Court File and Parties

COURT FILE NOS.: CV-17-580045; CV-17-585295 DATE: 20180904 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: NATIONAL STEEL CAR LIMITED, Applicant AND: INDEPENDENT ELECTRICITY SYSTEM OPERATOR, THE ATTORNEY GENERAL OF ONTARIO and HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, Respondents

COUNSEL: Jerome R. Morse and David Trafford, for the Applicant Alan H. Mark and Melanie Ouanounou, for the Respondent, Independent Electricity System Operator Robin K. Basu, Padraic Ryan, Hayley Pitcher and James Rehob, for the Respondents, The Attorney General of Ontario and Her Majesty the Queen in Right of Ontario

BEFORE: Justice W. Matheson HEARD: In writing.

Costs Endorsement

[1] This costs endorsement arises from my decision rendered June 20, 2018. [1] The respondents The Attorney General of Ontario and Her Majesty the Queen in Right of Ontario (the “moving parties”) moved to strike out two applications [2] that challenged the constitutionality of aspects of the Global Adjustment, which forms part of the electricity regime in Ontario. The motions were supported by the respondent, Independent Electricity System Operator (“IESO”), which has responsibility for administering the challenged legislative regime. The motions were successful and the applications were struck out.

[2] The general principles applicable to party and party costs are well settled. Costs are discretionary. Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out factors I may consider in exercising my discretion, in addition to the result of the proceeding and any written offers to settle. Overall, the objective is to fix an amount that is fair and reasonable, having regard for, among other things, the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634, 71 O.R. (3d) 291 (C.A.) at paras. 26, 38.

[3] Certain general principles are articulated in subparagraphs (0.a) and (0.b) of Rule 57.01, specifically the principle of indemnity and the affirmative obligation to consider the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.

[4] The moving parties and the IESO rely on the general principle that costs should follow the event. The motions were successful. The applications seeking relief against these parties have been struck out. The moving parties seek $50,000, all inclusive, as partial indemnity costs for the motions. They make no claim for costs of the applications themselves although they could have done so. The IESO seeks costs of approximately $120,000 in relation to both the motions and the applications. Both of these amounts compare favourably to the costs of the applicant in relation to the motions, from which I conclude that the overall quantum is within the applicant’s reasonable expectations. The applicant’s costs were approximately $210,000, all inclusive, on a partial indemnity basis.

[5] The applicant submits that there should be no order as to costs for a number of reasons. Mainly, the applicant submits that it is a public interest litigant bringing a novel constitutional challenge. However, the applications sought private damages in the millions of dollars. To this, the applicant submits that it is possible that retroactive legislation could have been passed to remove the damages claim. I find this possibility too remote. I accept, however, that there could have been a broad public impact if the applications had been successful and although the applications were defeated by established law, the specific regime had not previously been challenged in this way. I have taken this into account along with the related submissions about the nature of the issues advanced in the applications.

[6] With respect to the IESO, the applicant submits that there should be no costs because the IESO did not, itself, bring a motion. However, the IESO was a full participant in the motions. The agreed timetable shows that the IESO was to deliver its material before the applicant had to respond and the IESO factum sought its costs. The applicant received permission to deliver a lengthier factum in order to respond to the IESO. Indeed, much of the applicant’s oral argument was devoted to responding to the IESO.

[7] No authority has been presented to show that a party supporting a motion brought by another party must serve a notice of motion seeking costs. I conclude that while a formal motion is not required, it is appropriate to consider such a party’s costs claim in context, in relation to what was actually added to the proceedings beyond what was done by the moving parties and having regard for the reasonable expectations of the unsuccessful party. If a supporting party takes a watching brief only, costs may well be inappropriate. However, in this case, the IESO fully participated. The IESO’s participation was contemplated by the overall plan for the motions and therefore within the reasonable expectations of the applicant in that regard. And part of the costs claim relates to the application as against the IESO, which has now been struck out. I have, however, also taken into account the amount sought as compared to the costs claim of the moving parties and conclude, taking all factors into account in the exercise of my discretion, that it is appropriate to substantially reduce the quantum of the IESO costs claim.

[8] I have taken all of the submissions into account in the exercise of my discretion, and award the moving parties costs in the amount of $50,000, all inclusive, and IESO costs in the amount of $75,000, all inclusive.

Justice W. Matheson Date: September 4, 2018

[1] National Steel Car Limited v. Independent Electricity System Operator, 2018 ONSC 3845. [2] There is no material difference between the two applications for the purpose of these motions.