ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-10-15192
DATE: 20120524

BETWEEN:

SIKH CULTURAL SOCIETY OF METROPOLITAN WINDSOR, MOHINDER SINGH KANDOLA, GURBAX SINGH WAHID, HARJINDER SINGH KANDOLA, KULBIR KAUR BHOLA, BALWINDER KAUR MANN, GIAN SINGH CHANDAN and PRITAM KAUR CHANDAN
Applicants

– and –

SUKHDEV SINGH KOONER, AVTAR SINGH KOONER, GURFATEH SINGH KOONER, MANJINDER SINGH KOONER, INDERPAL SINGH DHANOA, GURJIT SINGH GILL, RAVINDER SINGH (MAVI), AMARJIT SINGH NIJJAR, JATINDER SINGH RAI, HARPREET SINGH LABANA, GURMEET SINGH, SATNAM SINGHMATHARU, LEHMBER SINGH PAHL, SURINDER KAUR MATHARU, MANJINDER KAUR KOONER, RAJINDER KAUR KOONER, KAMALJIT SINGH SIDHU, SUKHPREET KAUR SIDHU, GURBAKSH SINGH SIDHU, SATYA KAUR BATH, BALDEV SING BRAR, RAJVEER KAUR NIJJAR, SURJIT SINGH RIYAT, DALJIT SINGH SIDHU, GOVINDER SINGH SARAO and GIACOMO RAMIERI
Respondents

Robert J. van Kessel, Sahar Cadili, Edwin G. Upenieks and Kiran Gill, for the Applicants

William V. Sasso and Jacqueline A. Horvat, for the Respondents

HEARD: Written Submissions

ENDORSEMENT ON COSTS

Nolan J:

[ 1 ] On October 31, 2011, following a five-day hearing which took place in March and June 2011, I released my Reasons for Judgment. The applicants were successful. The individual applicants were the members of the New Executive Committee (“NEC”) of the Sikh Cultural Society of Metropolitan Windsor (“the Society”) who were elected by acclamation in the constitutionally-required elections of the Society in December 2009. The respondents included members of the Former Executive Committee (“FEC”) along with some of their supporters, a number of whom had their memberships suspended by the NEC. No one other than the individual applicants had put forward their names for election in 2009. Instead, at the annual general meeting of the Society held on November 15, 2009, just after the nomination committee had been appointed by the FEC, one of the respondents, S. Kooner, who had held numerous positions on the Executive Committee for the past 16 years, proposed the appointment of a Jathedar/CEO, a position not previously in existence in the Society since its incorporation. Had it been approved, the person who would be appointed to such a position would hold office for life, could appoint his successor and would not be accountable to either the Executive Committee nor the membership for any decisions made with respect to properties owned by the Society. Any decision made by the Jathedar would be final and binding and the Jathedar was not able to be sued by an individual inside or outside the congregation. The proposal was rejected by the members at that meeting.

[ 2 ] On December 6, 2009, the acclamation of the seven-member Executive Committee, the NEC, was announced. On the same day a further petition, allegedly signed by 620 members of the congregation, was produced by supporters of S. Kooner. The petition urged S. Kooner to accept the position of Jathedar.

[ 3 ] Although the Constitution provided that the NEC assumed power from the date of the election, the books and records of the Society held by the FEC were not turned over to the NEC. This refusal was the basis for the first court application on February 9, 2010. R.S.J. Ducharme ordered that the books and records were ordered to be turned over. In spite of this order, the turnover of the books and records did not take place until February 27, 2010.

[ 4 ] Following that court order various steps were taken by the FEC including the expulsion of two of the recently elected members of the NEC who were applicants in the proceeding before me. The resolution was subsequently quashed by Rogin J. on June 11, 2010 who made a finding that the expulsion was done in bad faith and contrary to natural justice. In August 2010 the respondents organized a non-confidence vote, after which an election was held and seven other persons were elected to take over the Executive Committee from the NEC. After the results of that “election” were announced, the newly elected Executive Committee took over the Gurdwara by force. This action was followed by a second application to court commenced by the Society and the other applicants. On August 31, 2010 Quinn J. declared that the non-confidence motion was void and of no effect and granted an interim injunction which, among other terms, restrained the respondents from going within 1000 metres of the Society. The injunction also required the turning over of books and records to the NEC. This injunction remained in place with most of the original terms and conditions in place until January 31, 2012 after the hearing before me.

