Court File and Parties
COURT FILE NO.: 16-67156 DATE: 2016/08/09 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Abdullah Abdullah, Nawaf Elenezi, Asfaw Mekonen, Timothy Omotunde, Vikash Kumar, Botros Nakhle, Said Youssef Roukoz, Dawit Tegegne, Fezel Popal, Walid N. Salika, Taminderpal Singh Mokha, Georges Chamoun, Meshari Amir, Amrik Singh, Mohamud Mohamed Hassa, Michel Tarabie, Tanios Abou-Hamd, Muhammad Saood Khalid, Rafael Kamar, Ahmed Khandid, Hayder Abid Zeyd, Elias Karam, Getachew Ayele, Farid Haddad, Fadla Hamade, Ghassan Skaf, Unifor and Unifor Local 1688, Plaintiffs
AND
Ahmad Hashim Maziri, Abrham Wossenu Zewde, Steven Albert Maurice Anthony Leger, Colleen Marese Pemberton Nnaemeka, Mazen Sabbagh, Georges Abou-Eid, Alireza Najaf Zadeh, Osamwonyi Abiokunla Owie, Sainthia Bisengimana, Christopher Amiana, Reynold Pierre-Louise, Mohammad Kazem Tohidi Shabestari, Genet Negash Bayable, Stella Riesom, Teklezghi Ghebremedhin Yohannes, Abdullahi Jam Ali, Mohamed Hamdan, Aya Hamed, Yassin A. Mouhoumed, Apollos Gustanar, Jane Doe and John Doe, Defendants
BEFORE: Mr. Justice Robert J. Smith
COUNSEL: Sean McGee and Alison McEwen, for the Plaintiffs Brian C. Elkin and Paul D. Mooney, for the Defendants
HEARD: In Writing
Costs Endorsement
Overview
[1] A number of licensed Ottawa taxicab drivers (the “taxicab drivers”) and their Union, Unifor and Unifor Local 1688 (“Unifor”) sought an injunction against 13 of the 20 named defendants plus John and Jane Doe, who were drivers for Uber (the “Uber drivers”). The taxicab drivers and their Union wer unsuccessful in obtaining an injunction to enforce the City of Ottawa’s By-Law licensing and governing taxicabs. (the “By-Law”)
[2] They brought a motion for an interlocutory injunction seeking to prevent all Uber ridesharing drivers in the Ottawa region from engaging in peer-to-peer (“P2P”) transportation services operated through an internet based mobile application developed by Uber.
Positions
[3] The Uber drivers submit that costs on a substantial indemnity basis in the amount of $128,621.50 plus disbursements of $1036.17 should be ordered payable forthwith by the applicants.
[4] The applicants submit that the Uber drivers’ costs are disproportionately high and costs should be ordered paid in the event of the cause. Unifor and the taxi drivers also submit that costs should not be awarded on a substantial indemnity basis as the motion for an injunction raised a genuine issue for trial and the applicants had not acted in a reprehensible or egregious manner.
[5] The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”) and include in addition to success, the amount claimed and recovered, the complexity and importance of the matter and the principle of proportionality, the conduct of any party which unduly lengthened the proceeding, whether any step was improper, vexatious or unnecessary, or taken through negligence mistake or excessive caution, a party’s denial or refusal to admit anything, any offer to settle, the principle of indemnity, scale of costs, hourly rate claimed in relation to the partial indemnity rate set out in the Information to the Profession effective July 1, 2005, the time spent, and the amount that a losing party would reasonably expect to pay.
Success
[6] In this case, the Uber drivers were successful in opposing the motion for an interlocutory injunction as Unifor and the taxi drivers could not demonstrate that they would suffer irreparable harm that could not be compensated for by way of damages or that the balance of convenience was in their favour.
[7] I do not agree with Unifor’s argument that they were successful on the motion because they met one of the three requirements for an injunction. I find that The Uber drivers were successful in opposing the motion for an injunction.
Complexity and Importance and Proportionality
[8] The issues were above average complexity and were important to the parties. The issues were due to the legal complexity of the Uber ridesharing program, the Union for the cab drivers sought to enforce the City’s By-Law by way of injunction, where the City was not a party, and the injunction was sought against 13 individuals identified as Uber drivers instead of against the Uber corporate entity.
Scale of Costs
[9] I found that Unifor and the taxi drivers, at least one of who was a taxpayer in the City of Ottawa, had standing to bring the motion for the injunction to enforce the City’s By-law, and I also found that they had raised a serious issue to be tried. As a result, I find that the applicants’ action was not groundless or totally without merit, that they did not make any unfounded allegations of fraud, deceit or conspiracy. Their conduct in bringing the motion for an injunction did not constitute reprehensible, scandalous or outrageous conduct as stated in Marineland of Canada Inc. v. Powell, 2014 ONSC 4740. As a result, I find that costs should be assessed on a partial indemnity rate.
