties that require proof of a mens rea.
73This again is conduct that happened before the commencement of the proceedings and before the NOP had been issued.
74Conclusion: Whether Chesterman applies or not, I do find that this conduct is sufficiently linked to the proceedings that it may be considered. The hearing proceeded on the basis set out in the NOP. The NOP flowed from the non-compliances, serious occurrences, complaints, and history of enforcement, including the referrals to enforcement for non-compliances with s. 77 of the Act. If the s. 77 offences had not been improperly referred to enforcement, the Director’s concerns about “honesty and integrity” may not have persisted.
75On the other hand, the appellant would hardly have been better off if its directors or staff had been charged under the Provincial Offences Act with violating s.77 of the Act.
76In any case, I do not find that this error favours a cost award. First, the inapplicability of the enforcement provisions for offences under s. 77 of the Act was raised for the first time by me in my reasons for decision. It was not raised by either party or discussed during the hearing. I am not going to attach costs to an error without the opportunity for the parties to make submissions on it.
77Moreover, the Director was entitled to her opinion that the course of conduct of the appellant afforded reasonable grounds to believe that the appellant or Cheryl Peyton would not operate the childcare centre in accordance with the law and with honesty and integrity. The incidents referred to were of concern to the Ministry. They were at best incidents of sloppy record keeping. In one instance, I found that a record had been purposely fudged, though there was no reason to believe that Ms. Peyton or Ms. Tye had any knowledge of that misconduct at the time.
78The respondent also could have raised the same allegations and sought to revoke the appellant’s licence under s. 23(2)(d) which applies if a licensee or anyone acting on behalf of the licensee made a false or misleading statement.
79In short, I do not agree that it was unreasonable for the Director to have continued to rely on s. 23(2)(b)(ii) as a ground for refusing to renew the appellant’s licence and to rely on evidence of false and misleading statements in support of it. The fact that I ultimately did not share the Director’s opinion with respect to this conduct is not a basis for costs.
viii), ix) and x) – Failure to pursue or consider certain information
80The appellant also impugns the Director’s conduct in failing to have pursued information that may have assuaged its concerns.
81For example, the Director did not meet with Ms. Tye, yet if she had, then the Director’s concerns about the daycare may have receded, just as they did for the CAS upon meeting with Ms. Tye. The appellant additionally relies on my own conclusions respecting Ms. Tye and my finding that she had taken multiple steps to address the issues of concern in this case prior to the NOP being issued.
82The Director also did not pursue the appellant’s request to amalgamate the 24/7 care offered at its other childcare centre with the programme at the appellant day care centre. In my decision at paragraph 243 I found this proposal to be a long-term thoughtful response to issues that were occurring.
83The Director also did not follow up on information about the new Supervisor before issuing its NOP, despite having been informed by the PA that the changes at the centre were positive under the new supervisor’s leadership.
84The appellant relies on my comments made in various places in my decision that a hearing de novo allows me the opportunity to consider information that may not have been before the Director or that the Director did not pursue (see for example, my analysis at paragraph 206). The appellant submits that the Director’s refusal to pursue that information was unreasonable and is a ground for costs.
85The appellant further compares the evidence led in the case of Meghan (c.o.b. Perfect Little Angels Daycare)8 and Bliss Montessori School (Re)9 – the only cases prior to this one that concerned the licencing of a childcare centre. Those cases are referred in my decision at paragraphs 240 and 270. In both those cases, the Tribunal upheld the Director’s proposal to revoke the licence. The appellant complains that the appellant was not provided the same opportunities as the appellants in those cases to come into compliance before the NOP was issued.
86Conclusion: This conduct occurred prior to the proceedings, but even if Chesterman applies, I do not find this to be a basis for costs.
