Court File and Parties

COURT FILE NO.: CV-21-00673636-0000 DATE: 20230612 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CANADIAN FRONTLINE NURSES, SARAH CHOUJOUNIAN, KRISTEN NAGLE and KRISTAL PITTER, Plaintiffs AND: CANADIAN NURSES ASSOCIATION, TIM GUEST, MICHAEL VILLENEUVE, TOGETHER NEWS INC. o/a COMOXVALLEY.NEWS and o/a VANISLE.NEWS and JOHN DOE, Defendants

BEFORE: VERMETTE J.

COUNSEL: Alexander Boissonneau-Lehner, for the Plaintiffs Richard G. Dearden, Marco S. Romeo and Alexandra Psellas, for the Defendants Canadian Nurses Association, Tim Guest and Michael Villeneuve Paul Champ and Christine Johnson, for the Defendants Together News Inc. and John Doe (a.k.a. William Horter)

HEARD: In writing

Endorsement as to Costs

[1] On December 23, 2022, I released an endorsement (2022 ONSC 7280) granting the Defendants’ motions under subsection 137.1(3) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) and dismissing the action.

[2] The parties were not able to agree on costs and have delivered costs submissions.

[3] Subsection 137.1(7) of the CJA provides that if a judge dismisses a proceeding under section 137.1, the moving party is entitled to costs on the motion and in the proceeding on a full indemnity basis, unless the judge determines that such an award is not appropriate in the circumstances.

[4] I was advised that on June 26, 2022, the Plaintiffs made an offer to settle to the Defendants Canadian Nurses Association, Tim Guest and Michael Villeneuve (together, “CNA Defendants”). The offer was that the Plaintiffs and the CNA Defendants would consent to an order dismissing the action as against the CNA Defendants with prejudice and without costs. This offer to settle was made four days after the timetable for the motion was ordered at Civil Practice Court and the day before the CNA Defendants’ motion record was required to be delivered.

1. Initial positions of the parties

a. Position of the CNA Defendants

[5] Pursuant to subsection 137.1(7) of the CJA, the CNA Defendants request their costs of this proceeding on a full indemnity basis in the amount of $410,335.15. They submit that there is no evidentiary foundation for deviating from the statutory presumption of full indemnity costs. They argue that this libel action bears the hallmarks of a strategic lawsuit against public participation (“SLAPP”) and was intended to chill off the CNA Defendants from opposing the Plaintiffs’ positions about COVID-19 health measures and protecting the public.

[6] The CNA Defendants submit that, as reflected in their costs outline, the tasks performed and the time spent are reasonable.

[7] With respect to the Plaintiffs’ offer to settle, the CNA Defendants argue that it was an inappropriate strategy on the part of the Plaintiffs. The CNA Defendants state that they wanted their costs of defending the action and preparing a complex anti-SLAPP motion. Further, the CNA Defendants note that the Plaintiffs did not obtain a judgment as favourable as the terms of their offer, nor did they obtain a “judgment” within the meaning of Rule 49.10. The CNA Defendants’ position is that the costs consequences in Rule 49.10(1) do not apply to the Plaintiffs’ offer to settle.

b. Position of the Defendants Together News Inc. and John Doe (a.k.a. William Horter)

[8] Pursuant to subsection 137.1(7) of the CJA, the Defendants Together News Inc. and William Horter (together, “TNI Defendants”) ask for their costs of the motion and the action on a full indemnity basis in the amount of $74,625.92.

[9] The TNI Defendants point out that it is the burden of the unsuccessful responding party to demonstrate why a departure from full indemnity costs is appropriate. They state that the presumption of full indemnity costs upon the dismissal of a proceeding under section 137.1 is not altered simply because a court finds in favour of an unsuccessful responding party on one or more issues on the motion. They submit that there are no grounds from departing from the presumption of full indemnity costs in the circumstances of this case.

[10] The TNI Defendants submit that the quantum of costs sought is fair and reasonable in light of the costs awarded in other anti-SLAPP cases, and is in line with what the Plaintiffs could have expected to pay if they lost the motion and the proceeding was dismissed. They point out that the fees of counsel for the TNI Defendants in relation to the motion are very close to those of counsel for the Plaintiffs. They also note that the rates charged by counsel for the TNI Defendants are lower than the rates of the other parties’ lawyers (based on comparable experience). They state that the court ought not to “second-guess” the time spent by counsel unless it is manifestly unreasonable, in the sense that the total time spent is clearly excessive.

