COURT FILE NO.: CV-14-518059CP

DATE: 20180814

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DAVID HUGHES and 631992 ONTARIO INC.

Plaintiffs

– and –

LIQUOR CONTROL BOARD OF ONTARIO, BREWERS RETAIL INC. (carrying on business as “THE BEER STORE”), LABATT BREWERIES OF CANADA LP, LABATT BREWING COMPANY LIMITED, MOLSON COORS CANADA, MOLSON CANADA 2005 and SLEEMAN BREWERIES LTD.

Defendants

Paul Bates, Ronald Podolny and Tyler Planeta for the Plaintiffs

Kent E. Thomson, Matthew Milne-Smith and Michael H. Lubetsky for the Defendant Liquor Control Board of Ontario

Michael A. Eizenga, Ranjan K. Agarwal and Ilan Ishai for the Defendant, Brewers Retail Inc.

Jeff Galway and Catherine Beagan Flood for the Defendant Labatt Breweries of Canada LP and Labatt Brewing Company Limited

Paul Steep and Adam Ship for the Defendant Molson Coors Canada and Molson Canada 2005

Proceeding under the Class Proceedings Act, 1992

HEARD: In writing

PERELL, J.

REASONS FOR DECISION – COSTS

The Class Proceedings Act, 1992 is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes and the submission that a class action is in the public interest. [Adopted from Benjamin Franklin[^1]]

A. Introduction and Overview

[1] Pursuant to the Class Proceedings Act, 1992,[^2] David Hughes and 631992 Ontario Inc., which operated a pub known as The Poacher, sued: (a) the Liquor Control Board of Ontario (“LCBO”); (b) Brewers Retail Inc., which carries on business as The Beer Store; (c) Labatt Breweries of Canada LP and Labatt Brewing Company Limited (collectively “Labatt”); (d) Molson Coors Canada and Molson Canada 2005 (collectively “Molson”); and (e) Sleeman Breweries Ltd. (“Sleeman”). Labatt, Molson and Sleeman were the shareholders of Brewers Retail.

[2] Before certification of the proposed class action, the Defendants brought five summary judgment motions, and the Plaintiffs brought a sixth partial summary judgment motion.

[3] In addition to making claims against the Defendants, the Plaintiffs’ summary judgment motion raised a constitutional challenge, with the result that the Attorney General of Ontario intervened in the hearing of the motions.

[4] The six motions were argued over a four-day hearing. I granted the Defendants’ motions, and I dismissed the Plaintiffs’ action in its entirety.[^3]

[5] LCBO requests costs on a partial indemnity basis of $793,626.69, all inclusive, comprised of: (a) fees - $599,500; (b) HST on fees - $77,935; (c) disbursements - $102,697.07; (d) HST on disbursements - $13,350.62 and (e) HST-exempt disbursements - $144. The LCBO submitted that its fees were a substantial discount from what it could claim on a partial indemnity basis, but it did not disclose what were its actual costs.

[6] Brewers Retail requests costs of $600,000, all inclusive, on a partial indemnity basis. This request is based on actual partial indemnity costs of approximately $1.4 million, comprised of fees and HST of approximately $1.3 million and disbursements and HST of approximately $100,000. Brewers Retail stated that its actual costs, all inclusive, were approximately $2.2 million

[7] Molson requests costs on a partial indemnity basis of $522,291.42, all inclusive, comprised of: (a) fees - $400,455.94; (b) HST on fees - $52,059.27; (c) disbursements - $21,784.41; (d) HST on disbursements - $2,831.97; and (e) HST-exempt disbursements - $45,159.83. Molson stated that its actual costs, all inclusive, were $1,139,552.12 - approximately $1.1 million.

[8] Labatt requests costs on a partial indemnity basis of $414,926.57, all inclusive, comprised of: (a) fees - $322,331.50; (b) HST on fees - $41,903.09; and (c) disbursements - $50,691.98. The fee was calculated on the basis of 60% of the actual fees (which I, therefore, reckon to have been approximately $607,000, inclusive of HST). Thus Labatt’s actual costs, all inclusive, were approximately $660,000

[9] Sleeman settled its claim for costs for an undisclosed sum. Before settling, Sleeman requested costs on a partial indemnity basis of $438,595.28, all inclusive, comprised of: (a) fees - $303,595.28; (b) HST on fees - $39,467.39; and (c) disbursements - $95,649.65. Sleeman stated that its actual costs, all inclusive, were $667,420.78.

[10] The Attorney General made no request for costs.

[11] The Plaintiffs and the Fund indicated that their gross partial indemnity fee was approximately $1.0 million based on their lawyers’ gross total hours and multiplying those hours by 60% of actual hourly rates. This suggests that the Plaintiffs’ actual costs for the six motions was $1.8 million, inclusive of HST, plus undisclosed disbursements.

[12] Including Sleeman, the aggregate of all the costs requests is $2,769,439.96 -approximately $2.8 million. Excluding Sleeman, the aggregate of all the costs requests, all inclusive, is $2,330,844.68 - approximately $2.3 million. Based on the information provided to me about each Defendant’s actual costs, I estimate those actual costs in the aggregate to be approximately $6.5 million, all inclusive.

[13] In this class proceeding, the Class Proceedings Fund is statutorily responsible for honouring any award made against the Plaintiffs for costs. The Fund and the Plaintiffs submit that exempting Sleeman, the aggregate costs award for all the Defendants should not exceed $600,000 all inclusive.

[14] In Heller v. Ubertechnologies Inc.,[^4] I stated that: “like a forest fire in this era of climate change, costs in class proceedings have gotten out of control.” I do not withdraw from that statement, but in the immediate case: the costs regime is working as it was intended by the Legislature to operate; the Defendants have justified their claims for costs; and the Plaintiffs and the Fund have not justified any reduction from the amounts claimed. The Plaintiffs lit the costs fire, and the immediate case is not the occasion for judicial disaster relief.

[15] In the risk-reward regime of class proceedings, the Plaintiffs knowing took on the risk of an adverse costs award for a reward commensurate with the risk. The Plaintiffs expended costs of approximately $1.8 million, all inclusive, and they would have claimed a substantial portion of those costs had they been successful.

[16] For the reasons that follow, subject to a reduction of Dr. Winter’s $270,890.14 expert witness fee to the more reasonable and proportionate sum of $150,000, I award the Defendants the costs as requested.

B. Procedural and Evidentiary Background

[17] On December 9, 2014, the Toronto Star published an article by Martin Regg Cohn. Mr. Cohn described the 2000 Beer Framework Agreement between the LCBO and Brewers Retail as a "secret deal" between the LCBO and Brewers Retail, an "inglorious cash grab", and a "protectionist pact" that gouged both beer drinkers and the food and beverage industry. (It was a contested point whether the 2000 Beer Framework Agreement was a secret.)

[18] Three days later, on December 12, 2014, the Plaintiffs commenced a proposed class action by filing a Notice of Action.

[19] On January 8, 2015, the Plaintiffs filed their Statement of Claim.

[20] On May 13, 2015, the Plaintiffs delivered a Fresh as Amended Statement of Claim. Of the myriad of theories and sub-theories for the Plaintiffs’ case, the two main theories were: (1) the Defendants had conspired and the Regulated Conduct Defence applied only in criminal prosecution and the Regulated Conduct Defence provided no defence to a civil claim; and (2) if the Regulated Conduct Defence applied to civil claims, it only did so where there was a precise statutory instrument, which was absent in the immediate case, where the LCBO was coerced to sign the 2000 Beer Framework Agreement.

[21] After the litigation had been commenced, on August 1, 2015, amendments to the Liquor Control Act came into force. Some of the amendments were part of a provincial initiative to allow certain supermarkets to sell six-packs of beer. Other amendments were directly pertinent to the Plaintiffs already-commenced proposed class action; these amendments purported to exonerate some or all of the Defendants’ misconduct alleged by the Plaintiffs in their Fresh as Amended Statement of Claim.