[ 5 ] Pursuant to my judgment, the applicants were successful in being declared the valid Executive Committee of the Society, the list known as the “301 List” that had been produced by the NEC as the official membership list of the Society, along with any persons not on the 301 List but who were on the list of bona fide members who were entitled to vote in the December 2009 elections. The list of members proposed as valid by the respondents was rejected by me as being inaccurate and unable to be verified since the FEC had no authority to entertain applications for membership after December 31, 2009.

[ 6 ] I ordered that costs were to be paid to the applicant by the individual respondents on a scale and in an amount agreed upon by counsel or determined by me if no agreement was possible. The parties could not agree on costs and, as a result, I received written submissions from both the applicants and the respondents.

POSITION OF THE APPLICANTS

[ 7 ] The applicants seek costs from the respondents on a full indemnity scale in the amount of $280,000. In the alternative, they sought substantial indemnity costs of $250,000 or $160,000 on a partial indemnity basis.

[ 8 ] Counsel for the applicants argued that there are two instances in which full indemnity costs are warranted:

1. When there is an offer to settle under rule 49.10 of the Rules of Civil Procedure ; or

2. where there is reprehensible conduct on the part of the party from whom costs are being sought.

[ 9 ] In support of that position, I was referred to the case of Toronto Star Newspapers Ltd. v. Raleigh , 2011 ONCA 555 , 107 O.R. (3d) 288. At paragraph 34 of the decision LaForme J.A., speaking for the Ontario Court of Appeal, said the following:

This court, at para. 31 of Clarington , reaffirmed the principle that elevated costs are warranted in only two circumstances. First, where there is an offer to settle under rule 49.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 , which has no application in this case. Second, on a clear finding of reprehensible conduct on the part of the party against which the cost award is being made.

The British Columbia Supreme Court in Leung v. Leung (1993), 15 C.P.C. (3d) 42 (B.C.S.C.) defined the word reprehensible as “scandalous, outrageous or constitutes misbehaviour: but it also includes milder forms of misconduct. It means simply “deserving of reproof or rebuke”.

[ 10 ] The applicants acknowledged that neither party had made a rule 49.10 offer. The basis therefore, on which they seek full indemnity costs is the behaviour of the respondents. They pointed to the attempt of S. Kooner’s supporters to have him appointed as the Jathedaar/CEO which would have permitted him to override the decisions of the duly elected Executive Committee, even though such a position had been voted down by the membership, the forcible takeover of the Gurdwara after the non-confidence vote which resulted in the August 31, 2010 order of Quinn J., the FEC’s expulsion of two of the applicants, an action that was later quashed by the order of Rogin J.

[ 11 ] Counsel for the applicants also asserted that during the litigation the respondents attempted to raise new arguments and submit fresh evidence. One of these occasions was at the commencement of the hearing when the respondents attempted by way of oral motion to produce some additional applications for membership which the respondents alleged had just come to their attention. A similar application was made by way of motion and heard on June 6, 2011 before the re-commencement of the hearing of the application itself. In both instances the respondents were unsuccessful.

[ 12 ] The applicants also pointed to my findings wherein I refused to acknowledge as accurate or valid the membership list prepared by the respondents, finding the evidence of membership “highly suspect” and “not believable”.

[ 13 ] Counsel for the applicant also referred to my finding that the failure of the FEC to keep accurate records was the basis for much of the confusion regarding the validity of the membership lists which then became the subject of the application. As well, counsel for the applicants called S. Kooner’s evidence about when he first consulted a corporate lawyer as being a lie and thus, reprehensible conduct.

[ 14 ] Counsel for the applicants argued that the only reason the litigation was necessary was because of the failure of the respondents to follow the provisions of the Constitution of the Society and turn over the books and records to the properly elected New Executive Committee by the end of December 2009. The records were only turned over after a court order was granted in February 2010 and even then there was delay in all of the records being produced.

[ 15 ] The quantum of costs being sought on a full indemnity basis by the applicants is $280,000 representing most of the fees, disbursements and applicable taxes billed to the applicants for both the law firm which commenced the original applications as well as the second law firm which took over the file and proceeded to do the bulk of the work on the application, including the hearing. It was the position of counsel that because of the actions of the respondents, and the emergency situations which resulted from these actions at the Gurdwara, the file demanded “intense, concerted effort from a team of lawyers and students.” Voluminous materials were filed which included application records, supplementary application records, a three-volume further supplementary application record including a 24-page affidavit and a compendium consisting of two three-inch binders. Cross-examinations lasted two days and required extensive analysis and review of the evidence.

