Court File and Parties
COURT FILE NO.: CV-12-53727
DATE: 2013-10-02
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Khalid Aba-Alkhail, Manal Alsaigh, Waleed AlGhaithy
Plaintiffs
AND
University of Ottawa , Jaques Bradwejn, Paul Bragg, James Worthington, John Sinclair, Richard Moulton, Fraser Rubens, Eve Tsai, Eric Poulin, Therry Mesana, Lloyd Duchesne
Defendants
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Barbara Kulaszka for the Plaintiffs
Sally Gomery and Karen Jensen , for the Defendants
HEARD: In Chambers (Written Submissions)
ENDORSEMENT ON COSTS
[1] The defendants are seeking costs with respect to their successful motion to dismiss the statement of claim for being an abuse of process. They seek $177,873.88 all inclusive on a substantial indemnity basis or, if I order costs on a partial indemnity basis, they seek $120,408.86. The plaintiffs submit that $20,000 in partial indemnity costs all inclusive is all that they should have to pay.
Background of the Proceeding
[2] The action was commenced by way of a statement of claim dated November 24, 2011, issued in Toronto. The proceeding was transferred to Ottawa on consent. The plaintiffs agreed that the defendants were not required to file a statement of defense until after the motion to dismiss was brought and determined. The defendants’ evidence on the motion was an affidavit of a law clerk setting out the history of the previous proceedings and included forty-four exhibits. The law clerk was cross-examined on her affidavit for less than two hours and a transcript was obtained. The plaintiffs were not cross-examined. The parties attended on a case conference. They both filed factums and authorities for the motion. The matter was heard by me on December 4 and 5, 2012. Both parties subsequently filed brief supplementary submissions regarding a relevant Court of Appeal decision that was not addressed at the hearing.
Law
[3] Pursuant to subsection 131(1) of the Courts of Justice Act, R.S.O., c. C.43 as amended, costs are discretionary. Pursuant to Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 as amended, I may consider the result of the motion/proceeding, any offer to settle made in writing, and also the factors listed in subparagraphs (0.a) through (i). I was not presented with any formal offers. There is a general overarching requirement that I fix an amount of costs that is fair and reasonable in all the circumstances.
Analysis
[4] The defendants were entirely successful on their motion, and, as a result, in the action. There is no dispute that they are entitled to costs. They maintain that the substantial indemnity scale is appropriate for two reasons. First, the plaintiffs made allegations of improper conduct that were seriously prejudicial to the character and reputation of the defendants. Second, the claim was found to be an abuse of process.
[5] As set out in 1175777 Ontario Ltd. v. Magna International Inc., [2007] O.J. No 2549 (S.C.J.) at para. 32, affirmed on appeal at 2008 ONCA 406, “[u]nfounded allegations of improper conduct are … capable of attracting substantial indemnity costs, particularly when the allegations are seriously prejudicial to the character or reputation of the individual.” The claims made against the individual defendants here included defamation, conspiracy, misfeasance in public office, breach of fiduciary duty, and intimidation, all of which are allegations of improper conduct. The plaintiffs successfully solicited media coverage, compounding the prejudicial effect of these allegations.
[6] Regarding the second reason, as noted in Rousseau v. Scotia Mortgage Corp., 2013 ONSC 677 (S.C.J.), the dismissal of the proceeding as an abuse of process is relevant to the scale of costs issue. Re-litigation of claims is not in the public interest and is to be discouraged.
[7] Given either one of the above factors and certainly given both together, I find that it is appropriate to award costs on a substantial indemnity scale.
[8] Regarding the amount of costs, I now turn to the factors set out in Rule 57.01(1).
[9] The numerous claims made in the four-hundred plus paragraph statement of claim involving three plaintiffs and eleven defendants were very complex. Regarding the motion, however, the plaintiffs argue that in my dismissing the proceeding as an abuse of process and not addressing the alternate claim for relief, being the adequacy of the pleadings, the costs recovered should not reflect any amount for the work on the motion by defendants’ counsel relating to those pleadings.
[10] No case law was provided by the plaintiffs in support of this argument. It appears that they seek to rely on what has been called the ‘distributive cost principle’, where the party in whose favour judgment is given is awarded general costs on the action, and the court then awards costs to and against particular parties based on the outcome of the major issues in controversy. This is a discretionary rule: see William Allen Real Estate Co. v. Robichaud et al. (1990), 1990 6884 (ON SC), 72 O.R. (2d) 595 (Ont.H.C.), affirmed on appeal (1993), 1993 8637 (ON CA), 11 O.R. (3d) 734 (Ont.C.A.). I am not satisfied that the defendants in this case should be deprived of their costs on that basis. The plaintiffs were not successful on the alternate claim, as there was no adjudication on it. Further, the defendants succeeded on the entire claim relying on what they put forward as their main argument. I am satisfied that the normal disposition of costs should follow.
