Court File and Parties

CITATION: Locking v. McCowan, 2016 ONSC 7854

COURT FILE NO.: CV-14-517117 CP

DATE: 2016-12-15

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Daniel Locking / Representative Plaintiff

AND:

Ronald McCowan, Allen W. Weinberg, Joseph Feldman, Marc Charlebois, Laura Philp, Holyrood Holdings Limited, Samuel N. Nash, Goldman Sloan Nash and Haber LLP, Graham Rawlinson and Torys LLP

BEFORE: Justice Edward P. Belobaba

COUNSEL: John Archibald and Paul Bates for the Representative Plaintiff

Paul H. Le Vay, Samuel M. Robinson and Carlo di Carlo for defendant Ronald McCowan

Eric R. Hoaken and Larissa C. Moscu for defendant Allen W. Weinberg

R. Paul Steep, Shane C. D’Souza and Jessica L. Laham for defendants Joseph Feldman and Marc Charlebois

J. Thomas Curry and Mariam Moktar for defendants Laura Philp and Holyrood Holdings

HEARD: In writing

Endorsement

Proceeding under the Class Proceedings Act, 1992

costs award

[1] This is a class action brought by the unit-holders of Partners REIT, an unincorporated real estate investment trust whose units trade on the Toronto Stock Exchange. The unit-holders claim they sustained losses when the REIT’s unit price dropped because an improper property transaction had to be set aside. They allege that the losses were caused by the misconduct of the defendants.[^1]

[2] The certification of this class action proceeded in two stages – a contested hearing under s. 5(1)(a) of the Class Proceedings Act[^2] to determine the viable causes of action[^3] followed by a consent certification on the balance of the s. 5(1) requirements. The 5(1)(a) motion itself also proceeded in two stages. On the first motion, success was divided and no costs were awarded.^4 On the second motion dealing with newly added causes of action, the plaintiff prevailed.[^5]

[3] The plaintiff now seeks his costs for the second 5(1)(a) motion and the certification.

The second 5(1)(a) motion

[4] As I noted in my Endorsement, the plaintiff was entitled to amend his pleadings and add the new causes of action.[^6] And, because he prevailed on this motion, he is right to seek costs on a partial indemnity basis.

[5] The plaintiff asks for $31,089 inclusive of disbursements and taxes. The defendants criticize this amount as excessive and unreasonable for a mere “pleadings motion” but they have not provided their own costs outlines showing what they spent on a partial indemnity scale. Nor have they pointed out any obvious excesses in the fees or disbursements. In any event, this was not a simple pleadings motion. Four of the defendants argued limitations, collateral attack and abuse of process. The plaintiff was obliged to respond in full and did so successfully.

[6] I therefore find it fair and reasonable to fix the costs of the second 5(1)(a) motion in the amount requested, that is $31,089.

The balance of the certification motion

[7] As a general rule, where the defendant consents to the certification motion in a timely fashion, the costs incurred by the plaintiff in persuading the court that the requirements for certification under s. 5(1) of the CPA have been satisfied cannot be foisted on the defendant.[^7] However, “depending upon when and how the defendant’s resistance vanished, it may be fair and appropriate to give some credit to the defendant for not opposing the mandatory [certification] motion by awarding all or part of the costs in the cause.”[^8]

[8] Here, says the plaintiff, the defendants did not communicate their consent to the balance of the certification motion “in a timely fashion.” I accept the plaintiff’s narrative that the plaintiff reasonably expected that the certification motion would be opposed until about a month or so before the scheduled motion date. I also agree with the plaintiff that the cost of the financial analyst’s expert report is justified as a disbursement given the plaintiff’s need to satisfy the common issues requirement. (I note that at least one of the defendants, McCowan, concurs on this point.)

[9] The plaintiff asks for $65,235 in costs for the balance of the certification motion but suggests that half of this amount be payable forthwith, and the other half be made payable in the cause. In principle, I agree that a hybrid costs award on the facts herein is fair and appropriate. However, given the evidence about the timing of the defendants’ communication of consent, I would order one-third payable forthwith and two-thirds payable in the cause. That is, $21,745 is payable forthwith.

[10] The total amount that is payable forthwith is $52,834 ($31,089 plus $21,745).

Disposition

[11] In my view, for the reasons set out above, a hybrid costs award is fair and appropriate. Costs are fixed at $52,834 payable to the plaintiff by the defendants forthwith and $43,490 payable to the plaintiff in the cause.

[12] If the defendants cannot agree on how to allocate this costs award, I will be pleased to receive brief written submissions.

Belobaba J.

Date: December 15, 2016

[^1]: Now reduced to six: Ronald McCowan, Allen W. Weinberg, Joseph Feldman, Marc Charlebois, Laura Philp and Holyrood Holdings Limited.

[^2]: S.O. 1992, c.6.

[^3]: Locking v. McCowan, 2015 ONSC 4435.

[^5]: See my Endorsement dated September 7, 2016.

[^6]: Ibid., at para. 1.

[^7]: See my decision in Quinte v Eastwood Mall Inc., 2014 ONSC 1661, at para. 5.

[^8]: Frank v Farlie, Turner & Co., 2013 ONSC 4364, at para. 30. Also see Labourers’ Pension Fund of Central and Eastern Canada (Trustees of) v. Sino-Forest Corp., 2015 ONSC 6354, at para. 138.