Court File and Parties

COURT FILE NO.: CV-15-541794 DATE: 2018-05-29 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BONDFIELD CONSTRUCTION COMPANY LIMITED, Plaintiff – AND – THE GLOBE AND MAIL INC., PHILLIP CRAWLEY, SYLVIA STEAD, GREG McARTHUR, ROBYN DOLITTLE and KAREN HOWLETT, Defendants

BEFORE: E.M. Morgan J.

COUNSEL: Kevin O’Brien and Karin Sachar, for the Plaintiff Carlos Martins and Andrew MacDonald, for the Defendants

HEARD: Costs submissions in writing

COSTS ENDORSEMENT

[1] On March 28, 2018, I issued my judgment dismissing Bondfield’s action on the grounds that it contravened section 137.1 of the Courts of Justice Act, RSO 1990, c3 (“CJA”). That legislation requires the dismissal of proceeding where a court finds that it “arises from an expression made by the person [i.e. the Defendant] that relates to a matter of public interest” and, inter alia, “the moving party has no valid defence in the proceeding.”

[2] I found that the Globe and Mail has at least one potentially valid defence, thus putting an early end to Bondfield’s claim. As the successful party, the Globe deserves its costs. The question here is: on what scale should those costs be awarded?

[3] Counsel for the Globe and Mail seeks full indemnity costs. He cites section 137.1(7) of the CJA, which specifically authorizes costs on that basis:

If a judge dismisses a proceeding under this section, the moving party is entitled to costs on the motion and in the proceeding on a full indemnity basis, unless the judge determines that such an award is not appropriate in the circumstances.

[4] The amount that the Globe and Mail seeks on this basis is very large – over $650,000. In making this costs request, the Globe’s counsel has reiterated a submission that he made during the hearing itself, to the effect that the series of articles in issue and the litigation to which they gave rise were a major undertaking for a newspaper to pursue. In his written costs submissions, counsel for the Globe states:

Reporting these stories was a major journalistic endeavour. Three experienced investigative journalists devoted months of their time to researching and reporting even before any stories were published. In defending this action, the defendants produced more than 7,000 documents, hundreds of which had to be redacted to protect the identities of confidential sources. This alone required hundreds of hours both of the journalists’ and of their counsel’s time.

[5] I indicated in my reasons for judgment that the magnitude of the task of defending a law suit does not itself go to the merits of that defense. However, it does go to the issue of costs. This case has put the Globe to a great expense, and that expense is to be compensated. If anything, the legislature has upped the ante, as it were, by enacting a presumption of costs on a full indemnity basis.

[6] I would only pause to comment that costs are generally for the time and money spent on legal representation; the party’s own time and effort – while doubtless necessary and costly – is not what the costs regime is meant to compensate, except under limited circumstances for self-represented litigants. Further, the amount of research and due diligence engaged in by the Globe’s writers in producing the articles is not what is relevant in here. It is, of course, commendable journalistic practice. However, the costs regime, as set out in Rule 57.01(1) of the Rules of Civil Procedure and equivalent provisions in other provinces, is aimed, first and foremost, at indemnifying successful parties for the legal costs of pursuing or defending the action: British Columbia (Minister of Forests) v Okanagan Indian Band, 2003 SCC 71, [2003] 3 SCR 371 at paras 20-21.

[7] Counsel for the Globe points out that the large figure it seeks is not only reasonable in that it reflects the complexity of the case and the hours invested in it, but is proportional to the $125 million claim that Bondfield has brought against it. As I pointed out in my judgment, Bondfield has even at this early stage hard evidence of its damages, and so the Globe’s exposure is such that any counsel on their behalf would be prudent to take the claim very seriously. I do not blame the Globe’s legal team for putting an extraordinary number of hours into this case.

[8] The Globe submits that in enacting a statutory provision that specifically calls for full indemnity costs, “the Legislature is presumed to have understood that awards of full indemnity costs are very rare in the normal course.” This was not just a rote repetition of a standard formula for costs that one finds in the statute books. It is a signal to the court that costs in respect of section 137.1 of the CJA are not to be dealt with as business as usual.

[9] Against this, counsel for Bondfield points out that the Globe’s victory here was a narrow one. I found that the claim has substantial merit, and that it had to be dismissed only because at this preliminary stage I could not say that there was no defense whatsoever available to the Globe. In addition, it is Bondfield’s view that this was essentially a case of first instance, and that in such a close case there should be no costs awarded to either side. Alternatively, Bondfield’s counsel submits that costs should be awarded to the Globe and Mail on a modest partial indemnity scale, more in line with summary judgment motions.

[10] On ordinary costs principles, I would agree with counsel for Bondfield. The Court of Appeal has indicated that the object of awarding costs is, at its most general level, to do what is “fair and reasonable”, 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), 2004 CanLII 14579 (ON CA), 71 OR (3d) 291 (Ont CA), at paras 26, 37. While a large corporate party like Bondfield does not typically invoke a concern for access to justice, it is fair to say that everyone – including a substantial corporate enterprise – deserves their day in court, and should not suffer a punitive level of costs just for seeking to have that day in court. One might say that this is especially so where the action is one of defamation and it has found to have “substantial merit”, at least at an early stage.

[11] This, however, is not an ordinary case in terms of costs. It is based on a specific statutory provision in which the legislature, in its wisdom, has insisted upon full indemnity costs. While s. 137.1(7) of the CJA does not entirely eliminate the court’s discretion in fixing costs, a reduction from full indemnity requires a finding that the highest measure of costs is not appropriate under the circumstances. Typically, the court’s general discretion under section 131 of the CJA in fixing costs is exercised in accordance with the factors listed in Rule 57.01(1). But since in the ordinary course full indemnity is almost never appropriate, the formulation used in section 137.1(7) does not leave me much in the way of guidance.

[12] I find that although I must take the legislature seriously in specifying full indemnity costs for this kind of case, the fact that the ruling was a close one does play into the analysis. I conclude that in exercising my authority to determine what is appropriate under the circumstances, the Globe’s costs request should be reduced somewhat to reflect the unusual nature of its success in this case – that is, it succeeded in having a case against it dismissed at a preliminary stage where that case probably would not have been dismissed under the usual summary judgment analysis.

[13] I therefore confront two competing impulses. In view of the terms of section 137.1(7), it seems to me that the Globe is entitled to more costs than the ordinary case; and in view of the rationale for my ruling, it seems to me that Bondfield is entitled to pay less costs than a full indemnity scale would demand. I therefore conclude that Bondfield should pay the Globe something along the lines of substantial indemnity costs.

[14] The Globe’s calculation of costs on a partial indemnity costs comes to just under $400,000, while its request for full indemnity costs comes to just over $650,000. If one were to apply a substantial indemnity standard to the Globe’s costs figures, it would doubtless come in at somewhere around $500,000.

[15] Bondfield shall therefore pay the Globe and Mail costs in the all-inclusive amount of $500,000.

Morgan J.

Date: May 29, 2018