ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 12-56054

DATE: 20130610

BETWEEN:

MICHEL ASSELIN

Moving Party

– and –

MATTHEW MCDOUGALL AND MOVIEMAT ENTERTAINMENT LTD.

Respondent

William R. Hunter, for the Moving Party

Jeff G. Saikaley, for the Respondents

HEARD: by written submissions

DECISION ON COSTS

tOSCANO rOCCAMO j.

[1] On March 25, 2013, I released Reasons dismissing the Plaintiff’s motion for an interim injunction against the Defendants, and granting an order on consent validating service upon the Defendants of a Notice Letter under the Libel and Slander Act, R.S.O. 1990 c. L.12.

[2] The Defendants seek their full indemnity costs for preparation and attendance on the motion before me on March 14, 2013 and for preparation and attendance before Smith J. on December 7, 2012 and before R.S.J. Hackland on January 25, 2013. They claim full indemnity costs in the amount of $17, 914.78 inclusive of taxes and disbursements on the basis that they were wholly successful in defeating the motion. They maintain that the motion was entirely unnecessary, having regard to the Defendants’ Offer to Settle of December 4, 2012, followed by counsel’s service of a Rule 49 Offer on January 22, 2013.

[3] The Plaintiff submits that no costs should be awarded to the Defendants despite their success on the motion; however, if costs are awarded they should be limited to the all-inclusive sum of $5000, or they should be assessed.

[4] A chronology of the background facts and litigation history is instructive.

Background Facts

[5] On October 27, 2012, the Defendant McDougall posted a video on YouTube, the content of which the Plaintiff alleges amounts to defamation of his character. On October 30, 2012, counsel for the Plaintiff wrote to the Defendants and asked for the removal of the videos from the Internet and for an apology letter.

[6] The Defendants did not accede to the Plaintiff’s request and posted a second video on November 8, 2012 which the Plaintiff alleges also resulted in defamation of his character.

[7] On November 21, 2012, the Plaintiff failed in his attempt to serve the Defendants with a Notice Letter pursuant to the Libel and Slander Act and has alleged that the Defendants attempted to evade service.

[8] On November 23, 2012, a Statement of Claim was issued against the Defendants under the simplified rules procedure.

[9] On December 2, 2012, the Plaintiff served a Motion Record seeking an interim injunction requiring the Defendants to remove both videos and related commentary from the Internet. This motion was set for hearing on December 7, 2012. A Factum in support of the motion was served on the Defendants by email on December 4, 2012. On the same day, the Defendant McDougall emailed counsel for the Plaintiff advising that he had changed the settings of the videos on YouTube to “private”, with a view to permanently deleting the videos from the Internet upon confirmation this would settle the entire action. This offer was rejected in the letter of counsel dated December 4, 2012, whereby the Plaintiff elected to proceed with the motion for injunctive relief and to seek legal costs of $12,000 to $13,000.

[10] By email dated December 5, 2012, the Defendant McDougall renewed his offer to permanently delete the videos, if the litigation ended. At the same time, he advised that he had reset the videos on YouTube to once again permit viewing by the public. He advised that he would not be attending the motion on December 7 as he was out of town attending a job interview.

[11] In the second of two emails sent to the Plaintiff’s counsel on December 5, 2012, the Defendant McDougall specifically advised that the Defendants would not seek “to take the easy route and simply file bankruptcy now to stop this action”, but would wait until the matter was settled at a trial. At the same time he advised that he intended to find out-of-province employment and move his family in the New Year. The Plaintiff, through counsel, understood the emails to suggest the Defendant McDougall had closed down his business, sold his property, and intended to claim bankruptcy if the Plaintiff was successful at trial. The Plaintiff served a Supplementary Motion Record and a second Supplementary Motion Record addressing the evidence with respect to the sale of the property, as well as his understanding that the Defendants would wait until after trial to go bankrupt.

[12] On December 7, 2012, the Defendant McDougall attended on the motion without having filed any material in response to the motion. He requested and was granted an adjournment in order to retain counsel. Pending return of the motion on January 25, 2013, the Plaintiff was granted an interim interim injunction without prejudice.

[13] On December 18, 2012, the Plaintiff’s counsel served the Defendants with an Offer to Settle the motion pursuant to which the Plaintiff sought an interim injunction permanently deleting the two videos, and costs in the amount $7500 to the Plaintiff. If the Offer was not accepted by January 10, 2013, the Plaintiff sought $7500 plus substantial indemnity costs from the date of the Offer to the date of acceptance.