[11] The TNI Defendants also highlight the complexity of the motion and the fact that this proceeding involved expressions made by the Defendants on matters of great public interest.

c. Position of the Plaintiffs

[12] The Plaintiffs submit that it would be appropriate for this Court to exercise its discretion and award costs of the TNI Defendants and the CNA Defendants on a partial indemnity basis. The Plaintiffs further submit that the quantum of costs claimed by the Defendants, particularly the CNA Defendants, are excessive.

[13] The Plaintiffs argue that none of the traditional hallmarks of a SLAPP are present in this case, and that this militates in favour of departing from the presumption of full indemnity costs as the relevant justifications for the presumption are not engaged. They point out, among other things, that this is their first and only libel suit and that there is no evidence that this claim was brought for a punitive or retributory purpose.

[14] The Plaintiffs also refer to their offer to settle to the CNA Defendants. They argue that while the CNA Defendants had some basis for seeking payment of their costs, they did not seek a reasonable resolution and, instead, they continued to “plow ahead” with their anti-SLAPP motion. The Plaintiffs submit that their offer should be considered as a factor supporting a costs award on a partial indemnity basis because both the CNA Defendants and the Plaintiffs had to incur additional costs as a result of the CNA Defendants’ approach.

[15] With respect to quantum, the Plaintiffs’ position is that the costs sought by both the CNA Defendants and the TNI Defendants are disproportionate to the matters at issue and what an unsuccessful party would reasonably expect to pay. The Plaintiffs point out that while they had one lawyer do all the work for the two anti-SLAPP motions brought by the Defendants, costs are claimed for three lawyers by each set of Defendants. The Plaintiffs submit that the use of three lawyers inevitably led to some duplication and “over lawyering”. The Plaintiffs argue that when one compares the number of hours and the amount of full indemnity costs set out in the parties’ respective costs outlines, one has to conclude that the costs claimed by the Defendants fall well beyond the bounds of the Plaintiffs’ reasonable expectations.

[16] The Plaintiffs’ costs outline reflects the following costs on a partial indemnity basis: $15,404.78 with respect to the TNI Defendants’ motion, and $18,303.18 with respect to the CNA Defendants’ motion. The figures on a full indemnity basis are $25,674.63 with respect to the TNI Defendants’ motion, and $30,505.30 with respect to the CNA Defendants’ motion.

2. Recent decisions of the Court of Appeal and additional submissions of the parties

a. Additional submissions of the parties following the Court of Appeal’s decision in Park Lawn Corporation v. Kahu Capital Partners Ltd.

[17] On February 28, 2023, the Court of Appeal (Pepall, Trotter and Thorburn JJ.A.) released its decision in Park Lawn Corporation v. Kahu Capital Partners Ltd., 2023 ONCA 129 (“Park Lawn”).

[18] After noting that motions under section 137.1 of the CJA tend to be expensive, the Court of Appeal stated the following at paras. 38-39:

[38] To address the objectives of the legislation, it bears repeating that the emphasis of the motion should be on the “crux” or “core” of the analysis, namely the weighing exercise. This should not involve a trial of the issue or as some have put it, a “trial in a box”: Young, at p. 199; Canadian Thermo Windows Inc. v. Seangio, 2021 ONSC 6555 at para. 97. Rather, the motion is a screening procedure. At the third stage of the test, the weighing exercise, a technical, granular analysis is not required. Instead, as directed by the Pointes Protection and Bent decisions, the motion judge should step back and ask what is really going on.

[39] With this direction in mind and recognizing that an anti-SLAPP motion is meant to be efficient and economical, I would suggest that, as a guideline, the costs of such a motion should not generally exceed $50,000 on a full indemnity basis, although there will be exceptions and motion judges always have the power to award less, more or nothing as they see fit in the circumstances of each case. If the parties and the motion judge focus on the purposes that animate the anti-SLAPP provision, the inquiry will not generally be a difficult one for a motion judge. Indeed, typically the conclusion should be obvious and one readily reached by a motion judge.

[19] After the parties brought Park Lawn to my attention, they provided additional submissions at my request.

[20] The CNA Defendants’ position is that this Court has the discretion to award more costs than the guideline suggested in Park Lawn in the circumstances of this case. They note that the costs that they claim were incurred before costs guidance was provided by Park Lawn, and they provide examples of costs awards for anti-SLAPP motions that were made prior to Park Lawn that exceed the amount claimed by the CNA Defendants. They point out that their motion succeeded based upon the public interest weighing exercise and ended the action completely, contrary to the situation in Park Lawn. They state that unlike the motion in Park Lawn, their motion was not a tactical and strategic use of an anti-SLAPP motion. They submit that a dismissal of the action was of major importance to the CNA Defendants who were chilled off of supporting public health measures and protecting the public.

