Whitty v. Wells
CITATION: Whitty v. Wells 2017 ONSC 517
Court File No. CV-11-442307
DATE: 20170120
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
PATRICK WHITTY, RPR ENVIRONMENTAL INC., 1049585 ONTARIO INC., and 876947 ONTARIO LIMITED
Plaintiffs
- and -
EDWARD N. WELLS, EDWARD G. WELLS, BRADLEY MAY, RENZO BENOCCI, MARK VANDERLAAN, MANON BOMBARDIER GORDON OWEN, and ATTORNEY GENERAL OF CANADA
Defendants
BEFORE: F.L. Myers J.
COUNSEL:
Vilko Zbogar, for the plaintiffs
Jacqueline Dais-Visca and Abigail Browne, for the defendants (other than Sandra Antoniani)
John Evans for the defendant Sandra Antoniani
READ: January 20, 2017
costs endorsement
[1] The parties each seek costs in relation to the endorsement dated December 13, 2016, reported at 2016 ONSC 7716. Last month, the court resolved a number of motions and cross-motions among the parties concerning production of documents in these case-managed matters. This endorsement applies to all of the proceedings between and among the parties.
[2] The plaintiffs challenged, and required the court to make determinations on, some 300 claims of privilege made by the Crown. They also sought extensive further production of documents by the Crown. In addition, the plaintiffs moved to reverse two costs orders and a security for costs order that had been made against them on the basis that those orders had been obtained by the Crown making misrepresentations to the court.
[3] The Crown, for its part, sought an order clawing back from the plaintiffs a number of privileged documents that were erroneously disclosed as responses to over 60 freedom of information requests that had been made by or on behalf of the plaintiffs in parallel with their court actions.
[4] Ms. Antoniani, a Crown agent, moved to ensure that if the Crown had waived privilege on some documents related to her case, that the Crown could not then continue to assert privilege on other relevant documents in its possession related to her issues.
[5] The plaintiffs were unsuccessful on all of the motions. They claim that they had some success in obtaining further production from the Crown prior to the motions being heard. It is true that the Crown did provide more legible copies of some documents and it offered to allow the plaintiffs to review documents on its computers where there were compatibility issues with Mr. Zbogar’s computers. The Crown also matched some email attachments to their parent emails. None of that requires a motion. The Crown also produced a number of further documents prior to the hearing, however, as I found previously, I did not see how any of them was relevant.
[6] Of the 300 or so documents that I reviewed for privilege, I ordered over 30 disclosed. None of them was particularly relevant if at all.
[7] The Crown was wholly successful on its motion to clawback from the plaintiff privileged documents that had been erroneously disclosed. Mr. Zbogar notes that the Crown was not successful in its attempt to remove him from the record. But there was no difference in preparation or argument of the motion based on the different elements of the relief claimed. The issue was whether privilege existed and, if so, had it been waived. Discussion of Mr. Zbogar’s status took only a few sentences by either side. Moreover, in the endorsement, I noted that had Mr. Zbogar dealt with the Crown’s disclosures proactively by taking steps to deal with a potential erroneous disclosure of privileged material in the manner required by the case law, much cost, legal time, and upset could have been avoided.
[8] The plaintiffs’ motion to set aside the costs and security for costs award was unsuccessful. On that motion, the plaintiffs’ factum plainly alleges that the Crown committed a fraud on the court. After setting out the provisions of Rule 59.06 (2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and the test under that rule, the plaintiffs submitted as a ground of relief at para. 99 of their factum:
The court may reconsider and set aside its own order based on fraud where a party had made inaccurate or incomplete statements either knowingly or recklessly without regard to whether they were true or false.
[9] In para. 103 of their factum the plaintiffs alleged that the Crown misrepresented facts “carelessly or recklessly.” The same phrase was repeated at para. 106. Recklessness, of course, is a knowing mental state that is expressly referred to as part of the definition of fraud set out in para. 99 of the plaintiffs’ factum. Moreover, during the oral argument Mr. Zbogar overtly alleged that the Crown and its counsel made knowingly false statements to Justice Matlow and to me in evidence and in legal submissions. I took the allegations to be not just general but specifically made against Ms. Dais-Visca and Ms. Browne in addition to their client.
[10] In the plaintiffs’ written costs submissions, they argue: “However, there is absolutely nothing in the Plaintiffs’ material that claims or insinuates fraud or deliberate misconduct.” The two prior paragraphs demonstrate that this submission is not factually correct.
