ONTARIO SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 08-CV-368950CP
DATE: August 20, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Kenneth R. Parker
Plaintiff
- and -
Pfizer Canada Inc. and Pfizer Inc.
Defendants
Proceeding under the Class Proceedings Act, 1992
COUNSEL:
• Bryan C. McPhadden and Idan Erez for the Plaintiff
• William McNamara, Teresa Walsh, and Randy Sutton, for the Defendants
HEARING DATES: In writing
PERELL, J.
REASONS FOR DECISION – COSTS
[ 1 ] The Plaintiff, Kenneth R. Parker brought a motion to certify this action as a class proceeding under the Class Proceedings Act, 1992 , S.O. 1992, c. c. 6 against the Defendants Pfizer Canada Inc. and Pfizer Inc. Following a run-up that took about four years, and after a two-day motion, for reasons reported, Parker v. Pfizer Canada Inc. , 2012 ONSC 3681 : (a) I stayed the action as against Pfizer Inc., because there was no basis in fact for a duty to warn claim against it; and (b) I certified a duty to warn claim against Pfizer Canada. The certification order will amend the class definition and amend the common issues. Mr. Parker now seeks costs for the certification motion.
[ 2 ] Mr. Parker seeks on a partial indemnity basis $283,750.81 for legal fees, inclusive of taxes, plus disbursements of $70,117.43, inclusive of taxes, for a total cost claim of $353,868.24.
[ 3 ] For the reasons that follow, I award $300,000.00, all inclusive.
[ 4 ] Although Mr. Parker's action was not certified as against Pfizer Inc., which remains in the action for claims that may be advanced in individual actions by class members, he submits that no additional costs were incurred by Pfizer Inc. over and above the costs incurred by Pfizer Canada Inc. in opposing the motion and, therefore, no costs should be awarded in favour of Pfizer Inc.
[ 5 ] The Defendants submit that the amount claimed for fees is not reasonable and should be reduced by at least 60-70% for five reasons: (1) the certification motion was unsuccessful against Pfizer Inc.; (2) the Defendants were successful in substantially reducing the number of common issues resulting in a more focused and manageable proceeding moving forward; (3) based on Mr. Parker’s recent decision not to proceed with the waiver of tort question, only three of the 11 proposed common issues were certified; (4) the hearing lasted only two days, shorter than certification hearings in other class proceedings, reflecting a focused and efficient response with productive results; and (5) pursuant to an agreement among counsel, the British Columbia and Alberta actions were stayed in favour of the within Ontario action, and costs in respect of British Columbia and Alberta subclasses were to be decided under the respective Rules of each province without duplication of costs.
[ 6 ] In the alternative, the Defendants submit that a significant portion of any costs awarded to the Plaintiff should be "in the cause" to address the reality that over-lawyering by plaintiff's counsel in class proceedings is commonplace and to acknowledge that the certification motion is strictly procedural and does not determine the merits of the claim and so, in fairness, Mr. Parker should not recover costs when ultimately he and other class members may be unsuccessful.
[ 7 ] With the exception of the first argument, in the circumstances of this case, I see no merit to the reasons advanced by the Defendants to reduce the award of costs from the $353,868.24 sought.
[ 8 ] I think, however, that Mr. Parker’s failure to certify the action as against Pfizer Inc. justifies an approximately 20% reduction in the fees’ portion of its claim for costs.
[ 9 ] Mr. Parker is fortunate that Pfizer Inc. was not separately represented, because it might (I do not decide the point) have been entitled to a great deal more in costs than this abatement in the costs award.
[ 10 ] It is true that Pfizer Inc. is a proper party, but it was not a necessary party, and it seems to have been added for tactical reasons and possibly to discomfort its co-defendant. The joinder of Pfizer Inc. undoubtedly resulted in additional costs being incurred by the Defendants in opposing the motion, and, practically speaking, Pfizer Inc. is out of this action, because it is not involved in the common issues trial and because of the inefficiencies and likely improvidence of pursuing an individual claim against it without having certified any common issues against it.
[ 11 ] In the above circumstances, it is fair and consistent with the multiple purposes served by a costs award to reduce the costs received by Mr. Parker to $300,000.00 on account of the lack of success against Pfizer Inc. The question then becomes whether there should be any further reductions having regard to the court’s discretion in awarding costs and whether any portion of the costs awarded should be in the cause as opposed to being payable forthwith.