[22] The significance of the August 1, 2015, amendments to the Liquor Control Act bears taking notice because the Legislature, apparently intentionally, cut the ground out from under the Plaintiffs’ two main theories of their case.

[23] In January 2016, in apparent response to the Provincial Government’s enactment of the amendments to the Liquor Licence Act pursuant to s. 29 of the Class Proceedings Act, 1992, with the consent of the LCBO and with the other Defendants taking no position, the Plaintiffs sought to discontinue the action against the LCBO.

[24] Thus, in January 2016, the Plaintiffs sought leave to deliver a Second Fresh as Amended Statement of Claim that would: (a) remove the LCBO as a party but identify it as an unnamed co-conspirator; and (b) make substantive amendments to the claims being made against the remaining Defendants, removing some claims but adding some new claims or requests for relief.

[25] I dismissed the s. 29 motion without prejudice to it being renewed after the close of pleadings. My concern was that no purpose would be served by letting the LCBO out of the action (to be a named but not joined co-conspirator) only to have it rejoined by the other Defendants commencing third party claims for contribution and indemnity.[^5]

[26] On February 22, 2016, the Plaintiffs Delivered a Second Fresh as Amended Statement of Claim with the LCBO remaining as a co-defendant.

[27] In the proposed class action, the Plaintiffs sought to represent the following class:

All persons in Canada who purchased beer in Ontario during the Class Period. Excluded from the class are the defendants, their subsidiaries, and affiliates.

Class Period means between June 1, 2000 and the date on which this action is certified as a class proceeding.

[28] On March 24, 2016, the LCBO, Brewers Retail, Labatt, and Molson delivered their respective Statements of Defence, and the LCBO and Brewers Retail respectively brought motions for summary judgment.

[29] On April 1, 2016, Sleeman delivered its Statement of Defence.

[30] On April 5, 2016, Labatt, Molson, and Sleeman respectively brought motions for summary judgment.

[31] There were no cross-claims against the LCBO.

[32] On July 4, 2016, the Plaintiffs delivered their Reply and brought a motion for partial summary judgment.

[33] On July 4, 2016, the Plaintiffs delivered their Reply and the pleadings were closed.

[34] The Plaintiffs did not renew their motion to discontinue the action against the LCBO.

[35] There were six summary judgment motions. Brewers Retail, Labatt, and Molson brought combined motions for summary judgment dismissing the Plaintiffs’ action as against them; Sleeman supported Brewers Retail, Labatt, and Molson’s motion that the Plaintiffs’ action should be dismissed, and it brought an independent motion for a summary judgment based on the fact-based argument that it was not a co-conspirator; and the LCBO brought a motion for a summary judgment dismissing the Plaintiffs’ action as against it. The Plaintiffs brought a motion for a partial summary judgment.

[36] In advancing their summary judgment motion and resisting the Defendants’ summary judgment motions, the Plaintiffs proffered: (a) the expert’s report of Adam Dodek, the Dean of the Faculty of Law at the University of Ottawa; (b) an affidavit from the Plaintiff David Hughes; and (c) the expert reports of Thomas Wilson, a Professor at the University of Toronto’s Rotman School of Business.

[37] In advancing its summary judgment motion and resisting the Plaintiffs’ partial summary judgment motion, the LCBO proffered: (a) an affidavit from Andrew S. Brandt, who between 1990 and 2006 had been the Chair and CEO of the LCBO; (b) an affidavit from Ian Loadman, Senior Director, Corporate Affairs of the LCBO; (c) an affidavit from Senator Robert W. Runciman, who in 1999 was the Minister of Consumer and Commercial Relations in the Progressive Conservative Government of Premier Michael Harris; and (d) affidavits from Ralph A. Winter, Professor and Canadian Research Chair in Business Economics and Public Policy at the University of British Columbia Sauder School of Business.

[38] In advancing its summary judgment motion and resisting the Plaintiffs’ partial summary judgment motion, Brewers Retail proffered: (a) the expert reports of Mr. Winter; (b) an affidavit from Jeffrey Ross Newton, President of Canadian National Brewers, an unincorporated trade association.

[39] In advancing its summary judgment motion and resisting the Plaintiffs’ partial summary judgment motion, Labatt proffered: (a) the affidavit of Mr. Newton; (b) the expert reports of Mr. Winter; (c) an affidavit from Ignacio Lares, the Chief Financial Officer of Labatt.

[40] In advancing its summary judgment motion and resisting the Plaintiffs’ partial summary judgment motion, Molson proffered: (a) the affidavit of Mr. Brandt; (b) the affidavit of Mr. Loadman; (c) the affidavit of Mr. Newton; (d) the expert reports of Mr. Winter; and (e) the affidavit of David Perkins, the former CEO of Molson.

[41] In advancing its summary judgment motion and resisting the Plaintiffs’ partial summary judgment motion, Sleeman proffered: (a) the expert reports of Mr. Winter; and (b) an affidavit from John Sleeman, the founder and Chairman of Sleeman.

[42] Messrs. Brandt, Newton, Perkins, Runciman and Sleeman were cross-examined. Messrs.Lares and Loadman answered written interrogatories.

[43] The ten volume Joint Motion Record comprised 5,355 pages. There were six compendia comprising 1,249 pages. There were nine factums comprising 562 pages. There were fourteen case books comprising 6,882 pages.

[44] The summary judgment motions were argued on February 5, 6, 7, and 8, 2018.

[45] During the course of argument, I requested additional information and was provided with affidavits from Penny Wyder, the General Counsel and Corporate Secretary of the LCBO, and Ted Moroz, the President of Brewers Retail.

[46] I released my Reasons for Decision on March 15, 2018.[^6]

C. Facts

[47] In their proposed class action, the Plaintiffs sought damages of $1.4 billion, and punitive damages of $5 million for the following causes of action: (a) damages pursuant to s. 36 of the Competition Act[^7] for contravention of s. 45 of the Act, which has two versions over the class period; (b) civil conspiracy for breach of s. 45 of the Competition Act; (c) unjust enrichment for breach of the Uniform Price Rule of the Liquor Control Act;[^8] (d) waiver of tort; and (e) the freshly-invented tort of “Misconduct by a Civil Authority,” which is based on obiter dicta in Paradis Honey Ltd. v. Canada (Minister of Agriculture and Agri-Food).[^9]

[48] In their Statement of Claim, the Plaintiffs alleged two conspiracies by all the Defendants. Of the two, the Plaintiffs abandoned the “Prices and Fees Conspiracy” and focused on the “Market Allocation Conspiracy”, which they pursued with a statutory cause of action pursuant to sections 36 and 45 of the Competition Act and with a concurrent common law civil conspiracy tort claim. The Plaintiffs’ civil conspiracy claim was based on the same allegedly anticompetitive behavior that is contrary to the Competition Act. The Plaintiffs alleged a conspiracy based on the predominant purpose branch of the tort of civil conspiracy.

[49] In addition to two versions of the Competition Act, the Plaintiffs’ case involved an examination of several iterations of the Liquor Licence Act[^10] and the Liquor Control Act, along with their regulations and also the the Alcohol and Gaming Regulation and Public Protection Act, 1996,[^11] the Importation of Intoxicating Liquors Act,[^12] and the Management Board of Cabinet Act.[^13]

[50] The Plaintiffs’ causes of action were built on five alleged wrongdoings; namely: (1) the Defendants conspiring to enter into the 2000 Beer Framework Agreement, an agreement that was signed by the LCBO and by Brewers Retail on June 1, 2000 and that allegedly contravened both versions of s. 45 of the Competition Act; (2) the Defendants agreeing in the 2000 Beer Framework Agreement that the LCBO would not in its “Ordinary Stores” sell beer in packages greater than six containers; (3) the Defendants agreeing in the 2000 Beer Framework Agreement that the LCBO would not sell any beer product that was exclusively sold by Brewers Retail; (4) Brewers Retail, Labatt, Molson, and Sleeman unjustly enriching themselves by selling beer to Licensees in contravention of the Liquor Control Act’s Uniform Price Rule; and (5) the LCBO misconducting itself as a public authority by entering into the 2000 Beer Framework Agreement.

