Canadian Union of Postal Workers v. Her Majesty in Right of Canada, 2017 ONSC 6503

CITATION: Canadian Union of Postal Workers v. Her Majesty in Right of Canada, 2017 ONSC 6503

COURT FILE NO.: CV-11-436848

DATE: 20171130

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CANADIAN UNION OF POSTAL WORKERS/SYNDICAT DES TRAVAILLEURS ET TRAVAILLEUSES DES POSTES, DENIS LEMELIN, RON HANNON and JEREMY LECLAIR

Applicants

– and –

HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED BY THE ATTORNEY GENERAL OF CANADA

Respondent

• and –

CANADA POST CORPORATION

Intervener

Counsel:

Paul Cavalluzzo and Adrienne Telford, for the Applicants

Kathryn Hucal and Jon Bricker, for the Respondent

John D.R. Craig and Christopher Pigott, for the Intervener

HEARD: In Writing

REASONS FOR DECISION

COSTS

A. BACKGROUND

[1] This decision addresses the question of when and under what circumstances an intervener is required to pay or is entitled to receive costs. The Canadian Union of Postal Workers (“the Applicants”) brought an application to challenge the constitutionality of the Restoring Mail Delivery for Canadians Act, S.C. 2011, c. 17 (the “Act”) on the grounds that it infringed the Charter guarantees of freedom of association and freedom of expression: Canadian Union of Postal Workers v. Her Majesty in Right of Canada, 2016 ONSC 418, 130 O.R. (3d) 175, at para. 2 [CUPW 1].

[2] On consent of the parties, Canada Post Corporation (“Canada Post”) was granted leave to intervene as an added party pursuant to Rule 13.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), with the restriction that it could not duplicate or repeat the evidence, cross-examination questions or legal submissions of the Respondent (“Canada”). No other limits were placed on Canada Post’s participation.

[3] Pursuant to Canada Post’s request in its notice of motion, the issue of Canada Post’s entitlement to and liability for costs was reserved to the judge hearing the application. The court’s intervention order did not place any condition on Canada Post that would prevent it from seeking costs or protect it from an adverse cost award.

[4] In my reasons for decision dated April 28, 2016, I found that the Act unjustifiably violated sections 2(d) and (b) of the Charter and struck down the Act in its entirety: CUPW 1, at paras. 248-50. I further found that an award of damages under section 24(1) of the Charter was not appropriate: CUPW 1, at para. 244. During the hearing of the Application, the parties executed a consent agreement to address the issue of remedy. Pursuant to that agreement, the court retained jurisdiction to deal with “any remaining remedial issues” following the release of my decision on the merits: Canadian Union of Postal Workers v. Her Majesty in Right of Canada, 2017 ONSC 292, at para. 1 [CUPW 2].

[5] In June 2016, the Applicants wrote to the court seeking to address what they described as an “outstanding remedial issue” regarding the validity and enforceability of the Extended Collective Agreement. The Applicants’ request was unsuccessful. I concluded that the Applicants did not raise a “remaining remedial issue” within the meaning of the Consent Agreement and that this court does not now have jurisdiction as part of this Application to order further remedial relief. I further held that the issue of enforceability of the Extended Collective Agreement during the strike and lockout period is now properly before the Québec Superior Court: CUPW 2, at paras. 2-3, 76.

[6] The Applicants and Canada reached an agreement with respect to the portion of the Applicants’ costs of this proceeding for which Canada is responsible in the amount of $350,000 on a partial indemnity basis.[^1]

[7] The Applicants submit that they are entitled to recover the further amount of $136,693.93 in costs from the intervener Canada Post an amount which it submits is directly attributable to Canada Post’s role in these proceedings.

[8] Canada Post submits that following the Applicants’ unsuccessful motion for further remedial relief, it is entitled to its costs from the Applicants on a partial indemnity basis in the amount of $36,062.31.

[9] For the reasons that follow I find that Canada Post is liable for its proportionate share of the Applicants’ costs of the proceeding on a partial indemnity basis in the amount of $54,000. I further find that Canada Post is entitled to its costs of the remedial motion on a partial indemnity basis in the amount of $26,000.

B. POSITIONS OF THE PARTIES

1. The Applicants’ Position

The Applicants’ Request for Costs

[10] The Applicants submit that they are entitled to recover costs from Canada Post in an amount that directly reflects the extent of Canada Post’s involvement in this proceeding. The Applicants support their request with the following arguments:

(a) Canada Post’s interest

[11] Canada Post is “not the type of public interest intervener” to which the “general rule” against costs applies because it had “direct commercial and financial interests” in the result of this proceeding. The legislation that was being challenged by the Applicants “conferred a ‘strategic advantage’ to [Canada Post] which it wilfully capitalized on and directly benefitted from” and it was that interest that Canada Post was defending.

(b) Canada Post’s involvement

[12] The Applicants assert that an intervener who is added on its own initiative and who participates fully may be liable for costs. Canada Post participated fully and actively in this proceeding, including the pre-application proceeding. For example, Canada Post took the lead on cross-examining a number of the Applicants’ affiants.

