Date: 2004-02-26

Docket: C38522

Court of Appeal for Ontario

Before: Abella, Borins and Armstrong JJ.A.

Between:

Elizabeth Rogacki Plaintiff (Respondent)

• and -

Zbigniew Belz, Gazeta Inc., Gazeta Magazine and Alicja Gettlich Defendants (Appellant)

Counsel: Robert B. Bell for the respondent Peter I. Waldmann for the appellant

Heard: May 15, 2003

On appeal from the order of Justice W. J. Lloyd Brennan of the Superior Court of Justice dated June 12, 2002.

Addendum on Costs

[1] The appellant, while not found to be guilty of contempt, deliberately violated the Confidentiality Agreement he signed at the mediation. This conduct is relevant to whether he is entitled to his costs.

[2] Moreover, this appeal raises legal issues affecting mediation which have not previously been considered. Given their significance and novelty, we are of the view that there should be no costs awarded in this appeal.

Released:

"FEB 26 2004" "R.S. Abella J.A."

"RSA" "Robert P. Armstrong J.A."

Borins J.A. (Dissenting):

[3] In my view, the successful appellant is entitled to his costs of the motion and the appeal. As this is not the occasion for a discursive review of circumstances which may result in the court exercising its discretion to deprive a successful litigant of costs, I will be brief in discussing the two reasons why I believe the appellant should have his costs.

I

[4] The starting point is the principle of long standing that a successful party is entitled to his or her costs. This is a principle from which the court should not depart except for very good reasons. As this court stated in Bell Canada v. Olympia & York Development Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 at 142: "While it is well-established that a successful party has no entitlement to costs, that party is entitled to a reasonable expectation [of costs] in the absence of special circumstances". In my view, there is neither a good reason nor any special circumstance that would justify depriving the appellant of his costs.

[5] It is suggested that this case is an exception because the issue was novel. In M. M. Orkin, The Law of Costs, 2nd ed (Aurora, Ontario: Canada Law Book, looseleaf) at pp. 2-38 to 2-58, the author summarizes numerous decisions disposing of appeals without costs where, inter alia, the question involved was new or not previously decided by the courts, or the court determined an uncertain or unsettled point of practice or law. In my view, the issue on this appeal was not of sufficient novelty to constitute an exception to the general principle on costs. As stated in our reasons for allowing the appeal, (now reported: (2003), 2003 12584 (ON CA), 232 D.L.R. (4th) 523) Rule 24.1 does not support a finding that the appellant was in contempt of court as nothing in the rule precluded the appellant from publishing the first article, and rule 24.14 does not address confidentiality of the mediation process. As this conclusion followed a plain reading of Rule 24.1, I have difficulty in appreciating that the issue raised in the appeal was in any way novel. Nor was there any novelty in our further holdings that the confidentially agreement was not capable of enforcement under Rule 60 and that nothing in the article published in purported breach of the confidentiality agreement was capable of compromising a fair trial.

[6] I would add that an appellate judgment that considers an issue or question for the first time, or determines an uncertain point of practice or law, is not uncommon. From the perspective of the range of appeals considered by this court, this common situation does not constitute "special circumstances" or an exceptional case. It is expected that an appellate court will clarify the law when it is unclear. Something more is required to justify departing from the long-standing general rule on costs, otherwise successful litigants will be penalized by the court's refusal to award costs in their favour. See Blue Range Resource Corp. (Re) (2001), 2001 ABCA 177, 202 D.L.R. (4th) 523 (Alta. C.A.).

II

[7] The other reason why the appellant should not be deprived of his costs is based on the remedy sought by the respondent. As pointed out in our reasons for judgment at p. 537, it is a serious matter for a person to be found in contempt of court. A contempt proceeding is punitive in nature with broad powers given to the court, including the power to order imprisonment. A person found in contempt of court is entitled to bring proceedings before this court to clear his or her name. When successful, a party should not have to bear the costs of defending against the serious allegation that he or she had acted in a way that exhibited contempt for the court. In my view, together with the judgment of this court, an appropriate award of costs constitutes public rehabilitation of the appellant's reputation.

[8] In Canada Metal Co. Ltd. v. Canadian Broadcasting Corp. (No. 2) (1975), 1975 475 (ON CA), 8 O.R. (2d) 375, this court was asked to determine whether the trial judge had exercised his discretion judicially in depriving the appellant of the costs of his successful defence of a motion to commit him to jail for contempt of court by violating an injunction in the alleged production by him of a news bulletin. Although the trial judge found that there was insufficient evidence to prove this allegation, he had a strong suspicion that the appellant was involved in some way in the bulletin's production. When the appellant declined the trial judge's invitation to remove his suspicion by filing an affidavit stating that he had nothing to do with the production of the news bulletin, the trial judge deprived him of his costs of the motion.

[9] In allowing the appellant's appeal and awarding him costs of the motion, at p. 376 Jessup J.A. held:

The proceeding before the learned trial Judge was a quasi-criminal proceeding, and the learned trial Judge found a reasonable doubt as to the guilt of the appellant. Having so found, in my opinion, he proceeded in error of principle in denying the appellant his costs, simply because of a suspicion which existed in the learned trial Judge's mind. Different considerations might apply if this were not a quasi-criminal proceeding.

III

[10] I would note that in response to our reasons for judgment, the Civil Rules Committee is to consider an amendment to rule 24.1.14 that will add to the existing rule a provision that all communications at a mediation session and the mediator's notes and records shall "be subject to the deemed undertaking as provided in rule 30.1.01". If the amendment is passed, it seems that its effect will be to preclude one party to a mediation session from using information provided by the other party for purposes other than those of the proceeding in which the information was provided.

IV

[11] For the foregoing reasons, I would award the appellant his costs of the motion and the appeal on a partial indemnity basis. The costs of the motion and the appeal are fixed at $6,350 and $10,600, respectively, each inclusive of disbursements and G.S.T.

"S. Borins J.A."