Court File and Parties

Court File No.: CV-15-532625-00CP Date: 2019-06-05 Superior Court of Justice – Ontario

Re: Christopher Brazeau and David Kift, Plaintiffs And: The Attorney General of Canada, Defendant

Counsel: James Sayce and Janeta Zurakowski, for the Plaintiffs Greg Tzemenakis, Stephen Kurelek, Sean Stynes, and Diya Bouchedid, for the Defendant

Proceeding under the Class Proceedings Act, 1992

Heard: In writing

Before: Perell, J.

Reasons for Decision - Costs

[1] After a summary judgment motion in this certified class proceedings, the Representative Plaintiffs, Christopher Brazeau and David Kift seek an award of costs of $814,605.25 in partial indemnity costs plus $349,453.97 in disbursements, for a total award of $1,164,059.22.

[2] For the reasons that follow, I award $800,000.00, all inclusive.

[3] Through the Correctional Service of Canada, the Federal Government operates penitentiaries and related penal institutions across Canada. Pursuant to the Class Proceedings Act, 1992, [1] Messrs. Brazeau and Kift sued the Federal Government about the operation of those penitentiaries. On behalf of a class of inmates who are seriously mentally ill, Messrs. Brazeau and Kift alleged that by placing mentally ill inmates in “administrative segregation”, the Federal Government has breached the Class Members’ rights under the Canadian Charter of Rights and Freedoms. [2]

[4] In 2016, on consent, the action was certified as a class proceeding. [3] On consent, the following common issues were certified:

1. By its operation and management of the Federal Institutions from November 1, 1992 to the present, did the Defendant breach the Class Members' rights under section 7 of the Charter?
2. If so, were its actions saved by section 1 of the Charter?
3. By its operation and management of the Federal Institutions from November 1, 1992 to the present, did the Defendant breach the Class Members' rights under section 9 of the Charter?
4. If so, were its actions saved by section 1 of the Charter?
5. By its operation and management of the Federal correctional facilities from November 1, 1992 to the present, did the Defendant breach the Class Members' rights under section 12 of the Charter?
6. If so, were its actions saved by section 1 of the Charter?
7. If the answer to any of common issues (1), (3), or (5) is "yes", and the answer to any of (2), (4) and (6) is no, are damages available to the Class under section 24 of the Charter?
8. If the answer to common issue (7) is "yes", can the Court make an aggregate assessment of the damages suffered by all Class Members as a part of the common issues trial [summary judgment motion]?

[5] Messrs. Brazeau and Kift brought a summary judgment motion for answers to all of the common issues.

[6] During the course of the hearing of the summary judgment motion, because they discontinued certain claims that did not involve administrative segregation but were concerned about the Federal Government’s alleged failures in providing health care to the Class Members, Messrs. Brazeau and Kift were granted leave to amend the Class Definition.

[7] With the discontinuance of the claims involving health care but not involving administrative segregation, the summary judgment motion was designed to be dispositive of the action save for the individual issues trials. I granted the summary judgment motion - in part - and I dismissed it - in part. [4] The answers to the common issues were as follows:

a. By its operation and management of the Federal Institutions from November 1, 1992 to the present, the Federal Government breached the Class Members’ rights under section 7 of the Charter by the absence of an adequate review process for placements in administrative segregation. In other words, there is a class-wide breach of section 7 (misdescribed by Messrs. Brazeau and Kift as a breach of s. 9) of the Charter because the review process for administrative segregation contravened the Charter.

Without prejudice to any individual Class Member’s claim at an individual issues trial to assert that his or her treatment was contrary to section 7 of the Charter in his or her particular circumstances, by its operation and management of the Federal Institutions from November 1, 1992 to the present, the Federal Government breached the rights under section 7 of the Charter of those Class Members: (a) who were involuntarily placed in administrative segregation for more than thirty days; and (b) who were voluntarily placed in administrative segregation for more than sixty days.

i.  In other words, while individual Class Members may have suffered a violation of section 7 of the Charter by his or her placement in administrative segregation for less than thirty days, there was only a common or systemic breach suffered by two subclasses comprised of Class Members: (a) who were involuntarily placed in administrative segregation for more than thirty days; or, (b) who were voluntarily placed in administrative segregation for more than sixty days.

