ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 13-44192
DATE: 2015-11-09
B E T W E E N:
Canadian Planning and Design Consultants Inc.
Applicant
(Respondent on Cross-Motion)
- and -
State Of Libya aka Libya aka People’s Bureau Of The Great Socialist People’s Libyan Arab Jamahiriya-Canada aka The Great Socialist People’s Libyan Arab Jamahiriya-Canada aka Embassy Of Libya In Canada aka Embassy Of Libya aka Libyan Embassy Canada
Respondent
(Applicant on Cross-Motion)
- and -
Royal Bank of Canada
Garnishee
The Honourable Justice C.D. Braid
John Adair, Jennifer King, Malcolm Ruby and Gordon McGuire for the Applicant, Canadian Planning
John Melia and Jennifer Radford for the Respondent, Libya
Catherine Francis, for the Garnishee, RBC
HEARD: February 6, March 13,
April 2, May 5 and June 2, 2015
DECISION REGARDING COSTS
I. OVERVIEW
[1] These proceedings raised difficult issues of international law, diplomatic immunity, state immunity and crown prerogative. The court quashed Notices of Garnishment relating to Libya’s diplomatic bank accounts and must now determine costs arising out of the motions.
II. HISTORY OF THE LITIGATION
[2] The history of the litigation in this matter is set out in extensive detail in previous rulings. To summarize, Canadian Planning and Design Consultants Inc. (“Canadian Planning”) obtained judgment in the amount of approximately $11 million Canadian dollars against the State of Libya (“Libya”). Canadian Planning attempted to enforce that judgment by obtaining and serving Notices of Garnishment in relation to Libyan Embassy bank accounts at the Royal Bank of Canada (“RBC”) in Ottawa.
[3] Libya brought a motion seeking to quash the original Notices of Garnishment and to prevent any further enforcement attempts in respect of the bank accounts. In response, Canadian Planning brought a motion for a declaration that the original Notices of Garnishment are valid; and for a direction from the court to permit the issuance of new, amended Notices of Garnishment that reflect the amended style of cause in the proceedings.
[4] Four rulings were delivered by this court on the motions related to the Notices of Garnishment. The rulings can be summarized as follows:
i. The first ruling was released March 11, 2015 and is cited at 2015 ONSC 1638. In that ruling, the court found that the Foreign Missions and International Organizations Act, S.C. 1991, c. 41 is silent regarding diplomatic immunity over bank accounts. The court held that, pursuant to customary international law, diplomatic bank accounts enjoy a presumption of immunity. This presumption can be rebutted by the creditor, who should be provided with the opportunity to present evidence that the bank accounts were being used for a non-diplomatic purpose. Shortly after that ruling was released, the Ambassador for Libya filed a statutory declaration stating that the accounts are diplomatic bank accounts. The court then adjourned the matter to permit Canadian Planning an opportunity to produce other evidence that may rebut the presumption of immunity.
ii. The second ruling was released April 30, 2015 and is cited at 2015 ONSC 2188. Following the release of the first ruling, the court received a certificate from the Minister of Foreign Affairs. The Minister’s Certificate stated that Canada and Libya enjoy diplomatic relations, and that the accounts are diplomatic bank accounts that enjoy immunity. In the second ruling, the court held that the Minister’s Certificate did not end the matter, and the creditor must still be given the opportunity to rebut the presumption of immunity.
iii. The third ruling was released May 29, 2015 and is cited at 2015 ONSC 3386. In the third ruling, the court denied the creditor’s applications to cross-examine various individuals; and also denied the application seeking production of documents from Libya, RBC and other third parties.
iv. The fourth ruling was released July 2, 2015 and is cited at 2015 ONSC 3541. In the final ruling, the court analyzed the evidence and found that Canadian Planning had not displaced the presumption of immunity.
[5] In the result, the Notices of Garnishment were quashed.
[6] Following the release of the fourth ruling, I invited the parties to file written submissions on the issue of costs. I have received and considered those submissions.
III. POSITION OF THE PARTIES
[7] Libya was the successful party on these motions. Libya seeks its costs on a substantial indemnity basis in the amount of $324,820.77.
[8] RBC was the third party garnishee on these motions. RBC argues that it was a necessary party to these proceedings and seeks its costs on a substantial indemnity basis in the amount of $103,997.28.
[9] Canadian Planning submits that Libya has ignored its legal obligation to pay the judgment, and Canadian Planning is therefore entitled to its own costs on a partial indemnity basis in the amount of $82,124.33. In the alternative, Canadian Planning argues that there should be no costs award because the issues in the case were novel and complex; and that RBC was a third party who did not need to participate in the litigation. If costs are awarded to Libya, Canadian Planning argues they ought to be reduced to $80,000.
IV. ANALYSIS
[10] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides that “costs of and incidental to 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.” Rule 57.01 of the Rules of Civil Procedure enunciates the general factors to be considered by the court in exercising its discretion in relation to costs. I have considered those factors.
