CITATION: Reynolds v. Registrar (Alcohol and Gaming Commission of Ontario), 2019 ONSC 7057

DIVISIONAL COURT FILE NO.: 500/19

DATE: 20191205

SUPERIOR COURT OF JUSTICE - ONTARIO

(DIVISIONAL COURT)

RE: Reynolds v. Registrar (Alcohol and Gaming Commission of Ontario)

BEFORE: Justices Swinton, D.L. Corbett and R. Gordon, JJ.

COUNSEL: Michael Lacy, Sharon Kour, Lawrence Gridin and Scott Dallen, for the Applicants

Judie Im, Heather Burnett and Andi Jin, for the Respondent

HEARD AT TORONTO: In writing

COSTS ENDORSEMENT

[1] The respondent Registrar (Alcohol and Gaming Commission of Ontario) was successful in this application for judicial review and seeks costs of the stay motion and the application on a partial indemnity basis in the amount of $76,752.00.

Should the respondent be awarded costs?

[2] The applicants rely on an “Overriding Principle” that they say is specific to judicial review – namely, that costs shall not be awarded in favour of a decision-maker that successfully resists an application for judicial review of its decision. The applicants cite several cases in which courts in other jurisdictions have applied this principle: see, for example, 462284 B.C. Ltd. v. General Manager under the Liquor Control and Licensing Branch, 2019 BCSC 1052; Court v. Alberta Environmental Appeal Board, 2003 ABQB 912; Beverly Corners Liquor Store Ltd. v. British Columbia (Liquor Control and Licensing Branch), 2013 BCSC 2129.

[3] Despite the assertion that there is an Overriding Principle, that is not the practice in Ontario. Costs have been awarded to the Crown and to other public actors in cases where they have been the successful party (see, for example, C.G.L. v. The General Manager, Ontario Health Insurance Plan, 2014 ONSC 5392 (Div. Ct.); Chen v. Alcohol and Gaming Commission of Ontario, 2019 ONSC 1680 (Div. Ct.); Guzar v. The Corporation of the Township of Puslinch, 2019 ONSC 3511 (Div. Ct.); Kaur v. The National Dental Examining Board of Canada, 2019 ONSC 5882 (Div. Ct.)).

[4] It is true that costs are not normally awarded to or against an administrative tribunal that does not participate in a defense of the merits of its decision. As stated in Donald J.M. Brown and The Honourable John M. Evans in Judicial Review of Administrative Action in Canada, “[g]enerally unless the agency is acting in a proper adversarial role, an administrative tribunal will neither be entitled to nor ordered to pay costs” (at para. 5:2560 (2019)).

[5] In the present case, the Registrar was acting in an administrative role when he made his decision about the eligibility of the applicants to continue in the selection process for retail store licences for the sale of cannabis products. In this application for judicial review, he acted in an adversary role to the applicants to defend the validity of the rules under which he operated and the reasonableness of his decision. He was successful, and there is no reason to deny him costs in the circumstances.

The quantum of costs

[6] The applicants argue that if costs are awarded, the amount should be nominal. They argue that the issues argued in the application were novel, as is the legislative framework governing the cannabis retail lottery. They also submit that the Registrar acted unreasonably by waiting until the eve of the litigation before indicating that he would not draw down on the standby letters of credit. This meant that the applicants “had no choice but to incur the cost of litigation” and to pursue the vires issue respecting the requirement of a letter of credit.

[7] I do not accept these arguments. First, the applicants were not public interest litigants; they were pursuing their own commercial interests (see Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263 at para. 77). Second, the applicants have not established that the conduct of the Registrar should disentitle him from obtaining costs. The applicants sought to overturn the Registrar’s decision so as to continue to participate in the selection process. The vires argument was one of a number of issues raised. I do not accept that the uncertainty of the treatment of the standby letters of credit was the major reason for this application to proceed to a hearing.

[8] In my view, the Registrar is entitled to costs of the stay motion, as well as the application. Corbett J. reserved the costs of the stay motion to the panel hearing the application. Ultimately, the Registrar was fully successful on the merits in this proceeding, and he should have costs of the motion and the application.

[9] However, the amount of costs sought is excessive in the circumstances. In particular, there are excessive hours claimed for the preparation of the factum, and there was no need for three gowned counsel at the hearing. However, there were numerous important issues, a lengthy record and a very tight timeline to prepare for the hearing. As a result, I would fix costs of the stay motion at $10,000 and costs of the application at $30,000, amounts that are fair and reasonable in the circumstances.

[10] Accordingly, the applicants are ordered to pay costs to the Registrar of $40,000, inclusive, on a joint and several basis, payable within 30 days.

Swinton J.

D.L. Corbett J.

R. Gordon J.

Released: December 5, 2019