[21] The TNI Defendants state that after Park Lawn, it is clear that motion judges still retain the discretion to award costs exceeding $50,000 and must still take into account the factors set out in Rule 57.01 of the Rules of Civil Procedure, as applied to the specific circumstances of each case. They also submit that meaning must still be given to the presumption of full indemnity costs under subsection 137.1(7) of the CJA. The TNI Defendants argue that their full indemnity costs were proportionate and reasonable given the scope of this particular motion, which was brought in a particularly complex defamation claim. They point out that the full indemnity costs that they claim are lower than the costs that have been awarded in many other anti-SLAPP cases, and that such costs are within the range of what the reasonable expectations of the parties would have been for a proceeding of this nature. Like the CNA Defendants, they note that the obiter guidance in Park Lawn was not available at the time the motion was brought and argued.

[22] The Plaintiffs submit that there is nothing exceptional in this case justifying exceeding the guideline set out in Park Lawn. They state that the procedure in anti-SLAPP motions was meant to be efficient and inexpensive. The Plaintiffs argue that to the extent that there was complexity, it arose from two motions being brought when one would have sufficed. According to the Plaintiffs, they should not be prejudiced by this and this is not a compelling reason to depart from and exceed the guideline in Park Lawn.

b. Additional submissions of the parties following the Court of Appeal’s decision in Boyer v. Callidus Capital Corporation

[23] On May 2, 2023, the Court of Appeal (Gillese, Benotto and Coroza JJ.A.) released a costs endorsement in Boyer v. Callidus Capital Corporation, 2023 ONCA 311 (“Boyer”). The panel who decided Boyer is different than the panel who decided Park Lawn.

[24] Since the decision in Boyer is very short, I reproduce it in full:

[1] The parties have made submissions as to costs of the r. 137.1 motion determined by this court. The successful appellant claims $273,111.22 on full indemnity basis. The respondent submits that this is excessive and the amount should be reduced to $90,000. It points to this court’s decision in Park Lawn Corporation v. Kahu Capital Partners, 2023 ONCA 129 where Pepall J.A. spoke of the high costs of a r. 137.1 motion and offered a guideline of $50,000 in costs for a successful plaintiff.

[2] We do not accept the respondent’s submissions.

[3] There is a statutory presumption that the successful party be awarded full indemnity costs unless the judge determines that the award is not appropriate in the circumstances. S. 137.1(7) provides:

If a judge dismisses a proceeding under this section, the moving party is entitled to costs on the motion and in the proceeding on a full indemnity basis, unless the judge determines that such an award is not appropriate in the circumstances. 2015, c. 23

[4] The award is appropriate. Upon receipt of the statement of claim the respondent counterclaimed for $150 million alleging breach of a fiduciary duty. The claims were bald and unsubstantiated.

[5] The costs of the motion are fixed in the amount of $273,111.22 inclusive of disbursements and HST.

[25] After the parties brought Boyer to my attention, they provided additional submissions at my request.

[26] The CNA Defendants’ position is that Boyer reaffirms the statutory presumption in subsection 137.1(7) of the CJA that the CNA Defendants are entitled to full indemnity costs unless the motion judge determines that such an award is not appropriate. They point out that their costs, like the costs that were incurred by Mr. Boyer, were incurred prior to the issuance of Park Lawn. They submit that an award of full indemnity costs is appropriate in the circumstances that existed prior to the guidance set out in Park Lawn.

[27] According to the TNI Defendants, the Court of Appeal’s decision in Boyer simply confirms that, notwithstanding the guidance on costs in Park Lawn, a successful party is still presumptively entitled to recover full indemnity costs, in accordance with the statutory language.

[28] The Plaintiffs note that in Park Lawn, the Court of Appeal recognized that there would be exceptions. They submit that Boyer is such an exception. They point out that in Boyer, the Respondent made a bald and unsubstantiated counterclaim for $150 million alleging breach of fiduciary duty, and they argue that this was the rationale that the Court of Appeal relied upon in departing from the $50,000 guideline for full indemnity costs. The Plaintiffs state that, contrary to the situation in Boyer, this Court found that the Plaintiffs’ claim had substantial merit. According to the Plaintiffs, a departure from the Court of Appeal’s $50,000 guideline for costs on a full indemnity scale is not warranted in these circumstances.

c. Decision of the Court of Appeal in The Catalyst Capital Group Inc. v. West Face Canada Inc.