[13] The usual restrictions that are imposed on interveners (i.e. confining public interest interveners in constitutional applications to the parties’ record and limiting the length of an intervener’s factum and oral argument) were not imposed on Canada Post. Canada Post’s record was 2,268 pages (six volumes) long, which is almost as long as the Applicants’ and Canada’s records combined. The absence of these usual restrictions reveals that Canada Post’s role was closer to that of a party than to that of a public interest intervener.

[14] Moreover, a significant portion of Canada Post’s materials focused on its own financial interest in the proceeding, including the “financial and competitive pressures” that it was allegedly facing and its concern for its “continued financial viability”.

[15] The Applicants state that they incurred fees and disbursements in the amount of $622,318.72 to challenge the legislation at issue. On a partial indemnity scale the Applicants submit that they expended $136,693.93 in responding to Canada Post, who fully participated in the proceedings. A large part of the Applicants’ reply record was directed towards Canada Post’s claims and evidence (most of which related to Canada Post’s commercial interest rather than to the public interest), a significant amount of preparation was required for the cross-examination of Canada Post’s witnesses, and Canada Post raised complex issues in its 60-page factum and during oral argument that had to be addressed.

[16] The Applicants rely on Rule 57.01 of the Rules, which sets forth the factors the court may consider in exercising its discretion to award costs under section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

Canada Post’s Request for Costs

[17] The Applicants submit that it is inconsistent for Canada Post to claim that the general rule against costs applies to preclude the payment of costs to the Applicants arising from the application, but not the recovery of costs from the Applicants arising from the unsuccessful request for remedial relief.

2. Canada Post’s Position

The Applicants’ Request for Costs

[18] Canada Post submits that the Applicants are not entitled to recover costs from them. Canada Post relies on the following arguments in support of its position:

(a) Canada Post’s interest

[19] Canada Post’s intervention involved matters of public interest and novel issues, such as the interpretation of untested legislation.

[20] Canada Post asserts that it has a statutory duty to “maintain a basic customary postal service that meets the needs of the people of Canada” and that many of its responsibilities are of a public interest nature. Canada Post is required to “conduct its operations on a self-sustaining financial basis”. Accordingly, Canada Post’s interest in this proceeding is “not merely [of] a private ‘commercial’ or ‘financial’” nature. In any case, Canada Post would not be disqualified as a public interest litigant simply because it has a financial interest.

[21] This case also involved a novel issue, namely, the application of the Supreme Court of Canada’s decision in Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4 [Saskatchewan Federation of Labour] to back-to-work legislation. Additionally, this case required the interpretation of untested legislation, the importance of which transcended the interests of the immediate parties.

(b) Canada Post’s involvement

[22] As an intervener, the general rule against costs should apply. Canada Post asserts that the vast majority of the Applicants’ time was directed towards Canada rather than Canada Post, even though the Applicants contend that the number of pages in Canada Post’s record suggests otherwise. Although Canada Post provided evidence and submissions that were helpful to the court, Canada Post had limited involvement; this was not a case where Canada Post was responsible for “mount[ing] the defence” while Canada took a passive role. In any case, the general rule applies even if an intervener files extensive materials.

Canada Post’s Request for Costs

[23] Canada Post seeks costs from the Applicants arising from the Applicants’ unsuccessful request for further remedial relief. Canada Post states that the motion raised complex legal and factual issues, that it was required to file a lengthy, technical factum in response to those issues, and that the request was aimed directly at Canada Post.

C. THE LAW

1. The Issue

[24] When and under what circumstances is an intervener required to pay or entitled to receive costs?

2. The “General Rule”

[25] The “general rule” is that an intervener is neither liable for nor entitled to costs: Daly v. Ontario (AG) (1999), 124 O.A.C. 152, at para. 6 (Ont. C.A.) [Daly]; Harper v. Harper, [1980] 1 S.C.R. 2, at p. 16 (S.C.C.) [Harper]; Ogichidaakwe v. Ontario (Minister of Energy), 2015 ONSC 7582, at para. 8 [Ogichidaakwe]; Paul Perell & John Morden, The Law of Civil Procedure in Ontario, 3rd ed. (Toronto: LexisNexis Canada, 2017) at p. 436; and Young v. Young, [1993] 4 S.C.R. 3, at p. 138 (S.C.C.) [Young].

[26] This general rule applies both in the public and private interest contexts (i.e. regardless of whether the added party is intervening in support of a private interest or the public interest). Some decisions specifically comment that the general rule applies to interveners in the public interest context. These decisions do not however indicate that the general rule applies exclusively to the public interest context: see Canadian Foundation for Children, Youth & the Law v. Canada (AG), [2001] O.J. No. 1110, at para. 15 (Ont. S.C.) [CFCYL] where the court states that “the general rule in public interest litigation is that intervenors are not awarded costs”; see also Young, at p. 138 where the court referred to the general rule that “interveners who appear on constitutional cases” are not liable for costs.

[27] In other decisions the court states more generally that interveners do not pay and are not entitled to costs, without any specific reference to whether this rule applies to the public interest context, the private interest context, or both: see e.g. Daly, at para. 6; Harper, at p. 16; and Ogichidaakwe, at para. 8. If all of these latter decisions involved a public interest intervention, the general statement in these cases that “interveners are not liable for or entitled to costs” might be properly interpreted as being limited to the public interest context.