[51] The Defendants and the Plaintiff brought summary judgment motions. There were six summary judgment motions; namely: (1)(2)(3) Brewers Retail, Labatt, and Molson brought a combined motion for summary judgment dismissing the Plaintiffs’ action as against them; (4) Sleeman supported Brewers Retail, Labatt, and Molson’s motion and brought an independent motion for a summary judgment based on the fact-based argument that it was not a co-conspirator; (5) the LCBO brought a motion for a summary judgment dismissing the Plaintiffs’ action as against it; and (6) the Plaintiffs brought a motion for a partial summary judgment for a variety of declarations partially dispositive of claims and defences.

[52] In their respective summary judgment motions, all the Defendants relied on the “Regulated Conduct Defence” to resist the conspiracy claim.

[53] In their respective summary judgment motions, all the Defendants asserted that to the extent that there is any doubt about the legality of their conduct, that doubt had been removed by s. 10(3) of the Liquor Control Act, a 2015 amendment to the Act, which declared that the LCBO is deemed to have been directed and Brewers Retail is deemed to have been authorized to enter into the 2000 Beer Framework Agreement.

[54] In its summary judgment motion, the LCBO also submitted that the Plaintiffs’ claim should fail on its merits. The LCBO submitted that the Plaintiffs had failed to prove a contravention of the Competition Act and that they had failed to prove Misconduct by a Civil Authority because the Plaintiffs had failed to show that the 2000 Beer Framework Agreement was unlawful or that it caused any harm.

[55] With respect to the unjust enrichment claim, the Defendants to that claim asserted that to the extent that there is any doubt about the legality of their conduct, that doubt had been removed by s. 3(1.1) of the Liquor Control Act, which these Defendants alleged codified and declared their pre-existing interpretation and application of the Uniform Pricing Rule to have been lawful.

[56] For their part, in their partial summary judgment motion, the Plaintiffs sought declarations that: (a) s. 45(7) of the Competition Act, which codifies the Regulated Conduct Defence, does not provide a defence in civil actions; (b) if s. 45(7) of the Competition Act is available for civil actions, then it does not provide a defence to the LCBO and Brewers Retail with respect to the 2000 Beer Framework Agreement; (c) s. 10(3) of the Liquor Control Act, which retrospectively authorized the LCBO’s entering into the 2000 Beer Framework Agreement, is not capable of providing a “Regulated Conduct Defence” for one or more of the Defendants within the scope of s. 45(7) of the Competition Act; and (d) s. 3(1.1) of the Liquor Control Act, which declares how the Uniform Price Rule operates, cannot retroactively provide a juristic reason for Brewers Retail having charged licensees prices for beer that were in excess of retail prices for beer in contravention of the Liquor Control Act’s Uniform Price Rule.

[57] The Plaintiffs’ action was profoundly important to the parties. From the Plaintiffs’ perspective, it was seeking a damages award for the class of approximately $2.0 billion, which with pre-judgment interest would approach approximately $2.8 billion or more depending how long it took to certify the action and proceed to a settlement or a trial.

[58] From the Defendants’ perspective, the action was a threat to the long-established regime for the distribution of beer in the Province of Ontario. If the action had been successful, it would have necessitated a reconfiguration of government policy decisions with implications for government finances and with implications to a wide sector of government activities including public health and public safety. If successful, the action would have a substantial consequence to a highly regulated private sector activity namely the manufacturing, distribution, and sale of beer.

[59] Further, the Plaintiffs’ action was profoundly important to the Defendants because it alleged serious criminality and serious civil misconduct by both the public sector and by the private sector.

D. Legal Background

1. Costs General Principles

[60] Modern costs rules are designed to advance five purposes in the administration of justice: (1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage and sanction inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements.[^14]

[61] The court's discretion in awarding costs arises under the authority of s. 31(1) of the Courts of Justice Act,[^15] and is to be exercised by a consideration of the factors in rule 57.01 (1) of the Rules of Civil Procedure.[^16] 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.

[62] 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.

[63] 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.[^17] This is the "loser pays" principle.

[64] A critical controlling principle for the awarding of costs is that the sum awarded reflect the fair and reasonable expectations of the unsuccessful litigant.[^18] The overriding principle in awarding costs is reasonableness.[^19]

[65] 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.[^20]

[66] 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.[^21]

2. Costs on a Substantial Indemnity Scale

[67] Subject to the costs consequences provisions of the offer to settle rule, only in exceptional cases are costs awarded on a substantial indemnity scale.[^22] Costs on a substantial indemnity scale or full indemnity scale are reserved for rare and exceptional cases, where the conduct of the party against whom costs is ordered is reprehensible or where there are other special circumstances that justify costs on the higher scale.[^23]

[68] Costs may be awarded on a substantial indemnity basis where a party pleads but fails to prove that his or her opponent perpetrated a fraud or committed a criminal act or engaged in other dishonest or reprehensible conduct or makes unfounded allegations that impugn the integrity or good reputation of his or her foes.[^24]

3. Discretion to Reduce Costs or to Make No Order as to Costs

[69] The decision to award costs is discretionary, and the court has the discretion to reduce the amount of costs or to order that there be no order as to costs in a variety of circumstances.

[70] The court has the discretion to reduce the amount of costs or to order that there be no order as to costs when the proceeding raises novel issues, particularly where the resolution of this issue is in the public interest.[^25] The court has the discretion to reduce the amount of costs or to order that there be no order as to costs when the state of the law is uncertain or under development or underdeveloped and it is in the public interest that the question be resolved.[^26]

[71] For an issue to be novel in the legally significant way that would justify the court in ordering no costs against the party who unsuccessfully advanced the issue, it is not enough that the issue is unprecedented or that the issue has not been decided before; the legally significant novelty of a legal issue is found in the circumstance that the existing case law is inadequate to resolve the issue and there would be no proper reason for the party advancing the issue to expect to fail.[^27] If a litigant submits that a case is novel because there is no decided case directly on point, he or she may be met with the argument that although there are no decided cases, the law is clearly against the case, so the litigant should reasonably expect to lose and thus the case is not novel in the requisite sense that would justify making no order as to costs.[^28]

[72] The court has the discretion to reduce the amount of costs or to order that there be no order as to costs when the unsuccessful party qualified as a public interest litigant.[^29] To be a "matter of public interest," the action must have some specific, special significance for, or interest to, the community at large beyond the interests of the parties to the litigation.[^30] A matter of public interest is something more than a matter that might interest the public, and it may not be possible for a court to provide a precise and comprehensive definition of the concept.[^31]A public interest litigant is usually a litigant that advocates a matter of public importance but with little or nothing personally to gain financially from participating in the litigation.[^32] However, that a proposed representative plaintiff brings an action out of a bona fide concern to vindicate his or her concern for the public interest does not necessarily insulate that person from an award of costs.[^33]

[73] In normal litigation, it is relatively rare that the court will invoke its discretion to eliminate or reduce an unsuccessful litigant’s exposure to costs because the party was litigating a novel point or was litigating in the public interest. This follows because in the overwhelming majority of cases, the prime motivation of the parties will not be altruistic. In most cases, even if there is some public benefit that may be achieved by the litigation or some advancement achieved in the development of the law, a party will have the expectation that if he or she is successful a partial indemnity for legal costs will follow and if the party fails, he or she will have to indemnify the successful party. An after-the-fact submission that the case was novel or in the public interest has to be taken with more than a grain of salt. There is some irony when an unsuccessful party introduces a novel point and then relies on it to avoid paying costs when it is doubtful that had they been successful, they would have agreed to forgo costs.[^34]

4. Costs and Class Proceedings - General Principles

[74] Under the scheme developed in Ontario for class proceedings, subject to the court’s discretion and the directive of s. 31 of the Class Proceedings Act, 1992, discussed below, the plaintiff remains liable for costs. Notwithstanding the recommendations of the Ontario Law Reform Commission in its report about costs in class proceedings, normally costs are awarded in class actions, particularly at the certification stage of a proposed class action. It appears that the Legislature intended that costs play its historic roles in the administration of justice.

