CITATION: Wainfleet Wind Energy Inc. v. Township of Wainfleet, 2013 ONSC 3033
COURT FILE NO.: 53800/12
DATE: 20130524
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
WAINFLEET WIND ENERGY INC.
Applicant
– and –
THE CORPORATION OF THE TOWNSHIP OF WAINFLEET
Respondent
C. Williams, J. Johnson, and S. Stoll, for the Applicant
D. DeLorenzo and S. Draper, for the Respondent
M. Horner, for the Intervenor, Attorney General for Ontario
HEARD: March 13 and 14, 2013
The Honourable Robert B. Reid
COSTS ENDORSEMENT
[1] Wainfleet Wind Energy is in the process of developing a five turbine renewable power facility in Wainfleet, Ontario. It sought a declaration that a municipal by-law enacted by the Township relating to wind turbine development should either be quashed or does not apply to its project.
[2] The Township defended its by-law, and argued that if the by-law was unenforceable or ultra vires, certain provisions of Regulation 359/09[^1] made under the Environmental Protection Act[^2] (“EPA”) and certain provisions of the Planning Act[^3] were contrary to section 7 of the Canadian Charter of Rights and Freedoms[^4] and as a result were invalid.
[3] Because of the constitutional challenge, the Attorney General for Ontario intervened, defending the constitutional validity of the legislation.
[4] For the reasons set out in my decision dated April 12, 2013 I declared that the by-law was invalid and without effect as a result of vagueness and uncertainty.
[5] The parties were invited to make costs submissions if no agreement on that subject could be reached. The Attorney General as intervenor has not sought costs. The applicant seeks costs on a partial indemnity basis up to the date of an offer and substantial indemnity costs thereafter. The respondent submits that each party should bear its own costs.
Issues as to the award of costs:
[6] The costs submissions raise the following issues:
• Should costs be awarded to the successful party?
• Was there a Rule 49 offer pursuant to which substantial indemnity costs could be awarded?
• If costs are to be awarded, what is the appropriate amount?
Should Costs be Awarded?
[7] There is no dispute that my discretion as to costs is found in section 131(1) of the Courts of Justice Act[^5], and that I should exercise that discretion in accordance with the general principles set out in rule 57.01 of the Rules of Civil Procedure[^6].
[8] WWE submits that since it was the successful party, it should be entitled to costs.
[9] Township submits that because this was the first case in which a municipal by-law was challenged in light of the recent enactments relating to renewal energy, the clarification provided was for the general benefit of municipalities and renewable energy developers throughout Ontario. As result, the Township submits that the issues were of public interest and that therefore no costs award should follow.
[10] The basis of my decision that the by-law was invalid arose from the vagueness and uncertainty of its terms. That finding does not engage the general public interest and is particular to the by-law in question. Although it may be that comments made as obiter dicta have some interest beyond the parties, I do not consider that possibility sufficient to depart from a normal costs order in favour of the successful party.
[11] The Township submitted that there was divided success as a result of which each party should bear its own costs. It noted that the by-law was enacted in good faith to protect the health, safety and well-being of the Township’s residents. The by-law was not found to be ultra vires the Township’s authority pursuant to the Municipal Act 2001[^7].
[12] On an issue by issue basis, it may be said that success was divided. I note that a substantial amount of time and effort was taken by the Township on the constitutional question which ultimately did not need to be answered. The result of the application, however, was clearly in favour of WWE and therefore it will have its costs as against the Township.
Was there a rule 49 offer affecting the costs order?
[13] By correspondence dated January 17, 2013, WWE made an offer to resolve the matter. The terms of that offer can be summarized as follows: the application was to be withdrawn without costs, the Township would make no submissions to the Ministry of the Environment or the Environmental Review Board as regards the applicability of its by-law to the WWE project and the Township would grant municipal consent for a utility crossing at a location proposed by WWE.
[14] WWE submits that the result was less favourable to the Township than the proposal contained in the offer since the by-law would not have been declared invalid but simply would not have been applied to WWE’s project.
[15] It appears to me that the terms of my April 12, 2013 decision were less favourable to the Township than the offer as to its first two terms.
[16] The approval of a utility crossing is apparently a matter within the jurisdiction of the Ontario Energy Board and that application remains outstanding. It did not form a part of this litigation and is apparently a matter of some importance to WWE in its project.
[17] Because the offer contained a term that is beyond the scope of this application, I am not prepared to find that the terms of my decision are more favourable to the applicant than the terms of the offer, and as result, the substantial indemnity cost consequences of a rule 49 offer are not engaged in this case.
What is the appropriate amount for costs?
[18] Based on my comments set out above, WWE will have its costs from the Township on a partial indemnity basis.
[19] WWE has provided a bill of costs indicating the time expended and rates applied to the lawyers, law students and law clerks who were involved with the file. The Township submits that there appears to be a duplicity of effort resulting in “over-lawyering” and that the rates charged were excessive by comparison with those charged by lawyers practicing within the Niagara Region.
[20] One of the factors to be considered pursuant to rule 57.01 is the reasonable expectation of the parties. In my view, litigants are entitled to retain counsel of their choosing, including those who practice in Toronto and charge rates customary there. It should be within the reasonable expectation of the parties that the potential quantum of a costs award would relate to the actual rates charged by the lawyers involved.
[21] This litigation required preparation on a variety of issues involving the interaction of several pieces of legislation and a constitutional issue. I am not prepared to find that there was an excessive amount of time spent by counsel for WWE in preparing for and arguing the application at court.
[22] There is no explanation for the percentage relationship between the substantial indemnity rates and the partial indemnity rates used by counsel for WWE. The partial indemnity rates charged are between approximately 71% and 80% of the substantial indemnity rates, depending on the lawyer involved. I consider that relationship to be excessive and that a more appropriate relationship is for a partial indemnity rate to be 60% of the substantial indemnity rate. I have recalculated the bill of costs accordingly.
[23] As a result, there will be an order that the Township pay to WWE its costs of the application on a partial indemnity basis inclusive of HST in the amount of $69,585.50 plus disbursements as claimed in the amount of $4,021.09, inclusive of HST for a total of $74,006.60.
Reid J.
Released: May 24, 2013
COURT FILE NO.: Wainfleet Wind Energy Inc. v. Township of Wainfleet, 2013 ONSC 3033
COURT FILE NO.: 53800/12
DATE: 20130524
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
WAINFLEET WIND ENERGY INC.
Applicant
- and –
THE CORPORATION OF THE TOWNSHIP OF WAINFLEET
Respondent
COSTS ENDORSEMENT
Reid, J.
Released: May 24, 2013
[^1]: O. Reg. 359/09 “Renewable Energy Approvals under Part V.0.1 of the Act”, ss. 53, 54, 55.
[^2]: R.S.O. 1990, c. E.19.
[^3]: R.S.O. 1990, c. P.13, s. 62.0.2(6).
[^4]: Constitution Act, 1982, (U.K.), being Schedule B to the Canada Act, 1982, c.11.
[^5]: R.S.O. 1990, c. C.43
[^6]: R.R.O. 1990, Reg. 194, as amended
[^7]: S.O. 2001, c.25.