[28] However, this is not the case. Some of the interveners in these decisions are private interest interveners: see e.g. Daly, at para. 3 where the Ontario Secondary School Teachers’ Federation intervened “to ensure that the interests of its membership were heard” and Ogichidaakwe, at para. 8 where the intervening power company had a “commercial interest in the outcome”. In Gore Mutual Insurance Co. v. 1443249 Ontario Ltd. (2004), 29 C.C.L.I. (4th) 126, at paras. 4, 6, 8-9 (Ont. S.C.) [Gore Mutual], the Ontario Superior Court of Justice followed the general rule when the intervening insurance company had a “significant financial interest in the outcome of the case”. Accordingly, based on the applicable legal principles I find that the general rule applies to any intervener.

3. Exceptions

[29] Notwithstanding this general rule, there are cases where costs have been properly awarded to and against interveners.

[30] In Carter v. Canada (AG), 2015 SCC 5, [2015] 1 S.C.R. 331, the Supreme Court of Canada upheld the trial judge’s cost award against an intervener. The court stated as follows at paras. 144-146:

The final question is whether the trial judge erred in awarding 10 percent of the costs against the Attorney General of British Columbia. The trial judge acknowledged that it is unusual for courts to award costs against an Attorney General who intervenes in constitutional litigation as of right. However, as the jurisprudence reveals, there is no firm rule against it: see, e.g., B. (R) v. Children’s Aid Society of Metropolitan Toronto, [1995] 1 S.C.R. 315; Hegeman v. Carter, 2008 NWTSC 48, 74 C.P.C. (6^th) 112; and Polglase v. Polglase (1979), 1979 CanLII 587 (BC SC), 18 B.C.L.R. 294 (S.C.).

In her reasons on costs, the trial judge explained that counsel for British Columbia led evidence, cross-examined the appellants’ witnesses, and made written and oral submissions on most of the issues during the course of the trial. She also noted that British Columbia took an active role in pre-trial proceedings. She held that an Attorney General’s responsibility for costs when involved in constitutional litigation as of right varies with the role the Attorney General assumes in the litigation. Where the Attorney General assumes the role of a party, the court may find the Attorney General liable for costs in the same manner as a party: para. 96. She concluded that the Attorney General of British Columbia had taken a full and active role in the proceedings and should therefore be liable for costs in proportion to the time British Columbia took during the proceedings.

We stress, as did the trial judge that it will be unusual for a court to award costs against Attorneys General appearing before the court as of right. However, we see no reason to interfere with the trial judge’s decision to do so in this case or with her apportionment of responsibility between the Attorney General of British Columbia and the Attorney General of Canada. The trial judge was best positioned to determine the role taken by British Columbia and the extent to which it shared carriage of the case.

[31] The courts apply a number of factors in deciding whether to deviate from the general rule. Some of these factors include the following:

i. What was the nature and extent of the intervener’s interest in the issues that were before the court and in the outcome of the proceeding?

ii. What was the nature and extent of the intervener’s involvement in the proceeding?

iii. What are the intervener’s resources?

iv. Was the intervener successful on the merits?

v. Did one of the parties anticipate or provoke the intervener’s involvement?

vi. Did the terms of the order granting leave to intervene address the possibility of a cost award?

i. Interest in the Outcome

[32] Courts have deviated from the general rule where the intervener had a direct interest that was affected by the outcome of the proceeding. This has led to findings that the intervener is entitled to costs as well as findings that it is liable for costs.

[33] In Guardian Insurance Co. of Canada v. York Fire & Casualty Insurance Co., [1992] O.J. No. 3714, at paras. 1-2 (Ont. C.A.) [Guardian Insurance], the Ontario Court of Appeal awarded costs to an intervener, Old Mill Pontiac, because it was directly affected by the outcome. The interveners in Lavigne v. O.P.S.E.U. (1989), 67 O.R. (2d) 536, at p. 576 (C.A.), aff’d [1991] 2 S.C.R. 211 (S.C.C.) [Lavigne] were also entitled to costs because they were seriously affected by the proceedings.

[34] In Fraleigh v. Great-West Life Assurance Co., 2011 ONCA 555, 107 O.R. (3d) 288, at para. 30 [Fraleigh], the intervener acted in support of a private interest and was ultimately held liable for costs.

[35] Consistent with this approach, courts have decided not to deviate from the general rule where there was no evidence of a direct interest. In Toronto Police Assn. v. Toronto Police Services Board, [2000] O.J. No. 2236, at paras. 5, 9 (Ont. Div. Ct.) [Toronto Police], the Ontario Divisional Court followed the general rule because the intervener had no legal interest in the subject matter of the proceedings and would not have been adversely affected.

[36] The British Columbia Court of Appeal declined to grant costs to the intervener in Roeder v. British Columbia (Securities Commission), 2005 BCCA 442, 51 B.C.L.R. (4th) 351, at para. 4 [Roeder] after finding that the intervener would not be directly or adversely affected by the outcome. The Alberta Court of Queen’s Bench came to the same conclusion in Ritter v. Hoag, 2003 ABQB 401, at paras. 9, 11 [Ritter], refusing to depart from the general rule because the interveners’ interest in the result was “no greater than that of any other member of the public.”

