Court File and Parties

COURT FILE NO.: CV-23-00091107 DATE: 2023/04/12 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Canada Soccer Association Incorporated o/a Canada Soccer, Applicant AND Association de Soccer de Brossard, Respondent

BEFORE: Justice R. Ryan Bell

COUNSEL: Danesh Rana and Sean Bawden, for the Applicant Michael S. Rankin, Timothy Cullen, and Ricki-Lee Williams, for the Respondent

HEARD: In writing

COSTS ENDORSEMENT

Overview

[1] The Canada Soccer Association Incorporated o/a Canada Soccer moved for an interim stay of an arbitral award pending a decision in its application. Association de Soccer de Brossard (“ASB”) brought a cross-motion to enforce the arbitral award. I dismissed the motion and granted the cross-motion, and invited the parties to provide submissions in the event they were unable to agree on costs of the motions. [1]

[2] Both parties provided their costs submission in accordance with the schedule set out in my endorsement. While the schedule did not contemplate any reply, I permitted ASB to file brief reply submissions to address certain allegations raised in Canada Soccer’s submissions. Canada Soccer was also permitted to file a brief sur-reply.

[3] As the successful party on the motion and the cross-motion, ASB seeks its costs, on a substantial indemnity basis, together with disbursements, in the amount of $82,433.53. In the alternative, ASB submits that because it met its r. 49.10 offer to settle, it is entitled to $7,607.40 in partial indemnity costs up to the date of the offer to settle, and substantial indemnity costs thereafter in the amount of $60,297.39, for a total amount, including HST and disbursements, of $78,262.58. ASB requests an order that the costs awarded be paid forthwith.

[4] Canada Soccer submits that ASB engaged in bad faith negotiations leading up to the motion and the cross-motion and, therefore, it is Canada Soccer which should receive its costs of the motions, not ASB. Canada Soccer’s partial indemnity fees, together with disbursements, total $12,297. In the alternative, Canada Soccer submits that costs of the motions should be determined by the application judge.

[5] For the following reasons, I order that Canada Soccer pay ASB costs in the amount of $65,367.25 all inclusive. These costs are to be paid within 30 days.

Entitlement to Costs

[6] As the successful party on the motion and the cross-motion, ASB is presumptively entitled to its costs. Without referring to the rule in its submissions, Canada Soccer’s position that it is entitled to costs of the motions is based on r. 57.01(2) of the Rules of Civil Procedure. [2] Rule 57.01(2) provides:

The fact that a party is successful in a proceeding or a step in a proceeding does not prevent the court from awarding costs against the party in a proper case.

[7] This is not, in any way, a “proper case” that would justify an award of costs against ASB, the successful party on the motions. In its submissions, Canada Soccer suggests that ASB engaged in bad faith negotiating. I strongly disagree. In Aspiotis v. Coffee Time Donuts, at para. 6, Ground J. explained what is required to demonstrate a failure to negotiate in good faith:

To demonstrate a failure to negotiate in good faith, one would have to establish some improper conduct on the part of Coffee Time such as an attempt to mislead the plaintiff or negotiations with third parties at the same time as negotiations with the plaintiff were continuing. There is no such evidence. Failure of parties to agree on an essential term of a contract is not, by itself, evidence of negotiation in bad faith on the part of either party. [3]

[8] There is simply no evidence that in the lead up to the motion and the cross-motion, ASB engaged in bad faith negotiating. In its sur-reply, Canada Soccer submits that ASB acted in bad faith when it wrote to the Minister of Sport and accused Canada Soccer of “bullying.” Canada Soccer seeks to resurrect its failed argument on the motions – that ASB should be denied equitable relief because it has “unclean hands.” On the motions, I found that the letters, on their face, were unrelated to ASB’s cross-motion to enforce the arbitral award: The Canada Soccer Association Incorporated, at para. 34. The letters certainly do not constitute evidence of bad faith conduct so as to deprive ASB of its costs on the motions.

Costs Should not be Deferred to the Application Judge

[9] Canada Soccer submits, in the alternative, that costs of the motions should be determined by the judge hearing the application.

[10] I disagree. Rule 57.03(1)(a) provides that on the hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall fix costs of the motion and order them to be paid within 30 days. Canada Soccer has provided no rationale for deferring the issue of costs to the application judge.

Scale of Costs

[11] ASB seeks its costs of the motions on a substantial indemnity basis. ASB submits that Canada Soccer’s stay motion was unnecessary, there was no serious issue to be tried, and a substantial costs award would encourage Canada Soccer to “consider the steps it will take with respect to the application.”