ii. As the discussion below will explain, involuntary placements include both placements made at the request of the inmate (genuine voluntary placements) and also placements in which the inmate contrives or engineers an involuntary placement into administrative segregation.

b. For the subclasses (which may also be represented by Messrs. Brazeau and Kift as representative plaintiffs), the breach of section 7 of the Charter is not saved by section 1 of the Charter.

c. By its operation and management of the Federal Institutions from November 1, 1992 to the present, the Federal Government did not breach the Class Members’ rights under section 9 of the Charter.

d. There being no breach, the question of whether the breach of section 9 of the Charter is saved by section 1 of the Charter need not be answered.

e. Without prejudice to any individual Class Member’s claim at an individual issues trial to assert that his or her treatment was cruel and unusual, by its operation and management of the Federal Institutions from November 1, 1992 to the present, the Federal Government breached the rights under section 12 of the Charter of those Class Members (a) who were involuntarily placed in administrative segregation for more than thirty days; and (b) who were voluntarily placed in administrative segregation for more than sixty days.

i.  In other words, while individual Class Members may have suffered a cruel and unusual treatment by his or her placement in administrative segregation for less than thirty days, there was only a common or systemic breach suffered by the two subclasses comprised of Class Members: (a) who were involuntarily placed in administrative segregation for more than thirty days; or, (b) who were voluntarily placed in administrative segregation for more than sixty days.

f. For the subclasses, the breach of section 12 of the Charter breach is not saved by section 1 of the Charter.

g. Notwithstanding the principles from Mackin v. New Brunswick (Minister of Finance), 2002 SCC 13, [5] vindication and deterrence damages are available to the whole class under section 24 (1) of the Charter for the breach of section 7 of the Charter regarding the inadequate review procedure for placements in administrative segregation (misdescribed by Messrs. Brazeau and Kift as a breach of s. 9). In any event, vindication and deterrence damages are available to the subclasses that suffered a breach of sections 7 and 12 of the Charter.

h. The court can make an aggregate assessment of the Charter damages suffered by the whole class for the breach of section 7 of the Charter and of the Charter damages of the subclasses that suffered a breach of sections 7 and 12 of the Charter. The court assesses those damages as $20 million, which is to be distributed, less Class Counsel’s approved legal fees and disbursements, in the form of additional mental health or program resources for structural changes to penal institutions as the court on further motion may direct.

i. The Federal Government is not liable for punitive damages on a class-wide basis but may be liable for punitive damages after the Charter damages are determined at the individual issues trials.

ii. How the $20 million, less Class Counsel’s approved fees and disbursements, shall be distributed for the benefit of the class and the subclasses shall be determined by a distribution motion brought by Class Counsel.

[8] In addition to answering the common issues, as set out above, I concluded that subject to individual Class Members rebutting the statute-bar, there is a six-year limitation period that applies to all claims, and, thus, the start date for the Class Period is July 20, 2009 for all but the Estate claimants, for which the start date is July 20, 2013. This means that without prejudice to the claims of Class Members that have an individual rebuttal to the tolling of the limitation period, Class Members’ claims as a class from a placement in administrative segregation before July 20, 2009 are statute-barred.

[9] As noted above, Messrs. Brazeau and Kift seek an award of costs of $814,605.25 in partial indemnity costs plus $349,453.97 in disbursements, for a total award of $1,164,059.22. The Federal Government, however, submits that each party should bear their own costs because the summary judgment was granted in part and dismissed in part.

[10] With a reduction of the class period to six years, with the claim for punitive damages and for breach of section 9 of the Charter being dismissed and with the criteria for claims determined for just two subclasses, the Federal Government submits that Messrs. Brazeau and Kift fell far short of their target of a $337.5 million claim.

[11] Further, it submits that there should be no order as to costs because of the novelty and importance of the issues which have a very strong public interest ingredient.

[12] Further still, it submits that the ambit of the summary judgment motion was substantially reduced only after the hearing was underway as Messrs. Brazeau and Kift abandoned claims based on the alleged dereliction of the Federal Government’s responsibilities to provide proper mental health care for the Class Members, claims that had preoccupied a great deal of time and effort in the run up to the summary judgment motion.

