Court File and Parties

COURT FILE NO.: CV-13-478970 DATE: 20190610

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Industrial Alliance Securities Inc., Plaintiff AND: Diane Kunicyn, Defendant

And Between: Diane Kunicyn, Plaintiff by Counterclaim AND: Industrial Alliance Securities Inc. and Lise Douville, Defendants by Counterclaim

BEFORE: Stewart J.

COUNSEL: Melissa MacKewn, for the Plaintiff and Defendant by Counterclaim, Industrial Alliance Securities Inc. Brian Kolenda, for the Defendant and Plaintiff by Counterclaim, Diane Kunicyn Scott Kugler and Max Munoz, for the Defendant by Counterclaim, Lise Douville

HEARD: In Writing

Endorsement

[1] In my decision of March 12, 2019 dismissing the motion brought in this matter by Kunicyn, I invited counsel for the parties to deliver written submissions on costs if that subject could not be agreed upon by them. I now have received and considered those submissions.

[2] As one of the successful Respondents on the motion, IAS seeks costs on a substantial indemnity basis of $46,477.21 or, alternatively, on a partial indemnity basis of $31,366.28.

[3] Likewise, the Respondent Lise Douville seeks costs on a substantial indemnity basis in the amount of $33,573.19 or, alternatively, partial indemnity costs in the amount of $22,383.36.

[4] Although she was unsuccessful on the motion, Kunicyn submits that she had a reasonable basis to bring it. As a result, she argues that any costs of the motion should either be in the cause or in any event of the cause.

[5] If costs are to be fixed and awarded now, Kunicyn argues that they should be on a partial indemnity basis in an amount no greater than $15,000.00.

[6] The foundation of Kunicyn’s motion to gain access to otherwise privileged information was the allegation that there was a conspiracy among the Respondents and their lawyers to defraud a regulatory body that operated to destroy the privilege.

[7] Substantial indemnity costs are sought by both Respondents because Kunicyn had made these allegations in support of her motion against them and their legal counsel. As a result, IAS was required to obtain separate counsel for the motion, a step that necessarily involved the incurring by it of greater expense.

[8] Douville also was required to retain separate counsel to represent her given the specific and direct allegations made against her personally by Kunicyn.

[9] Kunicyn failed to overcome the necessary threshold to demonstrate that the crime/fraud ought to be applied in this case.

[10] Costs sanctions for unproven and serious allegations such as fraud, conspiracy, breach of fiduciary duty, or bad faith are often appropriate because they are rooted in assertions of dishonesty and deceit and go to the heart of a person’s integrity (see: Nazarina Holdings Inc. v. 2049080 Ontario Inc., 2010 ONSC 2559 (S.C.J.); The Investment Administration Solutions Inc. v. Pro-Financial Asset Management Inc., 2018 ONSC 2589 (S.C.J.)).

[11] Given the nature of the allegations made by Kunicyn, I consider that she must have reasonably expected to risk the imposition of costs sanctions if the allegations were not proven by her to the requisite degree on the motion. Likewise, the Respondents reasonably expected their costs to be paid in such an event on an increased scale.

[12] Accordingly, I am of the view that it is just and fair for the Respondents to recover their costs of the motion from the moving party Kunicyn on a substantial indemnity basis.

[13] However, that determination by me nevertheless is subject to the overriding principle of proportionality. I consider a reasonable amount for the Respondent IAS to recover for its costs of the motion is the all-inclusive amount of $35,000.00. On the footing that her actual costs were somewhat lower, the Respondent Douville shall recover her costs in the all-inclusive amount of $25,000.00. These sums shall be paid to the Respondents by Kunicyn within 90 days of the date of this decision.

Stewart J. Date: June 10, 2019