[12] I disagree with ASB that this is one of the “rare circumstances” where the level of costs should be increased to mark the court’s disapproval of the conduct of the party in the litigation. In Akagi v. Synergy Group (2000) Inc., 2015 ONCA 771, [4] on which Canada Soccer relies, the Court of Appeal for Ontario awarded costs against the receiver, an officer of the court, on a substantial indemnity scale as “a measure of our disapproval of its conduct.” [5] The Court of Appeal described the receiver’s conduct in the following terms:

…the receiver took a useful concept – that of the “investigative receivership” – and ran too far with it for an extraneous purpose, losing sight in the process of its role as an officer of the court, bound to protect the interests of every individual or entity involved. We conclude that the extension of the orders, on an ex parte basis, against Mr. Chaudhary and Student Housing/RV was particularly egregious in the circumstances. [6]

[13] Elevated costs may be warranted where a party has engaged in conduct that is reprehensible, scandalous, or outrageous: Davies v. Clarington (Municipality), 2009 ONCA 722, at para. 28. [7] As Lax J. observed in Manning v. Herb Epp, at para. 7, “[c]osts on the higher scale can be awarded as a form of chastisement and as a mark of the court’s disapproval of a litigant’s conduct. This is intended to punish as well as to deter others from engaging in similar conduct.” [8] This principle was readily apparent in Akagi where the court-appointed receiver “ran too far” with the tools he had been given by the court and used the receivership for an extraneous purpose.

[14] In this case, and with respect, Canada Soccer’s motion for a stay of the arbitral award was ill-conceived and, ultimately, unsuccessful. However, that does not render Canada Soccer’s litigation conduct egregious, reprehensible, or scandalous. Canada Soccer’s conduct was not conduct worthy of the court’s sanction and I decline to award substantial indemnity costs to ASB on this basis.

[15] ASB served a valid r. 49.10 offer to settle more than seven days before the motions were heard. The offer provided for the dismissal of Canada Soccer’s motion for a stay and the granting of ASB’s cross-motion temporarily enforcing the arbitral award, on a without costs basis. The result obtained by ASB on the motions matches the terms of its offer to settle. An offer to settle need not contain an element of compromise to qualify as an offer that will attract cost consequences: OPB Realty Inc. Canada International Medical Suppliers Company Limited, 2015 ONSC 6, at para. 7. [9] In my view, ASB is entitled to its partial indemnity costs up to the date of service of its r. 49.10 offer to settle and its substantial indemnity costs thereafter.

Quantum of Costs

[16] The fixing of costs is not a mechanical exercise. Costs “should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant”: Boucher v. Public Accountants Council for the Province of Ontario. [10] The incurring of costs and time spent by counsel is essentially a judgment call, and the prudence of counsel’s judgment must be considered at the time the work was done.

[17] Canada Soccer characterizes ASB’s partial indemnity costs as “grossly disproportionate.” Canada Soccer’s complaint rests with the number of counsel involved on behalf of ASB – four – and the number of hours claimed – 146. By contrast, the total number of hours spent by Canada Soccer’s counsel was 46.5 hours. The unsuccessful party’s legal bill does not in any way dictate the amount the successful party is entitled to recover; however, it may be of assistance as a benchmark for proportionality: Jackson v. Mayerle, 2016 ONSC 1556, at para. 99. [11]

[18] I find the rates charged by individual counsel for ASB to be reasonable based on their experience. The motions were heard and decided on an urgent basis. The motions were of considerable importance to both parties. As ASB put it, “they were effectively a final determination of the merits of Canada Soccer’s application, insofar as the 2023 soccer season was concerned.” Notwithstanding these factors, the total time spent by ASB’s lawyers appears excessive for motions of this nature which were not overly complex. I expect that some duplication of effort occurred. In addition, Mr. Rankin’s advisory role “to manage overall costs” is not readily apparent.

Conclusion

[19] Taking into account all of the above, the relevant r. 57.01 factors, Boucher and ASB’s r. 49.10 offer to settle, I conclude it is fair and reasonable to require Canada Soccer to pay ASB’s partial indemnity costs up to and including February 4, 2022 in the amount of $5,000, inclusive of HST, ASB’s substantial indemnity costs thereafter in the amount of $60,000, inclusive of HST, and disbursements of $367.25, for a total amount of $65,367.25. This amount is to be paid by Canada Soccer to ASB within 30 days.

Justice R. Ryan Bell Date: April 12, 2023