[75] In Pearson v. Inco Ltd.,[^35] the Court of Appeal identified the following principles for fixing costs on a certification motion: (1) Ontario, unlike other class proceedings jurisdictions such as British Columbia, has not sought to interfere with the normal rule that costs will ordinarily follow the event; (2) the costs must reflect what is fair and reasonable; (3) the costs should, if possible, reflect costs awards made in closely comparable cases, recognizing that comparisons will rarely provide firm guidance; (4) a motion for certification is a vital step in the proceeding and the parties expect to devote substantial resources to prosecuting and defending the motion; (5) the costs expectations of the parties can be determined by the amount of costs that an unsuccessful party could reasonably expect to pay; (6) the complexity of the issues; (7) whether the case raises an issue of public importance; and (8) a fundamental objective of the Class Proceedings Act, 1992 is to provide enhanced access to justice.

[76] Although the Pearson v. Inco Ltd. decision was referable to a certification motion, its principles can be taken to apply to costs in class proceedings generally.

[77] In exercising its discretion with respect to costs in class proceedings, the court may consider such factors as: (a) conduct or poor judgment that unduly prolonged the preparation or argument of the motion for certification; (b) failure to follow the schedule; (c) improper case-splitting; (d) delays in abandoning causes of action and issues that were ultimately dropped; (e) failing to communicate the revised list of common issues; and (f) refusing to acknowledge the significance of submissions and concessions.[^36]

[78] Another important factor in awarding costs in class actions is the principle that the court should have regard to the underlying goals of the Class Proceedings Act, 1992; namely: (1) access to justice; (2) behaviour modification; and (3) judicial economy.[^37] With respect to access to justice, defendants, just as much as plaintiffs, are entitled to access to justice, and the court in exercising its discretion must be aware of the access to justice implications of its award to both plaintiffs and defendants.[^38]

[79] A class proceeding should not become a means for either defendants or plaintiffs to overspend on legal expenses simply because the economies of scale of a class proceeding makes it worthwhile to enlarge the investment in the defence or prosecution of the case.[^39] A defendant should rein in any tendency to commit more resources than are necessary to fairly test and challenge the propriety of certifying the class proceeding.[^40]

[80] An important factor in awarding costs in class actions is s. 31 of the Class Proceedings Act, 1992, which provides that:

In exercising its discretion with respect to costs under subsection 131(1) of the Courts of Justice Act, the court may consider whether the class proceeding was a test case, raised a novel point of law or involved a matter of public interest.

[81] Under s. 31 of the Act, in class proceedings, the approach to fixing costs is the same as in ordinary actions, but the court should give special weight to whether the class proceeding was a test case, raised a novel point of law, or involved a matter of public interest.[^41] In Holley v. Northern Trust Company,[^42] at paras. 22 and 23, I noted that s. 31 is essentially precatory. I stated:

22. For good or for ill, the Legislature gave very little to plaintiffs in class actions with the enactment of s. 31 of the Class Proceedings Act, 1992. Regardless of the existence of s. 31, when a court exercises its discretion with respect to costs under subsection 131(1) of the Courts of Justice Act, the court may consider whether the class proceeding was a test case, raised a novel point of law or involved a matter of public interest. Section 31 is essentially precatory and simply reminds the court of a discretion that the court already has when awarding costs. As noted above, this discretion is exercised from time to time, but is not inevitably exercised so as to create an asymmetrical costs regime.

23. There is no doubt that the risk of having to pay costs is a deterrent to plaintiffs (and their lawyers) bringing class actions, but there is no doubt that undertaking that risk brings the potential award of significant costs, which would have been available to Ms. Holley in the case at bar. An adverse costs system is what the Legislature intended; it did not intend a costs regime that removes the risk. And it did not impose a public interest burden on defendants, who are also entitled to access to justice, by imposing an asymmetrical system of costs.

5. The Role of the Class Proceedings Fund

[82] A plaintiff's exposure to costs may be assumed by the Law Foundation of Ontario pursuant to the Law Society Amendment Act (Class Proceedings Funding),[^43] which was enacted contemporaneously with the Class Proceedings Act, 1992. The Legislature established the Class Proceedings Fund with the broad purpose of increasing access to justice.[^44]

[83] A plaintiff may apply to the Class Proceedings Fund for support. In determining whether to provide support and thus shield the representative plaintiff from costs and expose itself to a corresponding liability, the Class Proceedings Committee of the Law Foundation is directed by the Law Society Act and the related regulations to have regard to: (a) the merits of the plaintiff's case; (b) whether the plaintiff has made reasonable efforts to raise funds from other sources; (c) whether the plaintiff has a clear and reasonable proposal for the use any funds awarded; (d) whether the plaintiff has appropriate financial controls to ensure that any funds awarded are spent for the purposes of the award; (e) any other matter that the Committee considers relevant; (f) the extent to which the issues in the proceeding affect the public interest; (g) the likelihood that the proceeding will be certified; and (h) the available money in the fund.[^45]

[84] If the Fund accepts the application, it will pay for disbursements, excluding the plaintiff's legal fees, and, the Fund will indemnify the plaintiff for the costs he or she must pay the defendant if ordered to do so in the class proceeding. Sections 59.4(1) and (3) of the Law Society Act provide:

59.4 (1) A defendant to a proceeding may apply to the board for payment from the Class Proceedings Fund in respect of a costs award made in the proceeding in the defendant's favour against a plaintiff who has received financial support from the Class Proceedings Fund in respect of the proceeding ....

(3) A defendant who has the right to apply for payment from the Class Proceedings Fund in respect of a costs award against a plaintiff may not recover any part of the award from the plaintiff.

[85] The Fund’s assistance, however, has a price. A successful plaintiff must reimburse the fund for the disbursements and pay 10% to the Fund from any settlement or judgment proceeds.

[86] The case law establishes that while the Fund is entitled to make submissions with respect to costs, the issues of entitlement, scale, and quantum of costs must be determined without reference to whether the Fund provided support to the applicant for certification.[^46] In Garland v. Consumers’ Gas Co.,[^47] Justice Winkler, as he then was, stated at paras. 15 and 16:

15. In particular, counsel for the Law Foundation argued that the court should consider the Fund's limited financial resources in arriving at its determination. It was stressed that it is appropriate for the court to consider the central purpose underlying the new class proceedings regime, specifically, access to justice. The Fund advances this objective by providing funding for class action lawsuits. Thus, it is argued, several adverse costs awards could seriously deplete the Fund thereby precluding future applicants from obtaining funding and, by extension, access to justice. Counsel concluded that it was, therefore, appropriate for the court to consider the impact of a costs award on the Fund.

16. In my view, the impact of a costs award on the Class Proceedings Fund is not an appropriate consideration for the court in determining whether to award costs to a worthy party in an appropriate case. Rather, the impact of such an award should be taken into consideration by the Class Proceedings Committee in deciding whether to grant funding to a particular plaintiff. ….

[87] The case law establishes that where the Law Foundation is liable to pay costs to the defendant, the possible adverse effect on the viability of the Fund is not a ground to deny costs to the defendant but rather is a matter for the Fund to consider when it determines whether to provide funding to the plaintiff.[^48] While the Class Proceedings Fund can anticipate that its risk of absorbing an adverse costs award will not arise if the class action is public interest litigation or novel in the requisite sense to justify a no-costs award, the involvement of the Class Proceedings Fund is not meant to insulate the plaintiff from a possible adverse costs award, and the fund must assess the risks of an unsuccessful claim against the possible awards of sharing 10% of the plaintiff’s recovery.[^49]

[88] However, in Edwards v. Law Society of Upper Canada,[^50] Justice Sharpe remarked that any reluctance to make a high costs award against an individual bringing an action on behalf of others or for the aim of behaviour modification should also apply to the Fund; he stated at para. 14:

14. I would be reluctant to award costs against an individual having a modest personal stake who brings a proceeding, either for the benefit or a much larger group which has been similarly wronged and would otherwise receive no remedy, or where the proceeding has been launched in order to achieve behaviour modification of a wrongdoer. It seems to me that if the Fund supported such a claim, there should be a similar reluctance to award costs against the Fund.

