Court File and Parties

Court File No.: CV-22-00683322-0000 Date: 2024-02-03 Superior Court of Justice – Ontario

Re: Rocco Galati, Plaintiff And: Donna Toews (AKA "DAWNA TOEWS"), Kipling Warner, Canadian Society for the Advancement of Science and Public Policy (“CSAPP"), Dee Gandhi, Janes and Johns Doe, Defendants

Before: Justice Chalmers

Counsel: R. Galati, for the Plaintiff T. Gleason, for the Defendants

Heard: In-Writing

Costs Endorsement

Overview

[1] The Defendants brought this motion under s. 137.1 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the Act) to dismiss the Plaintiff’s action on the basis that it unduly limits their freedom of expression on matters in the public interest. By reasons dated December 8, 2023, I granted the Defendants’ motion and dismissed the Plaintiff’s action.

[2] I found that the Defendants were presumptively entitled to their costs of the motion. If the parties were unable to agree on costs, I ordered the Defendants to deliver written costs submissions of no more than five pages in length excluding the Bill of Costs and caselaw, within 20 days of the date of the endorsement. The Plaintiff was ordered to file his costs submissions in response, on the same basis, within 20 days of receiving the Defendants’ submissions.

[3] I received the Defendants’ written cost submissions dated December 21, 2023. The Plaintiff’s cost submissions were received on January 3, 2024.

Analysis

General Principles

[4] Section 137.1(7) of the Act provides that if a judge dismisses a proceeding under this section, the moving party is entitled to the costs of the motion and the proceeding on a full indemnity basis unless the judge determines that such an award is not appropriate in the circumstances. The section creates a presumption that a successful moving party will be entitled to full indemnity costs.

[5] Notwithstanding the legislative provisions, the cost award remains subject to the judge’s overriding discretion. In exercising the discretion under s. 137.1(7), the judge will be guided by the considerations that guide the exercise of discretion with respect to costs in other civil proceedings including the factors set out in r. 57.1 of the Rules of Civil Procedure and the overriding objective in any cost award that the award be fair and reasonable: Fortress Real Developments Inc. v. Rabidoux, 2018 ONCA 686, at paras. 62-64.

[6] The Court of Appeal recently considered the application of s. 137.1(7) in Park Lawn Corporation v. Kahu Capital Partners Ltd., 2023 ONCA 129 (Park Lawn). The court stated that the s. 137.1 motion should not involve a trial of an issue, but instead is a screening procedure. The motion is meant to be efficient and economical. The court stated that with that direction in mind, “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”. The court also noted that providing a guideline for costs may “serve to dampen the enthusiasm, no doubt well intentioned, to over-litigate an anti-SLAPP motion”: Park Lawn, at paras. 39 and 40.

Position of the Defendants

[7] The Defendants argue that there is no reason to depart from the presumption that the successful party is entitled to their full indemnity costs. The Defendants claim costs in the amount of $159,920.97 inclusive of counsel fee, disbursements, and H.S.T. They argue that the proceeding was complex. The evidence before the court consisted of more than 3,000 pages. The Plaintiff sued four Defendants and cross-examined the deponents of all affidavits tendered on the motion. The transcripts were over 500 pages. The Plaintiff also filed the affidavits of Lee Turner and Alicia Johnson that were subject to a preliminary objection by the Defendants. I found that the affidavits were irrelevant and inadmissible.

[8] The Defendants also argue that the costs claimed are within the range that this Court has found to be reasonable on a motion under s. 137.1. Following its decision in Park Lawn, the Court of Appeal allowed full indemnity costs in Boyer v. Callidus Capital Corporation, 2023 ONCA 311, in the amount of $273,111.22. In Volpe v. Wong-Tam, 2023 ONCA 680, the Court of Appeal upheld an award of costs in the amount of $383,877.66 and in The Catalyst Capital Group Inc. v. West Face Capital Inc., 2023 ONCA 381, the Court of Appeal upheld an order for costs on a full indemnity basis of more than $3,000,000 to numerous Defendants in amounts ranging from $118,000 to $1,500,000.

[9] One of the guiding principles of costs awards is that the costs are to be fair and reasonable, with due consideration for the parties’ reasonable expectations: Neuberger v. York, 2016 ONCA 303, at para. 17. The Defendants argue that the Plaintiff was aware of the cost consequences of proceeding as he did. Mr. Galati was counsel for the plaintiff in Gill v. Maciver, 2022 ONSC 1279 which was a defamation action dismissed under s. 137.1. His client was ordered to pay costs in excess of $1,000,000 after he was removed as solicitor of record: 2022 ONSC 6169. Mr. Galati was also counsel in Boraks v. Hussen, 2023 ONSC 6420 in which this court ordered his client to pay $168,130.88, plus H.S.T. on a motion under s. 137.1.

Position of the Plaintiff

[10] The Plaintiff argues that this is an appropriate case to depart from the presumption of full indemnity costs. The Plaintiff advances two reasons for departing from the presumption; that the Plaintiff had made a reasonable offer to settle, and that the quantum sought by the Defendants is excessive.

[11] The Plaintiff served an offer to settle on July 31, 2023, which remained open until September 4, 2023. The offer required the Defendants to retract and apologize for their comments made about the Plaintiff. The Defendants were also required to remove all posts, comments or content related to the Plaintiff and would undertake to not make any future posts or public statements about the Plaintiff. Each party would bear its own costs.

