SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-12-458218-CP

DATE: 20140331

RE: ELAINE QUINTE, JOHN QUINTE and 1358896 Ontario Inc. (CarrYing on Business as Hungry Jack's) / Plaintiffs / Moving Parties

AND:

EASTWOOD MALL INC., BOB NAZARIAN, THE CORPORATION OF THE CITY OF ELLIOT LAKE, M.R. WRIGHT & ASSOCIATES CO. LTD., R.G.H. WOOD, G.J. SAUNDERS, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, Algoma Central Properties Inc., Coreslab Structures (Ont) Inc., JOHN KADLEC, JAMES KEYWAN, Non-Profit Retirement Residences of Elliot Lake Inc. (cARRYING ON BUSINESS AS RETIREMENT LIVING), AND 1425164 ONTARIO LTD. INC. (CARRYING ON BUSINESS AS NORDEV) / Defendants / Responding Parties

Proceeding under the Class Proceedings Act, 1992

BEFORE: Justice Edward Belobaba

COUNSEL:
David O’Connor and Adam Dewar for the Plaintiffs

Sarah Pottle for Eastwood Mall and Bob Nazarian

John Walker for the Corporation of the City of Elliot Lake

James Le Ber for M.R Wright and Assoc., R.G.H. Wood and G.J. Saunders

Joseph D’Angelo and Judie Im for Her Majesty the Queen in Right of Ontario

Paul Tushinski for Algoma Central Properties Inc.

Francis De Santis and Devon Ryerse for Coreslab Central Structures

Eric Baum for James Keywan

Laura Day for Retirement Living

David Young for Nordev

No one appearing for John Kadlec

HEARD: November 12, 2013

costs award on certification

[1] This is the class action that was commenced after the collapse of the Algo Centre Mall in Elliot Lake. In a decision released on February 13, 2014, I certified the action as a class proceeding and noted that the plaintiffs were entitled to costs on a partial indemnity basis. [1]

[2] The costs assessment is complicated by the fact that most of the defendants did not oppose the certification and some of the costs have been settled. Only three of the 13 sets of defendants voiced objections at the hearing or in writing. More specifically, only the following defendants made submissions on the following issues:

• Province of Ontario: cause of action; class definition, common issues, preferability and costs of notice.

• Eastwood Mall and Nazarian: class definition and common issues.

• Retirement Living: class definition, common issues and costs of notice.

[3] The remaining ten sets of defendants were either unopposed (nine of them) or filed no response and did not participate (defendant John Kadlec.)

Two preliminary comments

[4] If the certification motion had been opposed by all of the defendants, I would have awarded $150,000 in costs. I agree with the plaintiffs that there was no over-lawyering, duplication or other litigational excesses that sadly are commonplace in most certification cases. I also acknowledge that the plaintiffs’ request for $190,000 in costs already includes a significant discount, at least from their perspective. However, in applying the reasoning set out in Crisante v. DePuy,[2] including the historical costs comparisons, I would have concluded that $150,000 all-inclusive was a fair and reasonable costs award – again, had this certification motion been opposed by all or most of the defendants.

[5] If the certification motion had gone on consent or was completely unopposed, I would not have awarded any costs to the successful plaintiffs. In my view, if a plaintiff requires judicial approval to convert his action into a class proceeding, the costs incurred in doing so, even on a partial indemnity basis, should not be imposed on consenting or non-opposing defendants, provided of course that these positions were communicated to the plaintiff in a timely fashion.[3]

[6] Here, as I have already noted, the motion for certification was unopposed by most of the defendants and opposed on a number of issues by only a handful of defendants.

Approach

[7] I am mindful of the Court of Appeal’s admonition that a distributive cost awards – where the motions judge considers each argument on each issue as part of a tallying exercise of the points won and lost – should be avoided.[4]

[8] My approach therefore will be as follows: (1) determine the costs that would have been incurred by the plaintiffs in any event, even with consenting defendants; (2) determine the additional costs that were incurred because certain issues had to be litigated with the opposing defendants; (3) note any costs agreements that have been reached with both non-opposing and opposing defendants; and (4) determine the costs award as against each of the remaining-opposing defendants.

