Her Majesty the Queen in Right of Ontario v. Rothmans Inc. et al.

[Indexed as: Ontario v. Rothmans Inc.]

Ontario Reports

Court of Appeal for Ontario,

Doherty, Simmons and Blair JJ.A.

October 22, 2013

118 O.R. (3d) 213 | 2013 ONCA 642

Case Summary

Civil procedure — Costs — Appeals — Ontario suing tobacco manufacturers under Tobacco Damages and Health Care Costs Recovery Act to recover $50 billion — Foreign defendants moving unsuccessfully to stay or dismiss actions on jurisdictional grounds — Court of Appeal dismissing defendants' appeals with costs in favour of Ontario on partial indemnity scale — Ontario's costs fixed at $237,332.50 — Appeals complex — No $100,000 ceiling existing for costs awards in Court of Appeal.

Ontario sued foreign and domestic tobacco manufacturers under the Tobacco Damages and Health Care Costs Recovery Act, 2009 to recover $50 billion. The foreign defendants moved unsuccessfully to stay or dismiss the actions on jurisdictional grounds. The Court of Appeal dismissed the defendants' appeal with costs in favour of Ontario on a partial indemnity scale.

Held, costs should be fixed in the amount of $237,332.50.

There is no ceiling of $100,000 for costs awards in the Court of Appeal. What has to be determined is an amount that is fair and reasonable in the circumstances and is consistent with the reasonable expectations of the parties. The appeals were complex and involved high stakes. Ontario had to respond to five different appeals. Each raised separate as well as common issues. It would not be appropriate to determine reasonable partial indemnity costs on the basis that the Crown was responding to only one appeal.

Cases referred to

Boucher v. Public Accountant Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 188 O.A.C. 201, 48 C.P.C. (5th) 56, 132 A.C.W.S. (3d) 15 (C.A.); Ontario v. Rothmans Inc. (2013), 115 O.R. (3d) 561, [2013] O.J. No. 2367, 2013 ONCA 353, 305 O.A.C. 261, 363 D.L.R. (4th) 506, 228 A.C.W.S. (3d) 93

Statutes referred to

Tobacco Damages and Health Care Costs Recovery Act, 2009, S.O. 2009, c. 13

APPEAL from the order of Conway J., [2012] O.J. No. 19, 2012 ONSC 22 (S.C.J.). [page214]

Charles F. Scott and Shaun Laubman, for appellant B.A.T. Industries p.l.c.

David R. Byers, Adrian C. Lang and Lesley Mercer, for appellant British American Tobacco p.l.c.

Craig P. Dennis and Owen James, for appellant British American Tobacco (Investments) Limited.

Guy J. Pratte, Ira Nishisato and Cindy Clarke, for appellant R.J. Reynolds Tobacco Company and R.J. Reynolds Tobacco International Inc.

Christopher M. Rusnak and Steven Abramson, for appellant Carreras Rothmans Limited.

William J. Manuel, Lise G. Favreau, Edmund Huang and Kevin Hille, for respondent Her Majesty the Queen in Right of Ontario.

[1] Endorsement BY THE COURT: -- These appeals arise out of actions commenced by Ontario against various foreign and domestic tobacco manufacturers under the province's Tobacco Damages and Health Care Costs Recovery Act, 2009, S.O. 2009, c. 13. In those actions, Ontario seeks to recover $50 billion, representing the alleged costs of health care services provided to the public as a result of what that Act refers to as a "tobacco related wrong".

[2] The foreign defendants moved to stay or dismiss the action on jurisdictional grounds. Justice Conway dismissed their motions, and in five separate, but related appeals, the various tobacco consortiums attempted to set aside that decision. In reasons released on May 30, 2013 [ (2013), 2013 ONCA 353, 115 O.R. (3d) 561, [2013] O.J. No. 2367 (C.A.)], this court dismissed the appeals, with costs in favour of the Crown.

[3] We have reviewed and considered counsels' written submissions respecting costs and, for the following reasons, fix Ontario's costs in the amount of $237,332.50, all inclusive.