[ 16 ] Although an actual bill of costs was not provided with the submissions, counsel submitted that their billing to the client was in the amount of $288,335.13 after certain courtesy reductions had been given to the applicants because of some work that had been duplicated between the first law firm and the second law firm. Counsel also asserted that the bulk of the work was done by junior lawyers, thus reducing the amount of what would otherwise have been charged to the applicants.

[ 17 ] Finally, counsel for the applicants argued that the Society is a volunteer organization which depends on donations from its members and others for its existence. Because of the actions of the respondents which were found to be unlawful, the litigation has required the use of the much-needed resources of the Society and that, given the actions of the respondents, an unfair burden had been placed on the Society.

POSITION OF THE RESPONDENTS

[ 18 ] It was the position of the respondents that the costs of the proceeding should be assessed on a partial indemnity basis and that I must determine the costs based on a consideration of the Courts of Justice Act , the factors set out in rule 57.01(1) of the Rules of Civil Procedure , and the tariffs They assert that the applicants are seeking full indemnity or substantial indemnity costs because of the subject matter of the dispute rather than the way in which the respondents conducted themselves during the course of the proceeding before me.

[ 19 ] Counsel for the respondents pointed out that full or substantial indemnity costs should not be awarded on account of the actions of any party giving rise to the litigation but rather their conduct during the course of the litigation. Counsel for the respondents argued that the respondents were within their rights, pursuant to the Constitution of the Society, to hold a non-confidence vote. They pointed out that included in the costs sought by the applicants were the steps required after the orders of Quinn J. and Thomas J. Much of the work, particularly the preparation of the voluminous documentary material, was the result of the proceeding being commenced by way of application rather than by action, a choice of proceeding that was initiated by the applicants themselves.

[ 20 ] Counsel for the respondents also pointed out a number of the applicants’ submissions such as the failure of the respondents to recognize the 2009 election results and the proposed CEO position had already been dealt with by the court in prior separate proceedings. The costs of the issue before Rogin J. had already been dealt with by him.

[ 21 ] It was further the position of counsel for the respondents that the actions of the respondents with regard to the conducting of the non-confidence vote was undertaken on the advice of counsel. Also, I made no finding that there had been violence undertaken on the part of the respondents to the proceeding as a result of the non-confidence vote and the subsequent takeover of the Gurdwara.

[ 22 ] It was also the position of counsel for the respondents that the interim injunction which was first granted by Quinn J. and continued with various adjustments by both Thomas J. and me had been made with no specific finding of wrongdoing on the part of the respondents.

[ 23 ] With respect to the allegations that either full or substantial indemnity costs should be awarded because of a violation of the Constitution and the Corporations Act by the respondents, again counsel argued that the respondents were acting on the advice of counsel and that “fairness, reasonableness and a proper consideration of the factors in rule 57.01 that inform the court’s discretion in the award of costs dictates that costs be awarded on a partial indemnity scale.”

[ 24 ] With respect to the quantum of costs, counsel for the respondents challenged the additional costs that were the result of the applicants change of counsel without explanation following the order of Thomas J. on October 15, 2010. Counsel for the respondents also challenged a number of disbursements for printing, photocopies and document reproduction as well as travel and miscellaneous disbursements on the grounds that no receipts had been provided.

DISCUSSION AND ANALYSIS

[ 25 ] Before dealing with the specific submissions of counsel, and considering their positions in relation to the scale, rates and quantum of costs to be awarded, I want to identify the basic principles to be applied to any determination of costs.

[ 26 ] In fixing an appropriate rate, the court must be guided by the overriding principles of reasonableness, that is the reasonable expectations of both parties. As Armstrong J.A. explained in Boucher v. Public Accountants Council for the Province of Ontario , 2004 14579 (ON CA) , [2004] O.J. No. 2634 (Ont. C.A.), the fixing of costs involves more than merely a calculation using the hours docketed and the cost grid. At para. 24 of Boucher , Armstrong J.A. said, “It is also necessary to step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable.” He reiterated what the court had said in Zesta Engineering Ltd. v. Cloutier (2002), 2002 45084 (ON CA) , 164 O.A.C. 234 (Ont. C.A.) at para. 4 :

In our view, the costs award should reflect more of what the Court views as a fair and reasonable amount that should be paid by the successful parties rather than by any exact measure of the cost to the successful litigant.