[11] The determination of costs is not a mechanical exercise. As noted by the Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), the fixing of costs involves more than merely a calculation using the hours docketed and the cost grid. The costs award should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs incurred by the successful litigant.
[12] The determination of costs must be proportionate to the order sought and within the reasonable expectations of the unsuccessful party (see Moon v. Sher (2004), 2004 39005 (ON CA), 246 DLR (4th) 440 (Ont. C.A.); Cosentino v. Roiatti, [2007] O.J. No.56 (Sup. Ct.)).
[13] All of the parties agree that the proceedings raised serious, novel and complex issues related to principles of state immunity, diplomatic immunity and crown prerogative. The Notices of Garnishment sought to enforce an $11 million judgment against a foreign state. The parties were required to extensively research international law and to analyze complex statutes and international conventions. These considerations are particularly important in assessing costs in these proceedings.
[14] The parties attended court on five separate occasions to make oral submissions. At the request of the court, the parties prepared several written submissions, in addition to factums that had already been submitted, to supplement their oral submissions. This took place over the course of five months.
[15] Libya seeks fees (including HST and disbursements) on a substantial indemnity basis in the amount of $324,820.77 or on a partial indemnity basis in the amount of $223,143.14.
[16] I find that there are no circumstances in this case that would justify costs on a substantial indemnity basis. In particular, in the proceedings before me:
a) There were no allegations of conspiracy.
b) Canadian Planning did not partake in improper litigation tactics.
c) The issues raised on these motions were without precedent in Canadian law. I do not accept RBC’s submission that Canadian Planning issued Notices of Garnishment in respect of bank accounts which it knew were prima facie immune from garnishment under the principle of diplomatic immunity.
[17] At the same time, I do not accept Canadian Planning’s argument that it is appropriate not to award costs because the issues in this case were novel and complex. Canadian Planning knew that these bank accounts were held in the name of the Libyan Embassy, and they knew that the Canadian Department of Foreign Affairs had already asserted that these bank accounts were protected by diplomatic immunity. Canadian Planning took a calculated risk in issuing the Notices of Garnishments and must bear some responsibility for Libya’s costs of the motion.
[18] The costs claimed by Libya exceed those claimed by Canadian Planning and RBC by more than $200,000. Libya’s costs outline shows that it expended 721.6 hours of preparation plus 72.1 hours for court attendances. Canadian Planning incurred 184.7 total hours and RBC incurred 197.5 total hours (including court appearances). Libya has not addressed the significant disparity between the number of hours incurred by Libya’s counsel and the time spent by counsel for the other two parties in preparation for these motions.
[19] In all of the circumstances, I find that $100,000 is a fair and reasonable assessment of Libya’s costs. This figure takes into account the nature of this litigation and what the unsuccessful party could reasonably have expected to pay.
[20] RBC argues that it was at risk for the entire amount claimed in the Notices of Garnishment, which compelled RBC to restrain the entire amount or face personal exposure. RBC argues, therefore, that it was a necessary party to these proceedings. RBC asks for costs on a substantial indemnity scale in the amount of $103,997.28; or on a partial indemnity scale in the amount of $73,942.10 (both figures including HST and disbursements).
[21] In my view, it would have been prudent for RBC to protect its own interests by monitoring the court proceedings. However, I do not accept that RBC was a necessary party to this litigation. RBC took on the role of strenuously advocating in favour of Libya’s position, which was neither necessary nor helpful to this court. It was inappropriate for RBC, a third party, to take sides in this dispute between a creditor and debtor.
[22] The position taken by RBC resulted in the duplication of Libya’s submissions to a great extent, which prolonged the proceedings unnecessarily. In addition, RBC filed the affidavit of Mary Burke-Cameron, a bank representative, which was unhelpful to the issues before the court. By filing the affidavit, RBC exposed Ms. Burke-Cameron to a motion for cross-examination, which further complicated the proceedings.
[23] I therefore find that RBC is not entitled to costs.
V. CONCLUSION
[24] In the result, Canadian Planning shall pay costs to Libya for the garnishment proceedings heard before me, in the amount of $100,000 inclusive of disbursements and HST. These costs are payable forthwith.
Braid J.
Released: November 9, 2015
COURT FILE NO.: 13-44192
DATE: 2015-11-09
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Canadian Planning and Design Consultants Inc.
Applicant
(Respondent on Cross-Motion)
and
State Of Libya aka Libya aka People’s Bureau Of The Great Socialist People’s Libyan Arab Jamahiriya-Canada aka The Great Socialist People’s Libyan Arab Jamahiriya-Canada aka Embassy Of Libya In Canada aka Embassy Of Libya aka Libyan Embassy Canada
Respondent
(Applicant on Cross-Motion)
and
Royal Bank of Canada
Garnishee
COSTS DECISION
Braid, J.
Released: November 9, 2015