[14] On January 4, 2013, the Defendants served a Statement of Defence along with a Jury Notice. Because the Defendants pleaded lack of notice as required by the Libel and Slander Act, on January 17, 2013, the Plaintiff served a third Supplementary Motion Record addressing the problems with service upon the Defendants. In the materials served by the Defendants in response to the motion on January 21, 2013, they maintained the position the action was statute- barred for failure to serve proper notice under the Libel and Slander Act. In addition, the Defendants alleged a failure on the part of the Plaintiff to provide an Undertaking as to damages which was fatal to his request for an injunction. The Undertaking was appended to the Motion Record served upon the Defendants on December 2, 2012.

[15] On January 22, 2013, less than seven days before the return of the motion on January 25, 2013, the Defendants served an Offer to Settle. The Offer proposed settling the motion on the basis that the interim interim injunction would continue until trial, and costs would be deferred to the trial judge. Nevertheless, the Plaintiff understood the Offer was contingent on settling the entire litigation.

[16] On January 23, 2013, the Plaintiff delivered a fourth Supplementary Motion Record containing evidence from a newspaper article which repeated a number of the statements contained in the YouTube videos. On the same day, the Plaintiff served a Supplementary Factum dealing with the validity of the Notice Letter.

[17] Due to scheduling difficulties, the motion did not proceed on January 25, 2013 but was adjourned after a brief appearance without submissions, to the date before me.

[18] On March 1, 2013, the Defendants served a Fresh as Amended Factum and Book of Authorities abandoning the issue with respect to the Notice Letter and the Undertaking as to damages.

[19] On March 8, 2013, the Defendants served a Supplementary Motion Record placing into evidence the charges laid against the Defendants by the town of Renfrew under the Provincial Offences Act. The charges were unrelated to the issues before me, and received no mention during argument of the matter on March 14, 2013.

[20] On March 14, 2013, at the outset of argument lasting approximately three hours, the Defendants acknowledged that notice of the claim had been validly delivered.

The Issues

[21] The issues raised by the parties’ submissions on costs are as follows:

1. The appropriate scale of costs to be awarded to the Defendants;
2. Whether the hours expended for legal services provided to the Defendants requires an assessment of costs;
3. Should the Defendants be awarded any costs for the appearance of December 7, 2012;
4. Application of the factors in Rule 57.01 relevant to an exercise of the court’s discretion to award costs under s. 131 of the Courts of Justice Act.

Scale of Costs

[22] As noted in Fraleigh v. Great-West Life Assurance Co. (2011), 107 O. R. (3d) 228, 2011 Carswell Ont. 8067 (Ont. C.A.) at p. 6, para. 34 elevated costs are only warranted in two circumstances :

1. Where there is an Offer to Settle under Rule 49.10 of the Rules of Civil Procedure; or
2. Where there is a clear finding of reprehensible conduct on the part of the party against which the costs award is made.

[23] The Defendants’ email Offer of December 7, 2012, was contingent upon resolution of the entire action. The Plaintiff was entitled to proceed to trial for a hearing on the merits and to pursue a claim for damages in addition to a permanent injunction and costs.

[24] The Defendants’ Offer of January 22, 2013 was made less than seven days before the return of the motion on January 25, 2013. By this date, the Plaintiff had prepared and served all materials except a very small fourth Supplementary Record and Factum. While the Defendants’ offer was not accepted, and the Plaintiff elected to proceed with the motion, I have not been persuaded that the main purpose of the motion was to make the Defendants incur costs unnecessarily and to use that financial pressure for leverage against them in the ongoing dispute between the parties. There is no evidence whatsoever to support this allegation. I have no reason to doubt the Plaintiff was motivated only by a desire to permanently remove from the Internet offending comments made about him on the Defendants’ YouTube channel. I similarly have no evidence to support the submission made on behalf of the Defendants that the motion has effectively exhausted Mr. McDougall or has had associated impact on his business. Under the circumstances, I decline to order full indemnity costs for services provided to the Defendants.

[25] Just as I have not been persuaded to exercise my discretion in this case to award full indemnity costs on the basis that the record before does not justify such an award, I am also unpersuaded by the Plaintiff’s submission that the Defendants should “not be rewarded for posting and allowing others to post on their YouTube channel, comments of a [this] vile nature.” To accept this submission, I would be required to wade into the exclusive domain of the trier of fact and to presume, in advance of trial, that the Plaintiff will succeed in his action in defamation. On the other hand, I see no reason that costs should not follow the event, that being the unmitigated success of the Defendants on the motion before me. Having served an Offer on January 22, 2013, that bettered the outcome of the hearing before me on March 14, 2013, I see no good reason to deny the Defendants’ substantial indemnity costs for services rendered after the hearing of January 25, 2013.

