ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 8937-12
DATE: 2013/03/25

B E T W E E N:

ANNAMARIA VALASTRO

Douglas Christie, for the Applicant

Applicant

• and -

THE CORPORATION OF THE CITY OF LONDON

Janice L. Page and Nicole Hall, for the Respondent

Respondent

HEARD: In writing

LEACH J.

1On February 4, 2013, I released my decision concerning the second motion brought by the Applicant within the context of this application; i.e., the Applicant’s motion for an interlocutory injunction. (This followed dismissal of the Applicant’s earlier motion for interim injunctive relief.)

2For reasons set out in my decision, I dismissed the Applicant’s motion.

3Because my decision was reserved, the parties had no opportunity to make submissions regarding costs when the motion was argued on January 24, 2013. My reasons therefore invited written cost submissions.

4Those now have been delivered by both parties. In particular, I have received the following: written cost submissions from the Respondent delivered February 15, 2013; responding written cost submissions from the Applicant delivered February 22, 2013; and reply submissions from the Respondent delivered March 4, 2013.

5In broad terms, the Respondent seeks recovery of its costs of the motion on a partial indemnity basis, fixed at $7,177.76, payable forthwith, (inclusive of the costs associated with pursuing costs, as well as disbursements and HST). Amongst other points, it generally emphasizes that it has chosen not to claim all of the costs that it necessarily incurred in responding to the Applicant’s motion, and submits that the sum claimed is entirely reasonable and appropriate having regard to considerations such as the City’s success on the motion, as well as the seriousness and breadth of issues raised by the Applicant on very short notice.

6For her part, the Applicant asks that she be viewed as a “public interest litigant”; (i.e., as someone who, in her submission, pursued a hitherto unaddressed matter of alleged public importance, beyond the immediate interests of the litigants, vis-à-vis a party with a clearly superior capacity to bear the costs of the proceeding, in circumstances where her conduct was not vexatious, frivolous or abusive). She says that “central” consideration, along with her limited financial means and concern for access to justice, (insofar as a cost award could have a “chilling effect” on “public interest litigation”), should result in no costs being awarded to the Respondent.

Analysis

7I start with the perhaps trite observation that, pursuant to section 131 of the Courts of Justice Act, R.S.O. 1990, c.C.43, as amended, and subject to the provisions of an Act or rules of court, “the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid”.

8This applies to all litigants and, barring a specific restriction imposed by any applicable Act, (not a consideration in this case), negates any suggestion that there is any special class of litigation, including professed “public interest litigation”, in respect of which the court’s general discretion to award costs is somehow inherently fettered or restrained at the outset.

9In particular, like Justice Ricchetti in Southgate Public Interest Research Group v. Southgate (Township), 2012 ONSC 6961, at paragraphs 35-36, I acknowledge and agree with earlier authorities confirming that “there is no rule or practice that a public interest litigant should be exempt from the ordinary costs rules”, and that “bringing an issue of public importance to the courts will not automatically entitle a litigant to preferential treatment with respect to costs”.

10In other words, professed “public interest litigation” concerns may be important and relevant in a particular case. However, they are but one consideration the court may factor into the exercise of its discretion.

11This is reinforced by the applicable provisions of Rule 57.01(1), similarly applicable to all litigants, which lists a broad range of factors the court may consider, in any case, when exercising its discretion to award costs pursuant to section 131. The overall goal is to award costs, (usually fixed), in an amount that is “fair and reasonable for the unsuccessful party to pay in a particular proceeding”; Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] O.J. No. 2634 (C.A.), at paragraph 26.

12In the case before me, numerous factors outlined in Rule 57.01(1) favour an award of costs in favour of the Respondent. In that regard:

a. I agree that the City was entirely successful in responding to Ms Valastro’s motion, and the principle of indemnity suggests that it accordingly should receive reasonable reimbursement for the costs it necessarily has incurred.¹ Moreover, pursuant to s.447.7(1) of the Municipal Act, 2001, S.O. 2001, c.25, those costs are not to be disallowed or reduced merely because the City employed the legal services of its salaried counsel.