[37] In Metropolitan Stores (MTS) Ltd. v. Manitoba Food & Commercial Workers, Local 832 (1990), 70 Man. R. (2d) 59, at para. 10 (Q.B.), the Manitoba Court of Queen’s Bench followed the general rule because the interveners were interested in but not directly affected by the result. Accordingly, an intervener’s interest in the proceeding must surpass a certain minimum threshold before it can justify an award of costs.

[38] The nature of an intervener's interest in the proceeding may vary. A financial interest in the outcome may be sufficient grounds to deviate from the general rule. The Nova Scotia Supreme Court granted costs to an intervener in Turner-Lienaux v. Nova Scotia (AG) (1992), 115 N.S.R. (2d) 200, at paras. 71, 73 (S.C.), aff’d (1993) 1993 NSCA 140, 122 N.S.R. (2d) 119 (C.A.) after concluding that she had a “significant financial interest” arising from the fact that the plaintiff was seeking “to have the intervenor removed from [her] job and replaced with the plaintiff.” Similarly, the intervener in Incredible Electronics Inc. v. Canada (AG) intervened to protect its monopoly. In awarding costs to the intervener, the Ontario Superior Court of Justice noted that it was “as entitled as anybody else to use legal proceedings to protect its property and enterprise interests and to ask for costs”: Incredible Electronics Inc. v. Canada (AG) (2006), 80 O.R. (3d) 723, at paras. 115, 117 (S.C.) [Incredible Electronics].

[39] An intervener’s interest does not have to be financial. The intervener obtained a favourable cost award in Hines v. Nova Scotia (Registrar of Motor Vehicles) (1990), 105 N.S.R. (2d) 240, at para. 17 (S.C.) [Hines] because it had a “very real concern about the outcome”, even though it had no “direct financial involvement in the proceeding”.

[40] In Imperial Oil Ltd. v. Alberta (Minister of Environment), 2005 ABCA 375, 376 A.R. 381, at para. 25 [Imperial Oil], the Alberta Court of Appeal stated that it is worth considering whether the intervener’s interest is “financial, proprietary, non-pecuniary or other.” In that decision, the intervener was granted costs because its members had a “greater stake … than anyone else” due to the effect of the case’s outcome on their health and property: Imperial Oil, at paras. 9, 31.

[41] An intervener might have an interest in a novel issue that is before the court, as was the case in Hines. In awarding costs to the intervening Canadian Diabetes Association in Hines, the Nova Scotia Supreme Court commented that “for the first time in Canada, the rights of diabetics in relation to driving privileges were going to be the subject of adjudication before a court”: Hines, at para. 17.

[42] Whether an intervener has a private interest, public interest, or both is also relevant to the determination of costs: Janzen v. British Columbia (AG) (1994), 45 B.C.A.C. 242, at para. 6 (B.C. C.A.).

[43] The general rule will usually be followed when a party is intervening in the public interest: B. (R.) v. Children’s Aid Society of Metropolitan Toronto, [1995] 1 S.C.R. 315, at pp. 390, 417 (S.C.C.) [CAS of Metropolitan Toronto] and Ritter, at para. 3. In Ritter, the Alberta Court of Queen’s Bench explained the justification for this rule at para. 3:

[I]t is generally not appropriate to require parties who have initiated litigation to bear the costs of those whom they did not themselves cause to be involved in the litigation. Costs are not awarded against public interest interveners because their intervention is offered and expected to assist the court.

[44] However, interveners may be required to pay costs if they are acting in support of both a private and public interest.

[45] A cost award against the Toronto Star was upheld in Fraleigh despite the fact that there was a public interest aspect to its intervention. This is because the Toronto Star was “intervening to advance its own interest in publishing … protected information” and was “motivated by business interests”: Fraleigh, at paras. 30-31.

[46] Similarly, in Ritter at para. 4, the Alberta Court of Queen’s Bench stated that an intervener acting in the public interest might be entitled to or liable for costs if it is personally affected by the outcome more than other members of the public.

[47] The Northwest Territories Supreme Court adopted this same reasoning in Hegeman v. Carter, 2008 NWTSC 48, 74 C.P.C. (6th) 112 [Hegeman]. In Hegeman, the court concluded at para. 9 that there was a public interest component to the Attorney General’s intervention; in particular, the Attorney General helped the court by ensuring that it “had the benefit of submissions supporting all the possible interpretations of [the relevant statutory provision]” and by “identifying the [relevant] competing principles”.

[48] However, the court also found that the Attorney General would be affected by the outcome more than members of the public. The Attorney General had a personal interest in the statutory interpretation issue, which was part of the reason for the intervention. Additionally, there was some level of administrative and financial relationship between the government and the decision-maker below. The court ultimately decided that the Attorney General was liable for costs because it was unsuccessful on the statutory interpretation issue: Hegeman, at paras. 10, 12.

