Citation and Parties

CITATION: Singh v. Progressive Conservative Party of Ontario et al, 2017 ONSC 5165

COURT FILE NO.: 17-00061903-00OT

DATE: 2017-08-30

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: VIKRAM SINGH and VIKRAM SINGH ONTARIO PC NOMINATION CAMPAIGN, Applicants

AND:

PROGRESSIVE CONSERVATIVE PARTY OF ONTARIO, PATRICK BROWN, RICK DYKSTRA, BOB STANLEY and LOGAN BUGEJA, Respondents

BEFORE: Cavanagh, J.

COUNSEL: Richard Macklin, Neil G. Wilson and Spencer Wong, for the Applicants

Matthew P. Gottlieb, Paul Fruitman and Brad Vermeersch, for the Respondents

HEARD: In Writing

COSTS ENDORSEMENT

[1] The applicant Vikram Singh (“Singh”) was an unsuccessful candidate at a nomination meeting to become the Progressive Conservative Party of Ontario (“PC Party”) nominee for Member of Provincial Parliament for the riding of Hamilton West. Singh commenced a judicial review application challenging the decision of the PC Party not to nominate him and alleged, among other things, that the nomination meeting was tainted by ballot tampering. Singh’s publicly filed application record included a partial transcript of a meeting attended by Singh and several of his supporters with the chairman of the 2018 Ontario general election campaign of the leader of the PC Party. Singh secretly recorded a considerable portion of this meeting.

[2] I heard two related motions in respect of whether the communications at the meeting are subject to settlement privilege. One motion was brought by the respondent Bob Stanley (“Stanley”), in his capacity as Executive Director of the PC Party and on its behalf, and the other motion was brought by Singh. I decided that the communications at the meeting are properly subject to settlement privilege and, as such, they are protected from disclosure to others and inadmissible in evidence on Singh’s judicial review application.

[3] Stanley seeks costs of the motions, as well as the costs of a prior motion brought without notice to preserve the status quo, on a substantial indemnity scale in the amount of $245,008.57. Alternatively, Stanley seeks an award of costs on a partial indemnity scale in the amount of $166,219.88.

[4] Singh submits that there should be no costs or reduced costs awarded against him on these motions because he is a public interest litigant. Alternatively, Singh submits that costs should be awarded on a partial indemnity scale in an amount that reflects his reasonable expectations for these motions, and should be payable in any event of the cause.

Is Singh a public interest litigant who should receive a “public interest” costs reduction in the form of either (i) no costs (other than reimbursement for disbursements), or (ii) an all-inclusive order of $30,000 reflecting a public interest reduced costs award?

[5] Singh submits, citing Incredible Electronics Inc. v. Canada (Attorney General), 2006 CanLII 17939 (ON SC), [2006] O.J. No. 2155 (S.C.J.), at para. 91, that he is what the law describes as a “partisan in a matter of public importance”. He submits that his conduct in relation to the meeting in question reflected a genuine public interest motivated by a higher purpose. Singh submits that when a litigants is held to be a “public interest” litigant, and costs are awarded against him or her, he or she receives a “public interest” costs reduction in the form of a greatly reduced costs award.

[6] Stanley submits that the surreptitious recording of a settlement meeting is not conduct in the public interest, nor is the filing of a privilege communication in a court record. Stanley submits that while the determination of costs of the underlying application might include public interest considerations, costs of these motions do not.

[7] In relation to the issues on the motions that were before me, I do not agree that Singh qualifies as a “partisan in a matter of public importance”. On these motions, I was required to decide whether the communications at the meeting in question are subject to settlement privilege. Although the issues on the underlying application may involve matters of public importance that would qualify for a costs reduction (I make no determination on this question), the issues on the motions that were before me did not involve matters of public importance such that Singh qualifies for a costs reduction for this reason.

Is Stanley entitled to costs on a substantial indemnity scale or on a partial indemnity scale?