E. Discussion and Analysis

[89] The Plaintiffs asserted that the Defendants had engaged in a decades-long criminal and civil conspiracy designed to increase the price of beer in Ontario, and the Plaintiffs sought $2.0 billion in damages plus approximately another billion in pre-judgment interest. Their proposed class action challenged the lawfulness of the entire beer retail distribution system in Ontario and it challenged as unconstitutional the legislative action of the Ontario government validating the legality of its regulatory scheme.

[90] There is no doubt that the Plaintiffs’ reasonable expectation was that each Defendant would vigorously and independently resist the proposed class action. Because the Plaintiffs alleged a conspiracy, it was necessary for each Defendant to retain its own counsel and defend its individual conduct. Sleeman had its own discrete defence. The Defendants committed approximately $6.5 million in legal expenses in defending themselves, and after they succeeded on the six summary judgment motions, excepting Sleeman, the Defendants request the partial indemnity of approximately $2.3 million for their legal expenses.

[91] In accordance with the normal principles that apply to regular actions and in accordance with the principles that apply to class actions, set out above, the Defendants would be entitled to their costs requests, which, in my opinion, are fair, reasonable, and within the reasonable expectations of the Plaintiffs.

[92] However, the Plaintiffs and the Class Action Fund submitted that the appropriate costs award in the circumstances of this case is $600,000 in the aggregate.

[93] In my opinion, all the Plaintiffs’ and the Funds’ arguments fail. All of their arguments are of the “easy to say but saying does not make it so” type, and I am not persuaded that there should be any reduction to the costs requests as submitted, save for one major disbursement.

[94] It is easy enough for the Plaintiffs and the Fund to say that the summary judgment motion in the immediate case was not complex and that this circumstance alone warrants a reduction in fees. More precisely, the Plaintiffs and the Fund, in paragraph 6 of their costs submission, stated:

The chilling effect of a costs order of this magnitude would be contrary to the fundamental objective of access to justice – especially in a case that boiled down to a handful of discrete legal issues with largely uncontested facts, a modest record, minimal expert evidence and minimal cross-examinations. On that basis alone, the quantum of any costs ordered must be substantially reduced from the quantum claimed.

[95] I was there. The summary judgment motions did not boil down to a handful of discrete legal issues. And if discrete is intended to mean simple legal issues, there was little simple about the legal issues, which were synthesized into nine factums, some of them jointly written factums, and case books comprising approximately 7,000 pages and which involved an analysis of a lengthy factual history, an analysis of a lengthy judicial history associated with the Regulated Conduct Defence, an analysis of constitutional law and statutory interpretation principles associated with retroactive enactments, and an analysis of the Competition Act, the Liquor Licence Act, the Liquor Control Act, the Alcohol and Gaming Regulation and Public Protection Act, 1996, the Importation of Intoxicating Liquors Act, and the Management Board of Cabinet Act.

[96] There is no merit to the Plaintiffs’ and the Funds’ argument that the summary judgment motions were so straight-forward that the Defendants’ costs requests are unjustified.

[97] As may be seen from reading my Reasons for Decision, the court was called on to address, among other – not simple - legal issues: (1) What is the Regulated Conduct Defence? (2) Does the Regulated Conduct Defence apply in civil claims for breach of s. 45 of the Competition Act in its two iterations? (3) Does the Regulated Conduct Defence apply to the 2000 Beer Framework Agreement? (4) Is s. 10(3) of the Liquor Control Act constitutional? (5) May the Defendants rely on the Regulated Conduct Defence in the immediate case? (6) Did the Defendants breach s. 45 of the Competition Act? (7) Did the Defendants, other than the LCBO, breach the Uniform Price Rule of the Liquor Control Act? (8) Did the Defendants properly apply the Uniform Price Rule of the Liquor Control Act? (9) Does s. 3(1.1) of Liquor Control Act codify and cure any breach of the Uniform Price Rule? (10) Do the Defendants have a juristic reason defence to the unjust enrichment claim? and (11) Did the LCBO commit the tort of Misconduct by a Civil Authority?

[98] It is not possible to say that the facts were uncontested unless one ignores the huge amount of work undertaken by the Defendants in marshalling a documentary record and in responding to the Plaintiffs’ requests for production and unless one ignores the controversies about what factual inferences to draw and legal conclusions to reach from those documentary records that spanned a legislative and policy history from the repeal of Prohibition in 1927 prohibition to legislation and policy changes made after the Plaintiffs’ action was underway.

[99] Maybe on Jupiter a 14,000-page record assembled for the court (from the who knows how large a data base examined for relevancy by the Defendants) is “modest,” but it is not modest on planet Earth.

[100] It is easy enough for the Plaintiffs and the Fund to say that the Plaintiffs’ action was in the public interest and raised novel issues that it was in the public interest to resolve. More precisely, the Plaintiffs and the Fund submitted that the costs award in this case must reflect the fact that the case involved a matter of public interest and raised novel points of law, within the meaning of s.31(1) of the Class Proceedings Act, 1992.

[101] Notwithstanding the Plaintiffs’ and the Funds’ argument, in my opinion, the proposed class action was not in the public interest in the requisite legal sense. In my opinion, the case at bar, the case at bar was commercial litigation to relocate $3.0 billion of money belonging to the taxpayers of this province to a subset of Class Counsel and Class Member taxpayers who allegedly paid too much for beer as a result of a government policy that had been in existence for decades.

[102] It is easy enough to say that any class actions is in the public interest because it is always in the public interest that there be access to justice and it is particularly easy to say that a class action is in the public interest when a defendant is a public sector actor or a defendant is in a regulated industry, but if the Legislature wished every class action to be regarded as in the public interest, it could have introduced a no-costs regime or an asymmetric costs regime but it did neither. Rather, as the Court of Appeal noted in Pearson v. Inco Ltd.,[^51] unlike other class proceedings jurisdictions such as British Columbia, Ontario has not sought to interfere with the normal rule that costs will ordinarily follow the event. The Plaintiffs and the Fund have not persuaded me that there should be some departure in whole or in part from the normal cost rules.

[103] The beer distribution policy was supported by elected Progressive Conservative, NDP, and Liberal governments, the last of which passed legislation to remove any doubt that the implementation of the policy was authorized. Even assuming that the Plaintiffs’ dubious allegation regarding a lack of government transparency and accountability about public and private sector contracting about where beer can be purchased as between governments stores and Brewers warehouse stores was true, that does not belie the fact that the Plaintiffs’ were primarily motivated by money and not to achieve a change of government policy more to their liking. The public interest component of the case about transparent policy making was modest at best and would have been better resolved in the electoral theatre rather than in the judicial theatre. Having regard to the directive of s. 131 of the Courts of Justice Act, 1992, this is a case in which the normal costs rules and principles should apply.

[104] In Yip v. HSBC Holdings plc,[^52] the Court of Appeal stated that the fact that litigation is entrepreneurial is not a proper basis to impose different costs consequences because class actions are by their nature entrepreneurial as a means of encouraging access to justice. Thus, in the case at bar, the Defendants are not entitled to be partially indemnified for the costs of their defence because they fended off entrepreneurial litigation. Rather, the Defendants are entitled to costs under the normative rules for costs, which is what the Legislature intended for class proceedings.

