CITATION: Kalra v. Mercedes Benz, 2017 ONSC 4692

COURT FILE NO.: CV-16-550271-CP

DATE: 20170802

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: YOGESH KALRA, Plaintiff / Moving Party

AND:

MERCEDES BENZ CANADA INC., DAIMLER AG, MERCEDES BENZ USA LLC and MERCEDES BENZ FINANCIAL SERVICES CANADA CORPORATION, Defendants / Responding Parties

Proceeding under the Class Proceedings Act, 1992

BEFORE: Justice Edward P. Belobaba

COUNSEL: Peter Griffin, Kirk Baert, James Sayce and Andrew Skodyn for the Plaintiff

Steven Rosenhek, Robin Roddey, Caroline Youdan and Allison Worone for the Defendants

HEARD: June 13, 2017

Costs on Certification motion

[1] In a decision released on June 29, 2017, I certified this proposed class action about the emission levels in the defendants’ line of BlueTEC diesel vehicles.[^1] I found that eleven of the seventeen common issues could be certified as proposed, three required revision and three could not be certified.

[2] I invited costs submissions but I cautioned the parties that that “this may well be a case for no costs given the extent to which success (as measured by overall results and related work effort) was divided.”[^2]

[3] I have now reviewed the parties’ costs submissions. The plaintiff asks for $569,882, including disbursements and taxes, on a partial indemnity basis. The defendants say overall success was indeed divided (as I initially suggested) and that no costs should be awarded.

[4] My initial impression about divided success was prompted in large part by the fact that a significant portion of the dispute between the parties in terms of both factum page count and oral argument time was devoted to the plaintiff’s misguided use of aggregate damages to establish liability and his failure to provide a plausible methodology that could measure actual loss on a class-wide basis for those common issues that included a loss component. I made clear in my decision that aggregate damages could not be used for these purposes and that four of the proposed common issues could not be certified as proposed or would have to be revised because of the aggregate damages/class-wide loss issues.[^3] Two others were rejected or required revision for other reasons.[^4]

[5] Having reviewed the parties’ submissions and my reasons for decision, I am now satisfied that my initial impression was wrong and that success was not equally divided - after all, the plaintiff satisfied all five hurdles in s. 5(1) of the Class Proceedings Act[^5] and 11 of the 17 common issues were certified as proposed. Nonetheless, it still remains true that the plaintiff devoted significant time and effort to the misdirected aggregate damages/class-wide loss submissions. This misdirection must be recognized in the costs award.

[6] Therefore, I will proceed as follows. I will first ensure that the plaintiff’s costs outline has complied with the hourly rate schedule as set out in the Grid. I will then adjust the costs award to reflect the time and expenses that were wasted on the aggregate damages/class-wide loss matter because these costs should not be paid by the defendants.

[7] I recognize that the defendants have also advanced a “plaintiff misconduct” submission (about the plaintiff’s factum length and his inappropriate reply) but in all the circumstances I am satisfied that the two steps just noted will achieve a fair and reasonable costs award.

Step one: ensure compliance with the Grid

[8] As I explained in Mask v. Silvercorp Metals[^6] there is good reason to apply the hourly rates set out in the Grid without adjusting for inflation. I will therefore continue to use the suggested rates: $225 for a ten year call, $300 for a twenty year call and $350 for those with more than twenty years at the bar, with appropriate tweaks for the in-between years. For example, Mr. Sayce, a seven-year call is pegged at $195 and Mr. Skodyn, an eighteen-year call, at $285.

[9] Applying the Grid rates, the total fees claim is $201,461 excluding taxes. The total claim for disbursements, excluding the legal research charges,[^7] is $192,026. The overall costs claim is therefore $393,487, taxes excluded.

Step two – a fair and reasonable reduction

[10] I agree with the plaintiff that costs awards should generally not involve a detailed itemization of which side prevailed on which issue. In deciding costs, the certification judge should not “break the certification motion down with a play by play analysis.”[^8] But it is also understood that the costs award should be fair and reasonable. Here it is fair and reasonable to acknowledge that a significant portion of the certification motion (i.e. the aggregate damages/class-wide loss issues) involved a misdirected waste of time and effort for which the defendants should not be required to pay.

[11] In his costs outline, the plaintiff suggests that about 18 per cent of the fees amount can be attributed to the legal research, expert reports and cross-examinations relating to the aggregate damages issue. In my view, this understates the actual proportion. In any event, the 18 per cent suggestion would reduce the $201,461 by $36,263 to $165,198. The plaintiff has also advised by email that of the $141,658 spent on expert reports, about $102,855 was for expert reports that dealt with the aggregate damages submission. This brings the total disbursements claim down to $92,112.

[12] It is important to point out, however, that it was not only the misguided aggregate damages submission that was a waste of time and effort, it was also the suggestion that aggregate damages could provide the methodology that could measure class-wide loss and support the proposed common issues that included a loss component. This was also misguided and resulted in the significant revision of three of the common issues.

[13] Based on the factum page count and the parties’ submissions at the hearing, I estimate that the corrected fees claim ($201,461) should be reduced by a further 20 per cent to reflect the overall significance of the aggregate damages/class-wide loss issues. The fees claim is therefore reduced from $165,198 by a further $40,292 to $124,906.

[14] The total adjusted costs claim for fees and disbursements, excluding taxes, is therefore $217,018.

[15] Standing back and considering again the factors set out in Rule 57.01(1), including the requirement that the costs award must be fair and reasonable to the defendants, I fix the costs at $225,000 all-inclusive, payable by the defendants to the plaintiff within 30 days.

Justice Edward P. Belobaba

Date: August 2, 2017

[^1]: Kalra v. Mercedes Benz, 2017 ONSC 3795. [^2]: Ibid., at para. 86. [^3]: PCIs (viii), (ix), (xvi) and (xvii). [^4]: PCIs (xiv) and (x). [^5]: Class Proceedings Act, 1992, S.O.1992, c. 6. [^6]: Mask v. Silvercorp Metals Inc., 2015 ONSC 7780 at para. 7 [^7]: I do not allow computer research charges anymore than I would allow a law firm’s subscription charges to hard-copy law reports. [^8]: Pearson v Inco Ltd., 2006 CanLII 7666 (ON CA), [2006] O.J. No. 991 (C.A.) at para. 5.