[8] Stanley submits that Singh engaged in the following conduct which gave rise to Stanley’s motion that was reprehensible, scandalous and outrageous, such as to warrant an award of costs on a substantial indemnity scale:

a. Singh surreptitiously recorded the meeting.

b. Singh included the transcript in his application record knowing that it was privileged and confidential and that it was based on an intentionally edited and incomplete recording of the meeting.

c. Despite knowing that the transcript was privileged and confidential, Singh failed to provide any of the respondents with advance notice that he intended to publicly file the transcript before doing so, and thereby made Stanley’s motion unnecessarily urgent.

d. Singh intentionally distributed the transcript to several media outlets less than 24 hours after filing it in the public record and he would not say whether he knew that Stanley was seeking to prohibit dissemination of the transcript when he sent it to media outlets.

[9] Singh submits that he acted in good faith and that there are no aggravating features that would justify an award of costs on a substantial indemnity scale. In particular, Singh submits:

a. He did not act improperly by not conceding at the outset that the meeting was conducted on a without prejudice basis.

b. He did not act improperly by publicly filing the transcript as part of his application record and he waited until the following day to notify representatives of the media.

c. There was no impropriety in relation to disclosure of the audio recording, the recording played no part in the decision, and no material portions of the discussion in the recording were excluded.

[10] An award of costs on a substantial indemnity scale is reserved for exceptional cases where a party has engaged in reprehensible, scandalous or outrageous conduct.

[11] Singh did not act unlawfully in secretly recording the meeting, and I do not regard his conduct in doing so as justifying an award of costs on a substantial indemnity scale.

[12] Although the recording that Singh provided to Stanley was not complete, and submissions were made by Stanley and by Singh at the hearing of the motions in relation to the evidence about the audio recording, I did not find it necessary to make any findings with respect to the disclosure of the audio recording as part of the reasons for my decision on the motions. I do not conclude on the evidentiary record in respect of the disclosure of the audio recording that Singh engaged in reprehensible conduct in this respect.

[13] Singh’s failure to provide advance notice to the respondents that he intended to include the transcript in his application materials to be publicly filed and to provide a copy of his application materials to the media do not rise to the level of conduct that is reprehensible so as to warrant an award of costs on a substantial indemnity scale. I take this conduct into account when I consider the proper amount of costs to be paid on a partial indemnity scale.

[14] I conclude that Stanley is entitled to an award of costs on a partial indemnity scale.

What is the proper amount to be paid for costs?

[15] Stanley submits that that amount of costs claimed is fair and reasonable. Stanley has claimed costs for a senior partner, a second partner, and two junior associates (who worked on the file consecutively and not concurrently). Stanley has removed the time expended by several other timekeepers, including a partner and several associates, whose services were needed in light of the urgency required for Stanley’s motion.

[16] Stanley submits:

a. Singh had to be aware that including the transcript in the application record would elicit a powerful response from the respondents once the record was publicly filed. Stanley submits that Singh is a litigation lawyer who would have known that urgent steps would be taken to remedy his disclosure of the transcript and that these kinds of urgent steps are expensive. Stanley submits that, applying the factor in rule 57.01(1)(0.b), these matters affect the amount of costs that Singh could reasonably expect to pay if he were to be unsuccessful on the motions.

b. Stanley was completely successful on the motions, including on the interim ex parte motion.

c. Singh increased the costs of the motions by unreasonably refusing to acknowledge that the meeting was privileged and confidential.

d. Singh increased the costs of the motions by failing to disclose the full audio recording.

e. Singh increased the costs by making the motion unnecessarily urgent.

f. The motions dealt with complex legal issues engaging issues of settlement privilege, available exceptions to settlement privilege, the test for breach of confidence and the test for setting aside an order obtained without notice for material non-disclosure.

[17] In my reasons for decision on the motions, I found that the evidence was overwhelming that the communications at the meeting were to be kept confidential and not disclosed. I also drew an inference (from the text messages that Singh participated in after the meeting) that Singh did not disagree that it was expressed at the beginning of the meeting that it was without prejudice and confidential. Singh would have known that disclosure of the transcript in his application materials would provoke a forceful and urgent response from the respondents to seek an order that would protect the confidentiality of the communications at the meeting. Singh did not need to file the transcript in the public court file on the same day as, or on the day following, the day the application record was served. Singh chose to provide a copy of the transcript to the media on the day after the application record was served. When he was cross-examined, Singh, to my surprise, could not say whether or not he sent the application record to the media representatives before or after he knew that the respondents were preparing affidavits for a motion to try to stop Singh from using the transcript.