[29] On May 29, 2023, the Court of Appeal (Miller, Coroza and Copeland JJ.A.) released its decision in The Catalyst Capital Group Inc. v. West Face Capital Inc., 2023 ONCA 381 (“Catalyst”). The panel who decided Catalyst is different than the panel who decided Park Lawn and Boyer, except for Coroza J.A. who also part of the panel who decided Boyer.

[30] The parties brought Catalyst to my attention, but I did not request additional submissions.

[31] In Catalyst, the costs awarded by the motion judge on a full indemnity basis, which were very significant, were not disturbed on appeal. The Court of Appeal referred to Park Lawn on several occasions throughout its decision with respect to a number of issues, but it did not refer to the $50,000 figure mentioned in Park Lawn. I note, however, that the appellant in Catalyst did not allege that excessive time was spent by the parties, and did not challenge the hourly rates sought and the number of hours spent: see Catalyst at para. 161. The Court of Appeal stated the following at paragraph 163:

[163] As will become apparent below, I defer to the motion judge’s exercise of discretion in relation to costs for all parties. Further, as noted above, the appellants do not take issue with the hourly rates or number of hours billed by legal counsel. I would thus dismiss the Catalyst parties’ costs appeal in its entirety as the costs awarded were appropriate in the circumstances of each case.

3. Discussion

a. Scale of costs

[32] When an action is dismissed under section 137.1 of the CJA, the statutory presumption is that the successful moving party will be awarded costs on a full indemnity basis, unless the judge determines that such an award is not appropriate. The statute does not provide any factors to be considered in deciding when the presumptive award will not be appropriate. There are many different factors that may impact on the exercise of the motion judge’s discretion, depending on the circumstances of the individual case. However, merely concluding that there are countervailing determinations on the factors that are required to be considered under section 137.1 is an insufficient basis to make a finding that it is not appropriate to award full indemnity costs. See Levant v. DeMelle, 2022 ONCA 79 at paras. 75-77, 81.

[33] In my view, there are no factors in this case that would justify departing from the presumptive scale of costs in subsection 131.1(7). While this case may not be a traditional SLAPP suit involving, among other things, a financial or power imbalance, I made findings regarding the significant importance of the expression in issue, the chilling effect of the lawsuit, the failure to show that the publications in issue had caused any harm, and the puzzling nature of the Plaintiffs’ decision to sue the CNA Defendants and the TNI Defendants. Ultimately, the outcome of the motion turned on the factor set out in subsection 137.1(4)(b), which is not unusual as this factor has been recognized to be the crux or core of the analysis under section 137.1.

[34] The Plaintiff’s offer to settle to the CNA Defendants does not have an impact on the scale of costs. It does not trigger any costs consequences under Rule 49. Further, the CNA Defendants’ decision not to accept the Plaintiffs’ offer is understandable. The offer to settle was delivered the day before the deadline for the delivery of the CNA Defendants’ motion record and the Plaintiffs did not offer to play any costs to the CNA Defendants, despite the fact that the latter had just incurred significant costs to prepare motion materials. Ultimately, the CNA Defendants were successful on their motion and they are entitled to cost on a full indemnity basis, as are the TNI Defendants.

b. Quantum

[35] Given the decision in Park Lawn, the fact that subsequent Court of Appeal decisions appear not to follow the guidance set out in it, and the fact that no clear explanation is provided for not following the guidance, the principles that lower courts should apply when ordering costs with respect to a successful motion under subsection 137.1(7) of the CJA are unclear.

[36] Considering the recent decisions of the Court of Appeal, the language of subsection 137.1(7) of the CJA, and the general principles applicable to costs awards, I conclude that, on a motion under section 137.1, a motion judge should award costs: (a) on a full indemnity basis, unless the judge determines that this scale of costs is not appropriate in the circumstances; and (b) in an amount that is fair, reasonable and appropriate in all the circumstances of the case, taking into account the scale of costs that has been selected. By definition, an award of costs on a full indemnity basis will be significantly higher than an award of costs on a partial indemnity basis. However, even if costs are awarded on a full indemnity basis, those costs must be reasonable full indemnity costs: see Fortress Real Developments Inc. v. Rabidoux, 2018 ONCA 686 at para. 68. The factors used to assess the fairness and reasonableness of the quantum of costs in other motions should be considered on a motion under section 137.1, but additional factors may also be relevant, such as the practice considerations and the risk of abuse that are discussed in Park Lawn at paras. 34-40.