[13] In the alternative to the submission that each party should bear its own costs, the Federal Government submits that the costs for legal fees be reduced by 50% from $814,605.25 to $407,302.63.

[14] Further, the Federal Government submitted that since Messrs. Brazeau and Kift failed to provide the supporting documents to validate the reasonableness of the disbursements, the court should order the documentation to be produced and allow the Federal Government to make further submissions.

[15] I shall deal with the matter of the disbursements first.

[16] The breakdown of the disbursements is:

Accommodation Fees $2,989.86 Agent's Fees $66,582.09 Article/Book Purchases $464.05 Consulting Fees $42,502.69 Copies – External $26,855.17 Copies – Internal $336.60 Courier $1,742.03 Document Management Fees $77.60 Equipment Rental Fees $525.00 Expert Fees $122,638.40 Filing Fee $468.00 Legal Research $2,176.25 LPIC Levy $50.00 Meals $3,458.76 Meeting Room Rental Fees $1,022.23 News Release Fees $4,645.00 Postage $473.26 Process Servers $1,775.00 Telephone/Long Distance $2,516.89 Transcripts $15,766.63 Transportation $12,185.81 Subtotal $309,251.30 HST $40,202.67 Total $349,453.97

[17] I agree with the Federal Government that Messrs. Brazeau and Kift have provided very little by way of supporting documents to validate the reasonableness of their disbursements. I also note that there are several items that are unclear or that are of doubtful recoverability without some explanation such as: Accommodation Fees $2,989.86, Agent's Fees $66,582.09, Consulting Fees $42,502.69, Equipment Rental Fees $525.00, Meals $3,458.76, Meeting Room Rental Fees $1,022.23, and News Release Fees $4,645.00.

[18] Claims for disbursements, including expert’s reports, must be reviewed with careful scrutiny, and the principle that cost awards must be fair and reasonable applies to disbursements, including expert fees. [6]

[19] I see no purpose to be served by allowing both parties to make further submissions about disbursements. Balanced against the absence of detail, there is the circumstance that I have some appreciation of the value of at least the expenditure for expert fees and I have an appreciation of what might be a reasonable expenditure for disbursements. I am, therefore, awarding Messrs. Brazeau and Kift $200,000, all inclusive, for disbursements.

[20] Turning now to the matter of the claim for legal expenses. The court's discretion in awarding costs arises under the authority of s. 31(1) of the Courts of Justice Act, [7] and is to be exercised by a consideration of the factors in rule 57.01 (1) of the Rules of Civil Procedure. [8] 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.

[21] 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.

[22] 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. [9] This is the "loser pays" principle.

[23] A critical controlling principle for the awarding of costs is that the sum awarded reflect the fair and reasonable expectations of the unsuccessful litigant. [10] The overriding principle in awarding costs is reasonableness. [11]

[24] 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. [12]

[25] 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.

[26] 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. [13]

[27] 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. [14] 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. [15]

[28] In Pearson v. Inco Ltd., 2006 ONCA 7666, at para. 13, [16] which concerned the fixing of costs on a certification motion, the Court of Appeal identified the following principles for fixing costs that can be taken to apply to costs in a class proceeding generally including a summary judgment 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.

[29] As may be noted, one of the factors mentioned by the Court of Appeal is the costs awards in closely comparable cases. In this regard, Messrs. Brazeau and Kift rely on the following comparables:

Hughes v. Liquor Control Board of Ontario, 2018 ONSC 4862 [17] $2,374,497.13 Fairview Donut Inc. v. The TDL Group Corp., 2014 ONSC 776 [18] $1,850,000.00 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2016 ONSC 5496 [19] $1,702,777.79 Das v. George Weston Ltd., 2018 ONCA 1053 [20] $1,634,921.12 Lavender v. Miller Bernstein LLP, 2018 ONCA 955 [21] $1,009,063.32

[30] Applying the above principles to the circumstances of the immediate case, I regard Messrs. Brazeau and Kift as the successful party on the summary judgment motion. While, perhaps technically speaking, there was a divided success with the summary judgment motion dismissed in part and granted in party, and while, practically speaking, the Federal Government was successful in substantially reducing its exposure to liability, ultimately it was the unsuccessful party and subject to a substantial judgment that will grow larger after individual issues trials.

