COURT FILE NO.: 15-51609-CP (Hamilton)
DATE: 20181009
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Ernest James Howe (Plaintiff) v. Solart LLL Corp, Solart International Inc., Solart Group, Blacksun Investments Inc., Gestion Marc Andre Lemieux Inc., 8378541 Canada Inc., Viviane Lea Abecassis, Elisa Marcela Barrios, Ai Chen, Julien Cyr, Natercia Dos Santos, Elaine Dubois, Martin Dupuis, Fanny Girard, Melanie Lacroix, Marc-Andre Lemieux, Francisco Lemieux, Veronique Lemieux, Mark Leyton, Lennie Moreno, Sunny Natalia, Leonor Nonnenmacher, Sophie Poirier, Nikhil Toshniwal, Nicolas Vanhove, Martin Yockell, The Toronto Dominion Bank, 2325524 Ontario Inc. o/a Sentinel Solar, Guy-Philippe Bouchard and Energia-360 Canada Inc. (Defendants)
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL: Winfield E. Corcoran, for the Plaintiff
Nick A. Porco, for the Defendants Solart LLL Corp, Solart International Inc., Solart Group, Blacksun Investments Inc., Gestion Marc Andre Lemieux Inc., 8378541 Canada Inc. and Marc-Andre Lemieux, and associated proposed defendants
John P. Ormston, for the Defendant Melanie Lacroix
Andrew D. Pelletier, for the Defendant Sunny Natalia
James Renihan, for the Defendant Nikhil Toshniwal
David Elmaleh, for the proposed Defendant The Independent Electrical System Operator
HEARD: By written submissions received June 8 to July 26, 2018
E N D O R S E M E N T – C O S T S
I. Introduction
[1] On a motion in a putative class action, the representative plaintiff requested an order (i) for leave to amend his claim, (ii) to add 17 additional defendants, and (iii) to provide certain document service relief. For the reasons set out in Reasons for Decision reported at 2018 ONSC 3169 (the “Decision Reasons”), the plaintiff was substantially successful in obtaining the requested document service relief, which was unopposed (except by one existing defendant). However, the plaintiff substantially failed to obtain the balance of the relief sought. The costs of the motion were left to be determined based on written submissions.
[2] I received written costs submissions from plaintiff’s counsel and from counsel for those respondents that filed responding material on the motion. As outlined further below, counsel’s positions on costs may be summarized as follows:
The respondents that successfully opposed the motion seek their costs from the plaintiff, in one case on a substantial indemnity basis. The plaintiff submits that no costs should be awarded to those respondents.
The plaintiff seeks costs from the unsuccessful respondent (Nikhil Toshniwal), but only if the plaintiff is ordered to pay costs to the other respondents. Mr. Toshniwal submits that there should be no costs award against him.
[3] The respondents that successfully opposed the plaintiff’s motion fall into two categories: (i) respondents who opposed the adding of additional defendants and related amendments to the claim, and (ii) the existing defendants who did not oppose amendments to the claim, but were awarded costs thrown away. In the balance of this endorsement, I will address costs entitlement for of those categories of respondents, followed by consideration of costs relating to the document service relief with respect to Mr. Toshniwal.
II. Adding defendants/amending claim – IESO and Solart-associated entities
[4] As indicated in the Decision Reasons at para. 12, most of the hearing time for the plaintiff’s two-day motion related to his request to add as party defendants the Independent Electrical System Operator (the “IESO”) and the “Solart-associated proposed defendants” (as defined in the Decision Reasons), with consequential amendments to the claim. Solart’s counsel also argued against other proposed amendments to the claim relating to the existing “Solart-associated defendants”. On behalf of their clients, both counsel achieved complete success on the motion (or, in the case of the Solart-associated defendants, near complete success).
[5] As the successful parties, those respondents seek their costs from the plaintiff, in each case on a partial indemnity basis. The IESO’s counsel has provided a bill of costs which indicates partial indemnity costs totaling $33,047, including disbursements and tax. The corresponding figure in the bill of costs for the Solart-associated entities was $18,349.
