Lou v. London Life Insurance Company, 2017 ONSC 4929

REASONS FOR DECISION - COSTS

1The Plaintiff Zheng Lou commenced an action against London Life Insurance Company and Baomin Yi who sold her an investment product from London Life. Ms. Lou brought a two-branched motion: (1) for court approval of the settlement that she had reached with Mr. Yi; and (2) to convert her action against London Life into a class action under the Class Proceedings Act, 1992, S.O. 1992, c. 6. The first branch of the motion was not opposed, but London Life submitted that any order approving the settlement should protect its discovery rights in the litigation and its rights to claim over against Mr. Yi. London Life opposed the second branch of Ms. Lou’s motion. I dismissed Ms. Lou’s motion in its entirety. See Lou v. London Life Insurance Company, 2017 ONSC 4188.

2London Life seeks costs of $20,950.77, all inclusive. The costs are comprised of $19,947.33 for counsel fee with the balance of $1,003.44 for disbursements.

3Ms. Lou submits that the appropriate award should be $7,500 payable to London Life in the cause or alternatively in any event of the cause.

4The substance of Ms. Lou’s argument is found in paragraphs 6 and 12 of her costs submissions, where she states:

6. At the hearing of the motion to convert the individual action to a class action, counsel for London Life acknowledged that it had settled similar actions. All of these actions were subject to a confidentiality clause. That said, given that London Life has decided to reveal that there have been settlements, and as this Honourable Court is already aware that Yi has settled a portion of this individual action for $32,500, it can reasonably be stated that this is not a frivolous action. While Ms. Lou was aware of the consequences of losing a motion, the interests of justice will best be met by this Court allowing her individual action to proceed without a considerable costs award at this stage of her individual proceeding.

7. Ultimately, prior to this case, there was one reported case in Ontario's history on converting an individual action to a class action. This motion was not frivolous and the recent reported decision made by this Court is of value to the legal community. While the motion was not a test case per se, it is submitted that it was a reasonable motion to bring (and perhaps there is merit to the suggestion that it was somewhat analogous to a test case). It was a "close call". There were individuals who appeared to have similar circumstances and many of whom had language difficulties. As there were so many individual issues and a vague class definition along with limitation issues, this Court chose not to grant the amendment. However, it has never been suggested that this individual action is frivolous. There is no disputing that the result of the motion is an excellent result for London Life. Regardless, London Life should not be able to avoid Ms. Lou's individual action indirectly through a substantial costs award when her claim clearly has substantial merit.

5Apart from the circumstance that I regard the quantum of fees for an interlocutory motion as beyond the reasonable expectations of the unsuccessful party, I am not convinced that the case at bar is an appropriate case for ordering costs in the cause or for reducing the costs as requested by Ms. Lou.

6Ms. Lou was the unsuccessful party for what was a genuinely procedural interlocutory motion, the Class Proceedings Act, 1992 being an entirely procedural statute. Recognizing or assuming that she might eventually succeed in her individual action against London Life does not, in the circumstances of the immediate case, provide a reason for either postponing or cancelling London Life’s entitlement to costs as the successful party on the interlocutory motion.

7I would, however, reduce the quantum of costs to $15,000 all inclusive.

Perell, J.