[18] This context is important because it shows that Singh decided to take steps to make the transcript public on the day of or the day following service of his application record. I do not agree with Singh’s submission that he acted reasonably and responsibly by waiting for one day after service before providing a copy of his application record to media representatives. In my view, Singh’s conduct in trying to make the transcript public made the urgent motion for an interim order necessary, and contributed significantly to the costs that Stanley incurred in responding urgently upon receipt of the application record. The motion for an interim order would not have been necessary had Singh waited to hear from the respondents before publicly disclosing the transcript, and then consented to an interim order to preserve the status quo (or provided a suitable undertaking). The work that was done to prepare materials for this motion was necessary and used for the contested motions.

[19] Rule 57.03(3) provides that on a motion made without notice, there shall be no costs to any party, unless the court orders otherwise. I have decided that, given the context that I have outlined, Singh should be responsible for payment of the costs of the motion made without notice on a partial indemnity scale, and I so order.

[20] Stanley seeks costs based upon partial indemnity rates for senior counsel of $550, second counsel of $370, and two associates of $260 and $205, respectively. Singh disputes the hourly rates that Stanley used to calculate the costs that he seeks. Singh submits that these rates should be adjusted to reflect the rates in the Information for the Profession dated July 2, 2005, adjusted for inflation. Singh submits that with adjustments to the rates, a 10% reduction for the motion heard without notice, and a limit to the top two timekeepers, the partial indemnity fees would be approximately $90,000 (inclusive of HST).

[21] Singh submits that the fees should be further reduced so as to arrive at an overall costs award (if there is no public importance discount) of $80,000, inclusive of disbursements and HST.

[22] With respect to the hourly rates, Stanley submits that senior judges and the Court of Appeal have held that the Rates in the Information for the Profession should not be used. In Stetson Oil & Gas Ltd. v. Stifel Nicolaus Canada Inc., 2013 ONSC 5213 Newbould J., at para. 22, wrote that these rates “are completely outdated and unrealistic for an action fought by two major downtown Toronto law firms”. In Inter-Leasing, Inc. v. Ontario (Minister of Revenue), 2014 ONCA 683, the Court of Appeal, at para. 5, wrote that these rates “are now out of date, and that amounts calculated at 55%-60% of a reasonable actual rate might more appropriately reflect partial indemnity, particularly in the context of two sophisticated litigants well aware of the stakes”.

[23] The motions involved issues that were important to the parties and that required Stanley’s counsel to provide sophisticated legal services urgently and intensively over a short period of time. This case was not, however, a dispute between commercial litigants. While I do not disagree with the comments made by Newbould J. in Stetson insofar as they apply to sophisticated litigation between commercial parties who reasonably expect that the losing side will pay costs for fees calculated using 60% of the rates charged by major downtown Toronto firms, such rates should not be used to make costs awards in all civil litigation in Toronto or elsewhere in Ontario.

[24] The fixing of costs is not a mechanical exercise and, in addition to the factors in rule 57.01 of the Rules of Civil Procedure, the court must consider the amount that would be fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), 2004 CarswellOnt 2521 (C.A.), at para. 26.

[25] I regard the partial indemnity rates claimed by Stanley to be somewhat high for this case. Having regard to the factors in rule 57.01 and the principles in Boucher, I allow rates of $450, $325, $225 and $175 for senior counsel, second counsel, the more senior associate and the less senior associate, respectively.

[26] When these rates are used, the fees on a partial indemnity scale are $109,682.50. Stanley’s disbursements are $12,373.77. I fix costs to be paid by the applicants to Stanley in the amount of $136,315 inclusive of disbursements and HST. I disagree with Singh’s submission that costs should be payable in any event of the cause. The costs shall be paid within 30 days.

Cavanagh, J.

Date: August 30, 2017