[6] A successful party has a reasonable expectation of being awarded costs in the absence of special circumstances: Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.), at para. 21. Unless the court is satisfied that a different order would be more just, costs of a contested motion are fixed and ordered payable within 30 days: *Rules of Civil Procedure* R.R.O. 1990, Reg. 194, r. 57.03(1)(a).
[7] In his submissions, plaintiff’s counsel argued that no costs should be awarded to the IESO or the Solart-associated entities, principally on the basis that the plaintiff was treated unfairly in the conduct of the motion. In support of his position, he also referred (among other things) to various offers that the plaintiff made to certain respondents to settle the motion or the action as a whole. As explained below, I see no merit in the plaintiff’s submissions.
[8] In support of his position relating to unfairness, plaintiff’s counsel in effect argued (as he did during submissions at the motion hearing) that the proposed defendants had failed to provide the plaintiff with information that the plaintiff required to succeed in his motion to add those respondents as party defendants. Plaintiff’s counsel referred in particular to information that would have permitted the plaintiff to respond effectively to the proposed defendants’ position that the plaintiff’s claim against them was statute-barred at the time that the plaintiff brought his motion. Plaintiff’s counsel also made similar submissions in respect of other relief sought on the motion. The short answer to those submissions (as noted in the Decision Reasons) is that the plaintiff bore the burden of establishing that his motion should succeed. As I stated in one context (at para. 101), it is of no assistance to plaintiff’s counsel to complain that the respondents did not provide the information that he believes he needed to make his case on the motion.
[9] The plaintiff also undermined his unfairness argument by what appears to be revisionist history in his costs submission. In particular, he states that at a case conference on August 11, 2017, the respondents attempted to deny him the opportunity to submit evidence on the motion in response to their position that the claim against them was statute-barred, on the basis that the time for submitting evidence had expired. That case conference is referred to in the Decision Reasons (at para. 11), where I state as follows:
A timetable for this motion was established at a case conference in August 2017. Among other things, the timetable provided for the exchange of motion records (commencing with a supplementary motion record from the Plaintiff), cross-examinations (although none in fact occurred) and the exchange of factums. The timetable was subsequently amended on consent. [Emphasis added.]
[10] As noted in the Decision Reasons (at para. 8), the plaintiff subsequently filed a Supplementary Motion Record dated August 25, 2017, in which he had to opportunity to provide further evidence. There was in fact a subsequent telephone case conference in January 2018, in which counsel for the respondents successfully argued against further amending the timetable to permit the plaintiff to provide further evidence in support of the motion. By that time, the timeline for the parties to provide evidence had long past, and the plaintiff had already provided his factum. On that basis, as a matter of fairness to all parties, I declined to revisit the long-established timeline for the motion, which had been originally brought in June 2017.
[11] In considering whether costs should be awarded against the plaintiff, I also considered the plaintiff’s various offers referred to in his costs submission. In general terms, those offers either involved outcomes that were more favourable to the plaintiff than the actual results of the motion or related to settlement of the action (or certain aspects of it) on terms favourable to the plaintiff. I therefore did not find them of assistance to the plaintiff in this context.
[12] Based on the foregoing, I have concluded that the IESO and the Solart-associated entities should be awarded their costs of this motion on a partial indemnity basis, payable by the plaintiff within 30 days. In that regard, I see no special circumstances that would justify denying the responsible expectation of those respondents as successful parties on the motion.
[13] In fixing the amount of costs payable, consideration may be given to the factors set out in r. 57.01(1), which include the principle of indemnity and the amount that the unsuccessful party could reasonably expect to pay. Relating to the latter factor, I took into account the fact that the plaintiff is representing the interests of ordinary citizens, whose access to funds may be limited. At the same time, I recognize that this factor does not insulate the plaintiff from costs exposure. I also took into account the fact that in his notice of motion, the plaintiff indicated that he was seeking an order “that there be no costs”. However, I do not consider it reasonable for the plaintiff to expect that responding parties would take the same approach if they are put to the expense of successfully resisting the plaintiff’s motion.
