Court File and Parties

COURT FILE NO.: CV-16-549639-00CP DATE: 2018/12/31 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MATTHEW ROBERT QUENNEVILLE, LUCIAN TAURO, MICHAEL JOSEPH PARE, THERESE H. GADOURY, AMY FITZGERALD, RENEE JAMES, AL-NOOR WISSANJI, JACK MASTROMATTEI, JAY MacDONALD and JUDITH ANNE BECKETT Plaintiffs – and – ROBERT BOSCH GmbH Defendant

Counsel: Kirk Baert and James Sayce for the Plaintiffs Cheryl Woodin for Volkswagen Group Canada, Inc., Volkswagen Aktiengesellschaft, Volkswagen Group of America, Inc., Audi Canada Inc., Audi Aktiengesellschaft, Audi of America Inc. and VW Credit Canada, Inc.

Proceeding under the Class Proceedings Act, 1992

HEARD: In writing

PERELL, J.

Reasons for Decision - Costs

[1] In this class action under the Class Proceedings Act, 1992, the Plaintiffs sought pre-discovery production of three million documents from Volkswagen Group Canada, Inc., Volkswagen Aktiengesellschaft, Volkswagen Group of America, Inc., Audi Canada Inc., Audi Aktiengesellschaft, Audi of America Inc., and VW Credit Canada, Inc. (collectively “VW”), whom the plaintiffs had sued in another class action.

[2] The defendant submitted that the criteria for discovery from a non-party pursuant to rule 30.10(1) of the Rules of Civil Procedure had not been satisfied, and, therefore, the motion should be dismissed. VW submitted that the motion should be dismissed because: (1) the criteria of rule 30.10(1) of the Rules of Civil Procedure are not satisfied; (2) the production and use of the documents would breach the deemed undertaking of rule 30.1.01(3); and (3) the production of the documents would contravene a protective Order that was made by Justice Firestone in the VW Action.

[3] I dismissed the Plaintiffs’ motion without prejudice to it being brought again, if at all, after the examinations for discovery of the Defendant. See Quenneville v. Robert Bosch GmbH, 2018 ONSC 6775.

[4] VW seeks partial indemnity costs of $29,487.29 comprised of fees $24,909.50, HST $3,238.24, and $1,339.55 disbursements.

[5] The Plaintiffs submit that the appropriate costs award is $5,000, all inclusive.

[6] The Plaintiffs’ motion was a matter of substantial importance to them. They asked for relief from the deemed undertaking rule, and they submitted that fairness considerations required the deemed undertaking rule to be suspended. They submitted that a new confidentiality order could be made. They submitted that the documents were highly relevant and “required for the Plaintiffs’ prosecution of conspiracy claims against the Defendants.” They submitted that “denying the Class access to the Document Set would obscure more than half of the case against Bosch, tying one had behind Class Counsel’s back in what could be a years-long battle.”

[7] The motion was a matter of substantial importance to the non-party VW who were concerned about expense, privacy and exposure to potential liability in other proceedings if the three million documents, which were subject to a protective order, were not protected. I found that VW had a contractual and procedural expectation with respect to the use to be made of the documents that contained commercially sensitive, confidential, proprietary and regulated information that is shielded by a consent protective order bargained for by VW.

[8] Without disclosing how much time and effort Class Counsel expended to prosecute the motion, the Plaintiffs argue that it was an ordinary, run of the mill, almost humdrum production motion.

[9] The Plaintiffs point to the circumstances that there were no-cross examinations. They observe that the factums were of standard length and that while the motion records were apparently voluminous, most of the exhibit content did not have to be read and was well known. The Plaintiffs submit that the applicable law was well-known and that the motion was not complex but was simple. The argument lasted less than a half-day. They point out instances where VW’s costs outline displays excessive and duplicative time on simple tasks and an inordinate amount of time taking instructions from VW. They point to the fact that the Defendant Bosch settled its costs claim for the motion for $1,500. They point to the fact that there are no precedent decisions for a Rule 30.10 that approach an award of approximately $30,000 on a partial indemnity basis. The Plaintiffs submit that an approximately $30,000 costs award for straight-forward motion was beyond the reasonable expectations of the unsuccessful party.