[105] The Plaintiffs in their costs submissions took credit for their proposed class action having effected a change in govern policy and as demonstrating that the action was in the public interest. This proposition is bogus. Upon analysis, the 2015 amendments to the Ontario’s liquor control regime affirmed the old policies. In so far as there was changes made for the future of beer distribution in Ontario, the policy analysis and the policy decisions were made and being implemented before the Plaintiffs sued the LCBO, Brewers Retail, and its shareholders.

[106] But if the Plaintiffs and the Fund are entitled proudly (and they do boast) to take credit for being the catalyst for a change in government policy, then that aspect of their class action was spent before the summary judgment motions, but they forged ahead in pursuit of the commercial aspects of their proposed class action. At most, the Plaintiffs’ public spirit might be worthy of some reduction in their exposure to costs, but the Defendants have already substantially discounted their claims for costs.

[107] In support of their argument that the action was in the public interest, the Plaintiffs made the submission that their action was the only means for the class members to achieve access to justice, behaviour modification, and judicial economy. They submitted that without a class proceeding, the members of the class had no realistic prospect of getting their day in court to confront the well-resourced and sophisticated Defendants.

[108] Assuming the truth of this submission, which would be a more appropriate submission to make if the matter before the court was a certification motion instead of six summary judgment motions, the preferability of a class action as a means to obtain access to justice, does not make the class proceeding in the public interest, it rather only means that one of the certification criteria is satisfied.

[109] It is easy enough for the Plaintiffs to say that the case at bar raised novel points of law because the scope of the Regulated Conduct Defence is unclear and controversial and should be clarified and it is easy enough to say that there was no proper reason for the Plaintiffs to expect to fail. However, saying does not make it so.

[110] Whatever academics may say about what is the scope of the Regulated Conduct Defence (a legal question) or about what it ought to be (a policy question for Parliament and the Legislatures), the Plaintiffs had a plethora of reasons to expect to fail, not the least of which was that in the immediate case, the Legislature responded with retroactive curative legislation to make it clear that it authorized the contracting activities of its Crown agent and its activities in implementing the Uniform Price Rule.

[111] Moreover, the regulation of the alcoholic beverages industry and its relationship to the Competition Act is not a novelty nor at the fringes of the competition law. As noted in the reasons for decision, the Ontario High Court considered the Regulated Conduct Defence almost sixty years ago in R. v. Canadian Breweries Ltd.[^53] In that case, Canadian Breweries had acquired competitor’s breweries, and the issue was whether it had engaged in a criminal conspiracy under the Combines Investigation Act. Chief Justice McRuer held that the criminal conspiracy offence applied only to the portion of the market in which the provincial regulator permitted competition. Chief Justice McRuer acquitted Canadian Breweries because the alleged conspiracy did not affect competition in the portion of the market in which the statute and the LCBO permitted competition.

[112] Further, from the outset of the proposed class actions, the Plaintiffs were confronted with circumstance that their argument to limit the scope of the Regulated Conduct Defence had been rejected over 25 years ago in Attorney General of Canada v. Law Society of British Columbia,[^54] (the Jabour Case). Since the Jabour Case was decided, Parliament has reviewed and amended the Competition Act twice (1986 and 2010) and each time, it preserved the Regulated Conduct Defence as articulated in Jabour.

[113] Moreover, as noted above, the Ontario Legislature, albeit after the Plaintiffs’ action had been commenced, spelled it out that the impugned conduct of the Defendants was lawful. The Plaintiffs’ turning a brave Nelsonian blind eye to the approaching armada is not a basis for saying that they had no reason to think their action might fail because of uncertain law.

[114] There is also the fact that the Competition Commissioner had shown no appetited to wade in and challenge Ontario’s manner of distributing beer pursuant to the 2000 Beer Framework Agreement.

[115] It is easy enough for the Plaintiffs and the Fund to say that the Defendants’ costs requests are unprecedented and a threat to access to justice and the principles of the Class Proceedings Act, 1992. However, in my opinion, these easy-to-say statements are not true and do not justify any reduction to the Defendants’ costs requests in the immediate case

[116] The Plaintiffs submitted that unprecedented costs award sought by the Defendants would have a significant chilling effect on future class proceedings, undermining access to justice in an arena designed specifically to advance access to justice; and on that basis alone, the Defendants’ proposed costs figure must be substantially reduced.

[117] The Plaintiffs rely on the observation of the Court of Appeal that “[i]f the Fund were required to absorb steep cost awards imposed on litigants even though the proposed action displays the factors in s. 31(1) of the CPA, this would have an undesirable chilling effect on class proceedings”.[^55] I made a similar observation in in McCracken v CN, where I stated:

It seems obvious to me that exposure to an adverse costs award in the hundreds of thousands of dollars would deter access to justice because those who might support the claimants in advancing their claim will be deterred from offering that support or the supporters will be reserved and far more cautious in offering support. The Law Foundation as a supporter of those seeking access to justice, obviously will be deterred in providing support, if it was exposed to enormous costs awards.[^56]

[118] While those observations are true, they do not apply to the immediate case. The case at bar is not one in which the proposed action displays the factors in s. 31(1) of the Class Proceedings Act, 1992. And notwithstanding the recommendation of the Law Reform Commission, the Legislature did not remove the litigation chill that is an incident of exposing the representative plaintiff and class counsel to an adverse costs award. It rather seems that the Legislature wanted costs to play their usual role, which is to chill to the bone some litigants from prosecuting or defending, because of the legal expense of litigating, and to warm the cockles of the heart of other litigants with the thoughts of a solvent foe partially indemnifying them for the expense of the litigation.

[119] Any time when a class action fails, like death, and taxes, it is inevitable that the representative plaintiff, class counsel, and the Fund, if it is involved, will say that the case was in the public interest. But the Legislature did not insulate the Fund from litigation chill or from making a poor decision in supporting a particular class action, and it should not be forgotten that in supporting the Plaintiffs’ case, the quid pro quo was a 10% mandatory share of a pleaded $3 billion damages claim. And, in any event, in assessing costs, the court is required to ignore the Fund’s exposure to an adverse costs award and continue on with the legal fiction that it is the representative plaintiff who will be paying the adverse costs award.

[120] In the immediate case, the Plaintiffs and the Fund submit that viewed from the lens of the purposes of the class action regime i.e., access to justice, behaviour modification, and judicial economy, the costs awarded against them should be no more than $600,000 in the aggregate. However, viewed from the lens of access to justice, behaviour modification, and judicial economy, in my opinion, it is the Defendants who are entitled to the costs as requested save for the reduction in the disbursement for the expert’s fee.

[121] In the case at bar, the Defendants, who are as entitled to access to justice as plaintiffs, obtained the access to justice of having a meritless claim dismissed, which entails the normative rules about a cost indemnity for the successful party. In the immediate case, the summary judgment motions achieved access to justice for the Defendants and judicial economy, and behaviour modification is a neutral factor.

[122] There was no costs mongering by the Defendants. They were being sued for $3 billion and they spent $6.5 million in defending themselves; approximately $1.3 million per defendant. Excepting Sleeman, they are claiming an indemnity of approximately $2.3 million. In the circumstances of the immediate case and having regard to the various factors in rule 57.01, it is neither fair nor reasonable to reduce the Defendants’ requests to $600,000, which would indemnify them for approximately 10% or less of their actual legal expenses. It is informative to note that the Plaintiff’s own actual costs were in line with what each individual defendant spend on legal costs notwithstanding that the much heavier burden in producing the documentary and oral evidence fell onto the Defendants.

[123] The case of Green v. CIBC,[^57] illustrates that for good or for ill the costs of prosecuting or defending a class action can be gobsmacking large. In that case, Justice Strathy, as he then was, awarded the successful plaintiff costs of approximately $2.7 million for a combined certification motion and a leave motion under the Ontario Securities Act, both of which motions involve evidentiary standards far removed from the rigour of a summary judgment motion.