[49] In Incredible Electronics, the Ontario Superior Court of Justice outlined the different factors to be considered in determining whether a litigant is acting in the public interest:

• The litigant must be “partisan in a matter of public importance” (i.e. the matter is important to the broader community and goes beyond the private interests of the parties) (at paras. 91-92);

• Having unselfish motives, at least to some extent, and having little to gain financially from participating in the proceeding are helpful indicia but not strict criteria. For example, litigation involving social assistance benefits or an indigenous rights claim might involve significant financial consequences, yet still be classified as a matter of public interest (at paras. 94-96, 98); and

• “[A] relevant but not determinative feature is that the public interest litigant is either the ‘other’, a marginalized, powerless, or underprivileged member of society or the public interest litigant speaks for the disadvantaged in society, even if he or she has his or her own selfish reasons for litigating” (at para. 99).

[50] Despite the courts’ reliance on this “direct interest” exception, the courts have followed the general rule in some cases even though the intervener had an interest in the outcome of the proceeding.

[51] In CFCYL, the intervening Canadian Federation of Teachers “represented a group with a real and substantial interest” in the issues being decided. Despite being “clearly affected” by the outcome, the Ontario Superior Court of Justice did not grant costs to the intervener: CFCYL, at paras. 18-19. Similarly the same court followed the general rule in Gore Mutual at paras. 8-9 even though the intervener “stood to gain a financial benefit from the outcome.”

[52] The Ontario Superior Court of Justice declined to grant a favourable cost award to the intervener in Ogichidaakwe despite the intervening power company’s commercial interest in the outcome. In particular, the court noted that this interest “was not central to the dispute”: Ogichidaakwe, at para. 8.

ii. Involvement in the Proceeding

[53] The nature and extent of an intervener’s involvement in the proceeding is a relevant consideration in deciding whether to deviate from the general rule.

[54] An intervener may be entitled to costs or insulated from an adverse cost award if the court finds that its contribution to the proceeding was helpful.

[55] In Roeder at para. 5, the British Columbia Court of Appeal insulated the intervener from an adverse cost award because its “submissions … were somewhat helpful … in answering a difficult question”.

[56] In Imperial Oil, the Alberta Court of Appeal highlighted the importance of the intervening Resident Action Committee’s involvement. The court found that the intervener’s contribution “would have been substantial” if the appeal had not been discontinued and, as a result, decided to award costs to the intervener: Imperial Oil, at paras. 9, 30.

[57] As the court emphasized in Imperial Oil at para. 25, it is worth exploring whether the intervener has added a new perspective that would otherwise not be considered or whether it is simply duplicating the parties’ submissions. In that case, the intervener was the only party to address one of the issues raised by the appellant, which was a significant question that formed the bulk of the appellant’s written submissions: Imperial Oil, at paras. 8, 30.

[58] The Ontario Court of Appeal awarded costs to the intervening Criminal Lawyers’ Association (the “CLA”) in Horsefield v. Ontario (Registrar of Motor Vehicles) (1999), 44 O.R. (3d) 73, at p. 94 (C.A.), aff’d on this issue by (1999), 185 D.L.R. (4th) 711 (Ont. C.A.) [Horsefield] because of the “great assistance” that it provided. The CLA “took the lead in presenting the argument on behalf of the respondent” and helped to ensure that all of the constitutional issues were fully addressed. The court also noted that it was “well served” by the CLA’s arguments: Horsefield, at pp. 79, 94.

[59] Consistent with this reasoning, the Alberta Court of Queen’s Bench awarded only a nominal amount of costs to the intervener in C.J.A., Local 1325 v. J.V. Driver Installations Ltd., 2005 ABQB 310, 383 A.R. 200, at para. 6 [J.V. Driver Installations] because it “bore more of a supporting role and less of a burden than the Respondents who … carried the weight of argument”.

[60] A helpful intervener is not always entitled to costs. In CFCYL at paras. 18-19, the Ontario Superior Court of Justice declined to grant costs to the intervener despite the fact that it’s “participation … was an important part of [the] process”. Although the intervener “filed extensive materials” and coordinated with the Attorney General to avoid “unnecessary duplication”, the court emphasized that “the lis … was between the Children’s Foundation and the Attorney General”, not the intervener: CFCYL, at para. 18.

[61] In Ogichidaakwe at para. 7, the Ontario Superior Court of Justice chose not to grant costs to the intervener; even though it “had unique perspectives to provide to the Court on the duty to consult”, its participation was only limited. The Alberta Court of Queen’s Bench came to a similar conclusion in Ritter at paras. 10-11, refusing to depart from the general rule despite its finding that the interveners’ participation was helpful.

[62] An intervener’s participation can also result in an adverse cost award or the withholding of a favourable cost award if the court does not find that the participation was helpful.

[63] The Ontario Superior Court of Justice withheld a favourable cost award from the intervener in Gore Mutual at paras. 6 and 9 because, even though the intervener had “fully participated” in the proceeding, the respondents “fully responded”.

[64] Similarly, an intervener might be liable for costs if the court finds that its involvement caused more work or expense for the other parties, without concluding that that involvement was helpful. In M. (C.) (Litigation Guardian of) v. Children's Aid Society of Waterloo (Regional Municipality), [2005] O.J. No. 2345, at paras. 34-35 (Ont. S.C.), the intervening Attorney General of Ontario was not liable for costs because it (1) did not take a position on the merits of the application and (2) “did nothing to prolong the proceedings or cause any party any additional work or expense.”