b. In terms of reasonable expectations², Ms Valastro repeatedly made reference during the course of these proceedings to her awareness of the substantial litigation costs normally attendant on parties having to address such matters properly. She did so in the context of emphasizing why it was difficult for her to pursue such litigation, while also suggesting that the City had a superior ability to readily absorb and sustain such costs. Her submissions confirm, in my opinion, awareness that the City necessarily was incurring its own substantial costs in dealing with Ms Valastro’s motion. This was or should have been accompanied by a reasonable expectation that the City would be seeking an appropriate cost award if it succeeded in having the motion dismissed. Indeed, from the outset, Ms Valastro has anticipated such requests by an express pre-emptive and cost-defensive assertion that she should be shielded from any requested adverse cost awards, having regard to her suggested status as a public interest litigant. In relation to “reasonable expectations”, I also note that Ms Valastro did not file her own bill of costs, outlining the time her own lawyer incurred in advancing and arguing the motion. Pursuant to authorities such as Smith Estate v. Rotstein, 2011 ONCA 491, additional reasons at 2011 ONCA 833, leave to appeal refused (February 23, 2012), Doc.34476 (S.C.C.), this permits an inference that the efforts spent by the unsuccessful party in relation to the motion were comparable to those of the successful party, with corresponding implications for the quantification of a cost award reasonable in the circumstances. In this case, the inference is buttressed by the fact that the cost submissions of Ms Valastro actually contain no challenge whatsoever to the quantum of costs sought by the City, but rely exclusively on her professed status as a public interest litigant as a reason why she should not be ordered to pay such costs.

c. In my opinion, the motion unquestionably was important, (from both parties’ perspective), and for the reasons outlined in my substantive ruling, substantial amounts of money also unquestionably were at stake³. In particular, as indicated in my substantive reasons, the unchallenged evidence before me confirmed that the motion exposed the City to the possibility of having to incur millions of dollars in added expense, in addition to having many of its residents subjected to prolonged inconvenience and financial loss.

d. As indicated in my substantive reasons, very little had changed from an evidentiary perspective between the time of Ms Valastro’s motion for interim injunctive relief and her motion for interlocutory injunctive relief, except that the evidence favouring the City’s balance of convenience arguments was stronger. Yet Ms Valastro did not formally concede, (as she might reasonably have done in the circumstances), that the same result should follow on the analysis suggested by RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311, if her counsel’s legal arguments about possible variation of the applicable test, (which added complexity to the proceedings), were not successful.⁴

13In the context of considering “any other matter relevant to the question of costs”⁵, I turn to Ms Valastro’s reliance on her professed status as a “public interest litigant”, and her related arguments that any cost award against her would constitute a significant barrier to justice.

14The criteria for evaluating whether “an entity is a public interest litigant” have been addressed in a number of decisions of this court⁶, and factors said to support such a finding include the following:

a. the proceeding involves issues with importance extending beyond the immediate interests of the parties involved;

b. the litigant has no personal, proprietary or pecuniary interest in the outcome of the proceeding, or, if he or she has an interest, it clearly does not justify the proceeding economically;

c. the issues have not been previously determined by a court in a proceeding against the same defendant;

d. the defendant has a clearly superior capacity to bear the costs of the proceeding; and

e. the litigant has not engaged in vexatious, frivolous or abusive conduct.

15In my opinion, having regard to these factors, there is good reason to doubt that the circumstances of this particular case rise to the status of “public interest litigation” in the sense contemplated and required by the authorities.

16For present purposes, I am content to proceed on the basis that Ms Valastro satisfies the second and fifth criteria.⁷

17However, in relation to the first criteria:

a. As has been emphasized by previous authority, the fact that a claimant genuinely and passionately believes the claimant has raised a public interest issue does not make it so. A bona fide concern to vindicate an individual perception of the public interest does not suffice.⁸

b. This particular case is not advanced by any organization or collective purporting to speak for a group of similarly situated and like minded individuals. To the contrary, on the record and evidence properly before me, there is nothing formally indicating that Ms Valastro speaks for anyone other than herself.⁹

c. As emphasized by the wording of the first criteria, the matter must involve a matter of importance which extends “beyond the immediate interests of the parties involved”. However, as was the case in Southgate Public Interest Research Group v. Southgate (Township), supra, the litigation before me does not really request any determination having any precedential value beyond its specific application to the circumstances at hand. In particular, one must not lose sight of the basic reality that this litigation is focused on whether a specific administrative step, taken in relation to a specific proposed project, on a specific property, located within a specific development area, was taken in compliance with allegedly applicable particular provisions of a particular Official Plan adopted only by the City of London. While it broadly falls under the rubric of litigation concerning the environment and the legality of municipal legislation, (both of which are important concerns in the abstract), in my view that alone should not suffice to constitute “public interest litigation”. The threshold for special cost treatment otherwise would be set too low.

18In relation to the third “public interest litigation” criteria, it is important to remember that the propriety of injunctive relief, dealing with essentially the same underlying fact situation, was raised and decided between the same two litigants just weeks before the motion in respect of which costs now are being decided. As outlined in my substantive reasons, little or nothing had changed by the time of the second motion, except that the evidence arguably was more favourable to the City’s position, and Ms Valastro relied on an additional legal argument which in my opinion was fundamentally misconceived.

