Superior Court of Justice – Ontario

CITATION: Seelster Farms Inc. v. ONTARIO, 2017 ONSC 5895

COURT FILE NO.: 272/14 (Guelph)

DATE: 2017 10 04

RE: SEELSTER FARMS INC. WINBAK FARM OF CANADA, INC, STONEBRIDGE FARM, 774440 ONTARIO INC., NORTHFIELDS FARM INC., JOHN MCKNIGHT, TARA HILLS STUD LTD., TWINBROOK LTD., EMERALD RIDGE FARM, CENTURY SPRING FARMS, HARRY RUTHERFORD, D10041NE INGHAM, BURGESS FARMS INC., ROBERT BURGESS, 453997 ONTARIO LTD., TERRY DEVOS, SONIA DEVOS, GLENN BECHTEL, GARTH BECHTEL, 496268 NEW YORK INC., HAMSTAN FARM INC., ESTATE OF JAMES CARR, deceased, by its executor Darlene Carr, GUY POLILLO, DAVID GOODROW, TIMPANO GAMING INC., CRAIG TURNER, GLENGATE HOLDINGS INC., KENDAL HILLS STUD FARM LTD., ANY KLEMENCIC, TIM KLEMENCIC, STAN KLEMENCIC, JEFF RUCH, BRETT ANDERSON, DR. BRETT C. ANDERSON PROFESSIONAL VETERINARY CORPORATION, KILLEAN ACRES INC., DECISION THEORY INC., 296268 ONTARIO LTD., DOUGLAS MURRAY MCCONNELL, QUINTET FARMS INC., KARIN BURGESS, BLAIR BURGESS, ST. LAD’S LTD., WINDSUN FARM INC., SKYHAVEN FARMS, HIGH STAKES INC., 1806112 ONTARIO INC., GLASSFORD EQUI-CARE, JOHN GLASSFORD, GLORIA ROBINSON and KEITH ROBINSON

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO and ONTARIO LOTTERY AND GAMING CORPORATION

BEFORE: EMERY J.

COUNSEL: Jonathan C. Lisus and Ian C. Matthews, for the Plaintiffs Robert Ratcliffe, Sandra Nishikawa and Chantelle Blom, for the Defendant, Her Majesty The Queen H. Michael Rosenberg and Dharshini Sinnadurai, for the Defendant, Ontario Lottery and Gaming Corporation

HEARD: in writing

COSTS ENDORSEMENT

(On the Motions to quash summonses)

[1] The plaintiffs seek costs on the parallel motions to quash summonses brought by the defendants Ontario and OLG that were argued in Guelph on June 19, 2017. They successfully opposed the motions to quash all but two summonses for reasons released on August 4, 2017, and amended on August 9, 2017. They seek those costs on a partial indemnity scale for time incurred before the service of an offer to settle served on March 31, 2017, and $97,100.90 on a substantial indemnity basis for time incurred after that date. The plaintiffs also seek their disbursements and related HST of $16,937.18. The total for costs claimed by the plaintiffs for these motions adds up to $132,992.26.

[2] It is important to highlight the fact that the motions to quash were actually the second of three sets of motions filed by the defendants this year. It matters because time and effort put into one motion may relate to another. On April 27, 2017, I granted Ontario’s motion to stay the examinations the plaintiffs intended to conduct under Rule 39.03 until the motions to quash could be heard on June 19, 2017. That motion was granted for reasons released at 2017 ONSC 2878 on May 26, 2017.

[3] The third set of motions have been brought by Ontario and OLG for summary judgment to dismiss the claims made by the plaintiffs in this action that will turn on questions of liability. The motions for summary judgment were scheduled to be heard in Guelph on November 14, 15 and 16, 2017. Those dates have now been vacated, on consent, to be rescheduled for a later time.

[4] The plaintiffs seek the costs of the motion to stay as well as for the motions to quash because I reserved the costs of the stay motion to the motions heard on June 19, 2017. The plaintiffs submit that an order reserving costs in this matter effectively means that those costs were intended to be in the cause: Quiznos Canada Restaurant Corp. v. 1450987 Ontario Corp., [2009] O.J. No. 2563 (SCJ).

[5] Ontario submits that the costs of the motions to quash should be reserved to the disposition of the motions for summary judgment. Ontario argues that, first, the outcome of those motions will determine whether the evidence of any witness who is ultimately examined under Rule 39.03 was relevant to the issues on those motions. Second, Ontario points out that it was successful on the motion to stay in April 2017 and the plaintiffs were not. Third, Ontario argues that it was successful on the standing issue that was argued as a preliminary matter on the motion to quash. All of these considerations must be taken into account when deciding costs on a global basis.

[6] In the alternative, Ontario submits that the costs claimed by the plaintiffs are excessive. Ontario argues that the time claimed by the plaintiffs on the motions to quash is unrelated to those motions. Ontario argues that the plaintiffs seek costs for time spent preparing materials in response to the motion to stay (on which the plaintiffs were unsuccessful), and the development and preparation of responding materials to the motions for summary judgment (that have yet to be heard) as prime examples of those excessive claims.