[124] The Plaintiffs and the Fund submitted that the Defendants ran up the costs by moving for a summary judgment rather than accepting the Plaintiffs’ suggestion that the discrete legal issues could be resolved by a Rule 21 motion. There are two short answers to reject this argument. First, a Rule 21 motion would have been a waste of time and unfair to the Defendants who sought a merits decision not a decision based on the low plain and obvious standard. Second, a Rule 21 motion would have been a waste of time because the Defendants could not accept the assumption that the pleaded facts in the Statement of Claim were true and the resolution of the myriad complicated issues needed the evidentiary foundation available by a summary judgment motion.

[125] I also disagree with the Plaintiffs’ and the Funds’ argument that the Plaintiffs should not be held responsible for any costs incurred by the LCBO after the discontinuance motion. Their argument was that it would be unfair to impose costs on them because the court denied them the opportunity to let the LCBO out of the action. Of course, I did no such thing, and I left open the opportunity for the motion to discontinue to be resumed. Moreover, had the motion been resumed and refused, then I may have decided that it was not in the class’s best interests to let the LCBO out of the action. The discontinuance motion was not brought, and the LCBO remained in the action entitled to defend itself subject to the normal costs rules.

[126] As it turned out, the major thrust of the Plaintiffs’ argument was that the LCBO caved in to government pressure and it appears that the Plaintiffs had a reason for not letting the LCBO out of the action. In any event, the LCBO was not let out. It prosecuted its summary judgment motion, and it, along with the other Defendants, was successful. Their costs requests are fair and reasonable and within the reasonable expectations of the Plaintiffs.

F. Conclusion

[127] For the above reasons, subject to a reduction of Dr. Winter’s $270,890.14 expert witness fee to the more reasonable and proportionate sum of $150,000, I award the Defendants the costs as requested.

Perell, J.

Released: August 14, 2018

[^1]: The actual quote is: “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”

[^2]: S.O. 1992, c. 6.

[^3]: Hughes v. Liquor Control Board of Ontario, 2018 ONSC 1723.

[^4]: 2018 ONSC 1690 at para. 1.

[^5]: Hughes v Liquor Control Board of Ontario, 2016 ONSC 867.

[^6]: Hughes v. Liquor Control Board of Ontario, 2018 ONSC 1723.

[^7]: R.S.C. 1985, c. C-34.

[^8]: R.S.O. 1990, c. L.18.

[^9]: 2015 FCA 89.

[^10]: R.S.O. 1990, c. L.19.

[^11]: S.O. 1996, c 26, Sch.

[^12]: R.S.C., 1985, c. I-3.

[^13]: R.S.O. 1990, c. M 1.

[^14]: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371; Reynolds v. Kingston (City) Police Services Board (2007), 2007 ONCA 375, 86 O.R. (3d) 43 (C.A.); 1465778 Ontario Inc. v. 1122077 Ontario Ltd. (2006), 2006 35819 (ON CA), 82 O.R. (3d) 757 (C.A.); Somers v. Fournier (2002), 2002 45001 (ON CA), 60 O.R. (3d) 225 (C.A.); Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330 (C.A.); Fellowes, McNeil v. Kansa General International Insurance Co. (1997), 1997 12208 (ON SC), 37 O.R. (3d) 464 (Gen. Div.); Hamilton-Wentworth (Regional Municipality) v. Hamilton-Wentworth Save the Valley Committee, Inc. (1985), 1985 1957 (ON SC), 51 O.R. (2d) 23 (H.C.J.).

[^15]: R.S.O. 1990, c. C-43.

[^16]: R.R.O. 1990, Reg. 194.

[^17]: McCracken v. Canadian National Railway, 2012 ONSC 6838; Hague v. Liberty Mutual Insurance Co., 2005 13782 (ON SC), [2005] O.J. No. 1660 (S.C.J.); 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), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.).

[^18]: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 at para. 24 (C.A.); Stellarbridge Management Inc. v. Magna International (Canada) Inc., 2004 9852 (ON CA), [2004] O.J. No. 2102 at para. 97 (C.A.); Zesta Engineering Ltd. v. Cloutier (2002), 2002 25577 (ON CA), 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), 2005 63806 (ON SC), 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.).

[^19]: Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 at para. 52 (C.A.).

[^20]: Das v. George Weston Limited, 2017 ONSC 5583 at para. 65.

[^21]: 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 65619 (ON SCDC), [2007] O.J. No. 2066 at para. 54 (Div. Ct.); Hague v. Liberty Mutual Insurance Co. (2005), 2005 13782 (ON SC), 13 C.P.C. (6th) 37 at para. 15 (S.C.J.); Risorto v. State Farm Mutual Automobile Insurance Co. (2003), 2003 43566 (ON SC), 64 O.R. (3d) 135 at para. 10 (S.C.J.).

[^22]: Foulis v. Robinson (1978), 1978 1307 (ON CA), 21 O.R. (2d) 769 (C.A.).

[^23]: St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, supp. reasons 2010 ONCA 479; Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.); McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), 2002 41899 (ON CA), 59 O.R. (3d) 97 (C.A.);

[^24]: The Catalyst Capital Group Inc. v. Moyse, 2018 ONCA 283; Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303; Lewis v. Cantertrot Investments Limited, 2010 ONSC 5679; McNaughton Automotive Limited v. Co-operators General Insurance Company, 2005 1058 (ON SC), [2005] O.J. No. 179 (S.C.J.), leave to appeal ref’d, 2008 ONCA 597; Toronto-Dominion Bank v. Leigh Instruments Ltd. (Trustee of) (1999), 1999 3778 (ON CA), 45 O.R. (3d) 417 (C.A.), leave to appeal refused 188 D.L.R. (4th) vi (S.C.C.); Goulin v. Goulin (1995), 1995 7236 (ON SC), 26 O.R. (3d) 472 (S.C.J.); National Hockey League v. Pepsi-Cola Canada Ltd. (1993), 1993 271 (BC SC), 102 D.L.R. (4th) 80 at pp. 87-88 (B.C.S.C.), aff’d (1995), 1995 2613 (BC CA), 122 D.L.R. (4th) 421 (B.C.C.A.).

[^25]: Fischer v. IG Investment Management Ltd., [2010] O.J. No. 2036 (S.C.J.) and 2014 ONSC 6260 (Div. Ct.); Dam Investments Inc. v. Ontario (Minister of Finance), 2007 ONCA 527, [2007] O.J. No. 2674 (C.A.); Sutcliffe v. Ontario (Minister of the Environment), 2004 34994 (ON CA), [2004] O.J. No. 4494 (C.A.); Re Canada 3000 Inc., 2005 18858 (ON SC), [2004] O.J. No. 1962 (C.A.); Gombu v. Ontario (Assistant Information and Privacy Commissioner), [2002] O.J. No. 2570 (Div. Ct.); Valpy v. Ontario (Commission on Election Finances), 1989 4330 (ON SC), [1989] O.J. No. 66 (Div. Ct.); C.U.P.E. Local 43 v. Metropolitan Toronto (Municipality) (1988), 1988 4692 (ON SC), 65 O.R. (2d) 47 (Div. Ct.).

[^26]: Guelph (City) v. Wellington-Dufferin-Guelph Health Unit, 2011 ONSC 7523, [2011] O.J. No. 6009 at paras. 1, 4, 46 (S.C.J.); Woodhouse v. Woodhouse, 1996 902 (ON CA), [1996] O.J. No. 1975 at para. 57 (C.A.).

[^27]: Vester v. Boston Scientific Ltd., 2017 ONSC 2498 at para. 50; Quality Rugs of Canada Ltd. v. Sedona Development Group (Lorne Park) Inc., 2017 ONSC 1353; Mancinelli v. Royal Bank of Canada, 2017 ONSC 1196; Fisher v. IG Investment Management Ltd., [2010] O.J. No. 2036 (S.C.J.); Baldwin v. Daubney, 2006 33317 (ON SC), [2006] O.J. No. 3919 at paras. 19-22 (S.C.J.).

