ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-CV-4533236
DATE: 20140324
BETWEEN:
THE TRUSTEES OF THE DRYWALL ACOUSTIC LATHING AND INSULATION LOCAL 675 PENSION FUND and 0793094 B.C. LTD.
Plaintiffs
– and –
SNC-LAVALIN GROUP INC., IAN A. BOURNE, DAVID GOLDMAN, PATRICIA A. HAMMICK, PIERRE H. LESSARD, EDYTHE A. MARCOUX, LORNA R. MARSDEN, CLAUDE MONGEAU, GWYN MORGAN, MICHAEL D. PARKER, HUGH D. SEGAL, LAWRENCE N. STEVENSON, GILLES LARAMÉE, MICHAEL NOVAK, PIERRE DUHAIME, RIADH BEN AÏSSA and STÉPHANE ROY
Defendants
A. Dimitri Lascaris, Douglas Worndl, Anthony O’Brien and Peter Jervis, for the Plaintiffs
Steven Tenai and Nicholas Saint-Martin for the Defendants, SNC-Lavalin Group Inc., Ian A. Bourne, David Goldman, Patricia A. Hammick, Pierre H. Lessard, Edythe A. Marcoux, Lorna R. Marsden, Claude Mongeau, Gwyn Morgan, Michael D. Parker, Hugh D. Segal and Lawrence N. Stevenson
Proceeding under the Class Proceedings Act, 1992
HEARD: In Writing
PERELL, J.
REASONS FOR DECISION – COSTS
1. Introduction
[1] By Reasons dated January 29, 2014, reported as The Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc.,[^1] I dismissed the Plaintiffs’ motion for leave to amend their Second Fresh as Amended Consolidated Statement of Claim and their Replies.
[2] I further dismissed many of the Plaintiffs’ requests for changes to the Discovery Plan that had been prepared by the Defendant SNC-Lavalin Group Inc. in July 2013 after earlier exchanges of draft plans that continued over many months.
[3] In my Reasons for Decision, I expressed the tentative view that SNC-Lavalin should have costs on a partial indemnity scale for the motion to amend the Second Fresh as Amended Statement of Claim and that the costs of the Discovery Plan Motion should be in the cause.
2. The Defendant SNC-Lavalin’s Claim for Costs
[4] SNC-Lavalin seeks partial indemnity costs payable within 30 days of $51,356.99 for the Amendments Motion, inclusive of HST and disbursements of $1,921.16.
[5] SNC-Lavalin seeks partial indemnity costs of $62,077.00 payable within 30 days for the Discovery Plan Motion, inclusive of HST and disbursements, which include expert’s fees.
[6] It may be noted that SNC-Lavalin says that it actually incurred partial indemnity costs of $101,614.50 for the Discovery Plan Motion, inclusive of $21,184.39 for the expert’s fees. (This compares with $122,277.99 expended by the Plaintiffs for that particular motion.)
[7] SNC-Lavalin submits that given the substantial additional burden that the Plaintiffs sought to impose by their requested amendments, it was reasonable for SNC-Lavalin to have assigned a team of partners and associates to prepare for the motion and to have been represented on the motion by a partner and senior associate.
[8] SNC-Lavalin notes in comparison that three partners and an associate appeared on the Amendments Motion for the Plaintiffs, and it submits that the time expended by its own lawyers was reasonable and appropriate for the issues raised and their importance. It submits that the amount requested is within the losing party’s reasonable expectations as to their exposure to an adverse costs award.
[9] For the Discovery Plan Motion, SNC-Lavalin submits that neither party should receive costs for the issues that the parties resolved through negotiation and compromise. It submits, however, that it should receive costs for the balance of the motion.
[10] SNC-Lavalin submits that it successfully resisted the unreasonable and disproportionate demands for changes to the proposed Discovery Plan. SNC-Lavalin submits that the Plaintiffs’ over-reaching demands forced it to incur substantial expense in responding to the motion, including the cost of retaining an expert to provide evidence as to the proportionality of the Plaintiffs’ requests. It submits that with the exception of the date parameter issue, the Court agreed with SNC-Lavalin’s position on the issues in dispute.
[11] SNC-Lavalin submits that the case at bar is not an appropriate case for costs in the cause. Alternatively, it submits that the costs should be just to SNC-Lavalin in the cause. It says that this is not a case where some limited or divided success on the motion should be recognized or a case where it would be fair for the Plaintiffs to recover their costs should they later be successful in the action.
