Court File and Parties

COURT FILE NO.: CV-17-588225

DATE: 20180528

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lisabeth Pimentel on her own behalf and on behalf of all members of LOCAL 75 of UNITE HERE, Plaintiff/Responding Party

AND:

Donald Taylor on his own behalf and on behalf of all members of UNITE HERE, (INTERNATIONAL), Defendant/Moving Party

BEFORE: Justice S. Nakatsuru

COUNSEL: Sean Dewart, for the Plaintiff/Responding Party

Michael D. Wright, for the Defendant/Moving Party

HEARD: April 24, 2018

ENDORSEMENT

[1] Back in the latter days of 2017 and the initial days of 2018, the fractious internal politics of Local 75 which represented hotel, restaurant, and food service employees across the Greater Toronto Area and the antagonistic relationship between Ms. Pimentel, the then president of Local 75 and the U.S. based affiliate, Unite Here (International), came to a head. On behalf of the members, Ms. Pimentel sued the defendant, Mr. Taylor, the president of the International Union. On December 14, 2017, she filed a notice of motion for an injunction. This motion was ultimately never heard. Ms. Pimentel abandoned her motion. The defendant now seeks his costs for that motion that was never heard.

[2] Rule 37.09(3) provides that where a motion is abandoned, the responding party is entitled to the costs of the motion forthwith unless the court orders otherwise. Of course, the court retains some discretion to determine this issue. In exercising its discretion, the factors in rule 57.01 are considered. The goal is to determine an amount of costs that is fair and reasonable in light of the purposes of modern costs rules.

[3] On this motion, the defendant seeks his costs on a partial indemnity basis. He submits that there is no reason not to award him costs pursuant to rule 37.09(3). The plaintiff responds that there is. Ms. Pimentel argues that this is one of the exceptional cases in which the unsuccessful party should recover her costs. She submits that the defendant "breached the terms of its own constitution, thwarted the process of the court in conduct that was tantamount to contempt, and subverted the democratic rights of Local 75's members."

[4] A brief outline of the material facts will put some substance to the framework of the issues. By April of 2017, the executive board of Local 75 had divided into two factions, one allied with the plaintiff and the other with the secretary-treasurer. Matters came to a head when the secretary-treasurer asked the defendant to place Local 75 into trusteeship. Thereafter, the operation of Local 75 became increasingly difficult for a number of reasons, including deliberate absenteeism from meetings and the inability of the board to form a quorum. On December 11, 2017, the plaintiff commenced an action. On December 14, 2017, she served a notice of motion for an injunction to prevent the defendant from imposing trusteeship on Local 75. On December 19, 2017, Justice Diamond scheduled the motion for injunctive relief to be heard June 8, 2018, and a motion for interim relief on January 4, 2018. On December 20, 2017, counsel for the plaintiff asked counsel for the defendant for a commitment that no steps to take control of Local 75 occur before the January 4 motion date. No commitment was forthcoming.

[5] On January 4, 2018, Justice Glustein adjourned the motion for interim relief to January 22, 2018, given that the plaintiff had not provided an undertaking as to damages. A time table was set up. No terms or restrictions were ordered by Justice Glustein. That same day, the defendant imposed a trusteeship on Local 75. The plaintiff was relieved of her union position and duties. On January 9, 2018, a membership meeting was set up for Local 75. From the plaintiff's affidavit material, this meeting devolved given the conduct of members of the International Union, such that the meeting was moved across the street to a different location. At this meeting, the members present passed motions to authorize the litigation, to oppose the imposition of the trusteeship, and to indemnify the plaintiff. Prior to the scheduled hearing on January 22, 2018, the plaintiff swore another affidavit dated January 11, 2018, providing the undertaking for damages, setting out the further history to the matter, and agreeing to resubmit all resolutions passed on January 9th at the next membership meeting. A notice of examination returnable January 17, 2018, was served on the defendant. On January 15, 2018, the defendant served his supplemental motion record. On January 17, 2018, the plaintiff cancelled the appointment of the cross-examination of the defendant. The plaintiff advised that she would not be proceeding with the injunction motions scheduled for January 22 and June 18, 2018, and served a Notice of Discontinuance.

[6] On this costs motion, Ms. Pimentel filed the five affidavits previously filed on the motion for an interim injunction. She has filed an additional affidavit on this motion for costs. While the defendant provided an affidavit supporting this motion, there is no corresponding material filed by him that addressed the merits of the motion for an interim injunction. Thus, I am keenly aware that I have really heard only one side of the story. But what I have reviewed is enough for me to conclude that Local 75 was in a very dysfunctional situation, both internally and in their relationship with the International Union.

[7] The plaintiff urges that I find that the trusteeship imposed by the defendant was not in accordance with the articles of the International Constitution, and that the conduct of the defendant and members of the International Union was improper if not abusive. Despite these urgings, I am not in a good position to determine whether the imposition of a trusteeship was valid or to pass judgment on the actions of all involved. That was an issue best addressed at the interim injunction hearing based upon a full record and applying the test for the issuance of such an injunction. I am further of the view that determination of this is not necessary for me to dispose of this costs motion.