[7] OLG submits that success was divided with respect to the internal issue of standing and the ultimate result on the motions to quash, and that the court should not award costs for those motions to any party. In the alternative, OLG submits that costs on the motions to quash should be reserved to the hearing of the motions for summary judgment.

[8] The plaintiffs filed a brief submission in reply, with leave. In that reply, the plaintiffs argue against the court making a “distributive” order for the costs on the motions to quash. They argue that those orders are rarely made and that the authorities prefer that costs be made on the overall result achieved by a party.

[9] The plaintiffs also argue in reply that neither defendant has filed a costs outline showing what either of those parties could reasonably expect to pay in costs if they were unsuccessful on the motions to date.

[10] I have the discretion to award costs in a proceeding or in a step in a proceeding under section 131(1) of the Courts of Justice Act. Although that discretion is exercised to determine entitlement, on what basis and for what amount, that discretion is subject to the provisions of any act or rules of court, including the Rules of Civil Procedure.

[11] The Court of Appeal has also set out general principles that the court is guided by when exercising this discretion.

[12] First and foremost among those general principles is the requirement a costs award should reflect what the court views as a fair and reasonable amount for the party paying costs to pay: Boucher v. Public Accountants Council of Ontario, 2004 CanLII 14579 (Ont. C.A.).

[13] The amount of a costs award should reflect more what the court considers to be a fair and reasonable amount that the paying party should pay rather than any exact measure of the actual costs incurred by the successful litigant: Zesta Engineering Ltd. v. Cloutier, 2002 CanLII 25577 (Ont. C.A.). If a judge is able to affect procedural and substantive justice by fixing costs, the judge should do so: Boucher v. Public Accountants Council of Ontario and Murano v. Bank of Montreal, 1998 CanLII 5633 (Ont. C.A.).

[14] I consider these guiding principles to be binding on my exercise of discretion. If the court makes an error in principle when awarding costs, or if the costs award is plainly wrong, an appellate court may set it aside: Hamilton v. Open Window Bakery Ltd., 2004 SCC 75, [2004] S.C.J. No. 72 (SCC). Otherwise, the decision of a motions judge when awarding costs is entitled to a high degree of deference. In Canadian Pacific Ltd. v. Matsqui Indian Band, 1995 CanLII 145 (SCC), Chief Justice Lamer recognized that it is within the motion judge’s discretion to award costs, and that decision should be respected unless the judge considers irrelevant factors, fails to consider relevant factors, or reaches an unreasonable conclusion.

[15] I have reviewed the costs outline based on a combined partial and substantial indemnity scale filed by the plaintiffs, as well as an outline for costs on a partial indemnity scale only. In each costs outline, only a general description is given for the fee items of work performed before and after March 31, 2017. Against those general descriptors is a summary of the total hours spent by Mr. Lisus, Mr. Matthews, Ms. Holmberg, Ms. Millett, a law clerk and other litigation support at the firm representing the plaintiffs. There is nothing in the general description of services that sets apart the time allocated to, or services provided by, the various lawyers and legal professionals at the firm representing the plaintiffs with respect to the motion to stay from the time and services spent on the motions to quash.

[16] It may be that the time and resources incurred to respond to the motion to stay inured to the benefit of the plaintiffs’ response to the motions to quash. It may be that the time and resources incurred to prepare the responding materials on the motions for summary judgment was equally beneficial on the motion to quash. Unfortunately, the plaintiffs’ submissions and the costs outline seeking costs on the motions to quash do not make those distinctions.

[17] I also find that the submissions on costs of Ontario and OLG provide little assistance. Those submissions do not delineate the time and resources spent by either of those parties on any one motion or the other. As I have mentioned before, neither has filed a costs outline of any description.

[18] The amount the plaintiffs are seeking for costs on the motions to quash is not insignificant. In the absence of the required facts and further submissions supported by those facts, I am unable to make determinations under the relevant factors set out in Rule 57.01, and whether costs should be awarded on a motion by motion basis under Rule 57.03 or if the circumstances call for a “distributive” costs order. All factors and the general principles that govern the awarding of costs must be considered for the court to decide what a fair and reasonable amount would be for one or more parties to pay to another. It is for these basic reasons that I am unable to make any decision regarding the plaintiffs’ claim for costs on the written submissions filed by the parties.

[19] The costs of the two motions to quash are therefore reserved to the court when the motions for summary judgment are heard. This includes the costs of Ontario’s motion to stay.

Emery J.

Released: October 4, 2017

CITATION: Seelster Farms Inc. v. ONTARIO, 2017 ONSC 5895

COURT FILE NO.: 272/14 (Guelph)

DATE: 2017 10 04

SUPERIOR COURT OF JUSTICE - ONTARIO

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO and ONTARIO LOTTERY AND GAMING CORPORATION

COSTS ENDORSEMENT (On the Motions to Quash Summonses)

Emery J.

DATE: October 4, 2017

Seelster Farms Inc. v. Ontario, 2017 ONSC 5895

Case Summary

Superior Court of Justice – Ontario

COSTS ENDORSEMENT

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Statutory Provisions 4

Legislation 4