87Each case has its own facts. In this case, by any objective standard this licensee had been failing at its core responsibility to supervise children safely. A child had been forgotten on a bus for over an hour in the cold. A child had been dropped at the wrong school without any process in place at that time to have hedged against that outcome. A child with medical needs fell down a number of stairs in circumstances where he ought likely to have had his hand held. On each occasion that there was a serious occurrence as above, or a complaint, an inspection ensued, and the appellant was found to have been non-compliant with various requirements under the Regulation. The appellant was given chances to come into compliance and then there was the inspection in October 2019 which resulted in multiple further non-compliances, concerns over fudged records, and objective concerns about sanitation which were fully supported by inspection reports from Public Health. Meanwhile, the appellant had not informed the Ministry about Ms. Tye’s new role as one of directors at the childcare centre as it was required to do under the Act.
88That the Director did not see what, ultimately, I was able to see after 11 days of evidence does not provide a basis for costs. That is the nature of a hearing de novo as I explain in my decision starting at paragraph 206.
F. Conclusion
89I find in this case that there was some unreasonable conduct on the part of the Director that warrants costs. I have turned my mind to the factors set out in Rule 19.5
90The Director’s failure to make disclosure of materials that ultimately proved to be in its possession, whether intentional or not, was unreasonable conduct that favours a cost award. A regulator who seeks to revoke or not renew a licence ought to know the extent of its own system and should be able to produce the relevant disclosure within that system upon request. Relevant evidence that is favourable to an appellant should be disclosed even if it is not requested.
91While I have found that the Director was entitled to proceed with its NOP despite the non-compliances and positive outcome at the last inspection, the late disclosure suggests that positive information may have been overlooked. Had it been disclosed, this may have resulted in more fruitful settlement discussions. Certainly, it was prejudicial for the appellant to have had to proceed to the hearing without it.
92I have also found it unreasonable for the PAs to have destroyed their notes contrary to their own directives.
93In neither case do I find that the Director or the PAs acted in bad faith, frivolously or vexatiously. Still, the conduct was unreasonable and liable to have prejudiced the appellant.
94In terms of quantum, proportionality is written into the Tribunal’s Rules for costs. No matter how egregious the conduct, the upper limit is $1000 per day. Yet nothing in the Rules indicates that only the most egregious conduct warrants the maximum award. Nor is there anything in the Rules that requires costs to be linked to time spent on the issues raised in the costs application. Costs also do not follow the event, meaning they are not determined based on which party was successful following a hearing.
95In this case, the Appellant’s own role in bringing about the proceedings cannot be overlooked. While I have found some of the Director’s conduct unreasonable as described above, it was not improper for the Director to have issued its NOP given the multiple complaints, non-compliances and serious occurrences, some of which were extraordinarily serious.
96If I were certain that producing the requested disclosure prior to the proceedings rather than by fluke at the tail end of the hearing would have resulted in the Director withdrawing its proposal, I would order the maximum amount. I do not have that certainty.
97Given that I have not found bad faith and given the appellant’s own actions in leading to the NOP, something less that the maximum allowable costs is appropriate. I am ordering a quarter of the amount requested or $2,750. In my view, this amount takes into consideration the time that may have been saved if proper disclosure had been provided. It also goes some way to remedy the unfairness to the appellant of having had to proceed to a hearing without the benefit of the PA’s notes and – until the tail end of the hearing – without the benefit of disclosure that had been requested and was relevant to its position.
G. ORDER
98The respondent shall pay the appellant $2,750 in costs within 30 days of the date of this Order.
LICENCE APPEAL TRIBUNAL
Jennifer Friedland, Member
RELEASED: July 20, 2021
Footnotes
- 2018 ONCA 637 (“Chesterman”)
- The AFRA Tribunal does not have the same cap on a costs award as the LAT.
- See for example, B.F. v. Wawanesa Mutual Insurance Company, 2017 CanLII 9821 (ON LAT)
- As in my decision, Director with a capital “D” will refer to the respondent Director under the CCEYA while “director” with a lower case “d” will refer to a director of the daycare.
- 2020 CanLII 57417 (ON LAT) at para. 20
- At this time, the appellant’s licence at its other location was also subject to an NOP.
- # A.1.2 (Referral to Enforcements – Refusals and Revocations) at p. 23
- [2005] O.L.A.T.D. No. 218 (“Little Angels”)
- [2016] O.L.A.T.D. No. 115 (“Bliss”)