[8] When I look at the whole of the record, I find that costs should be awarded to the defendant. As confirmed in Yelda v. Vu, 2013 ONSC 5903 leave to appeal denied, 2014 ONCA 353, the long-standing principle is that a successful party is entitled to costs except for good reasons such as the misconduct of the party, miscarriage in procedure, or oppressive or vexatious conduct of proceedings: see also Bell Canada v. Olympia & York Developments Ltd. (1994), 17 O.R. (3d) 1235 (C.A.). I do not find good reason in this case not to award costs to the defendant. The defendants acted appropriately in the circumstances to resist the injunction. The adjournment hearing of the interim injunction on January 4, 2018, was not due to any conduct of the defendant but for the plaintiff to provide an undertaking as to damages. The adjournment was granted explicitly without any terms or restrictions imposed on the defendant. Though the defendant moved quickly to impose trusteeship, he did not breach any judicial order or undertaking. I also note that the defendant had not moved to impose a trusteeship prior to January 4, 2018, a date at which but for the lack of the undertaking, the interim injunction would have been heard on the merits.

[9] In my opinion, the plaintiff made a tactical decision in not pursuing the interim injunction motion. It was her choice to abandon that motion. The only reason she gives is her belief that due to the defendant's conduct, Local 75 could no longer operate as a democratic organization. While she was entitled to hold that belief and base her decision to abandon the legal proceedings upon it, she still could have pursued the motion and the litigation in order to restore what she considered the democratic functioning of Local 75. Her complaint could have been fully aired at the motion for the interim injunction. If it was her position, as it is now, that the defendant had "stolen the march" by imposing trusteeship on January 4, 2018, she could have taken that to court on January 22, 2018, and obtained the appropriate relief. This is what the moving party did in Kinnear v. Hanley, 2017 ONSC 1165, a case much relied upon by the plaintiff. Indeed, even after finding out that the trusteeship had been imposed, she continued with her litigation and actions to contest the imposition of the trusteeship. She was girding herself to argue the merits upon the return date for the motion. However, she then chose to abandon her motion.

[10] Contextually, I am inclined to find that she abandoned the litigation to pursue an alternate remedy to what was happening. On January 16, 2018, the plaintiff resigned as President of Local 75 and along with hundreds of other Local 75 members joined another union, Unifor. The irresistible inference for her conduct was that by aligning herself to another rival union, she chose to address the democratic deficiencies of the Local by conducting a "raid" during the open period. I am not being judgmental of that conduct. Rather, it is a contextual factor that highlights the tactical nature of her decision to abandon the motion.

[11] Looking at the whole of the circumstances, I am of the view that there is no good reason not to award costs to the defendant. I have taken into account the purposes of the costs rules. They are: to indemnify successful litigants for the costs of litigation, although not necessarily completely; to facilitate access to justice, including access for impecunious litigants; to discourage frivolous claims and defences; to discourage inappropriate behavior by litigants in their conduct of the proceedings; and to encourage settlements. I find that the conduct of the defendant was not such to warrant a costs award against them. I further find that even though the plaintiff commenced the proceedings on behalf of the members of Local 75, and even taking into account access to justice concerns, costs should be awarded to the defendant.

[12] In terms of quantum, I have considered the appropriate factors, the bill of costs submitted by the defendant, and the submissions of the parties. This was a fractious and hotly-disputed matter. It was brought on an urgent basis. The issue of who was going to control Local 75 was an important issue for both parties. I have already taken into account the conduct of the parties to the extent noted above, but I also find that it appears that counsel for both parties, given the context in which this motion was brought, conducted themselves properly. There were no offers to settle. I have also considered the issue of proportionality and the reasonable expectations of the unsuccessful party. No submissions were made with respect to quantum by the defendant. This was a complicated injunction motion with a number of affidavits with attachments filed. The materials had to be prepared quickly thus involving more focused work in a short period of time. The plaintiff does not strenuously argue her reasonable expectations as an unsuccessful party. Given the work that it appears the plaintiff herself put into the motion, I can see why the plaintiff takes this position.

[13] Fairness and reasonableness are the overriding principles. Taking all this into account, I find the overall quantum claimed by the defendant on a partial indemnity scale on the high side given the nature of the proceedings and the amount of preparation that could reasonably be expected for this interim injunction motion. A fair and reasonable costs award is $30,000 all-inclusive and payable forthwith.

[14] On the matter of costs of this motion itself, if the parties cannot agree on the subject of costs, brief written submissions no greater than two pages may be delivered on behalf of the defendant within 20 days of today's date and on behalf of the plaintiff of the same length within 15 days thereafter.

Justice S. Nakatsuru

Released: May 28, 2018