Hourly Rates and Time Spent and Proportionality
[10] I agree with the Uber drivers’ submission that responding to an injunction requires intense work, as a motion for an injunction must be responded to on very short notice. The plaintiffs did not dispute the hourly rates claimed but disputed the amount of time spent in preparation to respond to the motion. The preparation time for legal counsel was nearly 43 days of work (at 7 hours per day).
[11] The issues on this motion were very complex as they involved questions of standing, by a taxi driver and the union representing the taxi cab drivers to enforce a City By-law. In addition, the complex factual component of how the Uber ridesharing program operated there were also many parties involved, but not the City of Ottawa or the Uber corporate entity.
[12] The motion for an injunction was extremely important to the parties given that, if granted, would have shut down the Uber drivers and Uber operators in the City of Ottawa. As a result, I find it was reasonable to spend a substantial amount of time responding to these complex and very important issues.
[13] A further complexity was the fact that the applicants did not seek an injunction against Uber’s corporate entity but rather chose approximately 13 Uber drivers, which constitute a very small number of the total number of Uber drivers in the Ottawa/Gatineau area.
Amount the Unsuccessful Party Would Reasonably Expect to Pay in Costs
[14] The applicants have not produced a costs outline disclosing the amount of time spent by then in preparing for the motion for injunction or their hourly rates. Therefore, it is difficult to determine their reasonable expectations in the circumstances. However, I find that the applicants’ Union is a sophisticated party, which was aware of the complexity of the issues involved, the novelty of the operation of the Uber ridesharing program, the conflicting decisions in different cities Toronto, Edmonton and Calgary, and therefore would have expected substantial costs to be incurred to respond to their motion for an injunction in the circumstances.
Payment Forthwith or in the Cause
[15] Unifor and the taxicab drivers submit that costs should be payable in the cause or in any event of the cause and should not be made payable forthwith.
[16] The Uber drivers submit that costs should be payable forthwith and they rely on the decision Longyear Canada v. 897173 Ontario Inc., [2008] O.J. No. 374, 164 A.C.W.S. (3d) 406, where at para. 8 the Court stated that:
The rationale for deferring the costs decision does not apply where injunction is denied. Whether or not this case proceeds to trial, and indeed even if Boart succeeds at trial, it does not follow that Boart was ever entitled to interlocutory relief. This extraordinary remedy is based on the additional factors apart from the overall merits of the case. I determined that Boart could not meet the irreparable harm and balance of convenience criteria. I see no reason why Boart’s inability to satisfy the injunction test should disentitle the defendants from receiving their costs at this point.
[17] Rule 57.03(1)(a) of the Rules states that normally costs of a motion should be fixed by the Court and be paid within 30 days, unless the Court is satisfied that a different order would be more just. In this case I find that the Uber drivers have successfully defended the motion for an interlocutory injunction and regardless of the result at the end of this trial, they should be entitled to their costs of this motion.
[18] Another important factor is that the applicants knew that the City of Ottawa was studying the issue and was considering licensing ridesharing programs and that if they did so, the likelihood of the matter proceeding to an actual trial would be greatly reduced.
[19] I also note that the taxi cab drivers and Unifor did not agree is that ordering costs for an interim motion would adversely affect their access to justice because Unifor has adequate resources to pay an award of costs. For the above reasons, I see no reason not to follow the standard procedure as set out in Rule 57.03(1)(a) and the Longyear Canada decision to fix the costs and that they be paid within 30 days.
Amount of Costs
[20] The Uber drivers point to a number of decisions where substantial costs awards were made where unsuccessful motions for injunctions were brought. In Jazz Air LP v. Toronto Port Authority, 2006 CarswellOnt 6104, costs of $160,000 were awarded for an unsuccessful one-day motion for an interlocutory injunction. In Longyear, the Court granted an aggregate costs award of $185,000 for an unsuccessful one-day motion for an interlocutory injunction, and in the case of Catalyst Capital Group Inc., v. Moyse, 2015 ONSC 5248, the Court assessed costs for a one-day motion for an injunction in the amount of $90,000 for one defendant and $70,000 for the second defendant.
[21] I also agree with the Uber drivers’ submission that a team approach to performing legal services is permissible given that there were discrete issues that were researched and prepared by different counsel.
Disposition
[22] Having considered all of the above factors, including that the Uber drivers were completely successful on their motion, and the importance and complexity of the matter, costs are fixed in the amount of $60,000 plus HST plus disbursement of $1,151.30 inclusive of HST on a partial indemnity basis and are payable within 30 days.