[37] I find that it is appropriate in this case to award costs in an amount that exceed the $50,000 figure suggested in Park Lawn. The motions in this case were not abusive. They had a certain level of legal and factual complexity, but none of the parties can be blamed for this as the complexity was inherent in the case and the applicable test under section 137.1. I also note that the motions were argued and decided before Park Lawn was released. Therefore, the Plaintiffs’ reasonable expectations could not have been influenced by the guidance given by the Court of Appeal in Park Lawn.

[38] The CNA Defendants prepared a voluminous motion record (3 volumes). While some of the documents that were included in it may not have been strictly necessary, most of the materials related to the weighing exercise (including the issues of harm and public interest) which, as noted in Park Lawn, is where the emphasis of the motion should be. The Factum of the CNA Defendants was detailed and helpful to the Court.

[39] The TNI Defendants’ motion record was not as voluminous as the CNA Defendants’ motion record, but this is largely because of the parties’ different roles. The contents of the TNI Defendants’ motion record were similarly focused on the weighing exercise. I also found the TNI Defendants’ Factum helpful.

[40] While the Plaintiffs appear to suggest that there should have been one motion instead of two, I disagree. The CNA Defendants and the TNI Defendants were sued with respect to different publications. There are no suggestions that they acted in concert and they are represented by different counsel. I find that, to the extent that it was possible, the Defendants’ counsel made some efforts to avoid overlap and duplication between the two groups of Defendants.

[41] It is to be expected that the Defendants, as the moving parties, would have had to spend more time on the motions than the Plaintiffs. They shaped the issues on the motions, which raised very important issues for them. The Plaintiffs’ response was, to a large extent, reactive. Further, as noted in my endorsement, the Plaintiffs’ evidence filed for the purpose of the weighing exercise, in particular with respect to harm and causation, was insufficient.

[42] I have reviewed the Defendants’ respective costs outlines. With respect to the TNI Defendants, I find that the lawyers’ hourly rates are reasonable and lower than the typical Toronto hourly rates. However, two of the three timekeepers have a significant number of hours and, in my view, it is appropriate to apply a reduction to take into account the inevitable duplication of work. I find that the appropriate quantum of costs for the TNI Defendants is in the all-inclusive amount of $65,000.00.

[43] With respect to the CNA Defendants, the lawyers’ hourly rates are not unusual for Toronto, but the hourly rates of the more junior lawyers, in particular the lawyer who only had approximately one year at the Bar at the time of the hearing of the motion, is higher than what an unsuccessful party could reasonably expect. Further, I find that the total number of hours spent by the lawyers is unreasonably high, even when considering the quality of the materials prepared by the CNA Defendants and the fact that, in many ways, they took the lead. In addition, the significant number of hours spent by each lawyer raises the issue of duplication of work. I also note that the most senior lawyer has the highest number of hours, despite the fact that there were two more junior timekeepers involved, with lower hourly rates. The principle of indemnification for reasonable costs requires that legal tasks which do not require the skill and experience of a senior counsel be appropriately delegated to less expensive timekeepers. If the choice is made to have all or the bulk of legal tasks performed by a senior lawyer, it is not a choice for which the opposing party should be obliged to pay at senior counsel’s rate. See Romspen Investment Corporation v. 6711162 Canada Inc., 2014 ONSC 3480 at para. 4 and Browne v. Toronto Star Newspapers Limited, 2015 ONSC 2968 at para. 14. Ultimately, I find that the appropriate quantum of costs for the CNA Defendants is in the all-inclusive amount of $250,000.00.

Conclusion

[44] Taking the foregoing into account, as well as the factors set out in Rule 57.01(1) of the Rules of Civil Procedure and the reasonable expectations of the parties, I find that the fair and reasonable awards of costs in favour of the Defendants for the motion and the action are: (a) $250,000.0 on a full indemnity basis for the CNA Defendants; and (b) $65,000.00 on a substantial indemnity basis for the TNI Defendants. In my view, given the nature of this case, the language of subsection 137.1(7) of the CJA and the costs awards that were being made by motion judges at the time that the motion was brought and heard, this is an amount that the Plaintiffs should reasonably have expected to pay in the event that they were unsuccessful on the motion and the action.

[45] The costs are payable by the Plaintiffs to the Defendants within 30 days.

Vermette J. Date: June 12, 2023