Court File and Parties
Court File No.: CV-09-389686-CP00 Date: 2016-06-01 Superior Court of Justice - Ontario
Re: Michel R. Mayotte, Plaintiff And: Her Majesty the Queen in Right of Ontario, Defendant
Before: Gans J.
Counsel: David Sterns and Adrienne Boudreau, for the Plaintiff Edmund Huang and Chantelle Blom, for the Defendant
Heard: In Writing and Via Teleconference held on May 12, 2016
Costs Endorsement
[1] Judgment in this matter was released in mid-February and is reported at 2016 ONSC 1233. I dismissed the plaintiff’s class action and invited the parties to make submissions in respect of costs to which this endorsement speaks.
[2] HMQ asks that it be awarded costs of defending the action over the past six years. It seeks costs on partial indemnity basis and asks to be paid the sum total of $779,405.70, which is broken down as $687,360 for fees and $92,045.70 for disbursements.
[3] The plaintiff does not take issue with the quantum claimed and candidly acknowledged that had it been successful, its claim for fees would likely have been greater than the amount claimed by Ontario.
[4] The plaintiff argues that since this action raised both novel points of law and involved matters of public interest I should exercise my discretion under s. 31 of the Class Proceedings Act, 1992 and award no costs or significantly reduce the costs otherwise awarded to Ontario.
[5] The plaintiff relies on the decision of Perell J. rendered in response to the summary judgment motion brought by Ontario basically on the eve of trial in which judgment he observed that the action “raises a profound rule of law question at the intersection of private and public law. At issue is the court’s regulation of a contract between citizens in the private sector and the state that is the public sector”: Mayotte v. Ontario, 2015 ONSC 4196, at para. 22.
[6] In the alternative, the plaintiff suggests that HMQ should not receive any costs in respect of its motion for summary judgment which was not only dismissed but caused Ontario to revisit its strategy and all but abandon certain of its defences.
[7] Ontario provided me with a Supplemental Costs Submission which relied on another decision of the ever-prolific Perell J. where he, as the current judicial dean of class action matters, attempted to give some guidance to members of the Class Action Bar and his judicial colleagues as to when and under what circumstances s. 31 of the CPA ought to be invoked: 1146845 Ontario Inc. v. Pillar to Post Inc., 2015 ONSC 1115. I find his observations in paragraphs 16-20 of the below referenced judgment to be most instructive.
[8] A detailed review of the law of costs in Ontario and whether a court should relieve an unsuccessful party against an order for costs as a departure from the norm of “costs following the event” was recently undertaken by D. Wilson J. in Sacks v. Ross, 2016 ONSC 2498. While arguably a very different case to the one under consideration presently, much of her observations are apposite to the matters now before me, which I incorporate by reference.
[9] When all was said and done, this case reduced itself to an adjudication of the duties of good faith in the performance of contracts as recently discussed and expounded upon by Cromwell J. in Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494, which I do not intend to review in this endorsement.
[10] As I observed in my reasons for judgment, the complex legal issues which gave rise to the Perell J. observations in respect of the universal importance of this action were either abandoned or not pursued when the matter was distilled to its ultimate essence. Accordingly, I do not see that this is an appropriate case for the exercise of the discretion sought pursuant to s. 31 of the CPA.
[11] However, I am not persuaded that Ontario should recover its fees for the launching and arguing of the unsuccessful motion for summary judgment. On the motion, Ontario took the position that: (a) it did not owe any duty of good faith to the plaintiff Issuers; and (b) that the anti-fettering doctrine was a complete bar to the claim. While I did not find that there was a breach on the evidence of issue (a), issue (b) was not pursued before me.
[12] Consequently, I would give the plaintiff credit for the costs of the motion, which from the Bill of Costs filed would amount to a credit for the sum of $216,550.
[13] I would observe parenthetically that Ontario does not make a claim for HST on its fees portion of the Bill of Costs. Since the HMQ lawyers are staff lawyers, I can only assume that HST is not exigible on any deemed costs, as it were, so that this amount will not form part of the calculus.
[14] I also note parenthetically that Ontario served a Rule 49 offer after the summary judgment motion but prior to trial. This offer, which clearly was not bettered, is of no moment to my evaluation of the costs in this matter.
[15] Ontario shall, therefore, be entitled to its costs fixed at $470,810 for fees and $92,045.70 for disbursements for a total of $562,855.70.