[4] Although the central issue on the five appeals was whether the Superior Court of Justice had jurisdiction to hear the action against the foreign defendants, the appeals also attacked certain evidentiary rulings made by the motion judge and her orders as to costs (which were substantial) as well. The appeals were complex, and the Crown was required to respond to each.

[5] Prior to the release of this court's decision, the parties each filed costs outlines with the court, calculated on a partial indemnity basis. Ontario is seeking the amount referred to above. On the other side of the courtroom, the appellants, should they have been successful, were asking for approximately $430,000 in total.

[6] The appellants accept that Ontario is entitled to its costs of the appeal on a partial indemnity basis, but they submit that [page215] the costs should be fixed in the amount of $100,000, all inclusive. In a nutshell, taken together, what they say is the following:

(i) the amount claimed is too high because this court has not traditionally awarded costs of more than $100,000 even in the rare event of very highly complex and lengthy appeals, of which they submit these appeals are not an example;

(ii) while there were in fact five appeals, the Crown treated them as one and filed a common factum and materials;

(iii) accordingly, it would be fair to award the Crown an amount approximately equivalent to the highest cost outline of one of the appellants (in this case, approximately $102,500);

(iv) it is not possible to determine whether the costs sought by Ontario would amount to a windfall as opposed to partial indemnity for its actual costs; and

(v) while the appeals may have been somewhat complex, the complexity arises from the fact that Ontario's claim is a unique claim based upon a statute drafted by Ontario; therefore, the complexity is Ontario's fault.

[7] We do not accept these submissions.

[8] The argument raised in (iv) has already been rejected with respect to the trial costs in the decision on this appeal; it gets no further traction here. The argument raised in (v) is without merit.

[9] We do not think it can be said that there is some sort of $100,000 ceiling for costs awards in this court. Each case must be decided in its own context. What has to be determined is an amount that is fair and reasonable in the circumstances and is consistent with the reasonable expectations of the parties: Boucher v. Public Accountant Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.), at paras. 37-38.

[10] Here, notwithstanding the appellants' protestations to the contrary, the appeals were complex. The appeals involved high stakes, and were litigated as if that were the case. This was not surprising, because, if successful, the foreign defendants stood to escape exposure to potential liability in a $50 billion lawsuit. The appellants required, amongst them, 12 counsel in the courtroom. We do not think it was beyond the appellants' reasonable expectation that the costs incurred by Ontario in responding would be insignificant or substantially outside the range of their own counsels' fees.

[11] Accepting that the Crown responded to the appeals with a common factum and materials and that undoubtedly there would have been some duplication in preparing for and presenting the [page216] Crown's arguments, the Crown nonetheless had to respond to five different appeals. Each raised separate as well as common issues. It would not be appropriate, in our view, to determine reasonable partial indemnity costs on the basis that the Crown was responding to only one appeal and, therefore, that those costs should be measured roughly against what the appellants in one of the appeals would have been seeking themselves.

[12] Finally, although the appellants quibble with some of the aspects of the Crown's costs outline, the substantial issues raised by them have been addressed above.

[13] In all of the circumstances, we accept the amount claimed by the Crown as fair and reasonable and within the reasonable expectations of the parties, in the somewhat exceptional circumstances of this case.

[14] Ontario also proposes that, as in the court below, these costs be apportioned between British American Tobacco p.l.c., B.A.T. Industries p.l.c., British American Tobacco (Investment) Limited and Carreras Rothmans Limited (collectively, the "BAT appellants"), and R.J. Reynolds Tobacco Company and R.J. Reynolds Tobacco International Inc. (collectively, the "RJR appellants"), to be payable on a joint and several basis, by each group. Ontario proposes a 75 per cent/25 per cent split.

[15] Although we recognize that such an order is unusual, we upheld a similar award with respect to costs ordered by the motion judge, and we see no reason not to make a similar order with respect to costs of the appeal.

[16] Accordingly, we fix the costs of the Crown at $237,332.50, all inclusive. The costs are to be apportioned $177,999.50 to the BAT appellants and $59,333 to the RJR appellants, to be payable on a joint and several basis by each group.

Order accordingly.

End of Document