[65] Moreover, the fact that an intervener is fully participating and extensively involved does not mean that this involvement is helpful to the court. In holding that the intervener in Hegeman was liable for costs, the Northwest Territories Supreme Court cited Mark Orkin, The Law of Costs, 2nd ed. (Toronto: Canada Law Book, 1987) at para. 5 of its decision, stating that “[a]n intervener added as a party on its own initiative and participating fully in the proceedings may be liable for some or all of the costs of the proceedings”, including “additional costs incurred by reason of the intervention.”

iii. Intervener’s Resources

[66] In CAS of Metropolitan Toronto at p. 410, L’Heureux-Dubé noted that “the resources available to the parties should not generally be a relevant factor in awarding costs.” This reasoning was followed by the Alberta Court of Appeal in Imperial Oil at para. 26.

iv. Intervener’s Success

[67] Generally, successful interveners are not liable for costs and are either entitled to costs or not entitled to costs depending on whether the general rule is followed. Unsuccessful interveners are generally not entitled to costs and, depending on whether the general rule is followed, are either liable or not liable for costs.

v. Parties’ Anticipation or Provocation of the Intervener’s Involvement

[68] Courts have considered whether the intervener’s involvement was anticipated or provoked in deciding whether to follow the general rule.

[69] In J.V. Driver Installations at para. 4, one of the factors that the Alberta Court of Queen’s Bench considered in awarding costs to the interveners was the fact that “[t]he Applicant’s application for judicial review … drew [the interveners] into that proceeding”.

[70] This was not a case where, as the court noted, “the court should hesitate to foist the cost of an unsuspected volunteer upon a party who could not have anticipated those costs when initially deciding to undertake the litigation”: J.V. Driver Installations, at para. 5.

[71] In Incredible Electronics, the Ontario Superior Court of Justice awarded costs to the intervener, noting at para. 114 that the intervener was not a “strange, albeit, interested party” because the application “was part of a long history” that the intervener had been involved in.

[72] The Federal Court followed a similar line of reasoning in awarding costs to the interveners in Sawridge Band v. R, 2006 FC 656, 293 F.T.R. 175 (Eng.), at para. 96 [Sawridge]:

[T]he way the Plaintiffs chose to frame the [underlying motion] compelled the Interveners to mount a comprehensive and vigorous response to protect their interests …. The Plaintiffs should have anticipated that response ….

[73] Conversely, an intervener can be held liable for costs if it initiates the continuation of a proceeding: Daly, at para. 6. In Daly at paras. 5-6, the Ontario Court of Appeal awarded costs against the intervener because it “effectively assumed carriage of the litigation” by deciding to appeal the lower court’s decision. The intervener had stated in its factum that it would be seeking payment of the costs of the appeal from the respondents, but it was ultimately unsuccessful on appeal: Daly, at para. 6.

vi. Terms of the Order Granting Leave to Intervene

[74] Roeder explains how the terms of an order granting leave to intervene might affect an intervener’s liability for or entitlement to costs. In Roeder, the intervener was permitted to participate in the appeal pursuant to a consent order. However, the order did not include the condition that no cost award would be made in favour of or against the intervener. On that basis, the British Columbia Court of Appeal concluded that the appellant had “accepted the possibility of a costs award in his favour or against him depending on the outcome of the appeal”: Roeder, at para. 2.

D. ANALYSIS

1. Should Canada Post be required to pay a Portion of the Applicants’ Costs of the Application?

[75] I find that it is appropriate that Canada Post be liable for its proportionate share of the Applicants’ costs of the proceeding. In coming to this conclusion I have considered a number of factors, including but not limited to the nature and extent of Canada Post’s interest and role in the proceeding, as well as the result.

Canada Post’s Interest in the Outcome

[76] Canada Post had a direct interest in the outcome of the proceeding. This is because the Applicants were challenging the constitutionality of legislation that compelled Canada Post to resume its postal services, compelled its employees to resume their employment duties, and prohibited strikes and lockouts during the extended term of their collective agreement: the Act, at ss. 3 and 7. In this way, the Applicants’ constitutional challenge had a direct and serious effect on Canada Post’s business interests.

[77] Courts may deviate from the general rule if (1) the intervener’s interest in the proceeding is private rather than public in nature or (2) the intervener’s involvement has both a public interest and private interest component (i.e. it is not acting entirely in the public interest): see Fraleigh, at paras. 30-31.

[78] The factors outlined in Incredible Electronics are helpful in determining the nature of Canada Post’s interest in the proceeding.

[79] The following suggests that Canada Post was intervening to protect a private interest:

• Canada Post is one of Canada’s largest employers, “operat[ing] in a commercial manner with a high degree of autonomy from the government”. To the extent that Canada Post represents the interests of anyone other than itself, it represents the interests of employers, who are not “marginalized, powerless … underprivileged … [or] disadvantaged”: see Incredible Electronics, at para. 99.

• Canada Post’s business operations and labour relations were directly affected by the application.