[^28]: Baldwin v. Daubney (2006), 2006 33317 (ON SC), 21 B.L.R. (4th) 232 at para. 22 (Ont. S.C.J.).

[^29]: Incredible Electronics Inc. v. Canada (Attorney General), 2006 17939 (ON SC), [2006] O.J. No. 2155 (S.C.J.); C. Tollefson, "Costs in Public Interest Litigation Revisited" (2011), 39 Adv. Q. 197; and C. Tollefson, "Costs in Public Interest Litigation: Recent Developments and Future Directions" (2009) 35 Advocates' Q. 181.

[^30]: Smith v. Inco Ltd., 2012 ONSC 5094; Pearson v. Inco Ltd. (2006), 2006 7666 (ON CA), 79 O.R. (3d) 427 (C.A.); Caputo v. Imperial Tobacco Ltd. (2005), 2005 63806 (ON SC), 74 O.R. (3d) 728 at para. 36 (S.C.J.); Moyes v. Fortune Financial Corp., [2002] O.J. No. 4298 at para. 6 (S.C.J.); Gariepy v. Shell Oil Co., [2002] O.J. No. 3495 (S.C.J.); Williams v. Mutual Life Assurance Co. of Canada, 2001 62796 (ON SC), [2001] O.J. No. 445 at paras. 24-26 (S.C.J.).

[^31]: McLaine v. London Life Insurance Co., [2008] O.J. No. 2360 at paras. 14-17 (Div. Ct.); Vennell v. Barnado's (2004), 2004 33357 (ON SC), 73 O.R. (3d) 13 at paras. 28-29 (S.C.J.).

[^32]: Mahmood v. Ottawa (City), 2017 ONSC 5138; Incredible Electronics Inc. v. Canada (Attorney General) (2006), 2006 17939 (ON SC), 80 O.R. (3d) 723 (S.C.J.).

[^33]: Arenson v. Toronto (City), 2012 ONSC 4488 at para. 7; Consumers' Association of Canada v. Coca-Cola Bottling Co., [2006] B.C.J. No. 1879 at paras. 25-27 (B.C.S.C.), aff’d 2007 BCCA 356, [2007] B.C.J. No. 1625 (C.A.).

[^34]: Das v. George Weston Limited, 2017 ONSC 5583 at para. 93; 1146845 Ontario Inc. v. Pillar to Post Inc., 2015 ONSC 1115.

[^35]: (2006), 2006 7666 (ON CA), 79 O.R. (3d) 427 at para. 13 (C.A.).

[^36]: Good v. Toronto Police Services Board, 2016 ONCA 250, leave to appeal to the S.C.C. refused [2016] S.C.C.A. No. 255; Pollack v. Advanced Medical Optics, Inc., 2012 ONSC 1850; Lau v. Bayview Landmark Inc., [1999] O.J. No. 4385 at para. 4 (S.C.J.).

[^37]: Green v. Canadian Imperial Bank of Commerce, 2016 ONSC 3829; Brown v. Canada (Attorney General), 2013 ONCA 18 at para. 37; Smith v. Inco Ltd., 2012 ONSC 5094 at paras. 74-109; Ruffolo v. Sun Life Assurance Co. of Canada, 2009 ONCA 274 at para. 37; KRP Enterprises Inc. v. Haldimand (County), [2008] O.J. No. 3021 (S.C.J.); McNaughton Automotive Ltd. v. Co-operators General Insurance Co., 2007 12709 (ON SCDC), [2007] O.J. No. 1453 (Div. Ct.).

[^38]: 2038724 Ontario Limited v. Quizno's Canada Restaurant Corporation, at para. 17, leave to appeal to Div. Ct. denied 2011 ONSC 859 (Div. Ct.); Fresco v. Canadian Imperial Bank of Commerce, 2010 ONSC 1036 at para. 18.

[^39]: 2038724 Ontario Ltd. v. Quizno's Canada Restaurant Corp., 2010 ONSC 5390 at para. 19.

[^40]: Singer v. Schering-Plough Canada Inc., 2010 ONSC 1737, [2010] O.J. No. 1243 (S.C.J.); Lavier v. MyTravel Canada Holidays Inc., 2008 44697 (ON SC), [2008] O.J. No. 3377 at paras. 31 and 32 (S.C.J.).

[^41]: Sutherland v. Hudson's Bay Co., [2008] O.J. No. 602 at para. 11 (S.C.J.); Caputo v. Imperial Tobacco Ltd. (2005), 2005 63806 (ON SC), 74 O.R. (3d) 728 at para. 32 (S.C.J.); Joanisse v. Barker, [2003] O.J. No. 4081 (S.C.J.); Fehringer v. Sun Media Corp., [2002] O.J. No. 5514 (S.C.J.); Garland v. Consumers' Gas Co. (1995), 1995 7179 (ON SC), 22 O.R. (3d) 767 (Gen. Div.), aff’d (1996), 1996 1022 (ON CA), 30 O.R. (3d) 414 (C.A.).

[^42]: 2014 ONSC 3057.

[^43]: 1992, S.O. 1992, c. 7. See also O. Reg. 771/92.

[^44]: Garland v. Consumers' Gas Co. (1995), 1995 7179 (ON SC), 22 O.R. (3d) 767 (Gen. Div.), aff’d (1996), 1996 1022 (ON CA), 30 O.R. (3d) 414 (C.A.); Martin v. Barrett, [2008] O.J. No. 3813 at paras. 6-8 (S.C.J.).

[^45]: Law Society Act, 1992, S.O. 1992, c. 7, ss. 59.2-59.3; Ont. Reg. 772/92, s. 5.

[^46]: McNaughton Automotive Ltd. v. Co-operators General Insurance Co., 2007 12709 (ON SCDC), [2007] O.J. No. 1453 at para. 8 (Div. Ct.); Garland v. Consumers' Gas Co. (1995), 1995 7179 (ON SC), 22 O.R. (3d) 767 (Gen. Div.), aff’d (1996), 1996 1022 (ON CA), 30 O.R. (3d) 414 (C.A.).

[^47]: (1995), 1995 7179 (ON SC), 22 O.R. (3d) 767 (Gen. Div.), aff’d (1996), 1996 1022 (ON CA), 30 O.R. (3d) 414 (C.A.).

[^48]: Edwards v. Law Society of Upper Canada (No. 2) (2000), 48 O.R. (3d) 329 at para. 52 (C.A.); Garland v. Consumers' Gas Co., Garland v. Consumers' Gas Co. (1995), 1995 7179 (ON SC), 22 O.R. (3d) 767 (Gen. Div.), aff’d (1996), 1996 1022 (ON CA), 30 O.R. (3d) 414 (C.A.).

[^49]: McCracken v. Canadian National Railway Company, 2012 ONCA 797 at para. 11; Singer v. Schering-Plough Canada Inc., 2010 ONSC 1737, [2010] O.J. No. 1243 at para. 20 (S.C.J.); David Polowin Real Estate Ltd. v. Dominion of Canada General Insurance Co. (2008), 2008 ONCA 703, 93 O.R. (3d) 257 at para. 29 (C.A.).

[^50]: (1998), 38 C.P.C. (4th) 136 (Ont. S.C.J.).

[^51]: (2006), 2006 7666 (ON CA), 79 O.R. (3d) 427 at para. 13 (C.A.).

[^52]: 2018 ONCA 626 at para. 80.

[^53]: 1960 99 (ON SC), [1960] O.R. 601 (H.C.J.).

[^54]: 1982 29 (SCC), [1982] 2 S.C.R. 307.

[^55]: McCracken v Canadian National Railway Company, 2012 ONCA 797 at para 10; Smith v Inco, 2013 ONCA 724 at para 66. See also Green v Canadian Imperial Bank of Commerce, 2014 ONCA 344 at para 9.

[^56]: McCracken v Canadian National Railway Company, 2012 ONSC 6838 at para 58.

[^57]: 2016 ONSC 3829.