19In relation to the fourth criteria, Ms Valastro relies on her professed “limited financial means”, and on the City’s alleged superior ability to absorb the costs of this litigation. However, these submissions run counter to authority generally emphasizing that the relative financial means of parties should not influence the court’s quantification of costs¹⁰, and authority distinguishing municipal bodies from private entities. On the latter point, I am persuaded by the following comments from Southgate Public Interest Research Group v. Southgate (Township), supra, at paragraphs 53-56:

Clearly, the residents of the Township can bear the costs without recovery from SPIRG.

However, the issue is whether the residents should have to bear their own legal costs simply because some unknown number of residents or neighbouring land owners brought an unsuccessful application forcing the Township to expend legal funds?

Unlike many of the cases, [dealing with alleged public interest litigation], where the successful party was a large corporation, here the successful party is essentially the residents of the Township as a whole. The residents of the Township who will already have to bear a portion of the legal costs since only partial indemnity costs are at issue. Without a cost award against SPIRG, the residents of the Township will no doubt have to pay even more.

I disagree with SPIRG’s submission that because the Township and the CBO are government parties [this] favours a no costs order. There is no such principle. No authority was cited for this principle. In this case, the Township’s ability to bear the costs is entirely offset by the fact it would force the residents of the Township to bear the costs occasioned by the unsuccessful members of SPIRG.

20In the case before me, the residents of London as a whole, formally represented by the City, have been entirely successful in relation to the motions advanced to date by Ms Valastro. They already will have to bear the costs of Ms Valastro’s earlier motion, (in respect of which the City, although entirely successful, voluntarily refrained from seeking a formal cost award). They also will have to bear the additional costs the City indicates it is not seeking in relation to Ms Valastro’s second motion, as well as the costs not covered by a partial indemnity cost award.

21To the extent the City has any “superior ability” to absorb the remaining costs now being claimed, this accordingly is entirely offset by the reality that it necessarily will force all its residents to pay for the unsuccessful litigation choices made by one particular resident.

22Having regard to the above considerations, it seems to me that the circumstances before me do not rise to the level of public interest litigation, as contemplated by the authorities, warranting effective immunization of Ms Valastro from an adverse cost award.

23If anything, the situation underscores another competing goal of the costs system incorporated into the Rules of Civil Procedure. As emphasized by our Court of Appeal, that cost system exists not only to facilitate access to justice, but in appropriate cases also uses the prospect of an award of costs against a losing party as a “reality check” to assist in discouraging frivolous or unnecessary litigation, or unnecessary steps in litigation.¹¹

24In this case, through the City’s forbearance in relation to Ms Valastro’s earlier unsuccessful motion for injunctive relief, Ms Valastro effectively was permitted access to justice to test the injunction waters and meet with failure, without having to face any adverse cost consequences.

25Without any appreciable change in circumstances, (or at least any changes in her favour), suggesting that a further motion was necessary or appropriate, she chose to press on with a further motion for interlocutory injunctive relief. That was her right. However, in doing so she now has put the City to considerable additional expense; expense that perhaps might have been avoided had the prospect of an adverse cost award, (rather than an apparently firm belief in her public interest litigant status, emphasized from the outset in her application material), weighed more heavily in her considerations.

26For the above reasons, and in order to ensure that an appropriate “reality check” is in place as the litigation moves forward, the City should be entitled to its costs of this most recent motion.

27The only remaining question is quantum.

28As noted above, Ms Valastro’s submissions were entirely focused on her alleged public interest litigant status. She accordingly advanced no particular objection to the amount of costs being sought by the City, except to say, in effect, that the number should be zero.

29For the reasons noted above¹², this permits an inference that Ms Valastro herself did not question the reasonableness of the time and effort devoted to the matter by the City as the efforts expended by her own lawyer were comparable.

30I nevertheless independently have some concerns about the quantum of costs being sought by the City, stemming from the overall context in which this particular motion was addressed.

31Costs of the overall application, (not yet the subject of a final substantive disposition), are not yet before the Court for consideration and determination.

32Similarly, as noted above, the City has had to respond to two discrete motions brought by Ms Valastro, and it sought no costs in relation to the first motion. That restraint was admirable, but necessarily means that the costs being considered and quantified on this occasion must be restricted to those incurred by the City to address Ms Valastro’s second motion.

33The City’s written submissions and bill of costs nevertheless suggest that insufficient efforts have been made to segregate and separately quantify the costs properly associated with the overall application and the two motions, and that the City effectively may have approached costs of these separate steps in the litigation as one combined exercise to some extent.

