ONTARIO
SUPERIOR COURT OF JUSTICE’
COURT FILE NO.: 10-20037
DATE: 2012-05-31
IN THE MATTER of the Tobacco Tax Act , R.S.O.1990, c.T. 10
B E T W E E N:
GRAND RIVER ENTERPRISES SIX NATIONS LTD.
Brian Duxbury, Amanda J. McInnis, Chantell Montour and Ben Jetten for the Applicant
Applicant
- and -
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO and MINISTER OF FINANCE
Frank S. Stopar and Walter Kim for the Respondents
Respondents
HEARD: at Hamilton on January 17 and 19, 2012
SUPPLEMENTARY REASONS - COSTS
CAVARZAN J.
[ 1 ] Grand River Enterprises Six Nations Ltd. (GRE) brought this application primarily to seek a declaration that it has a right to possess a shipment of cigarettes seized by the authorities pursuant to s. 24 of the Tobacco Tax Act (TTA). It applied, as well, for a remedy under s. 24(1) of the Canadian Charter of Rights and Freedoms (the Charter) for breach of its Charter s. 8 right to be secure against unreasonable search and seizure.
[ 2 ] The court was advised that this was a test case for some 17 or 18 similar pending proceedings in which the arguments advanced here will be relied upon.
[ 3 ] GRE succeeded on its Charter argument. It was ordered that the seized shipment of cigarettes be returned or, in the alternative, that GRE be paid for the value of the portion of the shipment which it owned. An analysis of the issues raised concerning the TTA resulted in findings in favour of the position of the respondents.
[ 4 ] In its submissions on costs, GRE represents that the total for counsel fees and disbursements on a partial indemnity basis is $273,312.63. The amount sought to be recovered, however, is $96,000.00. I take it that the reduced claim is tacit acknowledgement of the fact that the vast majority of the pre-hearing proceedings and of the hearing itself was devoted to the TTA issues.
[ 5 ] The Charter issue was raised in a subsequent Notice of Constitutional Question and involved a relatively small proportion of the overall effort dedicated to this file. The lion’s share of the two days of submissions was taken up by the TTA issues.
[ 6 ] The basic rule is that costs follow the events. GRE claims substantial success in that an order was made for the return of all of the seized cigarettes. This came, however, by way of an appropriate remedy pursuant to Charter s. 24(1) .
[ 7 ] In my view, this is a case in which rule 57.01(4) is applicable:
Nothing in this rule or rules 57.02 to 57.07 affects the authority of the court under section 131 of the Courts of Justice Act,
(a) to award or refuse costs in respect of a particular issue or part of a proceeding.
[ 8 ] In my view, no costs should be awarded to the applicant regarding that portion of the proceedings devoted to the TTA issues.
[ 9 ] In exercising my discretion under s. 131 of the Courts of Justice Act to award costs, I consider the applicable criteria in rule 57.01(1) of the Rules of Civil Procedure.
[ 10 ] The respondents fairly acknowledge the applicant’s success and that an award of costs is appropriate. There were no offers to settle.
[ 11 ] Regarding the quantum at issue, the parties have agreed that the value of GRE’s cigarettes is $145,361.50. The respondents submit that the costs claimed of $96,000.00 is not reasonable given the quantum at issue. Those relative amounts, however, are not determinative. Although it is not the case here, costs sometimes exceed the damages awarded. I respectfully agree with the following statement by J.W. Quinn J. in Raul Rimando et al. v. Dr. Allan W. Jackiewicz et al. [2003] O.J. No. 534 at para. 76 :
I see no reason why the court should be concerned with whether costs exceed the damages awarded. Everyone knows that, in some cases, the costs involved in going to trial will surpass the value of the claim or the amount otherwise in dispute. That is a foreseeable risk of litigation and it should not accrue to the benefit of the losing party.
[ 12 ] This was not a complex proceeding. The facts with respect to the TTA issue were not in dispute. Furthermore, the issues in the matter are of importance to the immediate parties only and do not raise matters of general public importance.
[ 13 ] There was evidence in the material before the court from which it was reasonable to conclude that much of the delay between the seizure on May 4, 2010 and the hearing of the application on January 17 and 19, 2012 was unnecessary and attributable to the applicant.
Conclusion
[ 14 ] GRE asks that costs be fixed in the amount of $96,000.00 inclusive of disbursements plus applicable interest, representing about one-third of partial indemnity costs of $273,312.63. In my view, $96,000.00 exceeds by a considerable margin what an unsuccessful party could reasonably expect to pay in the circumstances.
[ 15 ] An all-inclusive award of $50,000.00 conceded by the respondents would be more appropriate, and it is so ordered.
Cavarzan J.
Released: May 31, 2012
COURT FILE NO.: 10-20037
DATE: 2012-05-31
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER of the Tobacco Tax Act , R.S.O.1990, c.T. 10
B E T W E E N: GRAND RIVER ENTERPRISES SIX NATIONS LTD.
(Brian Duxbury and Amanda J. McInnis, Chantelle Montour and Ben Petten for the Applicant) - and - HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO and MINISTER OF FINANCE
(Frank S. Stopar and Walter Kim for the Respondents)
REASONS FOR DECISION Cavarzan J. JC:mg
Released: May 31, 2012