[14] With respect to the latter point, I accept the submission of responding counsel that their response to the motion was appropriate in the circumstances in terms of the time and expense reflected in their bills of costs. In that regard, I consider it appropriate that the costs awarded to the IESO be greater than those awarded to the Solart-related entities, since the IESO’s counsel bore the brunt of the submissions relating to the limitation issue, which Solart’s counsel relied to his clients’ benefit. In any case, as noted in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26, when fixing costs, the calculation of hours and time rates is only one factor to be taken into account. The overall objective is “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.”
[15] In all the circumstances, I fix the IESO’s costs at $24,000 and the costs of the Solart-related entities at $12,500, in each case payable by the plaintiff within 30 days.
III. Defendants who recovered costs thrown away
[16] Two of the defendants, Melanie Lacroix and Sunny Natalia, did not oppose the plaintiff’s proposed amendments to the statement of claim applicable to them. However, each of them succeeded in arguing that they should be awarded $700 for costs thrown away in responding to the amended claim. Each of them now seeks their costs of the motion. Each has provided a costs outline. Melanie Lacroix seeks costs of $8,076, calculated on a substantial indemnity basis. Sunny Natalia seeks partial indemnity costs of $3,685.
[17] In support of Melanie Lacroix’s request for substantial indemnity costs, her counsel referred to an offer to settle the motion dated February 2018 by accepting payment of $600 for costs thrown away. The plaintiff did not accept that offer. The result for Ms. Lacroix on the motion was more favourable than the terms of the offer.
[18] Rule 49.13 provides that in exercising its discretion with respect to costs, the court may take into account any offer to settle made in writing. In contrast, r. 49.10(1) is more specific, providing a plaintiff who achieves a judgment as or more favourable than the terms of a qualifying offer to settle with prima facie entitlement to substantial indemnity costs from the date of the offer to settle. Since r. 49.10(1) does not apply in this case, the fact that Ms. Lacroix’s result on the motion was more favourable than the offer to settle does not in itself justify a substantial indemnity costs award: see St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, 319 D.L.R. (4th) 74. As noted by the Ontario Court of Appeal in McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), 2002 41899 (ON CA), 59 O.R. (3d) 97 (C.A.), at paras. 37-38, costs are usually awarded on a partial indemnity basis, but substantial or full indemnity costs may be awarded “only in the rare and exceptional case”, based on “egregious or reprehensible conduct that warrants sanction” against the offending party: see also Foulis v. Robinson, (1978), 1978 1307 (ON CA), 21 O.R. (2d) 769 (C.A.); and Mortimer v. Cameron (1994), 1994 10998 (ON CA), 17 O.R. (3d) 1 (C.A.). I agree with respondents’ counsel that the motion process in this case was more protracted than necessary, in large measure because of plaintiff counsel’s conduct of the motion. However, I do not agree that the conduct in question rises rise to the level of egregious or reprehensible so as to justify a substantial indemnity costs award.
[19] In setting the costs award for these respondents, I also took into account the plaintiff’s submission that the costs the respondents sought were excessive as being out of proportion to the costs thrown away awarded on the motion. In that regard, I also note that the submissions relating to Melanie Lacroix and Sunny Natalia were dealt early on the first day of the motion hearing, with the result that their counsel were required to be present for part of the first day only. However, I am satisfied that their preparation for the motion and participation in pre-hearing proceedings warrants more than nominal costs award for the motion. I do not see the amount they were awarded for of costs thrown away as being a material limiting factor in fixing their costs of the motion.
[20] In all the circumstances, I fix costs of the motion for each of Melanie Lacroix and Sunny Natalia at $2,500, payable by the plaintiff within 30 days.
IV. Document service relief – Nikhil Toshniwal
[21] In his notice of motion, the plaintiff sought an extension of the six month period for service of the amended statement of claim on five existing defendants who had not previously been properly service with the plaintiff’s claim. As indicated in the Decision Reasons, I granted the requested service relief with respect to all five defendants. Four of those defendants did not oppose the requested relief, which was not surprising given the plaintiff’s previous difficulty in locating or serving them. However, the motion came to the attention of the Defendant Nikhil Toshniwal, who retained counsel to file responding material and appear at the motion hearing.