[11] I find that the issues resolved by the motion were very important. As noted, the statement of claim included attacks on the character and reputation of all the defendants. Further, the claims had potential far-reaching implications for every defendant given the total damages sought were 156.6 million dollars.
[12] As far as the conduct within the proceeding itself and improper steps, the parties fully cooperated to shorten the proceedings, and all counsel were very accommodating to each other and respectful at the hearing. The only matter worthy of note is that the plaintiffs started their action in Toronto prompting a motion to transfer by the defendants. The motion was resolved on consent. The order of Master P.E. Ryan dated February 3, 2012 did not order costs or reserve them. As a result, even though the plaintiffs’ counsel did not refer to this directly in her submission, I have discounted the costs for that motion from the defendants’ Bill of Costs.
[13] Regarding the experience of the lawyers for the party entitled to costs, the rates charged, and the hours spent, there was no particularized dispute by the plaintiffs in their submissions. I therefore find that the Bill of Costs is accurate. The plaintiffs did however argue generally that the defendants’ counsels’ knowledge of the facts and law from prior proceedings must be considered in gauging the quantum of the costs award. The argument is that an un-quantified amount of the legal work had already been performed, or at least it could have more efficiently migrated from previous litigation.
[14] The plaintiffs rely on Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), 71 O.R. (3d) 291 for this position. There the Court of Appeal found that the total amounts recovered in costs were not justifiable in part because of the similarities between the matter before the court below and that of an earlier proceeding between the parties. In this case, there were indeed some similarities to the previous proceedings resulting in the facts being familiar to the defendants’ counsel. However, the defendants’ counsel dealt with this appropriately in my view. They only filed one affidavit by a law clerk, who was then examined only briefly by the plaintiffs.
[15] What distinguishes this case from Boucher is that the arguments advanced on the motion were not at all like the arguments and issues in the previous proceedings. Here, the issue of abuse of process was new and most of the heads of relief sought in the statement of claim were new as between the parties, although founded on the same facts. The defendants addressed those heads of relief in the motion in asserting their alternate position that there was no reasonable cause of action. The bulk of the legal work in this case appears to have been expended on addressing the law and implications of those new issues. As such I do not accept the plaintiffs’ position that a significant reduction is warranted.
[16] Given that their reputations were at stake and they faced a multi-million dollar lawsuit, it is understandable that the defendants sought and received a very thorough presentation of their case from their solicitors. There is nothing before me to suggest that the defendants themselves ought not to have expected the bill they received from their own counsel.
[17] Having said that, the question still remains as to whether it is reasonable to assume that the plaintiffs understood that the costs they were exposing themselves to would be in the order of magnitude claimed. As noted by the Court of Appeal in Boucher, supra at para. 26, “[o]verall … the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.” These particular plaintiffs, it needs to be noted, given the sheer size of their statement of claim and the huge amount of compensation that they were seeking, had to have some sense that this was high-stakes litigation with huge potential cost risks. However, in my view the costs requested are still excessive. I find this even though I accept as set out above the appropriateness of the substantial indemnity scale, the complicated nature of the proceeding and motion, the importance of the issues, and the accuracy of the Bill of Costs itself. In the end I am mindful of Rule 57.01(0.b) and the need for me to consider what an unsuccessful party could reasonably expect to pay for what, in this particular proceeding, was essentially an intricate two-day motion that determined the action at its outset.
Decision
[18] Given all the above, the plaintiffs shall pay the defendants’ costs in the amount of $90,000 plus HST as a fair and reasonable amount in the circumstances. There was no specific issue taken with the disbursements claimed, and as such I also order that the plaintiffs shall pay the defendants’ disbursements in the amount of $4,000 plus HST and their non-taxable disbursements in the amount of $523. The difference between these disbursements and the amounts claimed are the rough adjustments I have made with respect to the motion to transfer as indicated above.
Mr. Justice Timothy Minnema
Date: ** October 2, 2013**
COURT FILE NO.: CV-12-53727
DATE: 2013-10-02
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Khalid Aba-Alkhail, Manal Alsaigh, Waleed AlGhaithy
Plaintiffs
AND
University of Ottawa , Jaques Bradwejn, Paul Bragg, James Worthington, John Sinclair, Richard Moulton, Fraser Rubens, Eve Tsai, Eric Poulin, Therry Mesana, Lloyd Duchesne
Defendants
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Barbara Kulaszka for the Plaintiffs
Sally Gomery and Karen Jensen , for the Defendants
ENDORSEMENT ON COSTS
Mr. Justice Timothy Minnema
Released: ** October 2, 2013**