Fixing or Assessing Costs

[26] The Plaintiff correctly points out the Costs Outline submitted by the Defendants does not provide a detailed breakdown of the work done by counsel on the motion, Mr. Saikaley, and his student, Adam Plenkiewicz. The total amount of time shown in the Costs Outline for services in relation to the motion and appearance on three occasions was 55 hours. The Plaintiff requested and received a breakdown of time from Defendants’ counsel reflecting the total amount of time expended was 112 hours. The Plaintiff takes the position that even 55 hours of time was excessive for this motion, and that given the discrepancy between the Costs Outline and breakdown of time spent, the quantum of costs should be determined on assessment by an Assessment Officer. The Defendants note that the discrepancy between their Costs Outline and the breakdown of time spent favours the Plaintiff, and that not all time expended was included in the original Costs Outline.

[27] I decline to make an Order referring this matter for assessment. There is a presumption that costs shall be fixed by the Court unless the Court is satisfied the case is an exceptional one. The fixing of costs should not be driven by a calculation of hours times applicable rates. Time expended on a motion is only one factor in the assessment process, together with the other factors considered by a court in Rule 57.01. The objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in a proceeding, rather than an amount fixed by reference to the actual costs incurred by the successful litigant: See Boucher v. Public Accountant’s Council (Ont.) (2004), 2004 14579 (ON CA), 2004 Carswell Ont. 2521.

[28] I have taken the approach to awarding costs in this matter expressed by the Court in Casson v. Wai-Ping, [2006] O.J. No. 138 (S.C.J) as cited with approval at para. 55 by Perell J. in Jaikaran v. Austin, [2011] O.J. No. 4840, as follows:

In fixing costs, a judge is not assessing them as if he or she were performing the function of an assessment officer. The object is to avoid the delay and added costs of a full assessment. The court attempts to determine what the services devoted to proceedings are worth. The incurring of costs and time spent by counsel and litigation is essentially the exercise of their judgment. The prudence, foresight and imagination of that judgment must be considered at the time the disbursement was incurred or the work done. It is inappropriate to apply a test of hindsight in determining whether a service or disbursement was for an extra not reasonably necessary to advance the plaintiff’s position. The time to view the decision to commit services to an issue is prior to it being taken.

[29] With this approach in mind, I have determined that the “lion’s share” of the Defendants’ preparation for the motion would have been done before January 25, 2013. The only additional materials served on behalf of the Defendants were the Fresh as Amended Factum and Book of Authorities abandoning the issue of the Notice Letter and the Undertaking on damages. There is little doubt that the matter of injunctive relief would have been the main, if not exclusive, focus of argument on January 25, 2013, had the motion proceeded. I would also add that the Supplementary Motion Record delivered by the Defendants March 8, 2013 dealing with the charges laid against the Defendants under the Provincial Offences Act was not even referred to on the motion before me. Consequently, I conclude that there was likely some time needlessly spent as well as some duplication of effort in preparation for the motion on March 14, 2013. In my opinion, a discount is warranted with respect to the time expended for legal research, drafting and preparation for the March 14, 2013 motion.

[30] Although I have concluded there was likely duplication and an excess of effort expended in preparation for the motion before me on March 14, 2013, I have no reason to presume this is the case with respect to the hours spent nor the rates sought for services performed in anticipation of the hearing on January 24, 2013.

Should the Defendant McDougall be awarded his costs for appearance on December 7, 2013?

[31] The Plaintiff relies on the holding in Tiago v. Misels, 2012 Carswell Ont. 11009 (Ont. S.C.J.) at p. 3, paras. 5 and 6 in support of his submission that the Defendants should not be awarded costs for the Defendant McDougall’s appearance on December 7, 2012. On this first appearance, the Defendants were self-represented and had not prepared responding materials.

[32] I concur with the reasoning in Tiago v. Misels to the effect that a self-represented party may be awarded costs if: the litigant devoted time and effort to do the work ordinarily done by a lawyer; and as a result, incurred an opportunity cost by forgoing remunerative activity.

[33] Without any evidence that the Defendants performed “work ordinarily done by a lawyer” with respect to the first appearance, or that the Defendants incurred any loss of opportunity, I am reluctant to assume any loss by the Defendants. Indeed, the only evidence on this issue is contained in the Plaintiff’s Supplementary and Second Supplementary Motion Records in emails which indicate that the Defendant McDougall was out of town for a job interview in the week before the motion, and did not expect to return to town until the evening of the motion. Therefore, he would have been absent from his place of employment in any event.

Factors Applied Under Rule 57.01

Result in the motion and offers to Settle (57.01(1))

[34] The Defendants were entirely successful in resisting the Plaintiff’s motion for an interim injunction. I would go further to add that the result was in keeping with the weight of authority which did not favour the granting of an interim injunction.