[22] In the plaintiff’s costs submissions relating to the extension of time to serve Mr. Toshniwal, the plaintiff, being the successful party, provided a costs outline with respect to that aspect of the motion. In his covering letter, plaintiff’s counsel also indicated that if I decided not to makes costs awards in favour of other respondents, the plaintiff would not seek costs against Mr. Toshniwal.
[23] I have difficulty with the position the plaintiff is taking. In his notice of motion, the plaintiff specifically stated that he was seeking an “order that there be no costs” relating to the motion. A no-costs order may well be appropriate where the moving party obtains relief from procedural requirements that the moving party has been unable to comply with. However, I agree with Mr. Toshniwal’s counsel that if the moving party’s intention is to seek costs against any affected party who opposes the relief sought, it is incumbent on the moving party as a matter of fairness to make that position clear from the outset in the notice of motion or in a timely amended notice. At the time of the motion hearing (over nine months after the motion was brought), plaintiff’s counsel indicated that he would be seeking costs against Mr. Toshniwal for failing to provide particulars of his objections to the facts pleaded against him in the proposed amended claim: see para. 100 of the Decision Reasons. However, I fail to see how the timing of that notice addresses the fairness concern. As well, as I indicated in para. 101 of the Decision Reasons, the plaintiff’s real complaint was that Mr. Toshniwal did not provide the plaintiff with information that he believed he needed to make his case on the motion. As noted above, I do not consider that objection to be valid, given that the plaintiff had the burden of establishing that his motion should succeed. In the event, my conclusion was that the plaintiff satisfied his burden in that case.
[24] In any case, if Mr. Toshniwal’s conduct in responding to the motion is a relevant factor, I would also consider the conduct of plaintiff’s counsel to be relevant as well. As indicated in the Decision Reasons at para. 102, I consider the position plaintiff’s counsel took in refusing to deal with Mr. Toshniwal’s counsel before he was formally on the record to be ill-advised, contributing to the ultimate delay in addressing the service issue.
[25] In all the circumstances, I agree with Mr. Toshniwal’s counsel that there should be no costs ordered with respect to the extension of time for service of the proposed amended claim on Nikhil Toshniwal.
VI. Costs order
[26] For the foregoing reasons, the following order will issue with respect to the costs of the plaintiff’s motion:
The costs of the Independent Electrical System Operation are fixed at $24,000, including disbursements and tax, payable by the plaintiff within 30 days.
The costs of the Solart-associated proposed defendants and the Solart-associated defendants are fixed at $12,500, including disbursements and tax, payable by the plaintiff within 30 days.
The costs of the Defendant Melanie Lacroix are fixed at $2,500, including disbursements and tax, payable by the plaintiff within 30 days.
The costs of the Defendant Sunny Natalia are fixed at $2,500, including disbursements and tax, payable by the plaintiff within 30 days.
No costs are awarded with respect to the extension of time for service on the Defendant Nikhil Toshniwal.
The Honourable Mr. Justice R.A. Lococo
Released: October 9, 2018
COURT FILE NO.: 15-51609-CP (Hamilton)
DATE: 20181009
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN:
Ernest James Howe
Plaintiff
- and -
Solart LLL Corp, Solart International Inc., Solart Group, Blacksun Investments Inc., Gestion Marc Andre Lemieux Inc., 8378541 Canada Inc., Viviane Lea Abecassis, Elisa Marcela Barrios, Ai Chen, Julien Cyr, Natercia Dos Santos, Elaine Dubois, Martin Dupuis, Fanny Girard, Melanie Lacroix, Marc-Andre Lemieux, Francisco Lemieux, Veronique Lemieux, Mark Leyton, Lennie Moreno, Sunny Natalia, Leonor Nonnenmacher, Sophie Poirier, Nikhil Toshniwal, Nicolas Vanhove, Martin Yockell, The Toronto Dominion Bank, 2325524 Ontario Inc. o/a Sentinel Solar, Guy-Philippe Bouchard and Energia-360 Canada Inc.
Defendants
ENDORSEMENT – COSTS
R.A. Lococo J.
Released: October 9, 2018