[ 27 ] In fixing costs, the court has discretion under s. 131 of the Courts of Justice Act to award full or substantial indemnity costs throughout the action for a successful plaintiff where the conduct of the defendant before and during trial warrants such costs. In this case, the applicants seek full or substantial indemnity costs throughout as a result of conduct of the respondents which I have detailed earlier in this endorsement. In addition to the discretion provided pursuant to the Courts of Justice Act , rule 57.01 of the Rules of Civil Procedure set out a number of factors that the court may consider in fixing costs. These factors include:

a) the amount claimed and the amount recovered in the proceeding;

b) the apportionment of liability;

c) the complexity of the proceeding;

d) the importance of the issues;

e) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding;

f) whether any step in the proceeding was,

i) improper, vexatious or unnecessary, or

ii) taken through negligence, mistake or excess of caution;

g) a party’s denial of or refusal to admit anything that should have been admitted.

[ 28 ] Applying those principles to the matter before me, I conclude that it is appropriate to award costs on a partial indemnity basis. Counsel for the applicants focussed much of their argument regarding entitlement to full or substantial indemnity costs throughout on the conduct of the respondents leading up to the commencement of the litigation and after as it related to events at the Gurdwara. These actions were not specifically related to the conduct of the litigation itself. Rather, they were the actions of either the individual respondents or their supporters which had been the source of criticism both by me in my reasons for judgment and by other judges who had dealt with various aspects of the litigation before the hearing.

[ 29 ] There is no doubt that the actions of some of the respondents and their supporters were not in accordance with the principles of natural justice and, indeed, the Constitution of the Society. Nevertheless, the parties were entitled to come to court to have the dispute dealt with. To award costs on a full-indemnity basis would be for the court to impose a penalty in the nature of a fine. In my view, that is not the purpose of an award of costs. Although the applicants criticized the respondents for bringing two motions during the hearing, one at the commencement on an oral basis and one during a period of adjournment, both of which were unsuccessful, and implied that these motions unnecessarily delayed or were designed to delay the proceeding, I disagree. There was some confusion about the terms of disclosure and although the respondents were unsuccessful on each motion, this lack of success can be dealt with by way of costs. The motions do not represent an improper step in the proceeding.

[ 30 ] As for the argument that the Society, which is supported by donations by members and other attendees, and which has been unnecessarily put to considerable expense in proceeding with this litigation, it was clear from the attendance at court during the conduct of the hearing that these were issues that were of great significance, not just to the parties themselves, but to other members of the Society. It became clear during the hearing that there are many persons who attend at, contribute to and participate in the events of the Society and who are not members eligible to vote on the elections. Nevertheless, many are persons who contribute funds to the Society on a regular basis, and many are persons who supported the applicants and other persons who supported the respondents.

[ 31 ] With respect to the quantum of costs, I have no issue with either the time spent by various counsel nor with the rates charged on a partial indemnity basis. In their reply material the applicants explained the various disbursements that had been challenged by the respondents. I am satisfied that they were valid and allowable costs required to deal with the application on an efficient basis. I also accept as accurate and necessary the number of hours that were expended by the applicants in preparing for the hearing. The compendia which were prepared by the applicants were used also by the respondents and were of great assistance to the court. Accordingly, the respondents shall pay costs to the applicants in the amount of $160,000 inclusive of fees, disbursements and applicable taxes.

“Original signed by Justice Mary Jo M. Nolan ”

Mary Jo M. Nolan
Justice

Released: May 24, 2012

COURT FILE NO.: CV-10-15192

DATE: 20120524

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: SIKH CULTURAL SOCIETY OF METROPOLITAN WINDSOR, MOHINDER SINGH KANDOLA, GURBAX SINGH WAHID, HARJINDER SINGH KANDOLA, KULBIR KAUR BHOLA, BALWINDER KAUR MANN, GIAN SINGH CHANDAN and PRITAM KAUR CHANDAN Applicants – and – SUKHDEV SINGH KOONER, AVTAR SINGH KOONER, GURFATEH SINGH KOONER, MANJINDER SINGH KOONER, INDERPAL SINGH DHANOA, GURJIT SINGH GILL, RAVINDER SINGH (MAVI), AMARJIT SINGH NIJJAR, JATINDER SINGH RAI, HARPREET SINGH LABANA, GURMEET SINGH, SATNAM SINGHMATHARU, LEHMBER SINGH PAHL, SURINDER KAUR MATHARU, MANJINDER KAUR KOONER, RAJINDER KAUR KOONER, KAMALJIT SINGH SIDHU, SUKHPREET KAUR SIDHU, GURBAKSH SINGH SIDHU, SATYA KAUR BATH, BALDEV SING BRAR, RAJVEER KAUR NIJJAR, SURJIT SINGH RIYAT, DALJIT SINGH SIDHU, GOVINDER SINGH SARAO and GIACOMO RAMIERI Respondents endorsement ON COSTS Nolan J.

Released: May 24, 2012