[12] The Plaintiff also argues that the Defendants’ costs are excessive both in scale and quantum. The Plaintiff delivered a cost outline that provides for costs on a partial indemnity basis in the amount of $48,267.39. The Plaintiff notes that the work and material dealt with by both the Plaintiff and Defendants is equal in quality and quantum.

Discussion

[13] The purpose of the anti-SLAPP legislation is to stop a plaintiff from silencing a defendant by pursuing meritless litigation that served to intimidate and undermine public expression: Park Lawn, at para. 33. I found that the Plaintiff brought this action for an improper purpose. At paragraph 98, I stated as follows:

For the reasons set out above, I find that the Plaintiff brought this action for the improper purpose of stifling debate with respect to his handling of a proposed class action that is being funded by public donations. I also note that the Claim was brought one day before the Plaintiff submitted a response to the LSO with respect to Ms. Toews complaint. I find that the Claim was brought for the improper purpose of limiting the LSO investigation, and to intimidate others from making any LSO complaints about him.

[14] I am not satisfied that the Plaintiff’s offer provides a basis for not awarding costs on a full indemnity basis. The offer requires the Defendants to retract and apologize for their comments made about the Plaintiff. In my reasons, I found that the Defendants’ speech was an expression in the public interest. I also found that the defences of justification and fair comment applied. Acceptance of the offer would have satisfied the Plaintiff’s objective in bringing this action, namely, to silence the Defendants from making an expression in the public interest. It is my view that the Defendants were justified in not accepting the Plaintiff’s offer.

[15] The Defendants were required to incur the costs of the motion to strike the action that I found was brought for an improper purpose. I am of the view that there is no reason to depart from the presumption that the moving party is entitled to its costs on the motion and the proceeding on a full indemnity basis.

[16] Although s. 137.1(7) provides that the presumption is that the successful moving party’s costs will be awarded on a full indemnity basis, the court must consider the fairness and reasonableness of the award having regard to the r. 57.01 factors.

[17] Here, the Plaintiff brought an action in which he seeks damages totalling $1,000,000. The s. 137.1 motion was complex and involved a significant number of documents. There had been cross examinations of 7 witnesses. There were over 3000 pages of documents on the motion, including 500 pages of transcripts. The issues involved expressions in the public interest and in particular comments with respect to the counsel retained to conduct public interest litigation. I am satisfied that the issues were of importance.

[18] The Plaintiff argues that the Defendants’ lawyers docketed an excessive amount of time for the motion. Mr. Galati was acting on his own behalf. He docketed a total of 108.2 hours on the motion. He did not have a junior lawyer assisting him. He applied an hourly rate of $450. The total value of the time on an actual basis is $55,019.70.

[19] The Defendants’ senior counsel, Tim Gleason (2001 call) docketed 162.3 hours, Amani Rauff (2019 call) docketed 239.8 and associate, Rebecca Glass (2015 call) docketed 2.5 hours. The hourly rate for Mr. Gleason was $475. Ms. Rauff’s hourly rate changed during the course of the motion from $235 to 250. Ms. Glass’ hourly rate was $295. The total value of the time on an actual basis is $151,328.

[20] I find that the time spent by the Defendants’ lawyers was excessive. The total hours for the preparation of the motion record, including the review of the file and drafting affidavits was 45.8 hours for Mr. Gleason and 92.4 hours for Ms. Rauff. For the preparation of the reply record and preparing for and attending on the cross-examinations, and drafting the factum was 83 hours for Mr. Gleason and 121.3 for Ms. Rauff. From a review of the Costs Outline, it appears that there was an overlap of the work performed by Ms. Rauff and Mr. Gleason. Both docketed for each item of work. There does not appear to have been an efficient division of responsibility.

[21] The time docketed by Mr. Galati does not provide a great deal of assistance in determining the appropriate time that ought to have been docketed. Mr. Galati was acting on his own behalf and there would have been no requirement that he carefully docket his time. Given his close familiarity with the issues, he may have required less time to draft the materials and prepare for the cross-examinations and the hearing than the Defendants’ lawyers. Having said that, Mr. Galati docketed only 12 hours for the attendance on the cross-examinations and 18.3 hours for the review and preparation of the responding factum. He only claimed 5 hours for the preparation and attendance on the hearing.

[22] It is my view that an appropriate counsel fee for the motions is $112,500. This is a reduction of approximately 25% of the Defendants’ lawyer’s actual counsel fee. With H.S.T. in the amount of $14,625 and disbursements of $5,143.17, the total costs are $132,268.17.

[23] I am satisfied that the award of costs in the amount of $132,268.17, inclusive of counsel fee, disbursements and H.S.T., is fair and reasonable in all the circumstances. I am also satisfied that the amount of costs is within the reasonable expectation of the Plaintiff to pay if unsuccessful. The costs are less than what was awarded in Gill v. Maciver, and Boraks v. Hussen, which were cases in which the Plaintiff was counsel.

Disposition

[24] For the reasons set out above, I award costs of the motion and the proceeding to the Defendants fixed in the amount of $132,268.17 inclusive of counsel fee, disbursements and H.S.T. The costs are payable by the Plaintiff to the Defendants within 30 days of the date of this endorsement.

Date: February 3, 2024 Chalmers J.