[10] The court's discretion in awarding costs arises under the authority of s. 31(1) of the Courts of Justice Act, and is to be exercised by a consideration of the factors in rule 57.01(1) of the Rules of Civil Procedure. These factors include the principle of indemnification, the reasonable expectations of the parties, the complexity of the proceeding, the importance of the proceeding and the conduct of the parties in litigation.

[11] The traditional discretionary principles developed for costs awards are codified in rule 57.01(1), which states:

Factors in Discretion

57.01 (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.

[12] The most general rule about costs, not to be departed from without good reason, is that costs at a partial indemnity scale follow the event, which is to say that normally costs are ordered to be paid by the unsuccessful party to the successful party on a partial indemnity scale. See McCracken v. Canadian National Railway, 2012 ONSC 6838; Hague v. Liberty Mutual Insurance Co.; Pike's Tent and Awning Ltd. v. Cormdale Genetics Inc. (1998), 27 C.P.C. (4th) 352 (Ont. Gen. Div.); Bell Canada v. Olympia & York Developments Ltd. (1994).

[13] A critical controlling principle for the awarding of costs is that the sum awarded reflect the fair and reasonable expectations of the unsuccessful litigant. See Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 at para. 24 (C.A.); Stellarbridge Management Inc. v. Magna International (Canada) Inc., [2004] O.J. No. 2102 at para. 97 (C.A.); Zesta Engineering Ltd. v. Cloutier (2002), 21 C.C.E.L. (3d) 161 at para. 4 (Ont. C.A.); McGee v. London Life Insurance Co., [2008] O.J. No. 5312 at paras. 5-8 (S.C.J.); Caputo v. Imperial Tobacco Ltd. (2005), 74 O.R. (3d) 728 at paras. 23-25 (S.C.J.). Lee v. General Motors Co. of Canada, [2004] O.J. No. 2245 (S.C.J.). The overriding principle in awarding costs is reasonableness. See Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66 at para. 52 (C.A.).

[14] The assessment of reasonableness is discretionary and very much dependent upon the circumstances of each case. In some cases, it may be reasonable for the successful party to make exhaustive efforts and to commit enormous legal resources, and in those cases, it might be said that the unsuccessful party could reasonably expect to pay those costs. In other cases, however, the successful party may have been well served by giving his or her lawyer instructions to make exhaustive efforts, but it might be disproportionate and unreasonable to expect the unsuccessful party to pay those costs, even if he or she would have expected or anticipated that his or her foe would have marshalled those legal resources. See Das v. George Weston Limited, 2017 ONSC 5583 at para. 65, var’d 2018 ONCA 1053.

[15] Although the unsuccessful party is not obliged to disclose what he or she expended on costs, where the unsuccessful party submits that the costs claimed by the successful party are excessive, evidence of what he or she expended is relevant to the determination of what is reasonable and of what the unsuccessful party might reasonably have expected to pay and the failure to proffer this evidence tempers and diminishes the unsuccessful party’s criticism of the excessiveness of the costs claim. See Chapman v. Benefit Plan Administrators Ltd., 2014 ONSC 537 at paras. 11-12; MacDonald v. BMO Trust Co., 2012 ONSC 2654 at para. 27; United States of America v. Yemec, [2007] O.J. No. 2066 at para. 54 (Div. Ct.); Hague v. Liberty Mutual Insurance Co. (2005), 13 C.P.C. (6th) 37 at para. 15 (S.C.J.); Risorto v. State Farm Mutual Automobile Insurance Co. (2003), 64 O.R. (3d) 135 at para. 10 (S.C.J.).

[16] In the immediate case, the Plaintiffs’ submission that $5,000, all inclusive, was the appropriate award was diminished by their decision not to disclose evidence of Class Counsel’s expenditures for this so-called straightforward motion. I do note that the Plaintiffs submitted two factums signed by two senior counsel and that there was senior and junior counsel gowned to argue the motion.

[17] That said, the Plaintiffs’ argument that the quantum of the partial indemnity costs award is excessive has some traction based on some evidence of over-lawyering.

[18] Applying the traditional discretionary principles developed for costs awards under rule 57.01(1), I would adjust the costs award, and I award VW $22,000, all inclusive.

[19] Order accordingly.

Perell, J. Released: December 31, 2018