[11] Finally, Ms. Antoniani had a substantial stake in the Crown’s motion to clawback documents. The need for her motion turned on the outcome. The plaintiffs also challenged Ms. Antoniani’s claims for privilege in her Affidavit of Documents. She succeeded on that motion.
[12] The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c)). Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v Public Accountants Council (Ontario), 2004 14579 (ON CA), 71 O.R. (3d) 291, at paras 26, 37.
[13] Rule 57.01 of the Rules of Civil Procedure identifies the factors a court may consider when exercising its discretion to award costs:
(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
[14] Overall the plaintiffs’ motions delayed these actions for no reasonable purpose. Penny J. and I have both commented previously that the plaintiffs’ procedural tactics seem to have repeatedly deflected these cases from progress toward efficient, proportional resolution. As noted in my prior endorsement, apart from the few privileged documents clawed back, I saw few relevant and even fewer important documents in the parties’ motion records and the hundreds of documents that I reviewed. There was no real evidentiary basis to require the court to conduct that review in retrospect. The narrow arguments made against the applicability of privilege were contrary to decades of law from the Supreme Court of Canada, the Court of Appeal, and this court. The allegations of misconduct against the Crown and its counsel were made with no evidence to support the recklessness, knowing falsity, and fraud alleged.
[15] I see no basis to depart from the normative approach that costs should follow the events. Mr. Evans is using discounted rates for LawPro. His partial indemnity costs of $25,635.80 are very reasonable. The plaintiffs argue that they should not be liable for costs of Ms. Antoniani’s participation in the Crown’s motion or on her own motion that was ultimately rendered unnecessary by the clawback order. In my view, it was the plaintiffs’ motion to challenge Ms. Antoniani’s claims for privilege and its inapt handling of mistakenly released privileged documents that lay at the heart of the costs incurred by Ms. Antoniani. The plaintiffs are therefore jointly and severally liable to pay Ms. Antoniani her costs on a partial indemnity basis forthwith in the amount of $25,635.80 inclusive of disbursements and taxes.
[16] The Crown concedes that its mishandling of its documents also lay behind the clawback motion. It has limited its costs claimed back to August 2016 when it first made demand for the return of the privileged documents that it had mistakenly released previously. But there could not have been many costs prior to that time that would have been properly asserted in these motions in any event. The Crown seeks approximately $36,000 for costs of the clawback motion on a partial indemnity basis. In my view, a more reasonable sum for that motion is $25,000 factoring all circumstances into the equation including deducting something in relation to time spent responding to Ms. Anotiani’s motion against the Crown.
[17] The Crown seeks substantial indemnity costs of approximately $55,000 in respect of the plaintiffs’ motions for further production and to set aside the prior orders for fraud. I agree that this is one of the very unusual cases where conduct of a party is sufficiently egregious and reprehensible so as to entitle the responding party to indemnity for substantially all of the costs that it was forced to incur to respond. The unproven allegations of fraud are an independent basis for costs being ordered on an enhanced basis. A party that alleges serious misconduct by the opposite party ought reasonably expect to incur an enhanced costs award if the charges are not made out. As to the motion for production of a further 51 categories of documents, in my view the motion served no purpose except to lengthen proceedings and harass the Crown. While the costs claimed by counsel are high, one shudders at the thought of the actual costs to the government of having multiple people in multiple departments of multiple ministries all attempting to communicate and coordinate the search for and production of significant swaths of documents. In my view, the plaintiffs had no reasonable expectation of obtaining anything of value from this effort. Moreover, as discussed in the prior endorsement, the Crown’s responses to the plaintiffs’ complaints were reasonable and ought to have satisfied the plaintiffs. Over one year has been lost and significant expense has been incurred without a reasonable basis. In my view, Rules 57.01 (d), (e), and (f)(i) all support an award of costs on a substantial indemnity basis in favour of the Crown. The rates advanced by the Crown for its counsel are quite reasonable. The hours advanced are high although there was much complexity in dealing with so many categories of documents even as grouped by both sides for the purposes of the motion. It is fair and reasonable for the plaintiffs to pay the Crown costs on a substantial indemnity basis in respect of the plaintiffs’ motions in the amount of $45,000.
[18] In all, the plaintiff are jointly and severally liable to pay forthwith to the Crown aggregate costs of $70,000 inclusive of disbursements.
F.L. Myers J.
Date: January 20, 2017