Analysis

[9] I begin with the observation that this matter should have been certified on consent or without any opposition. As I noted in my reasons for certification, “this is precisely the kind of case for which the class action was designed.”[5] Absent opposition, the plaintiffs’ motion for certification would easily have been granted. In my view, the costs that the plaintiffs would have incurred in generating what would have been an almost self-evident motion record and factum should not have exceeded $10,000.

[10] Having concluded above that a $150,000 costs award would have been fair and reasonable had the motion been opposed, and that $10,000 would have been spent in any event by the plaintiffs had the motion proceeded on consent, it follows that $140,000 in “additional costs” were incurred by the plaintiffs in having to respond to the (mainly misguided) objections of the several opposing defendants.

[11] I note that five sets of non-opposing defendants have each agreed to pay $10,000 in costs for a total of $50,000.[6] As already noted, I would not have required any of these non-opposing defendants to pay any costs. It follows from this that I will not require Algoma Central Properties, another non-opposing defendant, or John Kadlec, a non-participating defendant, to pay any costs.[7] However, the five costs settlements that have been agreed to by the non-opposing defendants remain enforceable. I also note that one set of opposing defendants, Eastwood Mall and Nazarian, has agreed to pay $15,000 in costs.

[12] The tally is thus $10,000 in non-recoverable costs and $65,000 in agreed-to settlements for a total of $75,000. This means that a further $75,000 in costs (on an all-inclusive basis) must be accounted for. Turning then to the two remaining-opposing defendants, the costs allocation in my view should be as follows:

(i) Retirement Living: This defendant objected to the class definition and the wording of the common issues. It also opposed the plaintiffs’ costs of notice request. It did not prevail on the first two matters which consumed the bulk of their written submission, but it did prevail on the costs of notice issue which took much less time and effort. Considering the relatively comparable $15,000 costs settlement with Eastwood Mall and Nazarian, I find it fair and reasonable to fix costs as against Retirement Living also at $15,000 all-inclusive.

(ii) Province of Ontario: This defendant took issue with four of the five certification criteria and provided extensive, albeit wrong-headed, argument about the cause of action, the class definition, the common issues and preferability. However misguided the submissions, the plaintiffs had to respond with equal force and detail. In my view, a full two-thirds of the additional costs of this certification motion can be laid at the feet of this defendant. If the non-opposing defendants had not generously agreed to contribute $50,000 to the costs award, I would have fixed costs as against the province of Ontario at $93,000, with Eastwood Mall and Retirement Living paying the other third, or $23,500 each. Given the settlements, however, I am content to impose costs of $60,000 as against Ontario. This is a fair and reasonable costs award because, as I have already noted, even though the province’s submissions were misguided they were extensive and required a detailed response from the plaintiffs.

Disposition

[13] I have found that the plaintiffs incurred $140,000 in “additional costs” because of the positions taken by certain opposing defendants. I note that $65,000 will be paid under settlement agreements. This leaves $75,000 to be allocated in a fashion that is fair and reasonable.

[14] For the reasons set out above, I fix costs as against Retirement Living at $15,000 all-inclusive and as against the province of Ontario at $60,000 all-inclusive, both awards to be payable forthwith.

[15] Order to go accordingly.

Belobaba J.

Date: March 31, 2014

[1] Quinte v. Eastwood Mall, 2014 ONSC 249 (S.C.J.).

[2] Crisante v. DePuy Orthopaedics, 2013 ONSC 6351 (S.C.J.).

[3] Respectfully I do not agree with two of my colleagues who appear to have a different view: see Lauwers J., as he then was, in Rowlands v Durham Regional Health, [2011] O.J. No. 1864 (S.C.J.) at para. 61, citing Cullity J. in Barbiero v Pollack, [2004] O.J. No. 6070 (S.C.J.) at para. 2.

[4] Pearson v Inco, 2006 7666 (ONCA) at para. 5; also see Lou v Bayview Landmark Inc., [1999] O.J. No. 4385 (S.C.J.) at paras. 3 to 5.

[5] Supra, note 1, at para. 9.

[6] M.R. Wright, Wood and Saunders; NorDev; Keywan; Coreslab; and the City of Elliot Lake.

[7] Strictly speaking, a modest costs award could have been imposed on Mr. Kadlec for not advising the plaitniffs of his position. However, given his non-participation from the outset, it must have been obvious to the plaintiffs that this defendant would not be opposing the certification. Hence, I will not award costs as against Mr. Kadlec.