• Canada Post could arguably benefit from the Act, which abrogated Canada Post’s employees’ right to strike and disrupted the balance of a meaningful process of collective bargaining in Canada Post’s favour: CUPW 1, at paras. 193-194. Canada Post had a financial interest in defending that benefit. Accordingly it can be argued that Canada Post had a lot to gain financially from participating in the proceeding and the underlying motivation for its intervention does not appear to be altruistic, except to the extent that the public might be affected by Canada Post’s financial viability: see Incredible Electronics, at para. 95.

[80] The following suggests that Canada Post was intervening in the public interest:

• Canada Post is Canada’s “only universal and comprehensive postal service”.

• Canada Post is a Crown corporation. The Canada Post Corporation Act, R.S.C. 1985, c. C-10, sections 5(2) and 19(2) require Canada Post to provide postal service at a fair and reasonable cost, on a self-sustaining financial basis, and in a way that meets the needs of Canadians. Canada Post submits that these are statutory duties; accordingly, its financial concerns have a public element and are not merely a matter of private interest.

• The Applicants’ success on the application and the consequent striking down of the Act could have resulted in a work stoppage that would have disrupted Canada Post’s operations and adversely affected its customers, the general public, and the economy.

• Canada Post took a position on important constitutional issues that transcended the interests of the immediate parties by affecting unions, employers, and employees generally. In this sense, Canada Post was “partisan in a matter of public importance”, as required by Incredible Electronics at paras. 91-92. This application was the first time that the Supreme Court of Canada’s freedom of association analysis in Saskatchewan Federation of Labour was applied to back-to-work legislation and the first time that the Act was interpreted or tested. The application also addressed the constitutionality of back-to-work legislation generally.

• As an intervener, Canada Post served the public interest by ensuring that arguments in favour of upholding a piece of legislation were fully canvassed.

[81] I have considered the complete factual matrix and record before me. I conclude that Canada Post’s involvement in this proceeding had both a public and private interest component. Accordingly, Canada Post was not acting purely or solely in the public interest: see Fraleigh, at paras. 30-31.

Canada Post’s Involvement in the Proceeding

[82] Regarding the nature and extent of Canada Post’s role and involvement in the proceeding, Canada Post requested that it “be treated as a Respondent”. It also requested that there be no “special restrictions” and that it have all of the same rights and obligations as a Respondent, including no restrictions on the “quantity and length of affidavits, participation in cross-examinations, length of written submissions, and time permitted for oral submission”.

[83] The only limit placed on Canada Post’s participation was that it could not duplicate or repeat Canada’s evidence, cross-examination questions, or legal submissions.

[84] Canada Post’s involvement was extensive, although not as extensive as Canada’s involvement. I am satisfied that the Applicants were required to expend additional effort to respond to Canada Posts’ affidavits and submissions.

[85] Nevertheless, Canada Post did provide a different and helpful perspective by addressing the employer’s interests. In addition, it had access to information relevant to the application that the other parties presumably did not have access to.

Canada Post’s Success

[86] Canada Post was not successful at the hearing of the application. Although not determinative, this is an important consideration.

Terms of the Order Granting Leave to Intervene

[87] In Roeder at para. 2, the consent order that permitted the intervener to participate in the proceedings did not include a condition specifying that no costs would be awarded to or against the intervener. On that basis, the British Columbia Court of Appeal concluded that the appellant had “accepted the possibility of a costs award in his favour or against him depending on the outcome of the appeal”: Roeder, at para. 2. Although no costs were ultimately awarded in that case, the court’s reasoning is directly applicable to Canada Post’s intervention in this case.

[88] The order that granted Canada Post leave to intervene did not include the abovementioned condition either. Canada Post did not request its inclusion in the order. Instead, at Canada Post’s request, the order stated that Canada Post’s entitlement to and liability for costs would be reserved to the judge hearing the application. Canada Post specifically requested that it “should be treated as a Respondent to the proceedings” without any “special restrictions”and with all of the same rights and obligations. Accordingly, it is evident that both Canada Post and the Applicants clearly anticipated and accepted the possibility that they could be entitled to or liable for costs.

2. Should Canada Post be entitled to its Costs of the Remedial Motion?

[89] I find that it is appropriate for this court to deviate from the general rule and grant costs to Canada Post. This conclusion flows primarily from the fact that Canada Post had a direct and private interest in the proceeding.

[90] I agree with Canada Post’s position that it is open to them to argue that the general rule should be followed such that it is not liable for the Applicants’ costs of the application, while also asserting that the general rule should not be followed such that it can claim its costs of the remedial motion against the Applicants.

[91] Whether the exceptions to the general rule apply depends on the specifics of the proceeding for which costs are being assessed. For example, the court could deviate from the general rule and award costs to the intervener in one proceeding because of the intervener’s private and direct interest in the outcome, but then follow the general rule and insulate that same intervener from liability for costs in a different proceeding because its participation was helpful. Canada Post’s submissions are not inconsistent.

[92] Although the motion for remedial relief flowed directly from the court’s determination of the application, the parties expended time and resources preparing for the remedial issue over and above their preparation for the application. Accordingly, given that the parties’ expenses arising from the remedial motion were not factored into the court’s assessment of costs arising from the application, a separate determination of costs for the remedial motion (including an analysis of the applicability of the general rule) is appropriate.