[12] SNC-Lavalin submits that the Plaintiffs over-reached and made unreasonable demands and their motion for changes to the Discovery Plan should never have been brought. It is, therefore, appropriate that the Plaintiffs be ordered to pay costs immediately and not await the outcome of the action.
[13] SNC-Lavalin submits that ordering costs in the cause runs the risk of encouraging future motions on Discovery Plans contrary to my view that that the introduction of Discovery Plans was not intended to create “sideshow litigation.”
3. The Plaintiffs’ Position and Claim for Costs
[14] The Plaintiffs’ position is that SNC-Lavalin’s partial indemnity costs for the Amendments Motion should be $10,000, all-inclusive, and that the costs of the Discovery Plan Motion should be in the cause. Alternatively, the Plaintiffs submit that they should receive the costs of the Discovery Plan Motion fixed at $15,000, all-inclusive.
[15] The Plaintiffs concede that SNC-Lavalin is entitled to costs for the Amendments Motion, but they submit that the costs requested are not fair and reasonable or within the reasonable expectations of the Plaintiffs.
[16] The Plaintiffs point out that in the Defendants’ factum delivered just before the argument of the motion, SNC-Lavalin conceded an amendment that is relevant to the issue of damages. The Plaintiffs submit that this circumstance warrants a reduction in the quantum of costs to which SNC-Lavalin may otherwise be entitled.
[17] The Plaintiffs point out that SNC-Lavalin did not file any affidavit material and there were no cross-examinations and it filed only a short factum for the Amendments Motion.
[18] The Plaintiffs submit that although their own partial indemnity costs for the Amendments Motion of $50,469.32 are comparable to SNC-Lavalin’s partial indemnity costs, it does not follow that SNC-Lavalin is entitled to the costs sought. The Plaintiffs say that reasonable expectations are also informed by other factors, such as costs awards in comparable cases, and, further, where the parties engage in overkill on a motion, the Court’s analysis must go beyond the unsuccessful party’s costs as an indicator of reasonableness.
[19] The Plaintiffs submit that the Court should seek to avoid inconsistency with comparable awards in other cases. The Plaintiffs submit that even in the class action context, where costs awards are often high as befits high risk and aggressively prosecuted and defended actions, costs awards on motions for leave to amend under rule 26.01 are typically substantially lower than the amount being sought by SNC-Lavalin.
[20] The Plaintiffs provide several examples. In Turner v. York University,[^2] Justice Horkins dismissed a motion by the plaintiff for leave to amend his statement of claim and awarded costs of $5,000, inclusive. In Dugal v. Manulife,[^3] a securities class action in which the plaintiffs are seeking $2.5 billion in damages, Justice Strathy dismissed a motion by the plaintiffs for leave to amend their statement of claim and awarded the defendants costs of $25,000, but that amount was divided between multiple defendants who were separately represented. In Bellefeuille v. Canadian Pacific Railway,[^4] Justice Hennessy awarded costs of $19,337.52, all-inclusive to the plaintiffs for a motion for leave to amend the statement of claim, and in Hester v. Canada,[^5] Justice Lax awarded costs of $7,500, all-inclusive to the defendants for an unsuccessful motion by the plaintiff for leave to amend the statement of claim and for a successful motion by the defendants for a stay of proceedings.
[21] Further, the Plaintiffs submit that the objective of access to justice should not be ignored in setting the amount of costs, and they submit that in all the circumstances of this case, $10,000 would be a fair and reasonable amount for the Amendments Motion.
[22] Turning to the Discovery Plan Motion, the Plaintiffs submit that SNC-Lavalin is over-reaching in seeking its costs for this motion. The Plaintiffs submit that if any party is entitled to its costs, it is them. However, they are willing to concede that the costs of the motion be in the cause.
[23] The Plaintiffs submit that upon analysis, the outcome of the motion was a success for the Plaintiffs having regard to the relative importance of the various issues that were in dispute. In this regard, the Plaintiffs claim victory with respect to the list of custodians whose electronic records would be searched and the date parameters of the searches to be conducted. They submit that the full measure of their success may have to await the outcome of the examinations for discovery because the outcome of the Discovery Plan Motion did not foreclose other routes to the information they were seeking.
[24] The Plaintiffs submit that even with these successes for them, there is no reason to depart from my tentative view that costs should be in the cause for the Discovery Plan Motion. However, if costs are to be awarded, the Plaintiffs submit that they should be payable to them in the amount of $15,000, all-inclusive, within 30 days.
[25] In a submission with chutzpah, the Plaintiffs say that costs to them of $15,000 would be a fair and reasonable result because it is a significant discount on their partial indemnity costs of $122,277.99 for the Discovery Plan Motion. The substantial reduction would still recognize their success on the most important issues on the motion while taking into account that they did not achieve complete success.