[35] Both parties delivered Offers to Settle. While there is merit to the Plaintiff’s submission that the Defendants’ Offer delivered on January 22, 2013 cannot be considered a Rule 49 Offer for purposes of the January 25, 2013 hearing only, and that the Defendant McDougall’s Offer of December 5, 2012 called for the Plaintiff to settle the litigation without recognition of any claim in defamation, I may still have regard to these offers pursuant to Rule 49.13. More importantly, however, the Plaintiff’s Rule 49 Offer suffers from its own frailties. In my opinion, the Plaintiff’s Rule 49 Offer effectively called for the Defendants’ capitulation by seeking a permanent injunction, and a sizeable award of costs in the amount of $7500 after delivery of a Notice Letter, a Statement of Claim, a straight forward Motion Record, and two small Supplementary Records on collateral issues. As previously noted, the Defendants bettered their Offer to Settle of January 22, 2013 in the result obtained on the hearing of March 14, 2013. This Offer can be considered a Rule 49 Offer in respect of this hearing, and I see no reason not to award substantial indemnity costs for that appearance.

Indemnity (Rule 57.01(1)(0.a))

[36] The Plaintiff points to the paucity of reported cases naming Mr. Saikaley as counsel in litigation related to libel and defamation, and the lack of his certification as a specialist in this particular area of the law in resisting the Defendants’ claim for indemnity based on counsel’s hourly rates.

[37] I have concluded that an award of costs to the Defendants on a partial indemnity scale to and including January 25, 2013, and on a substantial indemnity scale thereafter is appropriate in the circumstances before me. I decline to presume that reported litigation and designation as a certified specialist are pre-conditions for considering the principle of indemnity in the fixing of costs. I have no reason to reject Mr. Saikaley’s assertion that, as an officer of the court, he has practiced exclusively in litigation for 11 years, with an emphasis on defamation and libel cases. I have factored the principle of indemnity in my decision to award costs in this matter.

The Amount the Unsuccessful Party Could Reasonably Expect to Pay (Rule 57.01(1)(0.b))

[38] I have not received a Costs Outline from the Plaintiff. On December 4, 2012, the Plaintiff advised that he was seeking legal costs of between $12,000 and $13,000 on the hearing of the motion. On the first appearance before Justice Smith on December 7, 2012, the Plaintiff delivered a Costs Outline reflecting costs in the approximate amount of $11,000, or $8000 on a partial indemnity basis. The Plaintiff’s subsequent Rule 49 Offer dated December 18, 2012 sought costs in the sum of $7500. There were two subsequent appearances which undoubtedly drove up the Plaintiff’s partial indemnity costs to an amount well in excess of $10,000 having regard to the supplementary materials delivered after December 18, 2012, and two additional appearances on January 25 and March 14, 2013.

[39] By contrast, the Costs Outline of the Defendants claims partial indemnity costs of $5,778.07 inclusive of counsel’s fee for appearance, disbursements and taxes for preparation and attendance on January 25, 2012. The Defendants’ substantial indemnity costs for the appearance of March 14, 2013, including counsel’s fee for appearance, disbursements and taxes, amount to $5,856.20.

[40] Having regard to the result on the motion, the Offers to Settle, the Defendants’ actual fees as discounted for likely duplication of services for research and preparation, I am persuaded that a fair and reasonable award for the Defendants’ costs in this matter would be no less than an estimate of partial indemnity costs incurred by the Plaintiff.

The Complexity of the Motion (Rule 57.01(1)(c))

[41] In my opinion, the issues on the motion were not complex in relation to the availability of interim injunction in a defamation case. Both parties referred me to the same cases on the test applied to obtain an interim injunction. The Court alone referred to the lack of clarity in the law with respect to the issue of publication of potentially defamatory comments made by persons other than the Defendants.

The Importance of the Issues (Rule 57.01(1)(d))

[42] I am satisfied that the issues on the motion were important to both parties. On the one hand, the Defendants sought to assert and protect the right to freedom of expression in relation to the dispute between the parties. On the other hand, the Plaintiff sought to protect his reputation against what he alleged were personal attacks on his character and integrity, having nothing to do with the Defendants’ issues with the town of Renfrew.

Conclusion

[43] Having considered the written submissions of counsel, and all relevant factors in the application of my discretion under s. 131 of the Courts of Justice Act, I fix costs payable by the Plaintiff to the Defendants within 30 days at $10,500 inclusive of fees, disbursements and taxes.

[44] I decline to award costs for preparation of Costs Submissions in this matter. In my opinion, both parties made valid arguments with respect to the application of the factors to assist me at arriving at my decision in this matter.

Madam Justice Toscano Roccamo

Released: June 10, 2013

COURT FILE NO.: 12-56054

DATE: 20130610

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Michel Asselin

Plaintiff

– and –

Matthew McDougall and Moviemat Entertainment Ltd.

Defendants

DECISION ON COSTS

Madam Justice Toscano Roccamo

Released: June 10, 2013