Court File and Parties
COURT FILE NO.: CV-13-493837CP DATE: 20170410 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JOYCE BERNSTEIN Plaintiff – and – PEOPLES TRUST COMPANY and PEOPLES CARD SERVICES LLP Defendants
Counsel: Louis Sokolov, and Nadine Blum for the Plaintiff Lawrence Thacker, Constanza Pauchulo and Patrick Healy for the Defendants
Proceeding under the Class Proceedings Act, 1992
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] Pursuant to the Class Proceedings Act, 1992, S.O. 1992, c. 6, Joyce Bernstein brought a proposed class action against Peoples Trust Company and Peoples Card Services LLP (collectively “Peoples Trust”). The action was brought on behalf of all consumers in Ontario within the meaning of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A, who purchased or acquired a prepaid payment card sold or issued by Peoples Trust Company between October 1, 2007 and April 30, 2014. She alleged breach of contract and that Peoples Trust perpetrated an unfair practice under the Consumer Protection Act, 2002 and also breached the Gift Card Regulations in O. Reg. 17/05 (General), a regulation enacted pursuant to the Act. She successfully moved for certification of her action as a class action. See Bernstein v. Peoples Trust Company, 2017 ONSC 752.
[2] The parties were unable to settle the matter of costs and Ms. Bernstein seeks costs of $146,492.72, all inclusive. The breakdown is: $124,950 (60% of full indemnity) on a partial indemnity basis; $4,730.99 for disbursements; and $16,811.73 for HST.
[3] Peoples Trust did not contest the hourly rates, number of lawyers engaged, or hours worked by Class Counsel as outlined in her Bill of Costs. Nor did Peoples Trust dispute the general principles about the fixing of costs as set out in Ms. Bernstein’s costs submissions.
[4] Peoples Trust, however, did dispute the claim for costs and submitted that the appropriate award should be $120,000, all inclusive, of which $80,000 should be payable in 30 days and $40,000 payable to the plaintiff in the cause.
[5] The rationale for this award, as submitted by Peoples Trust, is that: (a) the overarching principle governing costs is that the costs award must be fair and reasonable; (b) determining what is fair and reasonable must take into account the outcome of the motion; and, (c) in the immediate case, there was divided success because on the critically important issues of the definition of the class, class period, and class size, Peoples Trust was successful. Peoples Trust submits that it was successful on this issue because the class was found to be overbroad in including members whose claims were presumptively statute-barred under the Limitations Act, 2002 with the result that the class period was reduced from 9.5 years to 2.5 years in duration.
[6] Peoples Trust relied on costs decisions where, in light of divided success, the court either reduced the quantum of the award and, or, made some or all of the costs payable in the cause. See: Pearson v. Inco Ltd., 2012 ONCA 101; Parker v. Pfizer Canada Inc., 2012 ONSC 4643; Ontario Inc. v. Pet Valu Canada Inc., 2011 ONSC 3475; Fantl v. Transamerica Life Canada, 2013 ONSC 5198.
[7] In the immediate case, while I disagree with Peoples Trust’s argument, I do agree that this is a case where it would be appropriate to make a portion of the costs award payable to the plaintiff in the cause.
[8] In my opinion, the appropriate award is $146,492.72, all inclusive, of which $136,492.72 shall be payable within 30 days and the balance of $10,000, plus post-judgment interest, pursuant to the Courts of Justice Act, R.S.O. 1990, c. 43, payable to the plaintiff in the cause.
[9] I do not regard the certification motion as being a divided success. Although the limitation period issue was a very important issue for Peoples Trust, the motion was a total success for Ms. Bernstein. There was a revised class definition, but that is not an uncommon successful outcome.
[10] However, I regard the issue of the application of the limitation period as an important issue that should have been conceded and, thus, to use the language of Rule 57.01, which provides guidelines for the court’s discretion about costs, is “conduct of any party that tended to lengthen unnecessarily the duration of the proceedings” or a “denial or refusal to admit anything that should have been admitted.”
[11] In the immediate case, the refusal to admit or lengthening of the hearing was quite modest, but controlling the costs of the certification motion is a serious problem, and it is a salutary message to send out to Class Counsel that they should not over-plead their case and that they should make appropriate admissions or concessions.
[12] In the class action context, over-pleading the class size, class period, and adding redundant causes of action and claims and not making concessions is a frequent phenomenon. And it is a problematic phenomenon because over-pleading and not making concessions virtually ensures that there will be a contested certification motion - and an expensive one - that simply aggravates the access to justice problems that class action procedure was designed to ameliorate.
[13] And, over-pleading ignores the changing landscape of the developments of class action jurisprudence where the risks of not achieving certification have at least diminished, making it unnecessary to plead everything in hope that something will be certifiable. Certainly, class counsel should not over-plead to provoke a contested certification motion in order to finance the class action.
[14] I hasten to add that in the immediate case the problem of not making a concession was modest and there would have been a contested certification motion in any event. That said, there was enough here to warrant that a very small portion of the costs be payable to the plaintiff in the cause.