[ 12 ] The Court has the power to be flexible in its award of costs, including refusing to award costs on a particular issue, providing hybrid or complex orders, or deferring the award of costs altogether: 2038724 Ontario Ltd v Quizno's Canada Restaurant Corp ., 2008 27822 (ON SC) , [2008] O.J. No. 2276 at paras 20-21 (S.C.J.); 2038724 Ontario Ltd v Quizno's Canada Restaurant Corp . 2010 ONSC 5390 at paras 21-23 , leave to appeal ref'd 2011 ONSC 859 (Div. Ct). The jurisdiction of the court to reduce a costs award is available from the normal discretionary factors that the court may consider when awarding costs under rule 57.01 of the Rules of Civil Procedure , which states, with my emphasis added:
GENERAL PRINCIPLES
Factors in Discretion
57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider , in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(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 to 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 excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted ;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs .
[ 13 ] I think awards of costs in the cause should be less extraordinary in certification motions, but such an award must be justifiable in the circumstances, and, generally speaking, unless there is a justification for delaying the determination of a portion of the costs, a plaintiff who emerges successful from a certification motion should receive his or her costs or a substantial portion of them forthwith and not in the cause. Distributive cost awards in certification motions that take into account the losing party’s success on some issues, are possible, but they too are extraordinary awards that require justification. See: Ford Motor Co of Canada v Ontario Municipal Employees Retirement Board , [2006] O.J. No 990 at para 22 (C.A.) ; Cressman, Foster Health Facility Inc. v. Furniss, 2008 ONCA 729 at para 12 ; Gray v Ontario , [2006] O.J. No. 2695, at paras 3 , 7 and 11 (Div. Ct.); Pearson v. Inco Ltd , 2006 7666 (ON CA) , [2006] O.J. No 991 at para. 6 (C.A.).
[ 14 ] Apart from saying that awarding costs is an activity of exercising discretion in a principled way and that an award of costs should be fair and reasonable in the circumstances, the extent to which the court employs the tools available to it will depend upon the exigencies of each case. In McCracken v Canadian National Railway Company, 2010 ONSC 6026 , I stated at para. 26:
- Where the court certifies a class proceeding, its broad discretion with respect to costs can take into account whether class counsel's original design for the class action was overreaching or required adjustment for the action to be certifiable. The court's broad discretion with respect to costs can take into account all of the multifarious purposes of a costs award. If the court certifies the class proceeding, the court's broad discretion with respect to costs can take into account the defendant's contribution to yielding a class proceeding that is not overreaching and that is manageable and appropriate for a common issues trial and, if necessary, individual issues trials
[ 15 ] It is unfortunate that plaintiffs sometimes over-plead their claims by adding unnecessary or provocative causes of action, remedies, and common issues that call out a defendant to resist the certification motion to reduce the excesses, but sometimes the reward for the defendant, if he, she, or it succeeds in pruning the class action, is just the tactical success of pruning the class action. Pfizer Canada Inc. has achieved that tactical success, and in my opinion a further reduction in the costs awarded is not justified in the circumstances of this case.
[ 16 ] Mr. Parker brought a motion to certify his action as a class proceeding, which is an obligatory motion under the Act, even if the opponent consents. The Defendants, however, did not consent, nor did they make any formal offer to settle, which might have involved suggesting a narrower list of common issues and the removal of Pfizer Inc. from the action. The Defendants vigorously defended the certification motion. Pfizer Canada Inc. was unsuccessful in resisting certification, and the action was certified as a class proceeding under the Act. That the class definition was narrowed or that the list of common issues was abbreviated is a common phenomenon of certification motions, and although, in some cases, the narrowing of the class definition, or the truncation of the common issues might justify a discretionary reduction in the costs to be awarded, this is not one of those cases. After a vigorously contested certification motion, Mr. Parker, as the successful party as against Pfizer Canada Inc. is entitled to the normal costs award that follows success less a reduction on account of its failure to certify any common issues as against Pfizer Inc. Although I have the jurisdiction to reduce the amount of costs awarded, I would not exercise that discretion in the case at bar.
[ 17 ] For the above Reasons, I award Mr. Parker costs of $300,000.00, all inclusive, payable forthwith.
Perell, J.
Released: August 20 2012
COURT FILE NO.: 08-CV-368950CP
DATE: August 20, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Kenneth R. Parker
Plaintiff
‑ and ‑
Pfizer Canada Inc. and Pfizer Inc.
Defendants
REASONS FOR DECISION - COSTS
Perell, J.
Released: August 20, 2012