[31] In this last regard, it should not be forgotten that the Federal Government’s persisting position is that it has no liability and that it has caused no harm nor breached the Charter in any respect. Subject to its appeal, it is an unsuccessful defendant. Thus, but for one factor that I will next address, I would not have reduced Messrs. Brazeau’s and Kift’s claim to be indemnified for a legal expenditure of $814,605.25 in partial indemnity costs.

[32] In my opinion but for the matter of the matter of the health care claims that were abandoned $814,605.25 for Class Counsel’s fee for the summary judgment motion would have been a fair and reasonable award and well within the reasonable expectations of the unsuccessful party.

[33] However, the abandonment of the health care claims more or less during the hearing of the summary judgment motion, does call for some adjustment in Messrs. Brazeau’s and Kift’s claim for costs.

[34] I, therefore, award $600,000 for legal expenses, all inclusive, which along with the award for disbursements yields an award of costs on a partial indemnity basis of $800,000, all inclusive.

[35] Order accordingly.

Perell, J. Released: June 5, 2019

[1] S.O. 1992, c. 6. [2] Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11. [3] Brazeau v. Attorney General (Canada), 2016 ONSC 7836. [4] Brazeau v. Attorney General (Canada), 2019 ONSC 1888. [5] Mackin v. New Brunswick (Minister of Finance), 2002 SCC 13. [6] Batchelor v. Looney, 2016 ONSC 1535; 495793 Ontario Ltd. (c.o.b. Central Auto Parts) v. Barclay, 2015 ONSC 602; Mayer v. 1474479 Ontario Inc., 2014 ONSC 2622; Bombardier Inc. v. AS Estonian Air, 2013 ONSC 4209; Hamfler v. 1682787 Ontario Inc., 2011 ONSC 3331. [7] R.S.O. 1990, c. C-43. [8] R.R.O. 1990, Reg. 194. [9] McCracken v. Canadian National Railway, 2012 ONSC 6838; Hague v. Liberty Mutual Insurance Co., 2005 ONSC 13782, [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 ONCA 239, 17 O.R. (3d) 135 (C.A.). [10] Boucher v. Public Accountants Council for the Province of Ontario, 2004 ONCA 14579, 71 O.R. (3d) 291 at para. 24 (C.A.); Stellarbridge Management Inc. v. Magna International (Canada) Inc., 2004 ONCA 9852, [2004] O.J. No. 2102 at para. 97 (C.A.); Zesta Engineering Ltd. v. Cloutier, 2002 ONCA 25577, 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 ONSC 63806, 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.). [11] Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66 at para. 52 (C.A.). [12] 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.). [13] Sutherland v. Hudson's Bay Co., [2008] O.J. No. 602 at para. 11 (S.C.J.); Caputo v. Imperial Tobacco Ltd., 2005 ONSC 63806, 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 ONSC 7179, 22 O.R. (3d) 767 (Gen. Div.), aff’d (1996), 1996 ONCA 1022, 30 O.R. (3d) 414 (C.A.). [14] 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 ONSCDC 12709, [2007] O.J. No. 1453 (Div. Ct.). [15] 2038724 Ontario Limited v. Quizno's Canada Restaurant Corporation, 2011 ONSCDC 859, at para. 17, leave to appeal to Div. Ct. denied; Fresco v. Canadian Imperial Bank of Commerce, 2010 ONSC 1036 at para. 18. [16] (2006), Pearson v. Inco Ltd., 2006 ONCA 7666, 79 O.R. (3d) 427 at para. 13 (C.A.). [17] Hughes v. Liquor Control Board of Ontario, 2018 ONSC 4862, leave to appeal costs ref’d 2019 ONCA 305. [18] Fairview Donut Inc. v. The TDL Group Corp., 2014 ONSC 776. [19] 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2016 ONSC 5496. [20] Das v. George Weston Ltd., 2018 ONCA 1053 varying 2017 ONSC 5583. [21] Lavender v. Miller Bernstein LLP, 2018 ONCA 955.