[26] Finally, the Plaintiffs say that SNC-Lavalin’s claim in respect of the expert report of Susan Wortzman should not be allowed because her report was not referred to or relied upon in my Reasons for Decision and the report was not responsive to the expert report of Phil Beckett filed by the Plaintiffs on the motion. The Plaintiffs point out that neither expert's evidence was relied upon and in these circumstances, the Plaintiffs submit that they should not be required to pay the expert fee incurred for Ms. Wortzman's evidence.
4. Discussion and Analysis
[27] The Plaintiffs thought a motion to amend their Statement of Claim was important enough to spend $50,469.32, all-inclusive, on a partial indemnity scale.
[28] SNC-Lavalin thought that resisting the motion to amend was important enough that it spent $53,278.15, all-inclusive, on a partial indemnity scale.
[29] That both parties would commit significant resources to a pleadings amendment motion is not is not surprising because if the Plaintiffs won, it would be a major victory for them and a major defeat for SNC-Lavalin. If SNC-Lavalin won, it would be a major victory for them but only a modest defeat for the Plaintiffs because the Plaintiffs still have a very formidable claim without it being amended. The point is that this was an important motion for both parties and particularly so for SNC-Lavalin.
[30] Despite their disavowal of their own expenditures as a measure of what the reasonable expectations of the losing party would be, in the circumstances of this case, the Plaintiffs would have expected that SNC-Lavalin would commit more legal resources than them because they had more to lose. As it turned out, their expenditures are similar.
[31] In my opinion, SNC-Lavalin’s claim of $53,278.15 is reasonable for what was a very important motion in a billion-dollar lawsuit and very much in line with what the Plaintiffs likely would have claimed if they had been successful. In this litigation, the high amount claimed for the Amendments Motion is within the reasonable expectations of the unsuccessful party on the motion.
[32] I, therefore, award SNC-Lavalin $53,278.15, all-inclusive, for the Amendments Motion, payable within 30 days.
[33] Turning to the Discovery Plan Motion, having considered the submissions of the parties, I am persuaded by SNC-Lavalin’s submissions that my tentative view that costs should be in the cause was incorrect.
[34] In all the circumstances of this case, I think the appropriate order is to award SNC-Lavalin costs of $62,077.00 in any event of the cause.
[35] I have been persuaded that SNC-Lavalin was the successful party, and while it should wait for its costs to be paid until the outcome of the action, it should have those costs win or lose; i.e. SNC-Lavalin should recover its partial indemnity costs for the Discovery Plan Motion in any event of the cause.
[36] I am persuaded that the Plaintiffs were not successful on the Discovery Plan Motion and their demands were disproportionate and over-reaching. The fact that they may obtain the information they were seeking during the examinations for discovery is not a sign of success but rather a sign that their demands were disproportionate and over-reaching.
[37] The Plaintiffs’ partial indemnity expenditure of $122,277.99 for the Discovery Plan Motion shows that SNC-Lavalin’s claim of $62,077.00 for the Discovery Plan Motion, inclusive of HST and disbursements, is reasonable and appropriate.
[38] I, therefore, award SNC-Lavalin $62,077.00, all-inclusive, for the Discovery Plan Motion in any event of the cause.
Perell, J.
Released: March 24, 2014
COURT FILE NO.: 12-CV-4533236
DATE: 20140324
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE TRUSTEES OF THE DRYWALL ACOUSTIC LATHING AND INSULATION LOCAL 675 PENSION FUND and 0793094 B.C. LTD.
Plaintiffs
‑ and ‑
SNC-LAVALIN GROUP INC., IAN A. BOURNE, DAVID GOLDMAN, PATRICIA A. HAMMICK, PIERRE H. LESSARD, EDYTHE A. MARCOUX, LORNA R. MARSDEN, CLAUDE MONGEAU, GWYN MORGAN, MICHAEL D. PARKER, HUGH D. SEGAL, LAWRENCE N. STEVENSON, GILLES LARAMÉE, MICHAEL NOVAK, PIERRE DUHAIME, RIADH BEN AÏSSA and STÉPHANE ROY
Defendants
REASONS FOR DECISION - COSTS
Perell, J.
Released: March 24, 2014
[^1]: 2014 ONSC 660.
[^2]: 2011 ONSC 6155 and 2011 ONSC 7146.
[^3]: 2011 ONSC 1764.
[^4]: 2010 ONSC 5499 and 2011 ONSC 188.
[^5]: 2007 52015 (ON SC).