[93] Canada Post’s private and direct interest in the proceeding, combined with the fact that it was ultimately successful, suggests that it should be entitled to costs. This private and direct interest stems from the following facts:

• Canada Post and the Applicants are parties to the Extended Collective Agreement. In their request for remedial relief, the Applicants submitted that the enforceability of this agreement should be addressed: CUPW 2, at para. 2.

• In April 2016, Canada Post brought a motion before the Québec Superior Court to reopen its application for judicial review of an arbitral award. Canada Post wanted to reopen the application so that it could argue that the award should be quashed on the basis that the extended agreement was unenforceable in light of the Act being declared invalid. The court allowed the motion. However, the court eventually stayed the proceedings pending the outcome of the remedial motion before me: CUPW 2, at paras. 2, 23. Accordingly, Canada Post had a direct interest in the resolution of this remedial motion and in the court’s determination of whether the Extended Collective Agreement was enforceable.

[94] Furthermore, this case is somewhat similar to the Federal Court’s decision in Sawridge. The Federal Court awarded costs to the interveners in Sawridge after finding that the underlying motion would directly affect the interveners’ interest in another court decision: Sawridge, at para. 49.

[95] Finally, with respect to Canada Post’s involvement in the remedial motion, Canada Post provided a different perspective than the other parties and, accordingly, its participation was helpful and necessary. For example, the first issue that the court considered was whether the effect of the declaration of invalidity on the extended agreement was a remaining remedial issue. While Canada focused its submissions on the fact that the court had “specifically rejected reading down or severing certain provisions of the Act”, Canada Post focused on the Consent Agreement and the fact that it “imposes clear limits on remedies”: CUPW 2, at paras. 27, 31, 35. This helpful participation provides additional justification for granting Canada Post its costs of the remedial motion.

E. QUANTUM OF COSTS - THE APPLICABLE PRINCIPLES

[96] Section 131(1) of the Courts of Justice Act provides as follows:

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[97] Rule 57.01 of the Rules 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.

[98] In Agius v. Home Depot Holdings Inc., 2011 ONSC 5272, at paras. 10-12, the Ontario Superior Court of Justice set forth the general principles to be applied in fixing costs:

Cumming J. in Duca Financial Services Credit Union Ltd. v. Bozzo, 2010 ONSC 4601, [2010] O.J. No. 3758 (Ont. S.C.J.) at para. 5, described the “normative approach” to an application for costs:

Costs are in the discretion of the Court: s. 131, Courts of Justice Act, R.S.O. 1990, c. C. 43 and Rule 57.01 of the Rules of Civil Procedure. In Ontario, the normative approach is first, that costs follow the event, premised upon a two-way, or loser pay, costs approach; second, that costs are awarded on a partial indemnity basis; and third, that costs are payable forthwith, i.e. within 30 days. Discretion can, of course, be exercised in exceptional circumstances to depart from any one or more of these norms.

Fixing of costs is not merely a mechanical exercise in reviewing the receiving party’s Cost Outline. In Andersen v. St. Jude Medical Inc. (2006), 264 D.L.R. (4th) 557 (Ont. Div. Ct.), the Divisional Court set out several principles to be considered in making an award of costs:

1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher [Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.)], Moon [Moon v. Sher (2004), 246 D.L.R. (4th) 440 (Ont. C.A.)], and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 75 O.R. (3d) 638 (C.A.).

2. A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.), at para. 4.

3. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).

4. The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano v. Bank of Montreal (1998), 41 O.R. (3d) 222 (C.A.), at p. 249.

5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.

The Court of Appeal has identified the overriding principle to be that the amount of costs awarded be reasonable in the circumstances. In Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (Ont. C.A.) Epstein J.A. stated at paras. 51-52:

As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher, this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at para. 37, where Armstrong J.A. said “[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice.”

[99] Section 131 of the Courts of Justice Act affords the court discretion to determine the amount of costs to be paid.

[100] The overall objective of fixing costs is to arrive at an amount that is fair and reasonable, rather than to reflect the amount of actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291, at para. 26 (C.A.).

[101] I do not intend to engage in a purely mathematical exercise based on the hours contained in the parties’ bills of costs. The rate charged per hour is an appropriate consideration. However, it is subject to the overriding principle of reasonableness as applied to the factual matrix of a particular case.

[102] I have reviewed the cost outlines and bills of costs provided and have considered the quantum of costs the Applicants have recovered from Canada. I have considered the appropriate legal principles as they apply to the facts of this case as well as the submissions of the parties. I order that the intervener Canada Post pay the Applicants its costs of the proceeding on a partial indemnity basis in the all-inclusive amount of $54,000.

[103] I order that the Applicants pay to the intervener its costs of the remedial motion on a partial indemnity basis in the all-inclusive amount of $26,000.

[104] I wish to thank counsel for their written submissions which were of great assistance to the court.

Firestone J.

Date: November 30, 2017

[^1]: Canada takes no position on the costs issue between the Applicants and Canada Post and provided no written submissions.