34For example, the City’s written cost submissions emphasize that “the Applicant’s Motion Record was served at 3:45pm on January 9th, 2013, less than twenty-four hours before the first hearing date of the Motion”; a short timeline relied upon by the City as a factor justifying its deployment of resources. However, that short service occurred in relation to Ms Valastro’s first motion. Again, the formal reality here is that there were two separate motions, and only the costs of the second motion are before me for determination.

35Similarly, the City’s written cost submissions suggest that the “legal issues raised on the motion were numerous, diverse and complex”, but I think that fairly may be said only in relation to the litigation as a whole. In particular, Ms Valastro’s second motion essentially focused almost exclusively on her new and unsuccessful legal argument that a different test for injunctive relief applied in the circumstances.

36The City’s submission that the underlying factual record was “voluminous, diverse and complex” similarly has resonance, in my opinion, only if one takes into account the evidence filed in relation to the first motion. As noted above, the factual situation really had not changed substantially prior to the second motion being brought, (although the City did supplement its original evidence in a meaningful way).

37I also note that, in addition to time and disbursements claimed in relation to preparation of its supplemental responding record, fresh as amended factum and supplemental brief of authorities, (used in relation to Ms Valastro’s second motion), the bill of costs now presented by the City includes time and disbursements associated with review of Ms Valastro’s application record, as well as preparation of the City’s original responding record, factum and brief of authorities.

38The City should not be faulted entirely for including matters relating to the overall application and the first motion in its cost calculations, as Ms Valastro relied on her original application record in relation to both her motions, and the City similarly relied to some extent, during the hearing of the second motion, on the material it had prepared in response to Ms Valastro’s first motion. However, the fundamental concern remains that the City should not be permitted to claim, in the current restricted cost determination context, all costs partially or perhaps even predominantly associated with its overall response to the Application, (which may still be claimed later), or its response to the first motion, (in respect of which costs were not sought).

39I unfortunately am left without further information to assist in the segregation of the City’s apparently blended costs of the application, and the first and second motions.

40Having regard to all of the above, and the “overriding principle of reasonableness” for such motions as applied to the factual matrix of the case, pursuant to the ultimate “cross check” required by such authorities as Boucher, Moon and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.), and Anderson v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557 (Ont.Div.Ct.), I think it appropriate to quantify the costs of the City in relation to the second motion at an all-inclusive figure of $4,700.00, payable forthwith.

“Justice I. F. Leach” Justice I. F. Leach

Released: March 25, 2013

COURT FILE NO.: 8937-12
DATE: 2013/03/25

ONTARIO
SUPERIOR COURT OF JUSTICE

B E T W E E N:

ANNAMARIA VALASTRO

• and-

THE CORPORATION OF THE CITY

OF LONDON

REASONS ON COSTS

Footnotes

1. 1See Rules 57.01(1)(o.a) and 57.01(1)(b), dealing respectively with the principle of indemnity and apportionment of liability, (more accurately described in this case in terms of relative success on the motion).
2. 2Rule 57.01(1)(0.b).
3. 3See Rules 57.01(1)(a) and 57.01(1)(d).
4. 4See Rules 57.01(1)(c) and Rule 57.01(1)(g).
5. 5Rule 57.01(1)(i).
6. 6See, for example, Incredible Electronics Inc. v. Canada (Attorney General) (2006), 2006 17939 (ON SC), 80 O.R. (3d) 723 (S.C.J.), at paragraphs 71 and 91.
7. 7In relation to the latter, I note the City’s argument that Ms Valastro, acting reasonably and having regard to the history of the matter, could have initiated proceedings and effected service of her material on earlier dates, thereby avoiding instances of service immediately before holidays or short service. While I agree that such conduct might be characterized in the abstract as abusive, and reasonably might be expected to put the City to added expense and inconvenience that otherwise might have been avoided, I also note, for reasons addressed further below, that such considerations really relate to costs of the overall application and of the earlier motion, neither of which properly are before me for determination at the moment.
8. 8See Sierra Club of Western Canada v. British Columbia (Chief Forester), 1994 6510 (BC SC), aff’d (1995), 1995 1448 (BC CA).
9. 9Discussion regarding reliance on a newspaper article and online comments submitted with the applicant’s cost submissions.
10. 10See, for example, Robb Estate v. St. Joseph’s Health Care Centre, [1999] O.J. no. 1461 (S.C.J.), at paragraph 7.
11. 11See Boucher v. Public Accountants Council for the Province of Ontario, supra, at paragraph 37, and Guelph (City) v. Wellington-Dufferin-Guelph, 2011 ONSC 7523, at paragraph 14.
12. 12See sub-paragraph 12(b), supra.